(Nov 2): Danone is ramping up research investment in China as it plans more medical nutrition products aimed at the country’s ageing population.

The French maker of protein-rich yogurts and fortified drinks opened a research and innovation centre in Shanghai on Monday — its third so-called OneBiome Lab after France and Singapore — to focus on areas including gut bacteria.

“There is a big opportunity around healthy ageing and around our life support,” Chief executive officer Antoine de Saint-Affrique said in an interview, citing the company’s “strong science” in proteins that he said are essential for muscles and mobility. “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.”

While Danone’s specialised nutrition products such as Aptamil infant formula are popular in China, it also knows its second-largest market accounting for 12% of global sales in 2025 is going through a profound demographic shift. Outside a baby boom in the Year of the Dragon in 2024, birth rates are plummeting, with just under eight million last year compared with about 17 million in 2017.

Meanwhile Chinese policymakers refer to a “silver economy” to describe an older generation that benefitted from globalisation, a two-decade real estate boom and rapid economic growth. About 360 million people in China, or roughly a quarter, were born during a population surge between 1962 and 1975.

Danone’s research aims to capture growing demand for maintaining mobility, managing microbiota, and supporting health through medical nutrition, Saint-Affrique said. It will also launch products at the China International Import Expo this week, he added, including a supplement for sustained weight management.

Saint-Affrique is five years into a turnaround of the French dairy group, based on offloading underperforming businesses and pushing its healthy food portfolio.

Demand for Danone’s high-protein yogurts has soared across markets amid a consumer craze for protein and gut health. The specialised nutrition business, which includes infant formula and hospital tube feeds, has generated less buzz but was its fastest-growing business in the latest quarter.

Danone last year acquired Kate Farms, which makes plant-based medical nutrition products for children, to help drive growth in the US, while the specialised nutrition market is also growing strongly in the Asia-Pacific. 

Given the ageing population in many countries, Danone has been looking to expand beyond specialised tube-feeding products used into hospitals into more over-the-counter items to be sold at pharmacies.

Saint-Affrique said that with fewer babies, parents in China have higher expectations on formula makers to invest in science to improve. Still, he expects Danone’s sales — currently skewed more to early life products — to become “more balanced” with medical nutrition catching up in the future.

The CEO also predicted more consolidation in China’s infant milk formula industry, “driven by better quality, better science” to bring value-added products to the market. Though Danone is open to options, the company is more likely to focus on growing sales organically, he added. 

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