French food giant Danone is stepping into 2026 with optimism after exceeding sales and cash flow expectations for 2025. The boost came largely from strong demand for baby food in China and successful cost-cutting measures.
CEO Antoine de Saint-Affrique mentioned the ongoing global volatility but expressed confidence in Danone’s mid-term goals. The company reported 2025 sales of €27.28 billion ($32.07 billion), marking a 4.5% increase that slightly surpassed analysts’ predictions of 4.4%. This uptick was driven by steady interest in medical nutrition and baby food, which counterbalanced a dip in the competitive U.S. coffee creamer market.
Danone’s recurring operating margin improved to 13.4% of sales, consistent with expectations, while cash flow hit €2.8 billion, exceeding the €2.5 billion forecast. As a result, Danone plans a 4.7% rise in dividends, bringing it to €2.25 per share.
Looking ahead to 2026, Danone aims for a sales growth of 3-5%, with operating income expected to grow even faster. Like other major brands such as Unilever and Nestlé, Danone has moderated its price increases after three years of significant hikes, which should help regain consumers who leaned toward more affordable options during inflationary pressures.
In recent months, investor focus has shifted to potential risks related to recalls of infant formula linked to contamination concerns. Although the impact of these recalls seems manageable for now, primarily affecting Europe and leaving the Chinese market unscathed, analysts remain cautious. They note that around 17% of Danone’s profits stem from infant formula in China, compared to less than 2% for Nestlé. This significant reliance heightens the stakes in an already competitive market.
According to recent data, the global baby food market is expected to grow at a pace of 5% annually in the coming years, indicating that companies like Danone could benefit significantly from ongoing demand in this segment. However, maintaining a strong reputation, especially in critical markets like China, will be vital as the company navigates these challenges.
For more insights on the food industry and trends, consider checking the latest reports by organizations like [Statista](https://www.statista.com) and [Euromonitor](https://www.euromonitor.com), which offer valuable data and analyses.
