Innovation on the menu for food giant

While innovation is paying off, revenues are still impacted by exchange rates

Kerry Group results may not have surpassed analysts’ expectations but they highlighted a strong performance by the food and ingredients company. Revenues and operating profit both increased, despite challenging market conditions, especially in the UK and Ireland. Creative and speedy innovation to meet demand for healthy, natural products is one of the secrets behind the group’s success last year, according to Kerry.

The company has invested heavily in technology and innovation in an effort to succeed in the increasingly competitive food market, spending more than €180 million on research and development last year alone.

Natural ingredients

The ingredients and flavours division grew 14 per cent last year, benefiting from an underlying trend in the industry to develop healthier and more natural ingredients, something which Kerry has cashed in on.

The food group brought significant innovation to the sliced meats market last year with the launch of Ireland’s first 100 per cent natural ingredients Denny deli-style ham. Richmond all-natural ham range was also successfully launched and received a favourable consumer response as the first 100 per cent natural ingredient ham on the UK market.

Last October the Group announced it is to invest €100 million in the establishment of a global technology and innovation centre in Kildare, the largest single investment in food innovation ever by a company in Ireland.

While innovation and moving toward more natural ingredients led to growth at the company, revenues are still impacted by fluctuations in exchange rates versus the euro, in particular movements in the US dollar and sterling exchange rates.

The group, which is Ireland’s third-biggest listed company, underperformed in the year so far due to the strength of the euro against the dollar.

Broader market

It has climbed 3.2 per cent since the start of the year, compared to 8.8 per cent for the broader Irish market. The stock opened down 1 per cent on Tuesday compared with a fall of 0.6 per cent in the broader Irish market.

It may have strong international credentials, but the company is still committed to Ireland. Chief executive Stan McCarthy yesterday said the company had no plans to move its main stock exchange listing from Dublin to London, following an announcement by DCC that it had suspended trading in Dublin.