Good day, and welcome to the Keri Group Third Quarter 2020 IMS Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to William Lynch, Head of Investor Relations for Keri Group. Please go ahead, sir.
Good morning, everyone, and thank you for dialing in to Cary's 3rd quarter interim management statement investor call. As for our interim results update, we are hosting today's call from different locations. So please bear with us if things are not quite as smooth as they would normally be. I'm joined on the call by our CEO, Edmund Scandlin and our CFO, Marguerite Larcon. Edmund and Marguerite will take you through a brief presentation, capturing the key points of this morning's results update.
And following the presentation, we will open the lines for your Before we begin, please note the usual disclaimer regarding forward looking statements. I will now hand over to Lesens.
Thank you, William, and good morning, everyone, and thanks for dialing in this morning. Over the next 10 to 15 minutes or so. Marv, recently, we'll update you on our business performance and we'll also outline the progress we've made across a number of strategic fronts during this last quarter. So starting with Slide 4, which gives a good snapshot of the dynamics we've seen so far this year. Which has seen significant variability and complexity across our industry.
The agility end ingenuity of our teams in adapting to these changing conditions has been key to our performance in the third quarter, which was in line with the guidance we gave at the H1 results update. So overall, we're very pleased with the rate of recovery in the 3rd quarter. Starting firstly with the food service channel. We maintained a good trajectory of recovery through the third quarter. Exiting the period back 10% and this improvement was achieved primarily due to 2 main drivers.
Firstly through a large percentage of our food service business being weighted towards chains and bigger players, who have adapted better to the court related restrictions. And secondly, We also had a number of innovations that were launched Pharm well. Key drivers of performance here were health and wellness products, such as immunity enhancements and probiotics, plant based offerings and clean label taste solutions. On the M and A front, this morning, we announced 2 new acquisitions, which we're very excited about. Firstly, BioK Plus International, a company based in Canada, and it's a leading biotechnology company with a number of probiotics in beverage and supplement applications.
It is a really strong science foundation with a number of clinical trials and unique claims around Digestive Health. It currently serves the North American market, and we do see significant potential to expand this business and leverage its technologies into different applications and into different geographies, similar to what we've done with Ganeiden over the last few years. Then, moving on to Ginning Nature. This is a company based in Shandong province in China. And it has leading capabilities in savory taste for the local meat, snacks and meals end use markets.
And we see great potential for this business to enhance Carrie's presence in the savory taste area in China Of course, China will continue to be a key market for carry going forward. Just from a timing perspective, Bio K has just completed and Gideon Nature is on track to close before the end of the year. So overall, we're very excited about the potential for these two businesses. And with that, I'll now hand you over to Marbury for more detail on our performance.
Thanks Edmond, and good morning, everyone. So now turning to Slide 5 to update you on our financial performance. On the right hand side, you will see we have made strong progress in volume and margin recovery in the third quarter. Our group volumes were 4.7% lower year to date, And importantly, you can see the positive rate of overall recovery in Q3, driven by significant improvements in our taste and nutrition business, where we was 130 basis points lower year to date as a result of 2 key drivers. The first and most significant was the customers being impacted by lockdowns and restrictions that were introduced Across the Globe.
And secondly, The COVID related costs we've incurred across our manufacturing footprint of almost 150 facilities, which have been partially offset by cost mitigation actions we have taken. States and nutrition margins were 80 basis points lower in Q3, which was a significant recovery, while consumer foods margins grew well in the 3rd quarter and overall by 10 basis points year to date. Now turning to our revenue performance on Slide 6. And looking at the breakdown of revenue components, the overall reduction in reported revenue of four point 5% was driven by reduced volumes of 4.7% price increases of 0.3% principally driven by increases in our Consumer Foods business and the adverse translation currency impact of 1.1%. And the positive impact overall from acquisitions of 1%.
