COVID-19 Impact on Danone, H2 2020 Update

Summary

COVID-19 Impact on Danone, H2 2020 Update key findings as of September 3rd, 2020 based on market analysis and brand diversification by industry and geography.

Due to its high exposure to highly affected regions, Danone is expected to adopt defensive strategies to survive the impact of the coronavirus outbreak on brand sales. Although dairy sector is showing gains, diversification in other sectors like frozen foods and pasta & noodles will improve overall growth prospect for the food industry. With social distancing measures across the globe, consumer shopping habits are changing. As is the case for many companies, adjusting business strategy to cater the changing consumer behavior and demand will be critical for Danone to ride out the crisis.

Scope

• Food sector sales to offer some resilience to Danone, amid the sales slowdown caused by pandemic
• Danone’s food sales growth is expected to compensate for decline in other industries in 2020
• A lack of diversification in Danone's food business means that it should focus heavily on defensive strategies in its core areas
• A decline is projected in Danone's non-alcoholic beverages business due to weak demand for soft drinks during the crisis, particularly in its Asian market
• Food industry is expected to be a savior for major conglomerates during the pandemic

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