Irish food company Kerry Group has insisted that, while M&A plays a central role in its growth strategy, its global scale and technological know-how also offer a competitive edge that will drive sustainable sales expansion.
Speaking at the Consumer Analyst Group of Europe conference in London yesterday (20 March), Kerry CEO Stan McCarthy said acquisitions had played “a very large part” in the business but also emphasises its global reach and technological capability.
Over the past year, acquisitions have helped the group to “plant the seed” in emerging markets, McCarthy said. During 2011, the company completed the acquisition of FlavourCraft in South Africa as well as two Indian acquisitions, EBI Cremica and Lactose India.
However, when Kerry unveiled its 2011 results in February, the firm indicated it would be reducing its M&A investment levels and increasing internal investment this year, with an eye to improving productivity and streamlining operations.
McCarthy yesterday suggested Kerry’s top line would benefit from its “increased global perspective”.
As Kerry enters emerging markets, McCarthy said that the group “needs local customers” to build its presence and local knowledge.
However, he added that Kerry sees the greatest growth potential in these new geographies coming from its global customers, who include the likes of Nestle, Kraft Foods, Unilever and Heinz.
“We have competence in global geographies: markets like India, Indonesia, Brazil, and South Africa. That local knowledge is hugely critical,” McCarthy said. “Growth will come from larger multinationals when they get representation in those geographies,” he added.
Kerry will also look to leverage its existing technologies to boost sales, McCarthy suggested.
“Kerry is and has a broad level of capabilities a broad level of technology,” McCarthy said. “As drivers of innovation and taste solutions we are going to leverage our technology… Kerry is in a position to cope with whatever trends are in the marketplace.”
In its ingredients business, McCarthy said that through its “diverse” technology base Kerry could utilize its technology to create “success in the market place”.
Meanwhile, in its consumer foods business in Ireland and the UK McCarthy said Kerry’s “brands and technology will be a key driver for this business in the future” as it develops “products that are represented in the refrigerator”.