Danone Outperforms Q1 Forecasts, Driven by Robust Demand in China
French consumer goods giant Danone reported stronger-than-expected sales growth in the first quarter of 2025, buoyed by recovering demand in China and increased pricing across key categories. The company posted like-for-like sales growth of 4.1%, surpassing analysts’ forecast of 3.5% and reflecting shifting consumer dynamics in major global markets.
Greater China emerged as a standout performer, delivering a low double-digit sales increase. The region’s rebound was fueled by solid demand for infant nutrition products, supported by innovation and strong brand activation. Danone’s specialized nutrition division benefited significantly, contributing to the company’s topline momentum.
“Our return to growth in China, particularly in Infant Nutrition, underscores the strength of our brands and the relevance of our product offering in a challenging consumer environment,” said CEO Antoine de Saint-Affrique during the earnings call.
By category, Danone reported mid-single-digit growth in both Essential Dairy & Plant-Based and Waters. The Waters division in particular saw strong early-year performance thanks to favorable weather conditions and stepped-up promotional activity. Momentum in Europe remained stable, while emerging markets played a central role in fuelling growth.
Price increases were again a key driver, accounting for 5.6% of the Q1 growth. However, volumes declined by 1.5% as cautious consumers, high inflation, and a normalization of post-COVID demand patterns pressured purchase behavior in some regions. The company noted a shift toward smaller pack sizes and increased promotional sensitivity, particularly in Europe.
The overall performance aligns with Danone’s 2025 strategic plan, which targets mid-single-digit sales growth and moderate margin improvement. Execution on portfolio prioritization and brand differentiation remains at the core of the company’s growth playbook.
Looking ahead, Danone reaffirmed its full-year guidance, aiming for like-for-like sales growth in line with its mid-term objectives. While expectations for cost inflation have moderated from previous peaks, the company continues to flag geopolitical volatility and consumer uncertainty as key external risks.
FMCG stakeholders tracking category resilience and regional recovery will note Danone’s ability to leverage pricing, drive innovation, and adjust its execution to prevailing market realities — particularly in competitive health-oriented segments like specialized nutrition and dairy alternatives.