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Monday, Oct 20, 2025
Outside the box.
Danone Says Food Industry Reaches ‘Tipping Point’ as Health and Demographics Reshape Growth
Chief Executive Antoine de Saint-Affrique asserts that shifting demographics and scientific advances place the food sector at a critical juncture, positioning Danone to lead the transformation with investments in gut health and medical nutrition.
The food industry is at a “tipping point”, according to Danone SA Chief Executive Antoine de Saint-Affrique, who argues that demographic change, health-related concerns and scientific innovation are converging to reshape how people eat and how companies must respond.
Speaking this week, de Saint-Affrique highlighted the rise in older populations “not in an amazing state [of health]” and the increasing role of diet and the microbiome in determining wellbeing.
He said many illnesses stem from “not taking care of the microbiome – too many antibiotics, not the right kind of dietary regime”.
He added that the logic of food delivering positive health effects is one his firm “has been advocating forever”.
Danone has been realigning itself for this moment.
It invested nearly 500 million euros in research and innovation last year, a ten percent increase, while accelerating acquisitions in medical nutrition, such as the purchase of U.S.-based Kate Farms and Belgian biotech firm Akkermansia Company.
The business has also reshaped its board, exited under-performing lines, reduced headcount and shifted its financial guidance away from short-term margin targets to long-term value creation.
On performance, Danone achieved volume-driven growth of 4.2 percent in the first half of the year and its share price has risen about twenty percent in 2025.
The company sees strong momentum in North America across high-protein, coffee and water categories.
The renewed strategy – dubbed “Renew Danone” – sets targets of like-for-like net sales growth of three to five percent for the 2025-2028 period, with recurring operating income expected to grow faster than sales.
Return on invested capital is targeted for double-digit levels and the company aims to generate free cash flow of around 3 billion euros.
Danone expects the trends driving change to intensify: ageing populations in developed markets, rising demand for specialised nutrition, regulatory shifts around sugar and additives, and the emergence of precision-health models.
De Saint-Affrique said this gives his company “a head start in what will be a different world, one in which we can play a leading role”.
Industry-wide, other food groups are grappling with scant growth, rising costs and erosion of brand power, particularly in the wake of inflationary pressure and competition from private-label alternatives.
In contrast, Danone points to structural tailwinds and repositioning as differentiators.
While some analysts say the company’s growth targets are modest given the stage of transformation, Danone’s management is confident in its trajectory.
As de Saint-Affrique put it: “We moved extremely fast”.
Speaking this week, de Saint-Affrique highlighted the rise in older populations “not in an amazing state [of health]” and the increasing role of diet and the microbiome in determining wellbeing.
He said many illnesses stem from “not taking care of the microbiome – too many antibiotics, not the right kind of dietary regime”.
He added that the logic of food delivering positive health effects is one his firm “has been advocating forever”.
Danone has been realigning itself for this moment.
It invested nearly 500 million euros in research and innovation last year, a ten percent increase, while accelerating acquisitions in medical nutrition, such as the purchase of U.S.-based Kate Farms and Belgian biotech firm Akkermansia Company.
The business has also reshaped its board, exited under-performing lines, reduced headcount and shifted its financial guidance away from short-term margin targets to long-term value creation.
On performance, Danone achieved volume-driven growth of 4.2 percent in the first half of the year and its share price has risen about twenty percent in 2025.
The company sees strong momentum in North America across high-protein, coffee and water categories.
The renewed strategy – dubbed “Renew Danone” – sets targets of like-for-like net sales growth of three to five percent for the 2025-2028 period, with recurring operating income expected to grow faster than sales.
Return on invested capital is targeted for double-digit levels and the company aims to generate free cash flow of around 3 billion euros.
Danone expects the trends driving change to intensify: ageing populations in developed markets, rising demand for specialised nutrition, regulatory shifts around sugar and additives, and the emergence of precision-health models.
De Saint-Affrique said this gives his company “a head start in what will be a different world, one in which we can play a leading role”.
Industry-wide, other food groups are grappling with scant growth, rising costs and erosion of brand power, particularly in the wake of inflationary pressure and competition from private-label alternatives.
In contrast, Danone points to structural tailwinds and repositioning as differentiators.
While some analysts say the company’s growth targets are modest given the stage of transformation, Danone’s management is confident in its trajectory.
As de Saint-Affrique put it: “We moved extremely fast”.
