Kerry revenues climb 19.3% to €8.8BN as “enhance and refine” strategy pays off

16 Feb 2023 --- The taste and nutrition giant has reported increased revenues driven by both volume growth and price hikes. The company’s taste and nutrition segment displayed strength last year, with volume increases across markets, regions and channels, while its dairy segment relied on price increases to boost revenues.

“We made good strategic progress in the year through development of our innovation platforms, footprint expansion and continued portfolio development,” says CEO Edmond Scanlon.

“We completed a number of acquisitions aligned to our strategic priorities of Taste, Nutrition and Emerging Markets and since year-end, we announced the potential sale of our Sweet Ingredients Portfolio, as we continue to enhance and refine our business to areas where we can add most value,” he continues.

Scanlon admits that there is “market uncertainty” but expects to achieve a 3-7% adjusted earnings per share growth on a constant currency basis in 2023, before the dilution from the potential sale of the Sweet Ingredients Portfolio.

Evolving markets
According to the company, consumers continued to seek new taste experiences, cleaner labels and added functional benefits through food and beverages in 2022.

“The cost-of-living crisis has resulted in many consumers looking for relative value options to meet their purchase preferences, depending on their available resources,” notes Kerry in its financial statement.

This is in line with Innova Market Insights’ Top Ten Trend for 2023, “Redefining Value,” which details how cost and value for money have become more important to more than half of F&B consumers worldwide. Today’s shoppers are increasingly exploring money-saving strategies, such as choosing lower-cost items and cooking from scratch. 

“Customers continued to prioritize the resiliency of their supply chains through this period of inflationary pressure. Innovation has become increasingly more targeted, as they seek to meet various consumer preferences within different price ranges,” explains the business.

“Customers are working with and looking for supplier partners to support them in addressing these current market challenges and opportunities, as they navigate through this dynamic operating environment.”

The company achieved an offsetting of its flat volume growth for dairy, despite high inflation, through a 36% increase in prices. 

According to the company, consumers continued to seek new taste experiences, cleaner labels and added functional benefits through food and beverages in 2022.Growth across regions
Kerry’s business volume in emerging markets increased by 10.4%, with robust growth in the Middle East, Southeast Asia and in South America. The outlier being China, whose zero-Covid policies harmed business activity.

In the Americas region, growth was led by meat, beverage and bakery. With an “excellent performance,” according to Kerry, in Meat and Meat Alternatives across food preservation, culinary taste, texture systems and clean-smoke technologies. 

Bakery achieved growth through increased demand for functional solutions and texture systems.

In the LATAM area, Mexico and Brazil were the leaders in growth.

In Europe, snacks lead the way through savory taste launches and growth in dairy through innovations in ice cream and dairy alternatives.

Meanwhile, in the APMEA region, local authentic innovation taste innovation with regional leaders consolidated the growth in snacks, while meat was led by savory taste and smoke innovations.

Tapping into sustainability
The business explains it made good progress in its sustainability strategy and commitments, edging closer to its Scope 1 & 2 55% reduction target by 2030.

“The Group achieved a 48% reduction in Scope 1 & 2 carbon emissions, while strong progress was made in reducing food waste in Kerry’s operations by 32%,” explains the business.”

Kerry also expanded this year its R&D budget, which amounted to €303 million (US$324.35 million), up from €297 million (US$317.92 million) in 2021.

By Marc Cervera