Kerry, the Irish dairy group, has continued to diversify into niche product sectors, with its latest acquisitions strengthening its presence in the US market at the same time.
The company announced late last week that it was to buy two US-based companies, Da Vinci Gourmet and Crystals International, for $62 million (€53m), both of which specialise in flavours for the beverage, dairy and foodservice sectors, among others.
Da Vinci Gourmet is a leading manufacturer of branded flavoured syrups, confectionery sauces and tea concentrates - serving speciality coffee chains, speciality food and grocery stores and foodservice outlets in more than 40 countries. It is particularly well known in the fast-growing speciality coffee market, where it provides over 60 distinctive flavours, Kerry said.
Meanwhile, Crystals International is a leading specialist manufacturer of natural fruit and vegetable flavours for beverage, confectionery, dairy, nutraceutical and pharmaceutical applications, and Kerry claims that the company has a reputation as the world's leading source of speciality natural fruit flavours, serving food processor, beverage, nutraceutical and foodservice markets across 28 countries.
Hugh Friel, Kerry's managing director, said that the acquisitions represented two further important steps in broadening the group's technology and customer base in fast-growing niches of global foodservice, ingredients and flavours markets - a key element of the company's thus-far successful growth strategy.
"The acquisition of Da Vinci Gourmet consolidates Kerry's leadership position in the gourmet coffee segment, complementing the Stearns and Lehman business acquired in 2002," Friel said.
"Combining Crystals International with Mastertaste's existing flavour technologies - in particular through synergies with the Florida-based SunPure acquisition completed in February 2003 - considerably strengthens the flavour division's position in beverage flavours and bases and in other all-natural sweet and savoury flavour applications."
In a little over 30 years, Kerry has grown from being a dairy foods and ingredients producer to a major international player in the food, ingredients and flavours market, and it has been particularly active in expanding its businesses in the last few years: it has bought 20 new companies since 2000.
In April this year it announced the acquisition of two other US companies, this time focused on the frozen desserts and meat products sectors, while previous purchases include the Freshways business, which supplies the foodservice sector, and the Golden Vale branded dairy product group.
The company has shown itself to be highly successful at targeting niche sectors, and at managing an increasingly diverse selection of companies at a time when many other groups are reducing their spread of operations.
But it has also grown organically, again expanding its branded food operations into high-growth, high-margin segments such as ready meals, snacks and in particular health foods.
This rapid growth has had a beneficial effect on the company's sales - although it has also exposed it to the fluctuations of international currencies, in particular the US dollar which has struggled against the euro in recent months.
Turnover for the first half of the current year - announced last month - was up slightly at €1.8 billion, despite the impact of currency fluctuations, driven by a 5.9 per cent increase in like-for-like sales. Pre-tax profits for the same period were up 52 per cent to €87.2 million, helped by lower interest payments and fewer restructuring costs in 2003, the company said.