Kerry Group boosts retail sales of beverages, meat, snacks in lockdown
In its interim management report, it said the first half of the year had seen major changes in the daily lives of consumers across the globe, with purchasing and consumption behaviours being “significantly disrupted”.
The report added: “During the period, a number of key consumer trends accelerated, with increased demand for health and immunity enhancement, natural authentic cooking, sustainability and plant protein, while many consumers reverted to centre‐of‐store offerings.”
It said its European business, including the UK, saw the retail channel perform well. Beverages achieved good growth through NPD in low/non-alcoholic and refreshing beverage categories, incorporating Kerry's botanicals, natural extracts and sugar-reduction technologies.
Meat performed well, driven by strong growth and business development in plant-based alternatives, while snacks had good growth in savoury applications with a number of large customers.
Dairy
Dairy delivered a solid performance in the period, while international dairy markets were impacted by global supply/demand dynamics, it added.
It said its Taste & Nutrition division, that supplies food and beverage ingredients, began the year strongly before the global spread of COVID-19.
Kerry's nutrition and wellness technology portfolio had a “very good performance” within the retail channel through customised solutions incorporating Kerry's broad protein portfolio, fermented ingredients, probiotics and immunity enhancing technologies.
Business volumes in the foodservice channel declined 27% in the first half of the year, with many out-of-home food and beverage outlets closed for an extended period of time.
Kerry Group said that the consumer market was “highly volatile” across the period due to COVID‐19.
But it did have some successes, as the Richmond sausage range delivered a strong performance, while the recently launched meat-free ranges under Richmond and Naked Glory brands performed very well.
Spreadable butter and the Dairygold range also benefitted from an uplift in consumer demand, it said.
Consumer behaviour
However, the shutdown did see a change in consumer behaviour. The chilled meals category was hit by reduced impulse purchases, while frozen meals performed well.
Sales performance across Kerry Foods’ food-to-go range varied, with Fridge Raiders proving popular in the first quarter, but challenged across the second quarter.
The Strings & Things range, led by Cheestrings delivered overall good growth, while the Oakhouse Foods range of home delivery meals delivered “exceptionally strong growth” across the second quarter.
The group reported revenue of €3.4bn, down by 4.3% versus the same period last year, reflecting a 6% volume reduction, increased pricing, contribution from acquisitions and favourable translation currency rates.
“We had a strong start to the year, prior to restrictions on movement impacting business performance as we moved through the first quarter,” said Edmond Scanlon - chief executive officer. “As anticipated, we have seen a significant impact on our Taste & Nutrition business - particularly our foodservice channel, where the impact was most pronounced in April, with the channel recovering well since then.
Performance in our retail channel improved in the second quarter, primarily through increased consumer demand for authentic cooking, plant-based offerings and health and wellness products.
“In spite of the challenges arising from COVID-19, we continued to make good progress on a number of fronts aligned to our key strategic priorities. Our global operations and supply chain continue to demonstrate resilience and engagement with our customers has been overwhelmingly positive, which gives us confidence in the trajectory of business recovery."
Last month, Kerry Foods promoted Nick Robinson to the role of chief executive from his previous position as managing director of consumer brands.
