Danone, maker of Activia yoghurt, Evian water and Aptamil infant milk said it expected like-for-like 2023 sales growth of between 4% and 6%, having previously forecast 3-5% growth.

Danone, which expects a gradual slowdown in inflation this year as well as productivity gains, reiterated its forecast for a moderate improvement in recurring operating margin for the year.

Danone said sales rose 10.5% like-for-like to €6.96 billion in the first quarter, beating expectations for 7.3% growth in a company-compiled consensus of 18 analysts. This was its fastest quarterly growth rate in a decade.

All three businesses – Essential Dairy and Plant-based, Specialised Nutrition and Waters – made a contribution to growth, it said.

“While this is encouraging progress, there is still much to be done. We remain fully focused on delivering on our Renew Danone agenda, setting a solid base for long-term sustainable value creation.” Chief Executive Antoine de Saint-Affrique said in a statement.

Danone, like its rivals Nestle and Unilever, has increased prices to cope with surging commodities and supply chain costs but faces a challenge when it comes to the extent of price hikes before even affluent shoppers decide enough is enough.

Danone increased its prices by 10.3% during the quarter while sales volume remained positive, up 0.2%.