It’s been a year and a half since Kerry Group decided to cut its dairy arm, paving the way for its transformation into a taste and nutrition pureplay company.
For Irish dairy, the shift was significant. For the first time in more than 50 years, Kerry’s dairy business would return to farmer ownership – and what a time for this to happen.
Dairy is experiencing strong momentum thanks to demand for natural foods, functional nutrition, foodservice expansion, and an ingredient landscape that supports surging whey protein prices. The protein trend in particular places dairy as a key ingredient across mainstream and specialist applications, from food and beverage to active and performance nutrition solutions.
At the same time, the general consumer sentiment remains shaky as geopolitical tensions strain affordability. Alongside surging milk production from the world’s largest dairy exporters – with supply-side adjustments expected to take hold later this year – this leaves supply-demand dynamics persistently out of balance.
And muted consumer demand has long hampered growth at Kerry Dairy Ireland. In 2024 – the last full year under the old structure – revenue fell double-digits as price declines offset volume growth. This wasn’t unique to this company – weak demand has impacted many European dairies in recent years, fuelling sector consolidation – but it was enough to ultimately convince the Group’s leadership that shedding the dairy business was necessary to seek growth where the real margins lied.
Still, there’s plenty of opportunity on the consumer and dairy ingredient side for Kinisla to pursue under its new ownership structure. The key would be positioning.
That means leaning into Irish dairy’s inherent strengths – grass-fed milk credentials and a heritage story that links sustainability with premium quality and traceability. The continued roll-out of the company’s regenerative agriculture programme also plays a role here to give the newly-renamed company a competitive edge.
On the consumer side, sharpening brand identity would be key.
The Strings & Things snacking portoflio gained market share across all markets, helped in large part by production capacity expansion. Cheestrings, Yollies and Munch Mix reached a record £130 million retail sales value and continued to lead the cheese snacking category’s growth, said the company, contributing a third of the total category’s £59.8 million growth last year.
Broad macro trends mean this part of the consumer portfolio is poised to maintain growth momentum, but keeping consumer excited about snacking products in a crowded market is the real challenge.
Smug Dairy – which started out as a hybrid dairy innovation, before evolving into a functional (and fully dairy-based) snacking range – has potential to be developed into an even more comprehensive and compelling proposition within this space.
Meanwhile, the dairy ingredients arm – supplying SMP, cheese and milk fat products among others – performed ‘satisfactory’ in 2025, said Kinisla. But with milk production still up globally and commodity market demand unstable, it’s one of the more exposed parts of the group. Recent GDT auction results suggest core powder demand remains resilient but pressure on fats is still on. This puts greater focus on relationships with manufacturers and the foodservice industry to maintain performance.
Kinisla’s nutritional ingredients performed strongly last year, the company said – with growth across demineralised whey and milk proteins. It is strategically important part of the business: Kinisla highlights the weight management trend and growing demand for protein across all applications – from RTD drinks to protein bars and other small, nutrient-dense formats – as key growth drivers. These are long-term trends that genuinely provide a strong foundation for future expansion.
Ultimately, Kinisla has the assets and tailwinds to succeed – but only if it can turn structural strength into sustained, profitable growth in an increasingly volatile market.
