Kerry’s third quarter performance was carried by its sales in proteins, fermented ingredients, probiotics and immunity-enhancing technologies. Overall, it was impacted by COVID-19, most notably in the foodservice channel. 

“In the foodservice channel, we have seen a strong recovery since April, as restaurants reopened and adapted their operations and menus to cater for increased consumer demand for takeaway, online and delivery,” says Edmond Scanlon, CEO of Kerry.

“Performance in the retail channel remained strong, primarily through growth in authentic cooking, plant-based offerings and health and wellness products. We continued to make good progress on a number of strategic fronts.”

During the third quarter, Kerry reached an agreement to acquire Bio-K Plus International probiotics in Canada and Jining Nature Group, a leading savory taste business in China. 

“We also recently launched our 2030 sustainability strategy, Beyond the Horizon,” Scanlon highlights.

Kerry reported revenue decreased by 4.5 percent, reflecting a volume reduction of 4.7 percent, increased pricing of 0.3 percent, an adverse translation currency impact of 1.1 percent and contribution from acquisitions of 1.0 percent.

The group’s trading margin declined by 130bps primarily due to the significant operating deleverage impact resulting from the sharp decline in foodservice orders when lockdown measures were introduced globally. Additional COVID-19-related costs were partially offset by cost mitigation actions. 

Taste & Nutrition delivers good growth
Kerry’s retail channel continued to perform well, with Kerry’s nutrition and wellness technology portfolio delivering good growth through customized solutions incorporating Kerry’s protein portfolio, fermented ingredients, probiotics and immunity-enhancing technologies. 

Developing market volumes declined by 2.9 percent year to date, with continued recovery in the third quarter led by good growth in China. 

Overall meat and chilled meals sales impacted
This division had overall underlying volume growth of 1.4 percent in the third quarter, and 0.1 percent year-to-date before the impact of the prior year ready meals contract exit. 

The Richmond sausage range continued to achieve strong growth, as did the recently launched meat-free ranges under both the Richmond and Naked Glory brands. 

The Denny brand performed well, while overall meat sales were impacted by reduced retailer deli counter operations. Spreadable butter and the Dairygold range performed well due to increased at-home consumption. 

The chilled meals category was impacted by reduced consumer traffic, particularly in the second quarter, while frozen meals had a good overall performance. 

Kerry’s “Food to Go” category experienced variability in sales performance across the period. 

After a strong start to the year, Fridge Raiders was challenged in the second quarter, before achieving good growth in the third quarter. 

Meanwhile, The Strings & Things range led by Cheestrings delivered good overall growth, while Oakhouse Foods home delivery meals had exceptionally strong growth across the period. 

Americas regional performance
Kerry’s foodservice channel in North America continued its recovery in the third quarter, achieving growth in nutritional and plant-based beverages; immunity-enhancing ingredients; protein portfolio; and natural extracts. 

Meals delivered very strong growth through authentic culinary solutions, with increased demand for natural stocks and broths. 

Overall Meat category performance was impacted by customer product availability on retail shelves, while performance in Dairy was supported by increased demand for clean label nutrition solutions across the category. 

In Latin America (LATAM), the foodservice channel improved through the third quarter. Overall performance in Brazil started to show good signs of recovery led by beverage and ice cream, while market conditions in Mexico remained more challenged. 

Europe regional performance
This region saw the most notable improvement in performance in the third quarter driven by foodservice, having initially been more impacted from COVID-related restrictions. 

The retail channel performed well, with Beverages achieving good growth through solutions for nutritional beverages and a number of launches in the low/non-alcoholic category. 

Snacks had good growth in savory applications with a number of large customers, while Confectionery was impacted by product repositioning in the category. 

Meat performed well in the period, driven by strong growth and business development in plant-based alternatives, as ranges continued to expand within the category. Russia and Eastern Europe continued to deliver strong growth through the third quarter. 

APMEA regional performance
Kerry’s performance in the Asia Pacific/Middle East/Africa (APMEA) region returned to overall growth in the third quarter, with strong performances in China and the Middle East.

The foodservice channel continued to recover in the third quarter, with variability across the region aligned to local conditions. 

The retail channel performed well, led by Snacks, Dairy and Meat, while Beverage and Meals were more challenged, as consumers opted for more traditional food and beverage offerings in many geographies across the region. 

Performance in the third quarter was particularly strong in Snacks and Dairy due to increased demand from regional leaders for Kerry’s clean label solutions. 

Meanwhile, the group continued to make good progress in expanding its capacity and deploying technology capabilities in China and the Middle East, while also moving into the new Technology & Innovation Centre in Shanghai.