Danone’s high-protein bet pays off as dairy giant posts solid growth

Danone has reported full-year 2025 sales of €27.3 billion (US$28.6 billion), up 4.5% on a like-for-like basis — a measure that strips out currency swings and acquisitions to show underlying business performance — with double-digit growth in its high-protein portfolio and strong performance in Specialized Nutrition underpinning the French dairy giant’s continued recovery. 

Volume and mix contributed 2.7% to growth, with pricing adding 1.8% — a balance CEO Antoine de Saint-Affrique frames as “broad-based, quality growth” driven by the company’s “health-focused portfolio.” 

“All categories and geographies contributed, with strong momentum in China, North Asia & Oceania, and sustained progress in Europe,” de Saint-Affrique says. “We continued to perform, expand our recurring operating margin, improve ROIC, and generate strong free cash flow, while transforming the company and reinvesting in capabilities, science, and innovation.”

The results land as Innova Market Insights crowns “Powerhouse Protein” its number one food and beverage trend for 2026, with nearly 60% of global consumers actively pursuing protein for overall health.

High protein drives EDP momentum

Danone’s Essential Dairy and Plant-based (EDP) division posted 3.5% like-for-like growth for the full year, with high-protein formats delivering double-digit expansion across both Europe and North America. The performance mirrors broader industry momentum — dairy ingredient suppliers have been racing to address the formulation challenges that come with elevated protein levels, from texture and mouthfeel to off-flavor management.

In Europe, Activia returned to growth across the region, while the company’s high-protein portfolio continued its run of strong quarters. North America presented a more mixed picture: high-protein products “continued to grow at a double-digit pace,” but the broader yogurt portfolio “remains a work in progress,” according to the company.

Danone’s high-protein portfolio, including its YoPRO skyr range, delivered double-digit growth across Europe and North America in 2025.Coffee Creamers are “progressively regaining competitiveness,” with clean label innovation launched during Q4, while STōK cold brew coffee “is thriving.”

Specialized Nutrition delivers premium margins

The Specialized Nutrition segment — spanning infant formula, adult medical nutrition, and pediatric products — grew 7.4% like-for-like with a recurring operating margin of 21.7%, up 112 basis points year-on-year. China, North Asia & Oceania drove the standout performance, posting 11.7% like-for-like growth for the full year.

“Specialized Nutrition continued to grow strongly, equally driven by Infant Milk Formula and Medical Nutrition,” the company says of its Q4 performance in the region. Japan’s EDP business also delivered what Danone describes as “remarkable performance,” led by functional brands Activia (Bio) and Oikos.

Kate Farms contributed to a strong Specialized Nutrition showing in North America alongside the legacy Nutricia businesses.

Margin expansion and cash generation

Recurring operating margin reached 13.4%, up 44 basis points, driven by a 77-basis-point improvement in margin from operations. The company reinvested 59 basis points into advertising and promotion, product superiority, and capability building.

Recurring EPS rose 4.6% to €3.80 (US$3.98), while free cash flow hit €2.8 billion (US$2.9 billion). Net debt improved to €8.4 billion (US$8.8 billion) from €8.6 billion the prior year. The company proposes a dividend of €2.25 (US$2.36) per share, up 4.7%.

Sustainability credentials

Danone achieved worldwide B Corp certification in November 2025, with more than 200 legal entities now certified across 60-plus countries. The company also secured a place on CDP’s “Triple A” list for climate, water, and forests — a marker de Saint-Affrique points to as evidence of “recognized global sustainability leadership.”

Infant formula recalls acknowledged

The results come as Danone navigates an industry-wide infant formula contamination crisis that has prompted recalls from multiple manufacturers over cereulide-tainted ARA oil. Danone notes it “has been recalling, from relevant markets, batches of infant formula products” in response to evolving requirements from national food safety authorities.

“While recall processes are underway in coordination with authorities, the current financial impacts identified are not material,” the company states, adding that the impact assessment will be finalized once recalls are completed.

Danone’s 2026 outlook

Danone guides for like-for-like sales growth between 3–5% in 2026, with recurring operating income growing faster than sales, in line with its mid-term ambition.

“In a world that remains volatile, we remain disciplined and fully committed to our science-based and consumer and patient-centric approach,” de Saint-Affrique says. “We enter the year with confidence.”