Danone’s healthy hydration brand Mizone is going from strength to strength in China as the company’s North American business continues to reel as a result of coffee creamer distribution woes.
Like-for-like sales grew 2.3% (1.3% volume/mix) in Q3 FY2025 and 1.8% (0.6% volume/mix) in the nine months of the financial year driven by Evian, Volvic and Aqua.
Healthy hydration brand Mizone was also a star performer for the group, with CFO Juergen Esser noting it had completed ‘another successful summer season’ in China.
“When you look at the number in terms of net sales, we are growing, I think, 5.62% in that Q3. And what it is hiding is that the underlying volume growth is high single-digit.”
“We are investing into distribution, into getting more space with distributors...in order to prepare already for 2026 season,” he told investors.
“In the overall beverage category, which is growing at a low single-digit pace, we see that healthy beverages are outperforming. This is exactly where Mizone is positioned.”
On the other hand, Latin America sales underwhelmed again, with adverse economic conditions impacting consumer sentiment, according to the CFO.
“In Latin America, we see what everybody is seeing, especially in Mexico, where consumer sentiment is pretty muted. That’s [been] one of the drivers why our Waters performance in Q3 has not been satisfactory, beyond the weather conditions, which have been quite awful during [the whole] season.”
But in North America, on-going distribution problems in creamers are starting to cost Danone. In Q1, the company had to recall large quantities of International Delight products, and shelf recovery is still underway, Esser explained.
“What’s happening there is that we had our supply chain issues in Q1, shares and distribution was falling down quite significantly, you can see that from scanner data. Market shares have stabilized in Q2 and since then have been recovering, as has distribution.
“That’s the journey, because it’s store by store, to get it back.”
Esser estimated that shelf recovery will complete in the first quarter of 2026, adding the sales issue is not down to consumer sentiment, which remains strong.
“This is a phase which continues to grow because people prepare more and more coffee at home. [It’s] a more affordable way to have your coffee experience, and the category is benefiting from it.”
In terms of new product development in creamers, Danone will focus on clean label innovation.
“As people are looking for more healthy propositions, it’s important that we, with International Delight, offer the right product.
“You can expect us to innovate and renovate towards naturalness and clean label in order to play a leading role in this category, which continues to show a solid growth momentum.”
