Kerry Group

Kerry foods are the 4th division of the corporate structure of Kerry Group plc. The section has been defined in their website www.kerrygroup.com . In looking at this section in detail, we're including the companies overview of this sector but we'll also be commenting using research on their progress in the previous year 2006.

Kerry Foods is a leading supplier of added-value food brands and customer branded products to major supermarket chains, convenience stores and independent retailers across the UK and Ireland, and selected European markets.

The division has eight business units under which the company's food products and services are marketed:

* Kerry Foods Ireland * Cooked Meats & Speciality Poultry * GB Brands * Frozen Meals & Snacks * Direct to Store (UK) * Foodservice * Ready Meals & Convenience Products

Kerry Foods has some 30 manufacturing facilities throughout Ireland and the UK, with an extensive distribution network in both regions. Its consumer and customer branded foods include sausage, sliced bacon, sliced meats, pastry products, ready meals, ready-to-cook products, savoury snacks, specialty poultry, cheese, cheese snacks, dairy spreads, low-fat spreads, desserts, UHT products, home-baking products, salads, sandwiches, mineral water, flavoured waters and fruit juices.

Included in it's portfolio of consumer branded products are over 20 high profile brands, many of which are category leaders in the chilled cabinet. The portfolio comprises – in Ireland; Denny, Dawn, Ballyfree, Golden Vale, Low-Low, Move over Butter, Kerrymaid, Easigold, Golden Olive, Golden Vale Churn, Easipail, Golden Cow, Kerry Spring, Charleville Cheese, Cheestrings, Attack-a-Snak, Brunchettas, Coleraine, EasiSingles, Platter Foods and Freshways – in the UK; Richmond, Wall's, Mattessons, Porkinsons, Bowyers, Lawsons, Cheestrings, Golden Bridge, Green's Homepride.

Brands Kerry Foods has achieved this position by responding creatively to the needs and requirements of a wide range of customers by matching ever-changing consumer demands, as a result of evolving lifestyle, leisure and demographic requirements.

Kerry's primary consumer food categories for example – chilled ready meals, cheese, spreads, pre-packed cooked meats, and sausage showed a vast improvement in 2006. Nevertheless difficulties in areas such as poultry and frozen foods had an impact on performance and trading profits on the Kerry foods sector of the company. From reading the interim reports we can see that sales revenue increased by 5.4% to €1.82 billion but however trading profits fell by 4.5% to €118m.

As expected with the ever improving UK food markets, fresh sausage sales improved with the expense of frozen. Richmond and Wall's brands (leading brands of fresh sausages) benefited highly from the 4.6% increase of fresh sausage sales in the UK. It should be noted that cleverly designed advertisements broadcasted on TV also benefited the increase in sales. As there is an improvement in Wall's sales they have designed to expand there brand development and distribution of pre-pack rashers.

During the year, Mattessons a subsidiary of Kerry Group in UK began a huge brand investment programme. This investment is expected to achieve a high return to the company. One of their products, smoked pork sausage has already shown a dramatic improvement in sales due to the advertising programme.

There was a disappointing performance noted in the home- baking category, leading brand Green showed a poor performing year due to the low sales of the ‘kids' sector. However there classic desserts and time savers mixers showed an improvement.

Following the TV series Jamie's school dinners, UK changed its attitude dramatically in relation to healthy eating. As Kerry group is forever changing, to meet their customer's needs they introduced ‘The Food Doctor' range of food. It uses a combination of raw and cooked ingredients that can be quickly steam cooked in the microwave. Another health conscious brand was launched this year the ‘Champneys' wellbeing brand of multi-cuisine meals.

The Hartlepool processing facility was closed to maximize operational efficiencies, due to poor profitability in the poultry sector Kerry Foods sold it Redgrave operation in the UK and its Smithboro operation in Ireland. The chilled patisserie business in Birmingham was also sold this year as was St. Brendan's Irish Cream Liqueur in Derry.

As for the cheese industry, Kerry had an excellent year with good growth across the board. The addition of the Low Low brand into cheese was the market's star performer with 40% increase in growth. The ever popular product Cheestrings continued to maintain its market share and reinforced its beneficial health attributes with a strong advertising campaign emphasizing it 100% natural cheese value.

In keeping with Kerry's healthy eating campaign, they introduced premium lower cholesterol spread under the Low Low brand, which again achieved high market performance. Also in 2006, Freshways continued its growth on being one of the best prepack food to go brands. Freshways launched their ‘Healthy Ways' range of sandwiches. Double digit growth was achieved by this very successful food to go range in the markets. Another healthy aspect was their new line of juices Dawn Benefits – Orange juice with Omega 3, Orange juice with Probiotic and Orange juice with Multivitamins.