Global nutrition giant Kerry Group has updated its outlook for its 2020 financial year and is now forecasting a decline in earnings of 8% to 11% for 2020.

Kerry stated there is still a high level of uncertainty in markets due to the impact of COVID-19, but added that it expects business volumes to return to growth in the final quarter of the year thanks to strong growth in retail sales and the continued reopening of the foodservice sector.

On Wednesday morning, Kerry Group reported third quarter results which show a sequential improvement in sales volumes right across its business over recent months.

Unprecedented

“This year has seen unprecedented variability and complexity across our industry. In the foodservice channel, we have seen a strong recovery since April, as restaurants reopened and adapted their operations and menus to cater for increased consumer demand for takeaway, online and delivery,” said Kerry CEO Edmond Scanlon.

“Performance in the retail channel remained strong, primarily through growth in authentic cooking, plant-based offerings and health and wellness products,” he added.

By division

Taste and nutrition

In its core Taste and Nutrition division, Kerry said sales volumes declined 1.9% in the third quarter of 2020, which is a marked improvement on the near 12% decline in the second quarter of the year when the COVID-19 pandemic was at its peak.

In the foodservice sector – a hugely important sales channel for Kerry’s taste and nutrition division – third quarter sales were down 15% year-on-year in the third quarter. While this is still a large drop on normal sales volumes, it is a marked improvement on the second quarter when sales to foodservice customers were down almost 50%.

Consumer foods

Kerry Group’s consumer foods division, which includes its stable of retail food brands such as Richmonds, Denny and Cheesestrings, recorded underlying sales volume growth of 1.4% in the third quarter and a slight expansion of profit margins.

Acquisitions

Kerry announced the acquisition of two new businesses in the third quarter. In China, Kerry said it had acquired Jining Nature Group, which produces flavour solutions for meat and snacks. Kerry said it had also acquired Bio-K Plus, a company based in the US and Canada which produces probiotics for beverage and supplements. Kerry did not disclose the financial terms of these acquisitions.