Kerry Grew Volume 3.3% While Its Customers Shrank. Big Food's Reformulation Bill Is Now the Supplier's Order Book

Kerry Group's revenue fell 3.7% in the first half of 2026. Its sales volumes rose 3.3%. Put those two numbers next to each other. They give you the clearest picture yet of where profit is moving in food and beverage.

The Irish taste and nutrition group reported €3.3bn of revenue for the six months to 30 June. A year earlier it was almost €3.5bn. Volume growth sped up through the half, from 3.1% in the first quarter to 3.5% in the second. Pricing came down 1.0% on input cost deflation. A weaker US dollar took another 4.8% off the reported line, and disposals took 1.1%.

The exact mirror of Big Food's results

Kerry sold more product and charged less for it. Its customers spent the same six months doing the opposite. Mondelez reported second-quarter revenue up 4.1%, with volume and mix contributing just 0.7 points. In developed markets, its volume and mix line was exactly zero. Every point of growth in the richer half of that portfolio came from price. In Europe, Mondelez pricing turned negative 1.4 points and volume and mix fell 2.1.

Kerry's European volumes rose 0.5% over the same period. Small, but positive, in the one region where the brands it supplies are going backwards. In the Americas, Kerry volumes grew 3.7% on revenue of about €1.82bn. In Asia-Pacific, the Middle East and Africa, volumes grew 4.9%. Foodservice volumes grew 4.8%. Emerging market volumes grew 5%.

One business is shifting more units at lower prices, the other fewer units at higher prices, and only one of those compounds.

Reformulation is a cost for brands and revenue for suppliers

Look at what actually drove Kerry's growth. The company named salt and sugar reduction technology, botanicals, natural extracts, taste solutions for high-protein products, enzymes and bio-fermented ingredients.

Every item on that list is a reformulation job someone else has been forced into. Sugar taxes. Synthetic dye phase-outs. Protein claims. Clean-label pressure from retailers. Front-of-pack labelling. Each one lands on a brand owner as a cost line and a project team. Each one also risks the taste that built the brand.

The supplier carries none of that. It sells the fix. Big Food's reformulation bill is the ingredient houses' order book, and the bill gets longer every year that regulators and retailers keep moving.

The margin target nobody in Big Food could publish

Kerry's EBITDA rose to €558m, with margin up 0.6 of a point to 16.7%. Then came the part that should hold an investor's attention. On the same morning, Kerry set out its targets for 2030. It wants volume growth of 3-5% and an EBITDA margin of 20-21%. It also wants cash conversion above 85%, return on capital of 12-13%, and high-single-digit earnings growth.

That is a supplier publicly planning roughly four points of margin expansion while most of its customers are defending the margin they already have. Mondelez's adjusted operating margin fell 1.2 points in the same quarter it grew revenue. The cost programme behind that target is called Accelerate 2.0. It should deliver about €100m a year by 2028, at a cost of about €140m.

What the currency line hides

The 3.7% revenue decline came mostly from exchange rates and disposals. Strip out the 4.8% currency drag and the 1.1% from portfolio changes, and the business grew. Adjusted earnings per share rose 7.9% at steady exchange rates, to €2.14. In reported currency the rise was 2.3%. Profit after tax was €282.6m, down from €303.1m.

A company that lifts its interim dividend 10% in a half where reported revenue fell is telling you which number it believes. Kerry raised the interim dividend to 46.2 cent. It also bought back €173m of its own shares. Full-year guidance was left unchanged, at 6% to 10% adjusted earnings growth.

What this means for the next three years

If recipe change is here to stay, then the profit pool in food and beverage is moving from the shelf towards the spec sheet. Three things follow, and all three are worth planning for now.

For brand owners, the make-or-buy call on recipe skills belongs on the board agenda. For buyers and investors, taste, enzyme and fermentation assets get more expensive. The deal wave already running through the ingredients sector says as much. And for anyone reading a growth number this quarter, the first question is no longer how much. It is how much of it was volume.