Good day, and welcome to the Kerry 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 Kerry Group. Please go ahead, sir.
Good morning, everyone, and thank you for dialing in to Kerry's third 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, Edmond Scanlon, and our CFO, Marguerite Larkin. Edmond and Marguerite will take you through a brief presentation capturing the key points of this morning's results update. Following the presentation, we will open the lines for your questions. Before we begin, please note the usual disclaimer regarding forward-looking statements. I will now hand over to Edmond.
Thank you, William, and good morning, everyone, and thanks for dialing in this morning. Over the next 10 to 15 minutes or so, Marguerite and I will 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. Starting with slide four, 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 and 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. Overall, we're very pleased with the rate of recovery in the third quarter. Starting firstly with the food service channel.
We maintained a good trajectory of recovery through the third quarter, exiting the period back 10%. This improvement was achieved primarily due to two 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 COVID related restrictions. Secondly, we also had a number of innovations that were launched in the third quarter. On the retail channel, this channel continued to perform 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&A front, this morning we announced two new acquisitions which we're very excited about. Firstly, Bio-K+ International, a company based in Canada. It's a leading biotechnology company with a number of probiotics in beverage and supplement applications.
It has 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 Ganeden over the last three years. Moving on to Jining 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. We see great potential for this business to enhance Kerry's presence in the savory taste area in China. Of course, China will continue to be a key market for Kerry going forward. Just from a timing perspective, Bio-K has just completed, and Jining Nature is on track to close before the end of the year.
Overall, we're very excited about the potential for these two businesses. With that, I'll now hand you over to Marguerite for more details on our performance.
Thanks, Edmond. Good morning, everyone. Now turning to slide five 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. Importantly, you can see the positive rate of overall recovery in Q3, driven by significant improvements in our Taste & Nutrition business, where we had a volume reduction of 1.9% in the third quarter. On group reported margin was 130 basis points lower year to date as a result of two key drivers. The first and most significant was the operating deleverage we experienced, resulting from a large percentage of food service customers being impacted by lockdowns and restrictions that were introduced across the globe.
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. Taste & Nutrition margins were 80 basis points lower in Q3, which was a significant recovery, while Consumer Foods margins grew well in the third quarter and overall by 10 basis points year-to-date. Turning to our revenue performance on slide six and looking at the breakdown of revenue components. The overall reduction in reported revenue of 4.5% was driven by reduced volumes of 4.7%, price increases of 0.3%, principally driven by increases in our Consumer Foods business, an adverse translation currency impact of 1.1%, and a positive impact overall from acquisitions of 1%.
Moving now to slide seven, focusing on our Taste & Nutrition business, which had volume reduction of 4.4% in the period and 1.9% in the quarter, which represents a significant improvement 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 third quarter, with year-to-date performance particularly strong in the beverage, meals, snacks, and pharma end-use markets. Our nutrition and wellness technology portfolio performed strongly through customized solutions incorporating Kerry's broad protein portfolio, fermented ingredients, probiotics, and immunity enhancing technologies. I'm pleased to say that performance in developing markets improved, approaching prior year levels with lower volumes of 1% in the quarter and 2.9% year-to-date.
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 third quarter, as I mentioned. Turning to slide eight and looking at Taste & 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 third 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 moved through the third quarter.
In Europe, we saw a significant improvement in the third 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 to 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 front, we made good progress in expanding our capacity and deploying our technology capabilities in the region, most notably in China and the Middle East. Now turning to Consumer Foods on slide nine for a few moments. The business had a good recovery in the third quarter with strong performances within the portfolio, most notably the Richmond, Fridge Raiders, and Cheestrings brands.
Underlying business volumes grew 1.4% in the third quarter and 0.1% year-to-date. Including the impact of the previously reported ready meals contract, overall business volumes were back 6.1% year-to-date. Trading margins improved by 10 basis points as efficiencies were partially offset by COVID costs and market pricing. Finally, the performance of our meat-free ranges under the Richmond and Naked Glory brands was very strong as both brands continued to take market share and extend their ranges. Moving now to slide 10 to cover off a number of other matters. KerryConnect, 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 & Nutrition, these were broadly neutral. While we had low to mid-single digit inflation within our Consumer Foods business.
We're expecting Taste & Nutrition to remain similar for the remainder of the year, with inflation in Consumer Foods softening. Our net debt was EUR 1.8 billion at the end of the period. On currency, we are currently estimating a translation currency headwind of circa 3% on earnings for the full year. Finally, in summary, before I hand over to Edmond, overall, our financial performance has improved significantly in the third quarter, with notable improvements in business volumes and trading margins.
