GLOBAL - Food processing and ingredients group, the Kerry Group, has seen a good start to the year maintaining the positive momentum reported in the last quarter of 2014.
The latest company report shows that while global retail food and beverage markets continue to be challenged by consumer trends towards more convenient shopping formats and broader channels, demand for innovation in health / wellness and nutritional offerings provided solid opportunities for growth of Kerry’s Taste and Nutrition technologies.
Kerry achieved an improved performance in EMEA markets.
American markets maintained positive momentum despite inflationary pressures in Brazil.
While strong business development continues to be achieved in Asia, reported growth slowed slightly due primarily to high inventory levels in China.
Market conditions in the UK and Irish consumer foods sectors have broadly stabilised.
The repositioned Kerry Foods portfolio performed well benefiting from snacking trends and a good recovery in meal solutions.
Business volumes grew by 2.5 per cent on a group-wide basis – slightly ahead of the level of growth in the fourth quarter of 2014.
Net pricing was 2.4 per cent lower, reflecting reduced raw material costs.
Reported revenues increased by 4.5 per cent compared to the first quarter of 2014, reflecting the business volume growth, lower pricing, 6.9 per cent positive translation impact due to significant currency tailwinds and (2.5 per cent) business disposal impact.
The company said that business trading performance continued to improve reflecting group-wide business operational improvements, improved product mix and the portfolio repositioning in Kerry Foods.
Kerry’s Taste and Nutrition technologies and Functional Ingredients and Actives divisions achieved sustained business development across developed and developing markets.
Business volumes increased by 2.9 per cent while pricing was 2.3 per cent lower relative to the first quarter of 2014.
Divisional trading profit margin increased by 40 basis points as a result of the Group’s business performance and efficiency programmes.
While retail pressures, channel and structural changes in the UK and Irish consumer foods markets continue to have an impact on market competitiveness, the chilled convenience and snacking market sectors reflect more stabilised trading market conditions, Kerry said.
Kerry Foods said its repositioned portfolio has achieved encouraging results to-date.
In the first quarter of 2015, divisional business volumes increased by 1.4 per cent relative to the first quarter of 2014, while pricing fell by 2.6 per cent.
The improved business mix and trading performance contributed to the division’s 20 basis points increase in trading margin.
In the meal solutions sector, Kerry Foods achieved a strong performance in its chilled ready meals accounts in the quarter.
Volumes also increased in the frozen meals market. Retailer EDLP pricing strategies impacted performance in the UK sausage market. Mattessons Fridge Raiders maintained good growth in the meat snacking sector.
In January, Rollover Ltd was acquired further extending Kerry Foods’ ‘hot-to-go’ offering and broadening distribution in the leisure and foodservice segments of the UK market.
The customer branded dairy spreads category was impacted by heavily promoted branded butter offerings.
In Ireland the relaunched Denny Gold Medal sausage brand continues to perform well. The Charleville cheese brand achieved good growth in the quarter.
Cheestrings continues to invest in broadening its geographic market reach in mainland European markets.
The ‘Yollies’ children’s yoghurt snack introduced to the Irish and UK markets during 2014 continues to achieve encouraging market penetration.
As previously announced, the Kerry Foods’ Direct-to-Store business in the UK was disposed of in January 2015.
TheMeatSite News Desk