Moving now to Slide 7 and focusing on our taste and nutrition business which had volume reduction of 4.4 significant improvements on Q2. Within the food service channel, volumes continue to recover well since April with Q3 volumes 15% lower compared to Q2 volumes, which were back 49%. The retail channel continued to deliver good growth across the 3rd quarter with year to date performance particularly strong in the beverage meals, snacks, and pharma, and juice markets. Our nutrition and wellness technology portfolio performed strongly to customized solutions incorporating Kari's broad protein portfolio fermented ingredients, probiotics, and immunity enhancing technology. And I'm pleased to say that performance in developing markets improved, approaching prior year levels with lower volumes of 1 And on trading margins, the year to date performance has been driven principally by operating deleverage and COVID related costs.
We have seen a significant recovery in the 3rd quarter, as I mentioned. Turning to Slide 8 and looking at taste and nutrition performance from a regional perspective. Firstly, to the Americas, which had lower overall volumes of 3.5% year to date. And 3% in the quarter in North America. We delivered strong volume growth in the retail channel with the beverage meals and dairy end use markets all performing well.
While in the foodservice channel, we saw continued recovery in the 3rd quarter led by performance with quick service restaurants. Our business in LatAm was impacted later in the period by COVID, and we have started to see signs of recovery in Brazil in particular as we move through the 3rd quarter. In Europe, we saw a significant improvement in the 3rd quarter with lower volumes of 2.1% versus the 17% volume reduction in Q2. The retail channel performed well, driven by beverage snacks and meat end use markets. While food service had a strong broad based recovery across the region.
In APMEA, overall, we returned growth in the third quarter with strong performances in China and the Middle East. The food service channel continued to recover with variability across the region aligned to local conditions. On the strategic fronts, we made good progress in expanding our capacity and deploying our technology capabilities in the region, most notably in China and the Middle East. So now I'm turning to Consumer Foods on Slide 9 for a few moments. The business had a good recovery in the 3rd quarter with strong performances within the portfolio, most notably the Richmond Bridge Raiders and Chiefs during the France.
Underlying business volumes grew 1.4% in the 3rd quarter and 0.1% year to date. Including the impact of the previously reported ready meals contracts, overall business volumes were back 6.1 percent year to date. Trading margins improved by 10 basis points as efficiencies were partially offset by COVID costs and market pricing. And finally, the performance of our niche free ranges under the Richmond and Naked Lori brands was very strong, as both brands continued to take market share and extend their ranges. And moving now to Slide 10 to cover off a number of other matters.
Terry Connect, so I'm pleased to say that our deployment in North America is on track and progressing well. A significant achievement given our teams are predominantly deploying virtually in the current environment. Raw materials for taste and nutrition, these were broadly neutral, while we had low to mid single digit inflation within our Consumer Foods business. We're expecting taste and nutrition to remain similar for the remainder of the year with inflation in consumer food softening. Our net debt was $1,800,000,000 at the end of the period.
And on currency, we are currently at a translation currency headwind of circa 3 percent on earnings for the full year. And finally, in summary, before I hand over to Edmunds, overall, our financial performance has improved significant in the third quarter with notable improvements in business volumes and trading margins, and we're currently at expecting to see further improvements across both measures in the final quarter. So now back to Edmund.
Thanks, Margaret. So before I get on to the guidance, I just wanted to give you a high level overview of our new sustainability strategy. Beyond the horizon, which we launched just a few weeks ago. We outlined the framework to you back in February, as you can see here on Slide 11, and it centered around innovation enabling sustainable nutrition. Which is core to our growth strategy and aligned to our purpose in Spartan Food And Irish Life.
So looking at the 3 pillars, as you see here, Firstly, we're going to continue to partner with our customers to deliver more impactful nutrition and more impactful innovation. Secondly, we're going to continue to deliver on our own sustainability commitments. And we have a strong history and track record of delivery against all of our sustainability targets. If I take, for example, Carbon, in the last 5 years, we've increased our overall business volumes by 20%, while at the same time reducing our absolute level of carbon emissions and reducing carbon intensity by 23% in the same period. We have targeted action plans and how we're going to deliver on all of these 2030 commitments, and we feel confident that we'll meet and build on these targets.
The combination of achieving these targets in conjunction with innovation, which I'll speak to on the next slide, will mean a better impact So moving now on to Slide 12 and specifically on the area of innovation. Innovation is central to our growth strategy. But what we're seeing more and more is that sustainability is now becoming central to our innovation strategy. And there has been a significant increase in consumer and customer demand for health and wellness products that also protect people and the tenants. Which led us to setting bind as balanced and positive nutrition.
