Danone, the world’s largest yoghurt producer, has turned its Russian business around by finding growth in the most unlikely of places — Siberian bogs.
Danone has injected cloudberries, amber-coloured fruit grown in swamps and bogs, into its Actimel yoghurt, while sister brand, Activia, has adopted a thick, peasant-style variant.
That’s helped the two flagship brands return to growth.
Profitability has also improved, since the French company shifted to more innovative products, according to Bernard Ducros, head of the business in Danone’s fourth-largest market.
“We reduced our exposure to low value-added products, like ultra-pasteurised milk,” Mr Ducros said in an interview in Moscow.
“That is a low-margin segment for us, and we don’t want to buy volumes there, via promotions and price reductions,” he said.
Danone has faced difficulties in Russia, once its largest market, over the last two years.
The ruble has plunged and inflation spiked, due to the low oil price and geopolitical tensions.
Brewers, such as Carlsberg and Heineken, along with Dove soap-maker, Unilever, have also grappled with ebbing demand there.
Last year, Danone’s Russian unit introduced set yoghurts, a type of thick yoghurt where fermentation occurs inside the tub. Danone had a 21.8% share in the country’s dairy market, which is worth about $8bn (€7.1bn) a year.
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