Danone to step up efforts in China

French food giant increases supply of health-focused products to win more customers

Danone SA, the French food producer, plans to distribute more health-focused food and beverages in China, in an effort to keep up with changing local lifestyles, according to a senior executive.

Bertrand Austruy, Danone's executive vice-president, said he believes in the mid-and long-term potential of the Chinese market, and sees the potential for growth, and plenty of opportunities.

He noted how rising incomes and greater urbanization is allowing people to become more choosey about what they eat.

"We believe that consumption upgrade is also about the upgrade of consumption mindset and we have noticed the rising awareness of Chinese consumers about nutritious and healthy diets. We will continue to innovate, to promote a healthier, science-based and properly-structured diet in China," he said.

The Paris-headquartered company operates nine plants, including China's first factory to export enteral nutrition products and related medical devices to markets in Europe and the US.

"China's evolving business environment and opening-up has contributed to Danone's steady growth in the country," he said, adding that the company believes that China's ongoing consumption upgrade and booming e-commerce business will benefit not just domestic sales, but also other parts of the world.

According to Austruy, the firm will continue to research innovative, health-focused products. Danone will also continue to optimize the nutritional quality of its products, such as its recent drive to reduce sugar, becoming the leader in low-sugar vitamin beverages in the Chinese market.

The company first entered China in 1987. Today it is the company's third largest market after the US and France, generating almost 2 billion euros ($2.29 billion) of sales in China last year, 7 percent of its global turnover.

Xia Hong, a marketing professor at Beijing Technology and Business University, said food and drink consumption is normally a practical indicator of the economy and the population size. In China, Xia said, not only are people consuming more, but also more types of food, as people become more sophisticated and look for convenience.

"The demand for juice, soft drinks, yogurt and milk will provide all sorts of opportunities for the food and ingredients business," Xia said.