Danone is stepping up research spending in China to develop more medical nutrition products for an aging population, and on Monday it opened a research and innovation hub in Shanghai. The site is the company's third OneBiome Lab after France and Singapore, and will work on areas that include gut bacteria.
CEO Antoine de Saint-Affrique said the company sees significant room in healthy aging and life support, pointing to Danone's "strong science" in proteins he called essential for muscles and mobility. He added, "At the heart of what we are doing is microbiota, which is at the origin of most diseases and which is a field where Danone was born."
Beyond popular items like Aptamil infant formula, Danone will roll out new products at the China International Import Expo this week, including a supplement aimed at long term weight management. Demand for its high protein yogurts has surged across markets amid interest in protein and gut health. Meanwhile, specialized nutrition - which spans infant formula and hospital tube feeds - led growth in the most recent quarter.
The company has been expanding its medical nutrition reach. Last year it bought Kate Farms - a company that produces plant-based medical nutrition for children - aiming to boost growth in the US, and it sees strong momentum in specialized nutrition across Asia-Pacific. With aging demographics in many countries, Danone is also moving beyond hospital tube-feeding products into more items sold over the counter at pharmacies.
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China is Danone's second-largest market and is expected to represent 12% of global sales in 2025. Apart from a Year of the Dragon baby bump in 2024, births are sliding - there were just under 8 million last year vs. about 17 million in 2017. With fewer babies, Saint-Affrique said Chinese parents want formula makers to invest more in science, and he expects further consolidation in infant milk formula, "driven by better quality, better science." He said Danone is open to options but more likely to grow sales organically.
Policymakers describe the "silver economy" as an older generation that reaped gains from globalization, a 20 year real estate boom and fast economic growth. Roughly 360 million people in China, about a quarter of the population, were born in the surge from 1962 to 1975.
Danone's research push targets three demand lines Saint-Affrique highlighted: keeping people mobile, managing microbiota, and supporting health with medical nutrition. That fits his five year turnaround built on exiting weaker units and leaning into healthier food and specialized nutrition. He also expects Danone's mix - currently heavier in early life products - to become "more balanced" over time as medical nutrition catches up.
For portfolios, the setup is clear: a large China market shifting older, a consumer focus on protein and gut health, and a business where specialized nutrition is the growth leader. Execution in China - from lab-driven innovation to pharmacy shelves - is what could turn that thesis into revenue.
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