We're currently expecting to see further improvements across both measures in the final quarter. Now back to Edmond.
Thanks, Marguerite. Before I get onto 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. It's centered around innovation enabling sustainable nutrition, which is core to our growth strategy and aligns to our purpose to inspire food, nourish life. Looking at the three 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. 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 five 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 on 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 for our customers, people, society, and the planet. Moving now on to slide 12, and specifically on the area of innovation. Innovation is central to our growth strategy. What we're seeing more and more is that sustainability is now becoming central to our innovation strategy.
There's been a significant increase in consumer and customer demand for health and wellness products that also protect people and the planet, which led us to setting our sustainable nutrition goal. Under this framework, we're currently reaching 1 billion people with ingredients that are defined as balanced and positive nutrition. Our aim is that by 2030, we'll be reaching over 2 billion people with sustainable nutrition solutions. This growth target is not something that Kerry 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 Kerry can add to improve their products, but also how this will help them to achieve their overall sustainability goals. The slide here just has a few examples of what Kerry's capabilities can deliver for 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. Just to close here, the key point is the drive towards sustainability, we believe is a total win-win for Kerry and our customers, and we're really excited about the potential that we see here. Turning to slide number 13 and future prospects.
Within Taste & Nutrition, 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&A opportunities aligned to our strategic growth priorities. 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. We're forecasting a full-year earnings per share decrease of 8%-11% in constant currency. With that, I'll hand you back to the operator, and we'll be glad to take any of your questions.
Thank you. If you would like to ask a question on today's call, please press star one on your telephone keypad. That's star one to ask a question. We will pause for just one moment to allow everyone to signal. We can now take our first question from Graham Hunt from Morgan Stanley. Please go ahead.
Hi, good morning, and thanks for the questions. Just two for me, if possible. You spoke about new opportunities coming from growth in the food delivery channel and food service. 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. 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? Second question on sustainability. As you mentioned, a number of your technologies can materially impact the carbon footprint and other sustainability metrics of your customers' products. How meaningful do you think this could be, in your existing portfolio, given most of your global FMCG customers now have net carbon neutral targets?
Is Kerry developed to be a key partner in helping them achieve this? Is this something you've always been engaged with them on, or should we see it as more incremental going forward?
Yeah. Thanks, Graham. I would say maybe on the second part of the question first. I would say from a sustainability standpoint, how we're thinking about that is that this is not something else that we need to do. We did update our targets and give you some more color in terms of what our sustainability goals are and what the big reach goal is from a nutrition standpoint. 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. 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.
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 gave 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 delivery is improving on the delivery experience for our customers. The bigger point on food service and the recovery that we saw in food service is that we see the bigger players being better able to cope with restrictions. Restrictions have been imposed, lifted, re-imposed over the last several months, and the larger players are better able to handle those restrictions. Like we said in the half one, first point was that 75% of our exposure to that channel is orientated towards the larger players.
Number two, we've seen a significant amount of innovation activity from those larger players, both in improving that delivery experience, number one, but also the reinstatements of LTOs. Basically what I'm saying there is that what we said we saw happening in Q2 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 Targett from Berenberg. Please go ahead.
Hello. Good morning, everyone. Couple questions from me. Firstly, just actually sticking with food service. Obviously, the anticipated return to positive volume growth in Q4, is that, I assume, driven by your expectation that further improvement in food service volume? Do you expect a re-acceleration on the retail side? I guess my question on the food service 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 those food service volumes could slip again in the fourth quarter. 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 customer restocking.
Secondly, just on the margin, could you maybe give us some color of how the kind of the COVID costs were trending in sort of Q2, Q3, and what your anticipation is for Q4, just to get an idea of to what extent that maybe those easing is driving the margin improvement? Thanks a lot.
I might jump in. Good morning, James. Just to take the second part of your question first, and then I'll ask Edmond maybe to give a perspective on the food service question. In terms of the COVID costs in the second half, it is fair to say that we continue to incur COVID-related costs. You remember at the half year that we provided some detail in relation to the costs. They primarily relate to, firstly, costs ensuring the safety and wellbeing of our employees, including personal protective equipment, zoning, segregation, and other employee support costs. Secondly, costs to ensure continuity of supply, including additional labor, raw material costs, stock holding and distribution costs. 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 costs, like we updated at the half year. 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 to be similar to H1. You'll appreciate there are many moving parts in the current environment. In terms, though, of the overall margin and the margin in Q4, we are looking at a further recovery in margins in the fourth quarter, with volumes improving and very much linked to volumes improving. Obviously, as I referenced, the COVID-related costs will continue. Maybe with that, I'd ask Edmond on the food service.
