Ornua hails ‘another record year’ for Kerrygold but warns of 2022 challenges
The dairy exporter said turnover increased 6.9% in fiscal 2021, climbing to €2.5bn, while operating profit rose 1.3% to €153.7m. The cooperative was also able to increase the payout to its farmer-owners by 13.5% year-on-year.
“Ornua maintained a strong, stable, and sustainable performance year-on-year, as we marked our 60th year in business,” CEO John Jordan said.
Kerrygold continues to shine
The company reported volume growth for its dairy brands, with Kerrygold volumes rising 12% and over 11m packs of butter and cheese sold globally each week. Oruna noted a €40m expansion of Kerrygold Park has received approval, meaning that the business will be able to meet ongoing demand growth.
“It was another record year for Kerrygold, with volume growth up 12% on 2020. Kerrygold continues to be the fastest selling brand on supermarket shelves in Germany and is the no.2 butter brand in the US; a market serving 330 million consumers,” Jordan reflected.
Ingredients business boosted by M&A
Ornua Ingredients doubled its footprint in the US market with the acquisition of Whitehall Specialties Inc, unlocking ‘significant’ growth and innovation capacity, the cooperative said.
“The addition of these four facilities across Wisconsin and Pennsylvania unlocks substantial growth in both the US and in other markets as we enhance our innovation and manufacturing capabilities, as well as adding 450 new skilled professionals to our workforce,” Jordan elaborated.
Ornua Ingredients also expanded its product portfolio in Europe and the Middle East, the group said.
Growing greener: Sustainability targets and progress update
In 2021, Ornua set a target of a 25% reduction in Scope 1 & 2 emissions by 2025.
Updating on the progress it is making, Ornua said energy and water audits were completed across manufacturing facilities to identify opportunities for improvement. “This enabled the business to develop a group-wide carbon reduction roadmap that clearly outlines a path to reducing its carbon footprint.”
The Group also set a target of 20% intensity reduction in Scope 3 emissions by 2025 and is collaborating with all stakeholders in the supply chain to examine ways of reducing its GHG emissions to meet the ‘demands of both customers and consumers.’
Ornua is committed to 100% fully circular packaging by 2030 and last year the group began examining all packaging formats. The business has already successfully moved a number of products in its UK Private Label cheese portfolio to fully recyclable packaging.
‘Significant challenges’ on the horizon
Looking to the future, Ornua said that ‘significant challenges’ lie ahead for Ornua and the wider dairy sector.
The impact of inflation on raw materials, packaging, fuel, energy, and salaries will put competitive pressure on many businesses this year. Geopolitical instability, global trade barriers, supply chain challenges, and market volatility will also continue to have a significant impact.
“We have been devastated by the tragic events that have unfolded in Ukraine these past months and recognise the plight of the Ukrainian people at this very difficult time. As a longstanding organisation with a global footprint, we acknowledge the impact of world events on our customers and the communities we serve and will continue to support all our stakeholders in navigating the knock-on effects of this terrible situation,” Jordan noted.
The Climate Action Plan and national targets will require ‘enormous effort and close collaboration’ from all stakeholders, the coop added.
Nevertheless, the CEO believes Ornua is well-placed to meet these challenges. “While challenges persist in 2022, we are commercially and strategically well-placed to manage their impact on our business and continue to return value to our member co-ops and the Irish farming families that they represent,” he said.
