Kerry’s nutrition division trumps dairy on volume, revenue growth

By Teodora Lyubomirova

- Last updated on GMT


Related tags Dairy Cheese Sustainability Nutrition

Dairy volumes in 2022 were similar to 2021 levels, with lower category volumes within Dairy Consumer Products amidst ‘significant price increases’.

Kerry Group released its preliminary statement of results for 2022, reporting a group revenue of €8.8bn (up 18.3%) and 18% organic growth. Profit after tax for the group is €606.5m with EBITDA at €1.2bn, up 12.9% on 2021.

Kerry’s value-added dairy ingredients and consumer products division, Dairy Ireland, reported a revenue of €1.5bn, up 37.1%, driven primarily by increased pricing. However, overall reported revenue for the division decreased by 13.4%, as increased pricing was more than offset by the impact of the sale of the Meats and Meals business in 2021.

Volumes grew modestly by 0.2% in the year after they slid by 4% in Q4. Category volumes however were lower within Dairy Consumer Products amidst ‘significant price increases’. Cheese snacking volumes in particular were impacted by ‘reduced promotional activity’ according to the company, while in the spreads category, consumer-branded ranges performed well. Meanwhile, dairy ingredients delivered volume growth despite higher pricing.

Taste and Nutrition’s positive results

The Taste and Nutrition division achieved a stronger volume growth compared to Dairy Ireland, posting a 7.8% volume growth with a strong Q4 performance of 6.1% compared to dairy’s -4%. Kerry said volumes increased across all regions, ‘despite the backdrop of managing significant price increases and supply chain constraints’. The positive results were driven by ‘strong performances in authentic taste technologies across botanicals, natural extracts and Tastesense salt and sugar reduction, while Kerry’s range of food waste reduction technologies continued to perform well’.
The division’s reported revenue growth increased by 29.4%.

R&D expenditure & sustainability

Kerry’s increased activity in research and development, particularly in the Taste, Nutrition and Emerging Markets segments, resulted in higher expenditure during 2022, of €303m versus 2021’s €297m.

On sustainability, the group reported a 48% reduction in scope 1 and 2 emissions and 32% reductions in food waste across its operations.

‘Innovation has become more targeted’

Reflecting on market opportunities and constraints, the company said: “Consumers continued to seek new taste experiences, cleaner labels and added functional benefits through food and beverages,” the company explained. “The cost-of-living crisis has resulted in many consumers looking for relative value options to meet their purchase preferences, depending on their available resources.”

“Customers continued to prioritise the resiliency of their supply chains through this period of inflationary pressure. Innovation has become increasingly more targeted, as they seek to meet various consumer preferences within different price ranges. Customers are working with and looking for supplier partners to support them in addressing these current market challenges and opportunities, as they navigate through this dynamic operating environment.”

Looking ahead, the company ‘remains strongly positioned for growth ahead of its markets’. ‘The group will continue to manage input cost fluctuations with its well-established pricing model. Kerry will continue to invest capital aligned to its strategic priorities and strategically evolve its portfolio.

“In 2023, the group expects to achieve 3% to 7% adjusted earnings per share growth on a constant currency basis, before an expected 2% dilution in the year from the potential sale of the Sweet Ingredients Portfolio.”

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