And our aim is that by 2030, we'll be reaching over 2 billion people with sustainable nutrition solutions. And this growth target is not something that Keri can achieve on its own. We're working across the entirety of our customer base right across the nutrition spectrum. The level of engagement and the number of dedicated sustainability calls with customers this year has been incredible. For me, it's one of the biggest door openers with customers that I've seen.
As our commercial teams are showing our customers, not only the value that Carrie can add to improve their products, but also how this will help them to achieve their overall sustainability goals. So, the slide here just has a few examples of what Keri's capability can deliver the life cycle assessment of a product, whether it be reducing carbon or water usage by 90% reducing saturated fats and delivering cleaner labels, all while ensuring these products taste great. So just to close here, the key point is the drive towards sustainability we believe is a total win win for carry and our customers, and we're really excited about the potential that we see here. So turning to Slide number 13 and future prospects. Within case of nutrition and, firstly, in our food service channel, we're seeing good recovery and we're continuing to partner with our customers on new menu developments.
Our retail channel continues to deliver good growth, and we have a very healthy innovation pipeline and strong customer engagement. Our Consumer Foods business continues to see some strong performances across the portfolio, while we continue to selectively focus on growth opportunities. We will continue to invest for growth and pursue M and A opportunities aligned to our strategic growth priorities, And finally, while there remains a high level of uncertainty based on current market conditions, we expect business volumes to return to growth in the final quarter. And we're forecasting a full year earnings per share decrease of 8% to 11% in constant currency. So with that, I'll hand you back to the operator, and we'll be glad to take any of your questions.
Thank
We can now take our first question from Graham Hunt from Morgan Stanley. Please go ahead.
Hi, good morning. Thanks for the questions. Just 2 for me if possible. You spoke about new opportunities coming from growth in the food delivery channel and food service. And I wondered if you could give a sense of how much that contributed to the recovery sort of this quarter versus recovery in existing volumes.
And then how much do you think those opportunities are going to impact your strategy now as we're seeing lockdown measures reintroduced across a number of markets, particularly in Europe? And then second question on sustainability. As you mentioned, a number of your technologies can materially impact the carbon footprint and other sustainability metrics. All of your customers' products. How meaningful do you think this could be in your existing portfolio given most of your global FMCG SMCG customers now have Net Karma neutral targets, and is Carrie developed to be a key partner in helping them achieve this.
And is this something you've always been engaged with them on or should we see it as more incremental going forward?
Yes. Thanks, Graham. I would say maybe on the second part of the question first, I would say, this is from a sustainability standpoint, but how we're thinking about that is that this is not something else that we need to do We did update our targets and, and, and give you some more color in terms of what our sustainability goals are and what the big reach goal is from a, from an nutrition standpoint. But it is important to recognize that this is not something new that we need to do. This is something that we have been doing.
We have been working with our customers on, what I have seen a significant step change in terms of the level of engagement around sustainability. And the step change has really come more on the nutritional impact that, we can help our customers to move along that nutrition spectrum. But it's not something new that we're doing. It's something that we've been doing for several years like the example that I just, I give on the presentation there. In terms of food service, I would say maybe rather than maybe just, let's say, talking about food delivery as such because our impact really on food deliveries improving on the, the, delivery experience for our customers.
But the bigger point on food service and the recovery that we saw in food service is that, the, if we see the bigger players being better able to cope with, restrictions. Restrictions have been, imposed, lifted, reinforced over the last several months, and the larger players are better able to handle those restrictions. And like we said in the, in the half 1, first point was that 75% of our, of our exposure to that channel is orientated towards larger players. And number 2, we've seen a significant amount of activity, innovation activity from those large players. Both in improving that delivery, experience number 1, but also the reinstatement of, LTOs.
So, and so basically what I'm saying there is that what we've seen or what we said we saw happening in Q2 with some of those, with some of those changes that we flagged actually came through in Q3 and into Q4.
Understood. Thanks very much.
