In its Half-Year 2025 report, Kerry Group indicated a 3.0% volume growth, a 100 basis points increase in EBITDA margin to 16.1%, and a 9.8% rise in adjusted EPS on a constant currency basis.
While operational efficiencies contributed to this growth, a more profound change is underway: an increased demand for nutritional reformulation, particularly in reducing salt and sugar levels.
The Irish ingredients company noted a rising adoption of reformulation solutions across its Bakery, Snacks, and Beverage segments. This trend aligns with stricter health policies and evolving consumer preferences.
For Kerry, these reformulation partnerships are pivotal, enhancing client portfolios and bolstering global growth while improving profitability.
“We’re supporting our customers as an innovation and renovation partner – helping them respond to health and regulatory pressures while maintaining great-tasting products,” stated Kerry CEO Edmond Scanlon. “That’s creating value for them and for us.”
Reformulation: From Tactical Fix to Strategic Growth Engine
Historically, reformulation served as a reactive measure due to cost, policy, or supply disruptions. However, it is now evolving into a fundamental aspect of long-term product development strategies.
Kerry’s best performance emerged from the Americas, showcasing a 3.7% volume growth, largely attributed to clients focusing on lowering sodium and sugar content in mainstream products. North American brands are under heightened scrutiny, particularly regarding added sugar labeling and sodium reduction targets, alongside the increasing influence of retailer-driven nutritional standards. Kerry observed that manufacturers are increasingly seeking technical expertise to achieve sodium and sugar reduction ‘without compromising taste’, blending reformulation with botanicals, natural extracts, and proactive health ingredients to attain broader wellness objectives—especially in snacks, baked goods, and functional beverages.
Globally, reformulation is transcending mere compliance. In a landscape where innovation budgets remain limited, many brands pivot towards modernizing core offerings. Enhancing the nutritional profile of high-volume SKUs emerges as a more cost-effective approach to entice health-conscious consumers and meet retailer demands.
This transition is reflected in Kerry’s reported product mix improvements. Its technologies for sugar and salt reduction are being applied across both branded and private-label portfolios—especially within retail and foodservice, where recipe adjustments are crucial for preserving flavor and familiarity.
Despite subdued traffic trends, foodservice volumes for Kerry increased by 4.6%, thanks to seasonal launches and menu innovations, many of which involved healthier reformulation. This quiet yet impactful change is aiding restaurant chains and quick-service restaurants in adhering to anticipated sodium limits while maintaining customer loyalty.
A Global Trend Shaped by Local Pressures
While North America leads the reformulation movement, this shift is clearly global. In APMEA, Kerry experienced a 4.2% volume growth, primarily driven by reformulation demand in Southeast Asia and the Middle East. In these regions, local regulations—such as sugar taxes and front-of-pack warnings—are compelling brands to quickly adjust their beverage and snack formulations.
In Europe, volume growth was more modest at +0.2%, yet sodium and sugar content remain central to research and development, particularly within nutritional beverages and bakery. Retailers are tightening standards on added sodium and sugars in their own-label segments, and the growing consumer interest in cleaner ingredient lists is driving manufacturers toward gradual reformulation.
Kerry’s operations in Latin America also reported robust results, especially in snacks and ready meals. Local regulations, such as mandatory nutrient warnings in Chile and Mexico, have motivated many companies to proactively lower sugar and sodium levels—largely to avoid on-pack penalties that jeopardize shelf appeal and advertising access.
Despite diverse legislative approaches, the overarching message across markets is clear: reduce sodium and sugar or risk losing relevance.
Notably, these reformulation initiatives contribute more than just volume growth; they enable Kerry to unlock higher margins. The company’s EBITDA margin climbed from 15.1% to 16.1%, spurred not solely by operational advancements but also by ‘portfolio and product mix benefits.’
In a cost-conscious environment, manufacturers are searching for multifaceted solutions that address regulatory compliance, brand differentiation, and clean label claims—all while preserving the sensory experience. The complex challenge of salt and sugar reduction is increasingly being addressed by mature, commercially viable ingredient systems that facilitate incremental reformulation without extensive recipe overhauls.
With governments anticipated to tighten regulations on added sugars and sodium further—from proposed nutrient profiles in the EU to voluntary sodium targets from the FDA in the US—it appears that this is not merely a passing trend, but rather a new standard.
Reformulation Is Here to Stay
Kerry maintains its full-year constant currency EPS guidance of 7%-11% growth and anticipates accelerated margin expansion in the latter half of 2025. The company continues to invest in its bio-fermentation and taste technology platforms, indicating that reformulation and health-driven product renovation are central to its future growth strategy.
Salt and sugar reduction may not capture headlines, yet behind the scenes, it is shaping R&D strategies, enhancing product perception, and, in Kerry’s instance, positively impacting the bottom line.
