Kerry Group and Unilever warn of continuing inflationary pressures

27-Oct-2022 - Last updated on 27-Oct-2022 at 12:18 GMT

The two companies have reported sales growth despite market challenges

Kerry Group and Unilever have warned of continuing inflation in their third quarter financial updates, which saw them both report strong sales.

Kerry Group, the ingredients and nutrition company, has seen strong sales despite the “unprecedented inflationary pricing environment.”

In its third quarter interim management statement it said that consumer preferences for new taste experiences, clean label and healthier options remain strong, while the importance of value options continues to rise across categories.

In its statement it highlighted that the resilience of supply chains remains a key focus across the industry due to “geopolitical volatility and inflationary pressures”.

Increased revenue

The group reported revenue increased by 16.1% in the period with business volume growth of 6.6%, increased pricing of 10.6%, a transaction currency tailwind of 0.2%, a translation currency tailwind of 6.6%, with the contribution from business acquisitions of 4.8%. This was partially offset by the impact of the business disposal of the Consumer Foods Meats and Meals business of 12.7%.

Its Taste & Nutrition business continued to see strong volume growth of 8.5% with strong Q3 growth of 8.2% driven by strong Snacks, Meat, Bakery and Beverage markets.

Kerry said that overall market conditions “remain uncertain” but said the group remained confident in its ability to continue to manage through the current inflationary cycle with its well-established pricing model and cost initiatives.

“We achieved excellent growth across the period through a combination of strong business volumes and pricing, as we continue to manage through this unprecedented inflationary pricing environment in collaboration with our customers,” said Edmond Scanlon, chief executive officer.

Sales growth accelerates at Unilever

Meanwhile, Unilever, the global company that owns food brands including Hellman’s, Knorr and Marmite, as well as home, beauty and personal care products, reported sales growth. Underlying sales growth accelerated to 10.6% in the quarter.

Its nutrition business saw underlying sales growth of 11.8% with dressings having a very strong quarter supported by continued growth momentum of Hellmann’s, particularly in the United States. Ice cream underlying sales grew by 13.2% with Europe benefitting from a strong summer season.

Alan Jope, chief executive officer said: “Unilever has delivered another quarter of growth in challenging macroeconomic conditions. Underlying sales growth improved to 10.6%, led by further increases in pricing with only a limited impact on volume, and we now expect underlying sales growth for the full year 2022 to be above 8%.

He added: “The global macroeconomic outlook remains mixed, and we expect the challenges of high inflation to persist in 2023. The delivery of consistent growth remains our first priority.”