We can now take our next question from James Targish from Berenberg. Please go ahead.
Hello. Good morning, everyone. Couple of questions from me. Firstly, just actually sticking with food service, So obviously the return to, your anticipated return to positive volume growth in Q4, I, you know, is that I assume driven by your expectation with further improvement in food service volume. Or do you expect a reacceleration on the retail side?
I guess my question on the foodservice is that, some of your peers have talked about some restocking benefits in Q3 and of course, as we see big markets like Europe sort of go back into lockdown. There's a lot of concern that these few service volumes could slip again in the 4th quarter. So I just wondered what gives you that confidence that you can deliver a further improvement in volumes in Q4 considering that outlook for food service and maybe the benefit you got in Q3 from restocking, from customer restocking. And then secondly, just on the margin, could you maybe give us some color of how the kind of the COVID costs we're trending, in sort of Q2, Q3, and what your anticipation is Q4 for Q4, just to get an idea of to what extent that maybe those easing is driving the margin improvement.
Hi, Mike Johnson. Good morning, James. And just to take the second part of your question first, and then I'll ask Edmond and maybe to give a perspective on the food service question. So in, in terms of the COVID costs in the second half, is it fair to say that, we continue to incur COVID related costs. You remember at the half year, that said we provided some detail in relation to the costs they primarily, relate to firstly costs ensuring the safety and well-being of our employees.
Including personal protective equipment, zoning, segregation, and other employee support costs, And secondly, costs to ensure continuity of supply, including additional labor, raw material costs, stop holding and distribution costs. And they continue to be a feature, just given the current environment. Obviously, we continue to take a number of short term actions to reduce the impact of the cost, like, we updated at the half year. And there's various measures that we have deployed. That being said, it is fair to say that an element of cost will continue.
And as we currently see things, we would expect, the net impact in the second half is to be similar to H1. Again, you'd appreciate many moving parts in, in the current environment. In terms of, the overall margin and the margin in Q4, We are looking at a further recovery in margins in the 4th quarter with volumes improving and very much linked to volumes improving. And, obviously, as I referenced, the COVID release half will will continue. So maybe with that, I'd ask Edmond on the food service.
Yes. Thanks, James. And maybe just to follow on from the last question, just to maybe frame. First of all, our overall food service volumes improved from being back almost by half and the second quarter to 15% in the third quarter with the run rate of 20% lower entering the quarter and 10% lower exiting, exiting September exiting the end of the, of the quarter. So in terms of vegetables, maybe Q4, first of all, we were in the 1st week of November, and we saw over performance in line with 2019, which we're pleased about.
We also see current trading, and as, as quite solid. And we have visibility on a number of product launches coming to the market in the, in the next in the next few weeks. So the combination of all this, as well as we believe we will be in a positive territory from volume rock perspective in the 4th quarter.
Sorry. Sorry, Ed, but just
to clarify, when you said, when you're talking about the, the, the in line in, prior year in October. So are you talking about food service? Just free service. And, when you just talked about that positive return to positive volumes in Q4, again, is that about TNN or you also think foodservice would be positive in Q4? Sorry, just to clarify.
Yes. So sorry, gents, yes. So to clarify, I was talking about a, from a total T and N perspective, October performance is in line. With 2019. And, in terms of, the outlook we do see, volume be in positive territory for the fourth quarter for Tawke and TNN.
You.
Question from Jason Mollins from Goodbody. Please go ahead.
You've answered quite a few questions on food service. I won't delve into that in any more detail, but maybe just in terms of some of the M and A deals that you've completed. Can you give any sense of quantum of of those combined deals and maybe in particular on the, the BIO K, the ProLogistix business, what sort of complementary opportunities that gives you over what you already have with Canadian and, something I'd be interested to explore. And then just sort of formally, in terms of your guidance that minus 8 to minus 11 that you've set out, what are, you know, given where start of November, what do you think are some of the key issues that maybe get you, either at either end of that sort of guidance range? Thanks.
