Groupe Danone is to launch a new beverage in China. The company plans to change its market positioning for its drinks business in the country as it looks to cater to increasingly sophisticated consumers and survive a rise in the price of raw materials.

Danone will launch a healthy beverage aimed at urban consumers through its joint venture with Hangzhou Wahaha Group Co., China's largest drinks company. The drink is a mix of fresh milk and fruit juice called Nutri-Express.

Danone believes that so-called functional drinks, with ingredients intended to bring health benefits, are more profitable and will become the fastest-growing drinks category in China over the next five years.

Beverages constitute around 85% of Danone's Chinese business.