Irish group Kerry Foods has revealed a 7.3% rise in sales to £1.85bn for the first half of 2008. The group has successfully raised prices to take account of increasing commodity costs and appears poised to make further acquisitions.
The company, whose brands include Homepride Flour and Cheesestrings, said that its Kerry Pinnacle operation "continued to deliver excellent growth in the lifestyle bakery sector".
Corporate affairs director Frank Hayes told British Baker the Kerry Pinnacle business had performed "fantastically well" and that the company was also "very pleased with the good progress we have made in the bakery sector in Europe and the Americas".
In its interim management statement to the end of June 2008, the company said that growth was maintained through sweet ingredients and flavours in the confectionery, bakery and beve-rage markets. "Enzymes also achieved double-digit growth through bakery and confectio-nery applications," it stated. However, pre-tax profits for the group increased by just 0.1% to £107m.
The firm said "complementary acquisition opportunities would continue to be explored across all Kerry businesses". Chief executive Stan McCarthy was quoted in the Irish Times, saying that Kerry would have at least £135m every year for acquisitions over the next five years.
"We would obviously like to do more than that, but we would like a lot of activities and initiatives that we have undertaken to be complete before we step up a gear," he said.
As part of its "go-to-market" strategy the company is investing £27m on a research and development facility in the US as it focuses on offering its ingredients and flavours technologies to customers round the world. In future the company also plans in the UK and Irish food markets to increase investment in its leading brands in the convenience and food-to-go sectors.
=== Consumer Watch ===
== Food extremes ==
Consumer food preferences are being driven to "extremes", as their choices are conditioned by factors beyond price, according to research by Rabobank, although it added that rising inflation could lead to greater price sensitivity.
Its latest Food Retail report cited the similar commercial success of two retailers: Whole Foods, which caters for less price-sensitive consumers seeking unique gourmet and organic products; and Kroger, which has cut prices but still outpaces its competitors.
Stephen Rannekliev, Rabobank food and agriculture and advisory vice-president, said: "Many consumers continue to be driven by factors beyond price. This means consumers are gravitating towards one extreme or the other - whether it’s a healthy lifestyle, convenience, price or something else."
Rabobank added: "Most major food retailers continued to show same-store sales growth in the first quarter of 2008 despite a lower inflation rate for food away from home which was 4.1% (from January to May 2008) compared to 5.5% for food at home."