KERRY GROUP has performed very well despite significant headwinds, shareholders heard yesterday.

In an interim management statement, the company said business continued to improve in the first quarter of 2010, except for the group’s consumer foods business in Ireland.

About 100 shareholders were told that ingredients and flavours now accounted for two-thirds of Kerry’s business. It is the largest player globally in the ingredients and flavours market.

In the first quarter, business volume in the ingredients sector was up 5.2 per cent. Reported revenues were up 5.9 per cent in the first three months of 2010.

The group was the leader in chilled foods cabinet in the UK and Ireland and, in the €100 billion food and drink market in Ireland and Britain, Kerry was right in the middle.

Kerry brands in Ireland lost out recently to private label and value brand offerings in Ireland due to “intense competition”. The meeting heard that a repositioning of brands in this area in the fourth quarter was seeing an improvement.

The group were extremely pleased with their performance in a climate of global recession, of severe depression in Ireland of deflationary pressure, more frugal consumers and rising unemployment, chief executive Stan McCarthy told shareholders.

He said the group had rationalised the business significantly last year, walking away from areas that were not profitable and were hugely dependant on currency, he said.

Recent results showed a pickup especially in areas such as healthy and clean label foods, he said. Government agencies as well as consumers were now involved in demanding healthier products, with concerns including sugar and salt and clear labelling. This demand was here to stay.

“I see it as producing huge opportunity for us,” Mr McCarthy said in response to a question from the floor on the effect of the recession on health labels.

But for currency fluctuations, Kerry would have achieved double digit growth in 2009, he said, when asked by one Kerry farmer for his response to a suggestion on Bloomberg recently that the dollar and euro would reach parity. “People think of currency as hurting or helping. Today we have to think in terms of volatility more,” Mr McCarthy, said, adding the key thing was to manage cash flow.

Currency would remain volatile: “We are more confident than we were three months ago of delivering 10 per cent growth in earnings per share in 2010.

Mr McCarthy said after the meeting that there was lots of room for expansion by Kerry on the Pacific Rim, including China.