Sector News

Kerry Foods freezes out frozen foods

November 24, 2014
Food & Drink
Kerry Foods, the maker of ready-meals for supermarkets including Marks and Spencer, is looking to sell its frozen foods business as it gears towards the more profitable ingredients division.
 
The company, which also makes lunchbox snacks including Cheesestrings, Mattesons Fridge Raiders and Wall’s sausages, is understood to be working with financial advisers at IBI, the corporate finance arm of Bank of Ireland.
 
The €9bn (£7.1bn) Dublin and London-listed food group competes with Greencore, Icelandic Bakkavor and Ranjit Boparan’s 2Sisters, all of whom could be potential buyers of the business, subject to competition approval.
 
However, some industry sources were this weekend sceptical that 2Sisters could bid for the company as it is already highly leveraged. In July the company secured £820m of new bonds to refinance the debt it took on to buy Northern Foods in 2011.
 
Kerry does not break out the revenue stream for its frozen foods business, but analysts estimate that it is less than 5pc of its total consumer foods business, which reported a 6.5pc decrease last year to €1.6bn.
 
In comparison, the group’s ingredients and flavours business grew by 2.4pc to €4.3bn.
 
Analysts believe that Kerry will continue to shrink its consumer food business and may sell it off altogether within the next five years.
 
The company was not involved in the horsemeat scandal in 2013, but consumer confidence and sales of frozen meals were damaged across the industry.
 
As a result, the company’s advertising of its Bisto frozen ready meals has since been refocused to assure customers of the quality of the contents with the tag line “made from 100pc minced beef from trusted sources”.
Kerry is headquartered in Tralee, County Kerry, and employs about 36,000 people in its manufacturing, sales and technical centres. It supplies companies in 140 countries.
 
Kerry Group declined to comment on the potential frozen foods disposal and IBI did not return calls for comment.
 
By Ashley Armstrong
 

comments closed

Related News

May 21, 2022

Cécile Béliot becomes Bel Group CEO

Food & Drink

Cécile Béliot has assumed the role of Bel Group chief executive officer, following the decision to separate the roles of chairman and CEO. The separation of the functions will enable Bel Group to develop in three areas of healthy snacking. Meanwhile, the company’s former CEO, Antoine Fiévet, has had his mandate renewed as chairman of the board.

May 21, 2022

“Corporate greed and dereliction of duty”: FDA commissioner slammed over infant formula shortage

Food & Drink

US Food and Drug Administration (FDA) Commissioner Dr. Robert Califf was grilled by lawmakers during a House Appropriations subcommittee hearing, where he was slammed over the agency’s handling of the escalating infant formula shortage.

May 21, 2022

Sweegen hails antioxidants and bitter blocking tech a turning point for sugar reduction and healthy aging

Food & Drink

Sweegen is ramping up its efforts to reduce sugar across F&B applications while simultaneously tapping into the benefits of using antioxidants and bitter blocking technology. Speaking to FoodIngredientsFirst, Casey McCormick, vice president of global innovation at Sweegen, says product developers can find a broad range of solutions in Sweegen’s nature-based sweetener systems as brands elevate better-for-you foods.