The Consumer Foods division of Irish food giant Kerry Group has posted a 1.3% increase in revenue in the first half of its financial year, to €685 million.
Volume growth in the division was driven by an improved performance in its food to go ranges.
Pricing was up 0.9%, which helped to ease the impact of raw material price inflation, the company said. Trading margin in the division was 7.0%.
Changing Behaviour
Kerry said that changing consumer behavior in both the UK and Ireland has led to increased competition in the CPG sector, with more retailers focusing on ‘range simplification, customer brands and EDLP strategies.
Within this rapidly changing environment, retailers are seeking to capitalise on higher growth areas of snacking and ‘on the go’ consumption’.
Tapping into these trends, Kerry said that its Cheestrings and Fridge Raiders products performed strongly in the period, however Convenience Meal Solutions were impacted by decreased promotional activity and the good weather.
The spreads category ‘continues to be challenged’, it added, although its softer butter brands performed well.
Overall Performance
Overall, Kerry Group reported group revenue of €3.2 billion, reflecting 3.6% business volume growth in the period. Its Taste & Nutrition business grew by 4.1%.
“Evolving consumer trends and the changing marketplace have provided increased opportunities and demand for Kerry’s industry leading RD&A and broad technology portfolio,” said Edmond Scanlon, chief executive.
“This, along with the Group’s enhanced end use market focus, drove healthy volume growth and underlying margin expansion in the first half of 2018. We also continued to make progress with and invest in business development initiatives aligned to our strategic growth priorities.”
Scanlon added that he expects full year growth in adjusted earnings per share “of 7% to 10% in constant currency”.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
