Kerry Combats “Weak” Market Conditions to Report “Sustained” Growth

02 Nov 2016 --- Kerry Group has battled "weak" global market conditions and uncertainty around Brexit to report "sustained volume growth" in the nine months to the end of September.

The Irish food and ingredients group reported a 3.2 percent increase in volumes in the period, as it affirmed its full-year earnings guidance in its latest trading update.

It said that growth in adjusted earnings per share in 2016 is expected to be towards the middle to lower end of 6 percent to 10 percent range.

Its volume increase was managed amid a number of challenges said Kerry, including currency volatility, geopolitical issues in developing regions and a more fragmented retail landscape as consumers switch to health & wellness offerings. 

In the nine month period, overall pricing was down 2.2 percent against a backdrop of 4.5 percent lower raw material costs.

Across its Taste & Nutrition unit, there was 3.4 percent volume growth, driven by solid growth in Latin America and US consumers embracing health & wellness trends. Pricing across the unit was down 2.2 percent.

In Taste & Nutrition, there was a strong showing across the bakery and meat sectors driven by Kerry's fermentation technologies, while clean label trends also helped growth through dairy and culinary applications in the school meals sector throughout the Americas region.

There was good growth in Mexico and Central America but EMEA markets continued to be challenging for Kerry’s Taste & Nutrition unit, as it was hurt by price deflation and geopolitical instability in some regional developing markets. 

Across Consumer Foods, Kerry overcame uncertainty caused by Brexit to report a solid business performance.

In the nine month period, business volumes grew by 2.2 percent. Pricing was 2 percent lower.

Consumer demand for dairy and meat snack offerings and prepared meals continued to provide good growth for the division. 

Chilled ready meals maintained solid growth and the launch of novel premium lines helped the frozen category. 

Across its consumer-facing brands, processed-meat brand Mattessons performed well as did Cheesestrings, boosted by encouraging brand growth in mainland Europe and the launch of brand extension Cheestrings Scoffies.