Kerry Group today (23 February) admitted it expects mixed fortunes from the company’s consumer foods businesses in the UK and Ireland in 2010.

The Ireland-based group, which makes Dairygold butter, Wall’s sausages and Mattessons snacks among its brands, said the downturn had weighed on its consumer food portfolio on both sides of the Irish Sea in 2009.

Kerry’s consumer foods revenues, which make up almost 38% of its turnover, fell 6.1% to EUR1.71bn (US$2.32bn) last year, although the company pointed out that underlying volumes matched the level reached in 2008. Trading profits from the division were flat at EUR122m.

Kerry said expenditure on food rose in the UK but fell in Ireland and slid further than the general slump in consumer spending in that market. The company’s Irish brands also “underperformed” compared to private label, while exports to the UK were hit by the strength of the euro against sterling.

Chief executive Stan McCarthy insisted the worst of Ireland’s economic problems had passed but admitted Kerry, which had been forced to restructure parts of its Irish business as exports suffered, would need to continue to tweak its business.

“We have to be practical in terms of our expectations for that market and we will continue to refine our model to ensure the positioning of our brands is realigned properly to where the Irish economy is at. We just have to manage our way through it,” McCarthy said. “We’re quite optimistic about the UK. The growth we had in 2009 will certainly continue in 2010.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Kerry’s UK business was boosted by last year’s acquisition private-label pastry supplier G. Adams. However, McCarthy suggested that Kerry would focus more on organic growth in 2010 right across its business.

“I’m more optimistic about organic opportunities with large customers. If we can deliver and execute organically at a strong level, we should not rush acquisitions. We have to be very clear that we optimise the organic opportunities,” McCarthy explained.

Kerry’s ingredients business, which accounts for over 60% of sales, saw its revenue fall 4.5% due to restructuring and lower raw-material costs. Trading profits, however, were up 4.9%.

McCarthy admitted parts of Kerry’s ingredients business had been “challenged” in certain markets but said the company was confident of driving organic growth from the division.

“We have got the reputation and the name to provide solutions for truly global brands,” he insisted.