Kerry strategy seeks to ease market pressures
Over the last 35 to 40 years Kerry has grown into an international corporation, primarily through acquisitions. Its structure was of many independent divisions operating under the Kerry umbrella, each with their own sales teams.
The company has sales of €4.8bn, and its food ingredient offering includes some 9000 different products for food manufacturers and food service companies. In the past, this has meant that a customer would see five people walk through the door, each from a different Kerry division.
Karl Burkitt, strategic marketing director for Kerry Ingredients & Flavours EMEA explained that the company “had reached a certain point and scale where it couldn’t really operate on that basis any more”.
Itfirst implemented its One Kerry strategy in the US, a “more focused and concentrated” market than Europe. In December 2008 it extended it to Europe, Middle East and Africa (EMEA) – a less cohesive business region. After a period of internal reorganisation, it started communicating the strategy externally with clients in November, at the FIE in Frankfurt.
Burkitt said the changes have the backing of the customer base. Food manufacturers are operating in a highly competitive environment and need to get products to market and to innovate quickly. Moreover, retailer networks put them under pressure, and the growth of private labels has made competition more intense still.
He said it is too early to communicate tangible results, either in terms of sales or speed to market. But anecdotal feedback indicates that the new way of working, where each customer deals with just one Kerry representative, is being well received.
Coffee and cake
Burkitt gave the example of an undisclosed coffee shop customer, whose core business is beverages and associated products but who has a full range of bakery items too.
Whereas Kerry previously went to them just with its beverage portfolio, it is now discussing food solutions too, such as reducing saturated fat and enhancing quality.
What is more, a seemingly straightforward mandate can call for a number of different solutions. For instance, taking fat out of a muffin means the taste has to be built back in, and so does the taste. “If you want to take fat out of a chocolate muffin, you have to take fat out of the chocolate as well”.
This calls on input from the whole Kerry range. “We would have been doing that in the past, but independently,” said Burkitt. In some cases the customer may not have known the full scope of the Kerry portfolio before, and so sought some solutions elsewhere.
“The speed is potentially a lot faster,” said Burkitt, although the exact speed depends on the product. The costs of saved time and effort also add up.
Centres of Excellence
Kerry is alsobuilding three new centres of excellence. It already has multiple technical centres attached to its various divisions, and while these will continue to drive scientific advances for their specific areas, application work in food matrices, in close collaboration with customers, will take place at the new cross-division centres.