Hi. Good morning, Jason. I might just take your first question on acquisitions before handing to Edmunds, to give some further color on on the acquisition. So firstly, we're very excited about the acquisitions that we announced, this morning. In terms of, consideration, the consideration for, the 2 acquisitions we announced this morning, was just north of $200,000,000 and towards a high teens EBITDA multiple.
So maybe just on the buy per case, just, I'll hand it to Evan to give some additional color on it.
Yes. Good morning, Jason. Thanks for the question. So maybe, I would like to maybe touch on, on, on both acquisitions because we're, we're quite excited by both of them. But the first one, in terms of buy, okay, First of all, it brings with it a very strong science and clinical foundation.
Is a very strong ethos in this company, you know, from a clinical and a science, background, which is the first positive The second point here is that it is the only probiotic in the world that's approved by Health Canada in reducing certain antibiotic associated conditions. And the third point is that it opens up, a new channel to us, which is the health care channel. And we believe in time and I'm sure with some investments, we will be able to push more of our existing portfolio through this channel. And it also then gives us slightly bigger exposure to the dietary supplement, market. So, quite complimentary to Canadian we do see it, evolving, more or less in the same way as, as, in Aden, as we, as we mentioned in the presentation, there will be opportunities to grow this business, by expanding the end use market reach as well as the geographic reach.
So that's it in bio cave, but just in terms of ginning nature, that brings with it a strong local Chinese savory case capability. It is a strong reputation in, in the local, Chinese market. For that capability, it brings within a new manufacturing facility that they've been transitioning into over the last few years. And, and that's, that's pretty much completed at this stage. And their focus has been on natural authentic savory taste, which would complement and those complement our own far through from food approach.
And then in terms of the, the guidance I suppose, look, it's it's, somewhat similar points that I made in the previous, in the previous question. You know, we are in the 1st week of November. We have, you know, a relatively a decent level of visibility and on how things are playing out, trading is solid. And we do know we have a number of of new launches, kicking in here in, in Q4, and, like we, like, we, we said we would, at the, at the H2, sorry, at the H1 presentation.
Yeah, thanks. We can now take our
next John from John Ennis from Goldman Sachs.
Hey, good morning, everyone. My first question is on innovation rate. Comments from some of the FMCU companies that highlighted SKU rationalization and have suggested that innovation rates are still running down significantly year on year. I just wondered if you're seeing this impact to your business or whether these trends are now beginning to reverse. And effectively, how much of a problem is it if, is it to carry if the number of launches in the market remains lower for longer within the food industry?
That's my first question. And then my second question is kind of a follow-up on some of the questions already on the retail part of the portfolio. So you grew 4% in this quarter. I just wondered why do you think the growth has been below the trends observed for some of the other in home food and beverage categories throughout COVID? Where we've seen kind of high single digit growth for some of the U S.
And European end markets. Why do you think you're not managing to deliver that level of growth and retell if you've got the product mix with the customer mix or is there something else that we should be aware of? Thanks.
Yeah. So, so your thanks, John, and maybe I'll take the first part, first on the CPGs and the innovation of what we're seeing. I would say, I would say first of all, I think we're past that SKU rationalization phase and we are very much back into a, an innovation zone. In fact, you know, like I said, in, in, in the H1 results, that, we've seen customers move at a pace, where their decisions made about launching new products. And just reminded of of a customer on the food service side that has, you know, brought a plant based meat, chicken alternative to market across a number of countries in, in Europe, in a 5 month, in a 5 month period.
And that kind of pace of innovation is is unprecedented. But, so I think COVID is being, is being somewhat of a catalyst for, for some of the CPGs to rethink, some of their processes as it relates to new product development. So that's the first point. The second point is that speed and getting products to market fast is becoming an even bigger, I would say, goal of the CPGs. And we believe based on our business model that we're well positioned to be able to, enable them to do that.
And the third point, I would say that as we are, we'd say, coming through COVID, the, the trends are becoming more clear. The, let's say, the post COVID trends, if I can say that are becoming a little bit more here maybe than they were in the, at the half 1. So health and wellness is, and I would say, functionality, health wellness and, and functionality in food, is, is really accelerating, whether that's things like, you know, immunity or just better for you type formulations, are certainly accelerating and we're seeing it across so many, so many categories, especially in snacking and beverage. Sustainability, I think, is just becoming, you know, even a bigger topic. And like I said in the presentation, the level of engagement there is at an unprecedented level.
