KEY INTERVIEW: Kerry on an Acquisition Spree to Tackle New Nutritional Platforms
02 Nov 2015 ---- Kerry, one of the world’s largest food ingredients manufacturers, recently announced a record $735m acquisition spree in order to boost its portfolio of innovative taste and nutrition solutions. The Functional Ingredients & Actives business has four core focus areas: Free From, Better for You, Good for You and Tailored for You. Albert McQuaid is the Functional Ingredients and Actives Chief Technical Officer and he spoke to FoodIngredientsFirst about how Kerry is taking the nutritional food market, one sector at a time.
“While the food industry as whole is consistently experiencing growth of around 0-2%, the general wellness and nutrition segment is experiencing a much higher level of growth of more than 7% CAGR. In response to this ongoing trend, Kerry formalized its Functional Ingredients and Actives division five years ago, sending a clear message that this area was part of its global strategy for growth,” explained McQuaid.
“There are four main areas that the division is focusing on, including Free From, which removes components of foodstuffs and is growing at double digit rate currently; Better for You also looks at reducing particular ingredients, but these tend to be unhealthy ingredients like salt, sugar or fat. Of course, they need to be compensated for, not just for taste and texture purposes, but often for functional purposes as well. The Good for You area adds ingredients to improve the nutritional quality of foods; currently the addition of protein, fiber or healthy fats is very popular; and finally, the Tailored for You area, which gives consumers with specific nutritional needs options to further their diet if required,” says McQuaid.
“By focusing on these areas, we know that we can use all the expertise that Kerry has amassed over the years to provide a unique offering that provides an overlap of the best in taste and nutrition. This is the strength of the company and the emphasis of our strategy.”
To be faced with the reformulation of an existing product is a regular task for McQuaid. “We often have to look into a reformulation of a product, for any number of reasons, for example it could be the reduction of sugar in a ready meal. In this case, to reduce the sugar by up to 30% but maintain the taste for the consumer is essential, not just for the sweet taste, but also to maintain the texture of the product. If we need to replace an ingredient, then we have to ensure that it is a natural ingredient that is recognisable on the labelling, which presents another, newer, challenge.”
According to McQuaid, the food industry is experiencing a very dynamic time. The traditional brands and products are finding that consumers are moving away from them in favor of the chilled and fresh products. In supermarket terms, consumers are moving from the center aisles to the perimeter of the store where the fresh convenience lies. Companies like Kerry have a role in keeping up with trends and working with food processors to ensure that their products adapt to consumer needs, says McQuaid.
Much of the new technology in food trends is consumer-lead but it is the role of food ingredient manufacturers to spot certain trends before they become popular, says McQuaid. Kerry implements its Rapid Fire Development program in key global trend centers like London, Chicago and Shanghai and looks closely at their niche, craft and high end offerings. The process takes those small new trends and tries to predict which will influence the major trends of the future. In this way they can see a way to make the products involved in the trend on an industrial scale, and how to ensure that customers have a way to quickly take up the trend as it becomes mainstream. This allows the customer to walk away with a product prototype within three days, that can be brought to market on an industrial scale.
There is clearly an overlap in the four main areas that Kerry focusses on and in some cases customers need to gauge whether a forthcoming trend will be determined by what the consumer desires, or more led by the industry.
Kerry’s new €100m Global Technology & Innovation Center, just outside Dublin, Ireland, seeks to pre-empt trends and give customers all the resources they need in order to create new products. “The center employs 800 staff and boasts six customer food and beverage suites, 14 technical laboratories and 250 food scientists who work solely on application projects that give customers the expertise to bring innovations to market. This approach gives the customer a chance to liaise with us at all times and to see their product in a semi-industrial environment before taking it to market.”
Ultimately, the most important factor is taste. While Kerry has a huge focus and experience in nutrition, the taste of the product is what the consumer will assess the final product on. McQuaid emphasizes its positive position in continuing to develop its own technology and research into taste and particularly how it can be manipulated. “Technology is being employed to change taste perceptions and this can support a product reformulation that may reduce salt or sugar, for example. We have reached a threshold, but we need to develop new technology to move forward even more and the challenge will be to incorporate natural ingredients.”
“Acquisitions such as those we have made recently are key to moving forward with innovations,” says McQuaid. “Red Arrow, a leading supplier of natural smoke flavors and authentic natural savory grill flavors, fits our ‘authentic’ approach to bringing new smoking technologies that can be used beyond flavor, for example for preservation and color applications, while Island Oasis covers a broad range of all-natural premium cocktail mixes and customized beverage solutions for foodservice applications. Foodservice is an area that we have identified as being of huge importance as it covers convenience and the out of home arena, which is becoming more important to consumers.”
The core focus for acquisitions centers around four main pillars: authentic taste, enhancing nutrition, emerging markets and foodservice. These pillars, linked to the four areas of growth mentioned previously, give Kerry a very solid basis on which to build its future and its relationships with its customers. The focus also allows for the involvement of all stakeholders in the development of the best and most modern form of taste and nutrition possible.
By Kelly Worgan
