Danone Dumps Chinese Purified Water Company
Danone has offloaded its Chinese purified water company, Robust Co. Ltd., to local company Win Holding for an undisclosed fee.
Instead, the French company will push Evian – which costs up to seven times more than domestic equivalents – to China’s middle class.
Two other of its mineral water brands will also be promoted in the Chinese market, following feedback which suggests the nation’s more affluent shoppers prefer imported SKUs.
'In order to build a strong sustainable business model, Danone has redefined the company strategy in the water business to adopt a more focused approach on natural mineral water,' Danone said in a statement.
Song Liang, an independent industry analyst, told English.Caixin.com that "Danone has been offloading Chinese businesses since late 2015 and now it focuses more on marketing, branding and importing its foreign products to China because they're favoured by Chinese customers."
Danone bought 92% of Robust in 2000, but failed to capture a decent share of the Chinese bottled water market dominated by local brands such as Wahaha and Nongfu spring, Song added.
Danone had previously sold off its baby formula division to a unit of state-linked China Mengniu Dairy last year in a market stagnating from China's one child policy, in exchange for a larger stake in the company .
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Peter Donnelly. To subscribe to ESM: The European Supermarket Magazine, click here.