Kerry Group Presentation

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Kerry Group Presentation
Andrew BowdDermot CampfieldAidan McEvoyLiam
McVeighRichard Smith
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Kerry Worldwide
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(No Transcript)
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Kerry Foods
GB Brands Hyde, UK Gainsborough, UK Thurcroft,
UK Enniskillen, NI Frozen Foods Wisbech, UK
Carrickmacross, Irl Convenience Foods
Burton-on-Trent, UK Poole, UK Attleborough,
UK Birmingham, UK Hartlepool, UK Poultry Redgrave
, UK Smithboro, Irl Direct to Store UK 34
Depots 425 Vans HO - Swindon, UK
Brands Ireland Tralee, Irl Shillelagh,
Irl Portadown, NI Dingle, Irl Sligo, Irl Finglas,
Dublin Irl Glenealy, Irl Durham, UK
Cheese Spreads Portadown, NI Listowel,
Irl Coleraine, NI Charleville, Irl
Liqueur Business Derry, NI Foodservice Omagh,
NI Mitcham, UK
Divisional HQ Egham, UK
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Kerry Foods Facts Figures
Sales Revenue (2005) Up 2 to 1.2
billion Growth in Sales of 2 Trading Profits
(2005) Up 4 123 million Growth in Profit
of 4

Focusing on Premium Growth Categories within
Sausages
Dairy Products
Speciality Poultry
Ready Meals
Cooked Meats
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Kerry Foods Business Model

• The Kerry Foods Business Model is both mature and
  well balanced.
• In addition to owning and producing its own
  leading brands the business also supplies many
  leading multiples with private label products.

Kerry Foods has experienced considerable growth
in recent years. This is due in part to

• Participation in growing markets including ready
  meals convenience
• A focus on retailer relationships
• Continuous investment in product innovation
• A strong distribution network across all channels
  in the UK and Ireland
• A strong portfolio of consistently supported
  brands

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Consumer Trends Food Sector

• Convenience Time poor cash rich societies
• More and more people are looking for convenient
  food options adults and families on the go, open
  to tasty, nutritious snacks in ready-to-use
  formats. (Source Mike Davies, Managing
  Director, North Downs Dairy)
• Indulgence, Authenticity and Quality intrinsic
  rewards
• Premium and speciality products have become
  mainstream, with own label broadening consumers
  taste horizons (Source John Weaver, Commercial
  Director, Petty Wood)
• Healthy Living obesity and knowledgeable
  consumers
• In our culture, people are looking for magic
  bullets. They want foods to take care of their
  health concerns (Source David Grotto,
  Spokesman for the American Dietetic Association)
• Travel and Dining new experiments

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Market Growth Trends

• gt Growth gt Consumers
• UK and Ireland No premium brands
• Market Value 8.6b in 2004 New Target Customers
  
• European Perspective 12 TM Brand Evolution
• Predictions Deceleration next 3 years

Chilled Food Market Value and Growth (source
Datamonitor)
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Video 1
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Kerry Foods

• GROWTH OF MARKETS
• Kerrys Chilled Food Market
• Healthy growth since the turn of the century
  (acquisition of Noon Group)
• Freshways adding new offerings
• Denny further improving performance
  (worth over 30m)
• Charleville Cheese and Coleraine Cheese
  strengthening their position
• Ingredients Market Kerry Ingredients
  Mastertaste allowing for new product offerings
  (entering new markets through acquisitions ie.
  Quest Food Ingredients)
• Source MarketWatch DataMonitor
• Ac Neilson 05

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Kerry Foods - PEST

• POLITICAL
• Pressure from FSA
• Regarding labelling, healthy eating, Sudan 1
  and Para Red.
• Government
• ECONOMIC
• Consumers with more disposable income
• Source Datamonitor

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Kerry Foods - PEST

• SOCIAL
• Health and Fit Craze
• Knowledgeable consumer
• TECHNOLOGICAL
• Product development

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Competitor Analysis

• Northern Foods PLC
• COMPANY STRUCTURE
• Northern Foods PLC is a multi-national
  organisation which supplies
• a range of products, including chilled ready
  meals, savory pastry products and
• chilled desserts under license for Mars.
• (Anthony Hobson, Chairman Northern Foods 2006)
• CURRENT AND FUTURE DEVELOPMENTS
• - Get Fit Programme 2004
• - Six Month Review - Discovered Problems
• - Main Supplier to ASDA 2005

