Danone’s facility outlay banking on baby allergy rise to fuel product demand

By Will Chu

- Last updated on GMT

Attending today's opening ceremony, Carola Schouten (left), deputy prime minister of the Netherlands and minister of agriculture, nature and food quality.©Danone
Attending today's opening ceremony, Carola Schouten (left), deputy prime minister of the Netherlands and minister of agriculture, nature and food quality.©Danone
Danone has taken another step in realigning its company vision with the opening of a new €240m facility in the Netherlands that will primarily concentrate on specialised infant formula.

The investment, which represents one of Danone’s largest in its European network in the last ten years, will also produce foods designed to appeal to infants diagnosed with cow’s milk protein allergy.

“Producing such highly specialised infant formula, our new facility builds on the scientific heritage of Nutricia, coupled with the latest green technologies,” ​said Veronique Penchienati -Bosetta, executive vice president, Danone specialised nutrition.

“At this facility, we’ll be producing food for vulnerable babies; and we’re also doing everything we can to preserve a healthy and clean environment for future generations,”

The facility, based in Cuijk in South-East Holland, will adopt a hydrolysation manufacturing process in which cow's milk proteins are broken down – or 'snipped' – into smaller protein fragments.

As a result, the immune system of a baby with cow's milk protein allergy is less likely to trigger an allergic reaction.

At full capacity, Nutricia Cuijk will produce more than 600 different products – including the Aptamil and Nutrilon brands.

Nutricia Cuijk also commits to sourcing dairy ingredients exclusively from Western Europe – the region with the lowest dairy farming CO2 emission rates, accord to a recent Food and Agriculture Organisation (FAO) report.

Netherlands a ‘dairy country’

“Danone's Nutricia Cuijk facility is not only a monument to innovation and sustainable production, but also a recognition of the Netherlands as a dairy country,”​ said Carola Schouten, deputy prime minister of the Netherlands and minister of agriculture, nature and food quality.

“With the opening of this factory, Danone again contributes to the Dutch Topsector know-how and our expertise in specialised nutrition."

Cow’s milk protein allergy (CMPA) is an abnormal response by the body's immune (defence) system in which proteins in a food (in this case cow's milk) are recognised as a potential threat.

According to Danone, around 2-5% of infants will develop cow’s milk protein allergy within the first year of life.

The prevalence of this allergy has led to a demand for specially formulated milk products. According to one document​​ ​between 2006 and 2016, prescriptions of specialist formula milks for infants with CMPA in the UK increased by nearly 500% from 105 029 to over 600 000 a year.

Similar research has identified the UK’s National Health Service (NHS) spending on these products jumping by nearly 700% from €8.9m (£8.1m) to over €66.5m (£60m) annually.

These figures have led to criticism​amongst some in the medical community. Writing in the British Medical Journal, Dr Chris van Tulleken from University College London said babies’ CMPA allergy might act as a ‘Trojan horse’ for the €44bn global formula industry.

He highlighted the condition as helping firms form relationships with the paediatric profession adding, “Epidemiological data give no indication of such a large increase in true prevalence [of the condition].​

“The extensive links between the formula industry and the research, guidelines, medical education, and public awareness efforts around CMPA have raised the question of industry driven overdiagnosis.​

Industry response

Citing current regulation, The British Specialist Nutrition Association (BSNA) said, “We do not believe that the WHO code precludes all interaction between healthcare professionals and industry. ​

“Instead, the code seeks to limit and define this interaction so as to manage potential conflicts of interest...​

“We also recognise the need to put in place policies to ensure that potential conflicts of interest can be managed and avoided. The measures in the Infant Formula [Nutrition] Industry (INI) code are in line with the WHO code, UK regulations, the ABPI code and GMC guidance.”​

Despite the controversy, Danone’s Specialised Nutrition arm posted​ net sales growth of +5.9% in 2018 on a like-for-like New Danone basis, which takes into account the firm's acquisition of US consumer packaged food and drinks firm WhiteWave in April 2017.

In Early Life Nutrition, sales growth was slightly negative in the fourth quarter. Sales growth was solid and broad-based outside China, with a material acceleration in most European countries and increased contribution from Africa, the Middle-East, and the US.

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