London-based activist fund Bluebell Capital Partners bought shares of the French group Danone and sent a letter to its leaders to review governance and strategy. He advises separating the functions of chairman and chief executive officer and calls for the replacement of the current CEO Emmanuel Faber.
Impact of COVID-19 pandemic
The disappointing results (published turnover down 3.6% in the first half of the year, profits lower than expected) were the main reasons for those actions. Due to the global crisis and the closure of bars and restaurants, the company lost an important outlet for its waters, an important activity of the group, alongside dairy products and infant nutrition. Four days after the letter was sent, Danone announced a vast plan to reorganize the group, including a severe reduction in the workforce: 2,000 jobs worldwide, including 400 in France.
French dairy market
France still stays one of the biggest dairy producers in Europe. The deliveries of raw cow’s milk were 0.6% higher comparing the period of January-November 2019/2020. At the same time, the intake of organic milk increased by 11.7%. The production of drinking milk and butter were also higher, but the output of cheese was 1.9% smaller. The categories that noted the biggest increases in terms of production were milk and cream powders – the numbers rose by 21.8%.
Export of French dairy products
The export of cheese, whey, and SMP declined by 4.2%, 1.8%, 2.6% respectively in the period of January-October 2019/2020. On the other hand, the export of bulk milk was higher by 18.4% and cream 5.9%.