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Competitor Analysis
UNIQ

• UNIQ Plc
• COMPANY STRUCTURE
• Focused on the value-added sector of the food
  industry and, in particular, the growing markets
  for convenience foods
• in both the UK and continental Europe
• (Geoff Eaton, Chief Executive Uniq PLC, 2005)
• CURRENT AND FUTURE DEVELOPMENTS
• New Products under the St. Ivel Brand 2005
• March 2005 Results of Five Month Strategic
  Review
• Priority now placed on Improving Performance

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Competitor Analysis

• Comparison of Financial Results
• Turnover () 3.06bn
  1.45bn 879m
• Pre-Tax Profit () 211m 4.3m
  (70.6m)

UNIQ
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Marketing Strategy

• BRAND PORTFOLIO
• Individual Brand Names
• Separate/Unrelated identity
• Proctor Gamble, Uni-Lever, Diageo
• Kerry Group Vs Cadburys
• PORTFOLIO PLANNING
• Process of managing groups of brands and
• product lines
• THE BOSTON MATRIX
• Product performance indicator
• Key problem When to invest, hold or withdraw
  support
• (Jobber and Fahy, 2003)

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Marketing Strategy

• Positioning Strategy
• Strong Portfolio of Consistently supported
  Brands
• (Kerry Group Annual Report, 2004)
• Traditional Brand Identity
• Family Orientated
• Mass market/non segmented
• Moving towards a more focused, segmented,
  targeted approach
• Innovation/Diversification
• Consumer attitudes, Lifestyles, Individualism,
  CSR
• Developing Retailer Relationships

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Marketing Strategy

• Distribution Strategy
• Global Distribution Strategy
• Sales Offices, Manufacturing Plants
• UK perspective
• Unrivalled National Distribution Network across
  all trade channels in the UK
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  (Kerry Group Annual Report, 2004)
• Intensive Distribution Strategy
• Aim to provide saturation coverage of the
  market
• (Jobber and Fahy, 2003)
• Close Relationship with Major Retailers
• Maximising Penetration
• Convenience

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Marketing Strategy

• Pricing Strategy
• Wide variety of Independent Brands and Products
• No one single pricing strategy available
• Products and brands all differently positioned
• Pricing setting can be
• Cost Orientated
• Competition Orientated
• Market Orientated
• (Jobber and Fahy, 2003)
• Example Low-low Brusnchettas
• Marketing based pricing strategy
• Charge premium prices
• Mature, professional target group
• Perceived customer value can determine price

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Marketing Strategy

• Promotion Strategy
• Kerry Foods dont self advertise
• No real benefit
• Promotion done at the brand and product level
• Key Promotion Development to reach out to the
  widest market
• Richmond
• Retained its position as Britains favourite
  sausage
• Well targeted marketing campaigns and on-pack
  promotions
• Competitions as seen above Targeting Kids and
  Families
• Advertisements Particularly TV
• Reaches mass audience
• Builds brand awareness
• Stimulates and captures the audience/viewer
• Package Design

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Key Emerging Trends
The Customer Changing attitudes of the customer
has had a direct impact on Kerry Group. Nowadays
the customer is more knowledgeable and more aware
of healthy eating. In response to this, Kerry
Group has placed greater emphasis on their
marketing strategies, in particular focusing on
brand evolution. The Market Kerry Group now
operate in a highly competitive market. Their
strongest competitors include Northern Foods PLC
and Uniq PLC. Kerry Group Chief Executive, Hugh
Friel states We operate in a highly
competitive trading environment, surrounded by
energy and raw material cost increases and
adverse currency movements. We expect further
business improvements in the following year to
match market expectations.
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Evaluation

• The mission statement of Kerry Group outlines
  three main objectives
• To be the major international specialist food
  ingredients corporation
• To be the leading international flavour
  technology company
• To be the leading supplier of added value brands
  and customer branded foods to the Irish and UK
  markets.
• The extent to which these objectives are being
  achieved can be determined through analysing the
  companys key performance metrics.

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Key Metrics
Kerry Group is well clear of its nearest
competitors, Northern Foods and Uniq PLC.
TURNOVER
PRE TAX PROFIT
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Conclusions
Kerry delivered solid operating and financial
results in 2005 despite significant input cost
pressures and highly competitive trading
conditions. While the trading environment proved
challenging accompanied with adverse currency
movements, Group business performed well,
benefiting from the continuing trends towards
convenient, nutritional products. Revenue is
therefore predicted to continue
rising. They have been able to achieve
this position by responding creatively to the
needs and requirements of a wide range of
customers, and by matching ever-changing demands,
as a result of evolving lifestyle, leisure and
demographic requirements.
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