Daily Newsletter

21 September 2023

Daily Newsletter

21 September 2023

Danone’s former Russia unit re-named H&N

The business was seized by the Kremlin in July.

Andy Coyne

Danone’s former operations in Russia have been re-branded as H&N, it has emerged.

The business, seized by the Kremlin in July, will now use the new brand – which stands for health & nutrition – on its products.

The Russian state-owned news agency Tass said the Danone Russia name had been changed earlier this month while another Danone entity, Danone Trade, has seen its name changed to H&N Trade.

Tass said the address of Danone’s old Russian website redirects the user to the H&N website and informed readers the new H&N logo features blue letters on a white background with a green leaf.

The agency said in July the shares of “foreign owners in the Russian structure of the dairy producer Danone were transferred to the temporary management of the Federal Property Management Agency”.

In the days after the Kremlin’s move, Danone asserted its legal ownership over the assets, which it underlined centred on its Essential Dairy and Plant-Based (EDP) division.

In a statement issued alongside the publication of its annual results, the Activia, Actimel and Evian brands owner said: “These changes took place without the knowledge of, or approval by, Danone. While Danone no longer retains control of the management of its operations in Russia, it remains their legal owner.”

The group said it would “deconsolidate” the assets, sparking a cash impairment of around €200m ($221.5m at the time).

Speaking to analysts after Danone published its results, CEO Antoine de Saint-Affrique said: “Given the sensitivity of the situation, I hope you will understand there is not much we can say at this stage other than the fact that we remain focused on people’s safety and on continuity of operations.”

Danone announced in October last year that it would shed its dairy and plant-based business in Russia.

Danone Russia, as was, is the country’s largest dairy company and has around 8,000 employees.

In the wake of the invasion of Ukraine, Danone halted its investment in Russia in response to the invasion of Ukraine but maintained its manufacturing and distribution of products “to still meet the essential food needs of the local population”.

Last month, Danone replaced its Russia-linked Russian dairy brand in Ukraine.

Previously, the Ukrainian product line was marketed under the Prostokvashino brand, which stems from Soviet-era cartoon series but iut has been re-named Prosto Nashe (literally translated from Ukrainian meaning “simply ours”).

The new brand’s portfolio includes milk, kefir, ryazhanka (a fermented milk product), sour cream and cottage cheese.

Food industry in Eastern Europe is highly fragmented

Per GlobalData estimates, the Eastern European food industry was valued at $180.5 billion in 2022 and is projected to grow at a CAGR of >4% by 2027. The top five companies together account for a value share of just 5.3% in 2022, with Mondelēz leading the pack. The Czech Republic, Poland, Romania, and Hungary were identified as high-potential countries, primarily due to the large size of their food industries, their high projected value growth rates, and their rising per capita expenditure.

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