Kerry observes robust performance in consumer foods and foodservice segments amid pandemic recovery

27 Oct 2021 --- Kerry has benefitted from improved overall market conditions through the third quarter period, observing good growth in retail boosted by launches incorporating its taste solutions, proactive nutrition portfolio and Radicle plant-based range.

The taste and nutrition company’s business volumes in emerging markets increased by 15.8% with strong growth across all regions. The group further reports that its acquisition of Niacet was completed on September 14 and its integration is underway.

Strong volume growth in Consumer Foods
In its latest overview, Kerry reported revenue increased by 6.3% in the Q3 period, reflecting a volume increase of 8.2%, increased pricing of 0.7%, an adverse translation currency impact of 3.6% and net contribution from acquisitions and disposals of 1.0%.

Meanwhile, group trading profit margin increased by 60 basis points (bps), reflecting a 60 bps improvement in Taste & Nutrition and a 20 bps improvement in Consumer Foods, driven principally by operating leverage.

Kerry’s Consumer Foods segment observed strong volume growth of 5.6% through the Q3 period.Kerry’s Consumer Foods segment observed strong volume growth of 5.6% through the period, led by meal solutions, dairy snacking and meat-free sales.

The company’s Meat division delivered good overall growth in the period, driven by the continued strong performance of Richmond’s meat-free range and the performance of Fridge Raiders. The sale of Kerry’s Meat and Meals business was completed on September 27.

Chilled meals achieved very strong growth supported by health and wellness ranges. Dairy also performed well, led by strong growth in the Strings & Things snacking range, with the spreadable butter ranges delivering a good overall performance.

Regional stability
The company notes that robust consumer demand boosted retail performance, while reopened foodservice channels are catering once again to out-of-home social engagement and food consumption.

“We are pleased with overall performance through the period, reflecting continued good growth in our retail channel and strong performance in foodservice. The Americas had good overall volume growth, Europe delivered an excellent performance, while growth in APMEA remained strong with varying conditions across the region,” comments Edmond Scanlon, CEO.

“A number of our end use markets had strong performances, with Beverage in particular achieving excellent growth,” he continues. “We have made some significant strategic developments throughout the year. We further enhanced our position as a market-leading taste & nutrition company, completing the acquisition of Niacet and the sale of our Consumer Foods’ Meats and Meals business.”

“Our outlook for the full year is unchanged and we expect to deliver strong volume and earnings growth.”

Americas region
Overall volume growth in the Americas was at 6.6%, with retail channel growth led by Kerry’s Beverage, Snacks and Bakery business. The foodservice channel here continued to deliver good performance, with significant activity across quick service restaurants, fast casual and casual dining, Kerry reports.

North America delivered good overall growth against a backdrop of supply chain and labor challenges impacting industry performance through the period. 

Retail was boosted by robust consumer demand, while reopened foodservice channels benefitted the out-of-home dining segment.Within the North American retail channel, the Beverage EUM achieved excellent growth with increased demand for proactive nutrition, new innovations with taste systems and natural extracts, and a number of launches in plant-based beverages. 

Within the Food EUM, Snacks had good growth supported by new launches in healthier snacking. Overall performance within Meat was solid, with strong business development in plant-based alternatives. Performance in Meals was impacted by product repositioning in the category, while Bakery delivered good growth through taste systems and cleaner label solutions.

Manufacturing has commenced at Kerry’s new facility in Georgia, US, which will see a significant increase in the level of operational activity in the coming months

In Latin America, Brazil achieved strong growth driven by performance in Beverage and ice-cream. Growth in Mexico was led by strong growth in Snack applications, while overall performance in CACAR was solid.

Europe region
Overall volume growth of 10.6% was observed in Europe, with an “exceptionally strong” performance in Q3. The retail channel here delivered strong growth led by Meat, Dairy and Bakery.

Meanwhile, foodservice achieved excellent growth with a significant increase in out-of-home consumption.

Growth in the retail channel was driven by performance within the Food EUM. Meat achieved excellent growth through a number of plant-based meat alternative innovations, launches with natural preservation and increased demand for healthier coating systems. 

Dairy achieved strong growth through taste solutions in premium and dairy-free ice cream ranges, while Bakery & Confectionery delivered a very strong performance with a number of clean label and indulgent innovations.

The foodservice channel achieved excellent growth reflecting lower prior year comparatives, increased consumption and extensions to menu ranges as the year progressed. Russia and Eastern Europe delivered excellent growth across both retail and foodservice channels, led by Meat and Snacks.

APMEA region
Overall volume growth of 12.5% was observed in Asia Pacific/Middle East/Africa (APMEA),. The retail channel here delivered strong growth led by Beverage, Meat and Snacks.

Foodservice channel delivered a good overall performance despite challenging conditions in some local markets.

The region delivered a strong overall performance in the period, led by very good growth in China and the Middle East. 

In the retail channel, excellent growth was achieved within the Beverage EUM with solutions incorporating Kerry’s botanicals, natural extracts and TasteSense sugar reduction technology in new innovations across tea, coffee and other beverages.

Within the Food EUM, Meat had strong growth through local authentic taste innovations, while Snacks performed well as a result of increased demand from regional leaders for taste solutions.

The foodservice channel delivered strong overall growth led by performance in Beverage, Meat and Meals, while performance was impacted in places by local COVID-related restrictions, most notably in South East Asia. The group made good progress in the development of its new Taste facility in Durban, South Africa, in the period.

Edited by Benjamin Ferrer