Kerry Grew Volume 3.3% While Its Customers Shrank. Big Food's Reformulation Bill Is Now the Supplier's Order Book
Kerry Group grew volumes 3.3% in the first half of 2026 while reported revenue fell 3.7%, the exact mirror of Big Food's price-led results. With a 2030 profit margin target of 20-21%, the ingredient supplier is now aiming higher than most of the brands it supplies.
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.
Global Aseptic Packaging Report 2026
Aseptic volumes across dairy, dairy alternatives, beverages and food in 37 countries — 2025 actuals, historical series and forecasts to 2030. Publishing August/September 2026.
Pre-order registrations are open at 2018 prices.
Pre-order your copyStrategic Insights
📊 Analytics & Strategic Insight
The firms selling the fix are growing faster than the firms that need it
The decision most in this industry are avoiding:
👉 Nobody wants to say out loud that their supplier is the healthier business. A brand owner with flat sales and a supplier growing units 3-4% a year are not in the same trade. One is fighting for shelf space. The other gets paid whichever brand wins.
👉 Reformulation is still run as a project when it is now a permanent cost line. The rules keep changing. Health claims keep moving. Teams still plan each change as a one-off with an end date. There is no end date.
👉 Almost nobody has added up how much of their own price rise went straight back out as ingredient cost. The money leaves quietly, one recipe at a time. Very few boards have ever seen that total on a single page.
Here's the full context:
→ 2018: The UK put a levy on sugary soft drinks. Dozens of countries have done something similar since. Recipes had to change, and somebody had to build a sweetener that still tasted right.
→ 2025: US regulators pushed the food industry to drop synthetic colours. Natural replacements cost more and behave differently in a factory.
→ April 2026: Kerry opened an expanded enzyme plant in Cork, aimed at dairy firms making lactose-free and lower-sugar products.
→ First half 2026: Ingredient prices fell back. Kerry's own prices dropped about 1%, so it grew units while its sales figure shrank.
→ Most recent: On 29 July Kerry reported 3.3% volume growth and set a 2030 profit margin target of 20-21%, well above the 16.7% it earns today.
What this means for food and beverage operators and investors:
✅ Unit growth is the only growth that survives a price war. Price-led growth stops the day a rival blinks. Selling more things does not.
✅ The spec sheet is turning into a profit pool. Taste, enzyme and fermentation firms sit in front of a demand line their customers cannot switch off. Expect their price tags to rise.
✅ Owning one hard step in your own recipe beats owning three easy ones. If a supplier is the only firm that can make your product work, they set the price of your next launch.
3 moves you can make this week:
1️⃣ Split last year's growth into units and price. One line each. If price did most of the work, call it a pricing plan and build the unit plan separately.
2️⃣ List every recipe change forced on you in the last three years. Add up what each one cost and who got paid for it. Most teams have never seen the total.
3️⃣ Name the one ingredient you could not replace in six months. That is where your margin risk lives. Start a second source, or start building it yourself.
Take the Next Step
🧭 Facing a decision like this in your own category?
Describe it in a few lines. Selected enquiries receive an initial strategic assessment: direction, likely scope and indicative investment range.
→ Start a project enquiry
Zenith Consulting
Submit your food & beverage project enquiry.
Share your requirements. If there is a strong fit, we’ll come back with an indicative investment range, project timeline and recommended strategic approach.
Reviewed by Zenith Consulting’s senior food & beverage strategy team.
Related analyses
- Corporate Strategy & Portfolio
Mondelez Added 100,000 Indian Stores in One Quarter While European Pricing Turned Negative
Mondelez added 100,000 stores in India in a single quarter and passed one million outlets in Brazil, while European organic revenue fell 3.5% with pricing down 1.4 points. The Q2 2026 numbers show where snacking growth now comes from, and what happens when the pricing lever runs out.
Read analysis → - Corporate Strategy & Portfolio
Hershey's Salty Snacks Sales Rose 23% in Q2 2026. The Profit From Them Fell 6%
Hershey beat second-quarter estimates by a wide margin and lifted its full-year outlook, and the shares still fell. The segment carrying its snacking strategy grew almost entirely by acquisition and earned less money than it did a year ago.
Read analysis → - Corporate Strategy & Portfolio
Sazerac's $15bn Brown-Forman Bid Was Fully Financed. Price Was Never the Problem
Sazerac offered $32 a share in cash for Brown-Forman and opened its own private books to make the case. The board called the proposal "not actionable", and the reason sits in the share register rather than the price.
Read analysis →
Share it with your peers
Pass this analysis to colleagues who track the food and beverage market.
Zenith Market Intel
Need a specific food or beverage market report?
Tell us which category, region or question would be useful for your team.
Sister Publication
Also follow our Water Dispense Market Intelligence
Category analyses, operator briefings, and investor signals across the global water dispense market.