Kerry has reported a solid underlying business performance for the half year ended June 30, 2018. Taste & Nutrition was up by 4.1 percent volume growth and Consumer Foods was up by 1.3 percent volume growth in H1. UK and Irish consumer foods markets encountered challenges in the period, however, Kerry’s Consumer Foods division delivered a solid underlying performance. Business Performance Group revenue on a reported basis increased by 1.4 percent to €3.2 billion reflecting strong volume growth and contribution from acquisitions.

Edmond Scanlon, Chief Executive Officer of Kerry comments on the results: “Evolving consumer trends and the changing marketplace have provided increased opportunities and demand for Kerry’s industry-leading RD&A and broad technology portfolio. This, along with the group’s enhanced end-use market focus, drove healthy volume growth and underlying margin expansion in the first half of 2018. We also continued to make progress with and invest in business development initiatives aligned with our strategic growth priorities.”

“In light of our results, we update our guidance and now expect to achieve growth in adjusted earnings per share of 7 percent to 10 percent in constant currency,” he adds.

The breadth and pace of changing consumer demands continued to drive significant fragmentation and change along the supply chain and within the industry, according to Kerry. Major global consumer trends such as authenticity, healthfulness, sustainability, premiumization, clean label and convenience aligned with local consumer preferences continue to drive increased innovation opportunities.

The group delivered volume growth ahead of its markets, according to the company. Taste & Nutrition achieved sustained volume growth in North America, solid growth in Latin America, a good performance in Europe and continued strong growth in APMEA.

Business volumes grew by 3.6 percent and pricing increased by 0.6 percent in the period. The reported revenue increase reflects the aforementioned business volume growth and positive pricing, contribution from acquisitions of 3.9 percent, an adverse translation currency impact of 6.6 percent and an adverse transaction currency impact of 0.1 percent.

Kerry’s taste technologies recorded a strong performance across all regions, with TasteSense sugar-reduction technology and natural extracts being key drivers of growth. Kerry’s broad clean label technology portfolio performed well, with fermented ingredients, proteins, nutritional bioactives and enzyme technologies all delivering good growth in the period. The group maintained a strong innovation pipeline, anchored by the ability to create new nutritional product solutions that meet local consumer taste preferences across the globe.

In North America, Kerry’s Meat EUM continued to deliver strong growth, meeting consumer demands for authentic taste, natural shelf-life preservation and a broader range of alternative protein-based products. Kerry’s natural extract capabilities were a key driver of growth in the Beverage EUM, where strong progress was continued through new launches with Kerry’s Cold Brew technology.

The Snacks EUM delivered strong growth through new innovative healthier snacks and indulgent world taste experiences. Kerry’s dairy taste and clean label technologies benefited from enhanced wellness and premiumization trends within the Meals EUM.

The acquisitions of the Kettle business from Tyson Foods and Dottley Spice in late 2017 strengthened Kerry’s positioning and contributed to a strong performance in the foodservice channel in the period. Good progress was also made in the expansion of fermented ingredient manufacturing capacity at the group’s Rochester, Minnesota facility.

In Latin America (LATAM), Mexico and Central America delivered good growth, while Brazil performed well, but was impacted by the truck drivers industrial action in Q2. The Snacks and Bakery & Confectionery EUMs delivered good growth, along with foodservice chains across the region.

The Beverage EUM delivered a strong performance in both the retail and foodservice channels, with a number of innovations deploying Kerry’s TasteSense sugar-reduction technology and natural extracts portfolio.