{"id":103156,"date":"2025-10-04T19:25:10","date_gmt":"2025-10-04T19:25:10","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/103156\/"},"modified":"2025-10-04T19:25:10","modified_gmt":"2025-10-04T19:25:10","slug":"crown-slips-on-pride-of-the-kingdom-as-kerrys-shares-languish-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/103156\/","title":{"rendered":"Crown slips on pride of the Kingdom as Kerry\u2019s shares languish \u2013 The Irish Times"},"content":{"rendered":"

After months of battling bankruptcy rumours, Beyond Meat<\/a>, the US maker of plant-based substitutes including chicken nuggets and beef burgers, waved the white flag this week on its debt pile and agreed a deal with bondholders to eliminate $800 million of borrowings. <\/p>\n

The restructuring \u2013 which will see the creditors accept bonds worth less than what they are owed as well as shares in company \u2013 sent Beyond Meat\u2019s stock to an all-time low on Wall Street. <\/p>\n

But it gives the 16-year-old Californian group a fighting chance after weathering a slump in sales<\/a> over the past four years amid a change in perception of how healthy highly processed meat alternatives actually are \u2013 and the fact, in these price-conscious times, that they are, kilo for kilo, generally more expensive than the real thing. <\/p>\n

Few Irish companies placed as much faith in the alt-meat revolution as Kerry Group<\/a>, the maker of flavouring ingredients for most of the world\u2019s largest consumer food companies, from Danone and Kraft to McDonald\u2019s and Starbucks. <\/p>\n

In October 2021, chief executive Edmond Scanlon<\/a> unveiled a strategy that placed plant-based taste and nutrition as one of the mega-trends it was chasing for growth. The others were authentic taste (using natural, high-quality flavourings in food); preservatives aimed at reducing food waste; and supplying ingredients to the health and biopharma sectors. <\/p>\n

But even as Kerry was forecasting that plant-based food would grow six times faster than traditional food over the remainder of the decade, Beyond Meat\u2019s revenues and share price had already started to decline. Plant-based meat and seafood unit sales would slump 28 per cent in the US, Kerry\u2019s biggest market, over the following two years, according to US think tank Good Food Institute data. <\/p>\n

Kerry has since shifted the focus from plant-based to the growing protein craze \u2013 where it specialises in making high-protein food more palatable. <\/p>\n

While it could be argued this shows that a beast like Kerry can be tactically agile, it also raises questions over strategy. <\/p>\n

And it\u2019s not the only part of Scanlon\u2019s vision four years ago that hasn\u2019t delivered. <\/p>\n

Kerry Group is on track to miss its goal of growing sales volumes by 4-6 per cent per annum for the third straight year.<\/p>\n

[\u00a0Poultry giant Moy Park pays \u20ac256m in dividend to US owners as profit jumpsOpens in new window<\/a>\u00a0]<\/p>\n

Shares in the group have slumped by 35 per cent over the past four years. And they are down almost 7 per cent from the time Scanlon took charge of the group eight years ago this week \u2013 even after Kerry has spent close to \u20ac1 billion, or eight per cent of its current market value, buying back shares in recent years. <\/p>\n

Scanlon, whose \u20ac6 million pay package last year made him the best paid chief executive of an Irish plc with its main listing in Dublin, appears on track to meet his target of expanding the group\u2019s earnings before interest, tax, depreciation and amortisation (Ebitda) margin target of 18-19 per cent by next year. That\u2019s largely thanks to the group selling a majority stake in its low-margin legacy dairy processing business at the start of this year to its former main shareholder, Kerry Co-op, as well scraping out efficiencies and reining in costs wherever possible. <\/p>\n

The wider ingredients sector hasn\u2019t had it great in recent years as it grappled with inflation and muted consumer demand. Take Givaudan, the Swiss flavours and fragrances giant. Its shares are down 20 per cent over the past five years. Or Germany\u2019s Symrise (down almost 40 per cent) and New York-listed International Flavors & Fragrances (IFF), which have both slumped close to 50 per cent, as sales volumes remain subdued. <\/p>\n

Kerry may be the pride of the Kingdom county since it was founded by Denis Brosnan in a rented caravan in a muddy field in Tralee in 1972 and set off on an international wave of dealmaking a decade and a half later \u2013 initially by buying Beatreme Food Ingredients in the US \u2013 to become one of Ireland\u2019s most successful multinationals. <\/p>\n

But few peers have seen the de-rating that Kerry has endured in the eyes of the stock market in recent times. <\/p>\n

[\u00a0Glanbia shares dip as Tirl\u00e1n sells 6.8% stake at slight discountOpens in new window<\/a>\u00a0]<\/p>\n

Kerry\u2019s stock is now trading at a level that its equivalent of 14 times analysts\u2019 earnings per share (EPS) forecasts for next year \u2013 down by a third from its own 10-year historic average. While the wider sector has also de-rated, it is trading at 20 times earnings.<\/p>\n

JP Morgan<\/a> analysts called out Kerry\u2019s low valuation in a report last week as \u201ccompelling\u201d for potential investors. <\/p>\n

They have taken some comfort in management changes in Europe \u2013 where volumes have been particularly weak for some time. Kerry has moved the previous head of its Latin American unit, Marcelo Marques, to take charge of Europe. It follows other movements at Kerry\u2019s regional head level earlier this year. <\/p>\n

Others are not so sure. \u201cIt\u2019s become the sleepy play of the sector,\u201d said one investor this week, who declined to be identified. <\/p>\n

Another long-time observer of the company complained: \u201cThe entrepreneurial spirit that Kerry was famous for is now lacking, replaced by bunch of accountant-types looking for efficiencies.\u201d <\/p>\n

In fairness, while acquisitions under Scanlon have been slower than under the group\u2019s three previous chief executives, he did try to pull off what would have been, by far, the biggest of all. Kerry was in the final running for the former nutrition business of US chemicals group DuPont six years ago, but lost out to a $26.2 billion bid from rival IFF. (There\u2019s a strong view, too, that IFF overpaid for the asset.)<\/p>\n

And he\u2019s been willing to part with low-yielding and non-core businesses, including its consumer meats and meals business; US sweet ingredients portfolio; and, most recently, the Irish dairy business. <\/p>\n

But if the stock continues to languish, will it only be a matter of time before an activist investor has a nibble? <\/p>\n","protected":false},"excerpt":{"rendered":"After months of battling bankruptcy rumours, Beyond Meat, the US maker of plant-based substitutes including chicken nuggets and…\n","protected":false},"author":2,"featured_media":103157,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[73],"tags":[64940,79,64939,18,19,17,47458,13190],"class_list":{"0":"post-103156","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-beyond-meat","9":"tag-business","10":"tag-edmond-scanlon","11":"tag-eire","12":"tag-ie","13":"tag-ireland","14":"tag-jp-morgan-chase","15":"tag-kerry-group"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/103156","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=103156"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/103156\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/103157"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=103156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=103156"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=103156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}