And our biggest focus there, again, is moving customers or helping move customers and their products along that nutrition spectrum. The torque point is convenience. I think we all understand that and that continues to be a big, a big factor the four points that, you know, I probably didn't touch on and the half one is value. So I think it's, it's pretty well understood that we will be facing into a fairly significant, recession here, perhaps. And value is becoming a bigger topic with customers.
But the point here is that when I'm talking about value, the type of conversation customers are more like designing to value, developing to value, formulating to value as opposed to, as opposed to, let's say, just cutting down on the, the, the, the particular, let's say, elements of functionality in a So it's designing and developing new products for value as opposed to just cheapening existing products. So I thought that, that makes sense, John.
Yes, that's helpful. Thank you.
We cannot second question. Please go ahead.
Just in turn, and the second question on retail performance.
Yeah. So sorry about that. Yeah. So, yeah, look, we've seen, we've seen volumes during the third quarter running at 4%. Which, which is above or historic, or historic run rate of 3%.
And I guess, you know, if we were to look back maybe towards the beginning of the year where our retail performance was in, in the zone of, of 2% in Q2, sorry, in Q1. What we did say at the time was that in places like China where we had we're relatively nuked into that market. We didn't have order to some of the traditional categories like, like noodles, for instance. So that did impact us towards the beginning of the year where those types of categories performed well, and we didn't have a significant exposure. What I, what I can tell you is that as we, you know, taking China as the example, the noodles as the example, we've seen demand for products aligned to the trends that I just, that I just mentioned and normalize over the most, the most recent months.
So, to a point that we've seen our retail business grow up to high single digits in China in the third quarter. So look, from our perspective, we feel that we will outperform our historic growth rates of the 3%. So we're in the 4% right now, and we expect it to be in that zone and, to outperform our historic run rates into the future.
Okay. Thank you very much. Thanks for following up there.
We can now take our next question. From Heidi Besterinen from Exane BNP Paribas. Please go ahead.
Good morning. Maybe on your Q4 guidance please, would it be possible to get a regional perspective on what you're seeing? Thank you. And then, the second question, maybe a few words on your midterm guidance, please, because at this stage, we're kind of behind on your various targets. So do you still feel confident on, delivering on that going forward?
And then lastly, what is your current thinking on further M and A, please? Thank you.
So maybe the good morning, Heidi, and maybe taking the last part of the question first. I would say from an M and A perspective, it continues to be, to be quite busy on the M and A front despite the obvious challenges. The pipeline continues to be strong. And we, we continue to work on several, projects and, as usual, as I normally say, it is hard to predict the timing of these projects, but I would say it's business as usual from a carry perspective as it relates to, to, M and A activities. In terms of the midterm markets.
Okay. I think, you know, we, we are, we are where we are in terms of, let's say, a worldwide, pandemic. Clearly, if you asked me that question back last, last February, we would say we're absolutely right on track. We have made a lot of progress over the course of the year when you consider where we were in, in April. And I think this is something perhaps we would come back at, you know, through the, through the course of 2021.
But for right now, I think we're in the zone of getting through this year and see how things look at, see how things look in 20 21. In terms of the, let's say, the performance by region or the outlook by region, you know, obviously there's a lot of, there's a lot of moving parts, but, maybe taking a quick, a quick run around We would say we're starting anatomy of force. We're quite, let's say, pleased with the with the fact that we've moved into positive territory in the apnea region, that has been driven primarily by, by China. And we do expect that to continue, in the Americas, I would say we're seeing a little bit of a different story between North America and LatAm, with, North America performing, let's say, you know, relatively relatively well. And, but with LatAm being a drag.
So we do see LatAm being continuing to be lagging by virtue of fact that, you know, COVID was later coming to, coming to LatAm and recovery will be a little bit later also. And in terms of the European market, there was a significant recovery in Q3, and we expect that to, to continue into, into Q4.
We'll now take our next question from Pavel Kenny from Davy Research. Please go ahead.
