When McDonald’s was about to launch its Beyond Meat offer McPlant burger this fall there was a problem: vegan cheese can taste terrible.
So she turned to Kerry Group, an Irish company that started half a century ago as a dairy cooperative. Today, Kerry is increasingly a global specialist in providing food ingredients and technology – the kind that helps make crisps “nicer”, smoked bacon, creamy oat milk, bread. last longer and non-alcoholic drinks are palatable.
With sales of some € 5.8 billion in taste and nutrition last year he claims to reach over 1 billion consumers worldwide with its products, many of which were developed in a seemingly unremarkable building in Naas, just off a motorway southwest of Dublin.
Its size can be assessed by comparison with rival European flavor houses Givaudan in Switzerland and Symrise in Germany, which serve the beauty and pet food industries as well as food businesses. They had sales of 3.4 billion euros and 2.1 billion euros of their respective ingredient divisions, although not directly comparable.
And Kerry is now betting more on the taste and nutrition business as her future. This year he sold most of his consumer foods meat and meals company and explored an outlet from his foundation dairy company. She also made recent acquisitions in probiotics and preservatives.
The market has sometimes been concerned about the rapid pace and adequacy of Kerry’s acquisitions. This is one of the reasons for the poor performance of its share price, which has weakened by 6% this year. In contrast, Givaudan’s stock is up 20 percent year-to-date and Symrise’s is up 17 percent.
Kerry also saw $ 2 billion wiped out of its market cap within hours in February when a short sale The fund called into question the group’s acquisition record. Its stock price has fallen more than 11% in one day. Kerry, who went public in 1986, denied the fund’s claims he overpaid.
But other analysts are more positive about the group’s strategy. About a third of Kerry’s taste and nutrition business is focused on the restaurant industry, which has been affected by Covid-19. Its rivals, on the other hand, provide scents and flavors for things consumers continued to buy during the pandemic, like detergents and pet foods, which Kerry does not.
And revenue from taste and nutrition has grown by more than a fifth since 2015, when Kerry officially repositioned this company not only to supply ingredients, but also to address the processed food issues of companies partnering with them. .
“What we do is [provide] intelligence within the food industry ”, says Edmond Scanlon, Managing Director.
Kerry’s goals seem to be a contradiction in terms: to make processed foods tastier, healthier, more natural and more sustainable. But he thinks that while buyers still want convenience, they’re demanding more nutrition and, increasingly, herbal options.
Worth now around $ 30 billion worldwide, the herbal sector is expected to explode to over $ 160 billion by the end of the decade, and Kerry himself expects herbal products to grow six times faster than food. traditional.
Herbal products currently account for 2% of Kerry’s taste and nutrition revenue, but are growing “at double-digit rates,” the company says.
But as demand increases, customers become more demanding, especially “flexitarians” who want to eat more, but not exclusively, plant-based products. They are looking for plant-based meat substitutes that taste like meat but are better for them and the environment. The company recruited starred chefs to participate in the development of the products.
“Using plants is our biggest challenge, and it’s currently the fastest growing and most demanding,” said Deirdre Smyth, head of global integrated technology.
At one point, Kerry had staff working on both Impossible Burger and Beyond Meat, but the rivalry was so sensitive – “like an arms race,” Scanlon says – that development teams had to be located on different continents.
Besides plant-based foods, Kerry sees other key drivers of future business such as “authentic taste” and wellness, including the use of natural plants and flavors. It also seeks to tackle costly food waste – a major source of carbon emissions – by extending the shelf life of bread and meat.
Luckily for Kerry, plant-based and nutritional foods seem to be more than just a passing fad. But as Smyth says, “Food never goes out of style. “