Buoyant baby market fills Numico's coffers

By Alex McNally

- Last updated on GMT

Related tags: Baby food

Baby food sales are up for Numico by more than 10 per cent - but
product prices will be bumped up to offset rising costs.

The firm said yesterday sales were up from €469m to €523 for the third quarter, and reported clinical nutrition sales up by some 14 per cent. Numico said baby food growth was accelerated in Western Europe from three per cent in 2006 to four per cent in the first nine months of 2007. A spokesperson added: "Numico remains confident that the intended price increases and savings in the variable cost bases will be able to offset the negative impact of higher raw material prices in 2007." ​The company was unavailable for further comment prior to publication. Royal Numico is made up of two divisions, baby food and clinical nutrition. The news shows that the baby food market is clearly buoyant, having also grown considerably in Numico's interim results. These showed the baby food section saw an 11.5 per cent rise from last year's €916m to €1,013m. Growing food prices have hit every sector of the industry and baby food shows no exception. Growth in the baby food section was driven by 8.2 per cent in volume and four per cent in price, Numico said. Key markets ​ Asia is also a key area for Numico, which saw an increase by 16 per cent in sales. The firm noted that there was "particularly strong" growth in Russia, Indonesia, Turkey and Vietnam. Total sales for the first nine months come to €1,536m. Baby food brands include Cow and Gate and Olvarit. Clinical nutrition also saw a sales boost of 14 per cent, driven mostly by volume. The improvement was also put down to a recovery in the German market, and strong performances across Europe. Royal Numico is currently a target for Group Danone, which made a proposal to acquire the baby food company for €55 per ordinary share in cash in July. This amounted to a total of €12.3bn. The move is expected to propel Danone into a top three spot in major markets for nutrition and infant products. Europe is in the midst of a major round of consultation over a new directive governing baby milk, which aims to improve how infant nutrition is regulated. Broadly speaking the directive aims to make sure the rules governing baby food are equal for all member states.

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