Good morning folks. Just two questions from my side as most have been asked already. Firstly, can we get an update on the investment in Georgia, your new meat facility? That's one. And secondly, just on Christmas trading from the consumer foods perspective and a retail perspective, how seasonally important is after the overall business?
Yes. Thanks, Tahoe. So on Georgia, we announced a significant investment, at the beginning of March in that facility. It just just to remind everybody, it is, cater towards the, the meat and plant based, protein markets I would say work continues there in terms of expanding the, that location just from a, from a, an, a capital standpoint, whether equipment or building that continues. It's still more or less on track.
Obviously, there's been a lot of, you know, let's say restrictions in travel and what have you, but it's more or less on track and we expect to have the first lines up and running there by Q1, 2021, which, which is, which was in line with our original, in line with our original timing. In terms of, of Christmas trading for our consumer foods business, it is an important part of, of, of, of our foods business. We do expect, a relatively strong Christmas trading period. I would say from an overall perspective, From an underlying perspective, we expect foods to trade, a little bit better in Q4 than it did in Q3 from an underlying perspective based on a a solid, to, to a strong, Christmas period.
And Edmond, is it meaningful for the TNN business? Any color?
Not not really. It's probably Chinese New Year has probably got a bigger impact than Christmas.
Thank you.
We can now take our next question from Charles Eden from UBS.
Hi, good morning. Just two questions from me if that's okay. So firstly, you mentioned the strong growth in your meat free brands, the rich meat free and native language. You able to update us just in terms of the growth rates you're seeing for these brands? And remind us what percentage of your consumer goods business today these brands combined represent?
That's question number 1. My second question is that you highlighted that larger customers approving more successfully navigating the current challenges within the food service channel, you need to also hold for the balance of your TMM business. I asked because one of your key growth drivers in recent years has been a strong momentum with the regional and local customers So do you think we're seeing the balance of power shift back to the larger brands as a consequence of COVID or do you distinguish with
a temporary effect? Thank you.
Thanks, Charles, for those questions. I would say in terms of the growth rates in our plant based food business within consumer foods, I would say we, we weren't, we just got into the market I would say about exactly a year ago. And, in terms of quantum, I would say the scale of our plant based business in Consumer Foods is in the zone of 2% to 3% of our Consumer Foods business. So it's grown significantly in a very sharp period of time. And I would say that there continues to be, growth, effectively week week month on month, and we continue to have strong pipeline of new innovation coming on there.
Frankly, you're very much powered by, our case in Nutrition Tech and that in combination with, or consumer foods, let's say go to market and marketing capability That's a, that's a, that's a good combination there. And we expect that to continue. We have, and we have new tech, new technologies and new launches coming in towards the, the end of the year and into next year. In terms of your question in terms of, let's say, types of customers, you know, large or medium size or what have you. And, and, just to orientate, our business is pretty much split, let's say, a part of, hard of hard global, regional, and, and, and local.
But I think it's important, first of all, to understand that when we talk about local customers, we're not talking necessarily about small ones. We could be talking about local, local joints in developing markets. So what we've seen so far is that Certainly, some of the global CPGs clearly are performing very well. But overall, when you take a step back, The reality is from a, from a consumer perspective, going back to the, to the trends that I just described, consumers are still looking for innovative products. So I believe there's still room in the market for customers regardless of scale and size.
There's room for those customers to bring, innovation to the market and that, that will be appreciated by consumers. And overall from a carry perspective, we're somewhat indifferent in terms of how we look at customers in terms of scale, for us, it's about pivoting resources or reallocating resources. And, we, we've, more than enough capability and nothing agility in our business model to be able to pivot to wherever the growth is. So we feel somewhat indifferent about what we Bose and feel we're we're well positioned to be able to, to meet consumer trends and enable customers regardless of size.
That concludes today's Q And A. I would now like to hand the call back to William for any additional or closing remarks.
Yeah. Listen, thanks everyone for for dialing into the call. I think if there's any follow-up questions, please reach out to myself and, IR colleagues and really, I suppose, all we'd like to say is just to wish everyone a very good day. Thank you.
This concludes today's call. Thank you for your participation. You may now disconnect.