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France's Danone makes play for private label market share as price hikes ease

FILE PHOTO: Dairy products of French food group Danone in a supermarket in Nice

By Richa Naidu

LONDON (Reuters) - Danone is recouping some of the market share it lost to retailers' private label brands with high prices, it said on Thursday, winning both cash-strapped and wealthy shoppers.

In the wake of the pandemic and subsequent supply chain crunch, input costs across commodities and raw materials sky-rocketed, prompting consumer companies to sharply raise prices which drove some customers to retailers' own label goods.

In recent quarters, companies like Danone, Nestle and P&G have said they plan now to ease price hikes and invest more in improving products and launching new ones to win back share. "The low-price segment in Danone's categories is growing fast, but the high price segment is also growing fast -- but the middle segment is a bit squeezed," CFO Juergen Esser said in an interview following a sales update.

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Consumers are either trying to get value for money with cheaper products, or through additional benefits in products that come with innovation, he added.

"We are winning share with our branded products categories; we see private labels not winning any more and decreasing in a number of countries," he added.

Esser gave Danone's dairy business in Europe as an example, saying it has introduced several "differentiated products" that are high-priced, but is also selling more affordable brands.

(Reporting by Richa Naidu;Editing by Elaine Hardcastle)