PARIS: Danone, the French food group, benefitted from cutting prices, innovation and "resetting" its brands last year, achieving volume growth at a time when many consumers were cutting back.

The company saw volume sales improve by more than 5%in 2009, including an uptick of almost 9% in the final quarter.

Franck Riboud, its chief executive, said "the most important thing for me ... is to be sure that Danone will not suffer from the crisis, and to leverage the crisis to reinforce its position."

"We are now entirely turned to 2010, with the ambition to continue to develop our categories, to further strengthen our brands, to keep increasing our competitive position and to continue to expand our cash flow generation."

The weak labour markets in the US and Western Europe, and the absence of further fiscal stimulus measures, mean it is unlikely there will be a "solid rebound in consumption" this year.

However, Riboud suggested that the situation is not as adverse for branded goods as many observers have asserted, and that retailers are also facing challenges of their own.

"In the last five years, everyone was saying that 'brands are dead' and the hard discounters are gaining share ... brands are gaining market share," he argued.

"The context is not as easy as retailers just running after being the lowest-priced proposition for the consumer."

Overall, Riboud said that the owner of Evian and Volvic had seen its market share improve in 90% of the countries and categories in which it had a presence in 2009.

One particularly effective strategy has been what he described as the "giraffe" – providing more volume for the same price, such as by offering 10% extra free.

In the dairy sector, the company's "key brands", which include Activa, Actimel and Danacol, were credited with "driving" growth, particularly in the US, Brazil, China and Japan.

More broadly, Danone has sought to "reset" its brand strategy, both in terms of prices – which have declined by an average of around 5% – and with regard to innovation.

"The Reset exercise has led to us to adjust the range depending on the country ... to launch new products, to launch new formats, with bigger formats in some cases," Pierre-André Terisse, its cfo, said.

"What I said about the repositioning also translates to innovation in our key brands ... we are also adapting our formats to local tastes."

Its activities in this field have included the launch of Activia Fiber yoghurt in the US, and Activia Breakfast pots in Bulgaria, Argentina, Brazil and Portugal.

Similarly, Danonino yoghurt has been rolled out in several European nations, with Densia also being introduced in Argentina and Brazil, and Light & Fit single-serve pots in the US.

Bebelac has similarly been added to its babycare portfolio in China, with various other products hitting shelves in countries ranging from Italy and Germany to Indonesia.

Data sourced from Danone; additional content by Warc staff