Danone (OTCQX:DANOY) has joined the stream of big companies announcing that more price increases are likely this year, after the Evian and Actimel producer made its biggest hikes in four decades last year.
The food and drink maker, which owns brands such as Volvic and Alpro, increased prices by 8.7% year-on-year, the company revealed in its full-year results today, with most of its hikes made in Europe and North America in the final months of the year.
Two-thirds of the company's cost increases were passed on to consumers last year, it said.
Looking to 2023, prices are expected to continue rising, but at a slightly smaller rate than that of the year before, according to chief financial officer Juergen Esser.
Overall sales volumes dropped by more than 4% in the last quarter of 2022, which it said was driven by a reduction in the company’s product ranges, with Nestle and Unilever also seeing a drop off last year.
However, the company’s full-year revenues increased by 7.8% year on year, a decade long record, thanks to the price increases.
This did not alleviate pressure on its profit margins, which fell by close to 1.5 percentage points to 12.2%, as not all of its costs were passed on.
The changes come after chief executive Antoine de Saint-Affrique launched a turnaround strategy when appointed in 2021, aiming to reduce the variety of products it sells, with plans to unload divisions such as its US organic dairy arm.
The market has reacted positively to Danone (OTCQX:DANOY)’s latest news with shares up 3.8% today at €54.