Kerry: how a global giant grew from humbleseeds
Published 10/10/2012 | 05:00
KERRY Group is one of corporate Ireland's great success stories. Set up by a group of Kerry farmers in a muddy caravan in a field in Listowel in 1972, it has become a food behemoth worth more than €7bn and employing 25,000 people.
Today, the company makes much of its money supplying ingredients and seasoning but back in the early-1970s products like this were unheard of.
The farmers' smartest move was to entice Denis Brosnan back from London where he was an accountant to run what was then called Kerry Foods at the age of 27.
Brosnan and colleague Hugh Friel, who became the company's second chief executive when Brosnan retired in 2002, had a clear plan from the beginning, but it is unlikely that even these two visionaries were able to anticipate just how successful Kerry would become.
The company was born just as Ireland joined the European Economic Community and gave Kerry farmers a vehicle to exploit the changes that membership of the EU's forerunner provided.
Kerry quickly targeted North America and became an early champion of the food ingredients industry -- a far-sighted move that helped to distinguish Kerry from mainstream food companies.
The company floated in 1986 and continued to expand through a series of acquisitions which pushed Kerry deep into the US (where it has a rare knack for buying the right companies) and further afield to places like China, which were then largely ignored by European companies.
The acquisition of Beatreme Food Ingredients in 1988, for which Kerry paid €130m, was a game-changer that gave Kerry a huge presence in the food ingredients sector. The $440m acquisition of Quest in 2004 was another.
Today, Kerry continues the tradition of surprising on the upside. In August, it raised its full-year earnings growth forecast after strong overseas sales of products from cheese in the US to sausages in Britain helped offset the struggling Irish economy.
"Even if it is what we have come to expect from Kerry, it is hard not to be impressed by its first-half performance," Davy analyst John O'Reilly said following those first-half results. While Ireland remains something of a black spot, the company is well-positioned to thrive elsewhere.
In Asia and emerging markets, it plans to expand both organically and through acquisitions, with offerings ranging from baby food ingredients to tapioca pearls used to form solid "bubbles" in a beverage called "bubble tea".
It is a long way from that muddy caravan in a field in Kerry which Denis Brosnan first visited 40 years ago to today's thriving food group.
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