Kerry Group has released the annual overview of its financial performance in 2019, outlining the need for fast-moving product development to deal with “unprecedented disruption” from new entrants bringing fragmentation to the marketplace. Particular attention has been given to the growth of the company’s plant-based segment amid booming consumer demand for “clean label” and “next generation” offerings. The group reports a revenue increase by 9.6 percent to €7.2 billion (US$7.8 billion).
“Our markets and the end‐to‐end supply chain are experiencing unprecedented disruption, as consumers are demanding more than ever before and traditional business models are being challenged as a result. What consumers want from food and beverage offerings is changing at pace. They want great tasting products that nourish their bodies, enhance their lives and are sustainable for the planet,” states Kerry.
“New entrants and challenger brands have added significant fragmentation to the marketplace. Key for customers to win in this fast‐moving environment is the ability to bring more products to market and to do so quicker. This changing marketplace is creating a significant opportunity for enterprises that can deliver on these new requirements,” it adds.
The group’s Taste & Nutrition category highlights a revenue increase in 2019 by 12.5 percent to €6 billion (US$6.5 billion), while its Consumer Foods category reports a revenue decrease by 2.4 percent to €1.31 billion (US$1.4 billion).
During the year, the group completed 11 acquisitions at a total consideration of €561.7 (US$608 million). These investments were aligned to the group’s strategic priorities for growth, bringing additional taste and nutritional technologies, expanding its presence in developing markets and adding to its foodservice offerings.
Over the past weeks, Kerry has been working with its team in China to manage the ongoing developments relating to COVID-19. “Our first priority remains the safety of our people and their families. Our team in China is taking all appropriate protective measures in our facilities and we are working with the Chinese authorities, our customers and other stakeholders to manage through the situation. We have included in our full year guidance the estimated first quarter impact on our China business,” states the company.
Regional performance
Kerry’s reported revenue in the Americas region increased by 16.5 percent to €3.2 million (US$3.5 million), reflecting 2.7 percent volume growth. The group reported plant‐based offerings in this region delivered a particularly excellent performance, as customers here continue to seek “clean label” and “next generation” offerings.
Success in the Americas was complemented by the acquisition of the coatings and seasonings business of Southeastern Mills (SEM). The Dairy segment benefitted from the ongoing evolution of the ice cream category toward healthy indulgence and added wellness benefits. Meanwhile, the company’s Cereal & Sweet category remained challenged, while Meals was also impacted by “churn within the segment.”
Progress was noted for the integration of Fleischmann’s (FVC) business and Ariake USA. These were complemented by the acquisitions of Isoage Technologies, Biosecur Lab and Diana Food, all based in Georgia, US), which enhance Kerry's flavor and clean label technology portfolio.
In Europe, Kerry’s Beverage category achieved strong broad‐based growth across a number of sub‐categories, ranging from low/non‐ alcoholic beverage, tea and coffee to plant‐based offerings. There was a strong performance within Foodservice, as customers enhanced their beverage offerings across their menus, with a number of “better for you” and seasonal product launches incorporating Kerry’s botanicals, natural extracts and sugar reduction technologies.
Within the European Food category, Kerry’s Meat strong overall growth in plant‐based meat alternatives was outlined, supported by the launch of the Radicle portfolio of plant-based solutions. Growth in Snacks was boosted by a number of new launches and healthy snack products that incorporate Kerry’s Ganeden probiotics. The Dairy sub‐EUM was impacted by softer demand in the ice cream category during the period.
International dairy markets were relatively stable in the period, reflecting less volatility in global supply/demand dynamics. Russia and Eastern Europe delivered good growth, as Kerry continues to develop its presence and offering across the region. The group also completed the acquisition of Pevesa Biotech – a specialist plant protein isolates and hydrolysates business based in Spain that serves key nutrition applications.
In Kerry’s Consumer Foods range, reported revenue decreased by 2.4 percent to €1.3 million (US$1.4 million), reflecting a 2.2 percent reduction in volumes.The Richmond chilled sausage range delivered good results, led by growth in chicken sausages and the new plant‐based sausage that was launched at the end of September, along with a range of meat‐free products under the Naked Glory brand.
Chilled meals continued to be impacted by reduced promotional activity, while frozen meals reported favorable performance. As previously announced by the company, production was ceased in the ready meals facility in Burton, UK, in September, and the site was sold prior to the year end.