Thanks, James. 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 in the second quarter to 15% in the third quarter, with a run rate of 20% lower entering the quarter and 10% lower exiting September, exiting the end of the quarter. In terms of, I suppose, maybe Q4, first of all, we're in the first week of November, and we saw October performance in line with 2019, which we're pleased about. We also see current trading as quite solid, and we have visibility on a number of product launches coming to the market in the next few weeks. The combination of all this, I suppose we believe we will be in positive territory from a volume growth perspective in the fourth quarter.
Sorry, Edmond, just to clarify, when you're talking about the in line in the prior year in October, are you talking about food service? Just food service? When you talked about positive volumes in Q4, again, is that about T&N, or you also think food service will be positive in Q4? Sorry, just to clarify.
Sorry, James. To clarify, I was talking about from a total T&N perspective, October performance is in line with 2019. In terms of the outlook, we do see volumes to be in positive territory for the full quarter, for the fourth quarter for total T&N. Thank you.
A reminder, if you would like to ask a question, please press star one. We can now take our next question from Jason Molins from Goodbody. Please go ahead.
Hi. Good morning. You've answered quite a few questions there on food service, I won't delve into that in any more detail. Maybe just in terms of some of the M&A deals that you've completed, can you give any sense of the quantum of those combined deals and maybe in particular on the Bio-K, the probiotics business, what sort of complementary opportunities that gives you over what you already had with Ganeden? That would be something I'd be interested to explore. Just sort of formally, in terms of your guidance, the -8 to -11 that you've set out, given we're at the start of November, what do you think are some of the key issues that maybe get you at either end of that sort of guidance range? Thanks.
Good morning, Jason. I might just take your first question on the acquisitions before handing to Edmond to give some further color on the acquisitions. Firstly, we're very excited about the acquisitions that we announced this morning. In terms of the consideration for the two acquisitions we announced this morning, was just north of $200 million and towards a high teens EBITDA multiple. Maybe just on the Bio-K, just I'll hand to Edmond to give some additional color on it.
Good morning, Jason Molins. Thanks for the question. I would like to touch on both acquisitions, because we're quite excited by both of them. The first one, in terms of Bio-K, first of all, it brings with it a very strong science and clinical foundation. 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. The third point is that it opens up a new channel to us, which is the healthcare channel. We believe in time, and I'm sure with some investment, we will be able to push more of our existing portfolio through this channel.
It also gives a slightly bigger exposure to the dietary supplements market. Quite complementary to Ganeden. We do see it evolving more or less in the same way as Ganeden. 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. That's hidden by Bio-K. Just in terms of Jining Nature, that brings with it a strong local Chinese savory taste capability. It has a strong reputation in the local Chinese market for that capability. It brings with it a new manufacturing facility that they've been transitioning into over the last few years. That's pretty much completed at this stage, and their focus has been on natural, authentic, savory taste, which would complement and does complement our own farm to food approach.
In terms of the guidance, I suppose, look, it's somewhat similar points that I made in the previous question. We are in the first week of November. We have a relatively decent level of visibility on how things are playing out. Trading is solid, and we do know we have a number of new launches kicking in here in Q4. Like we said we would at the H1 presentation.
Yeah, thanks.
We can now take our next question from John Ennis from Goldman Sachs.
Hey, good morning, everyone. My first question is on innovation rate. Comments from some of the FMCG companies have 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 your business or whether these trends are now beginning to reverse. Effectively, how much of a problem is it for Kerry if the number of launches in the market remains lower for longer within the food industry? That's my first question. Then my second question is kind of a follow-up on some of the questions already on the retail part of the portfolio. You grew 4% 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 in retail? Is it down to product mix, is it customer mix, or is there something else that we should be aware of? Thanks.
Yeah. Thanks, John. Maybe I'll take the first part first on the CPGs and innovation of what we're seeing. I would say, first of all, I think we're past that SKU rationalization phase, and we are very much back into an innovation zone. In fact, like I said in the H1 results, that we've seen customers move at a pace, where they have decisions made about launching new products. I'm just reminded of a customer on the food service side that has brought a plant-based meat, chicken alternative to market across a number of countries in Europe in a five-month period. That kind of pace of innovation is unprecedented. I think COVID is being somewhat of a catalyst for some of the CPGs to rethink some of their processes as it relates to new product development. 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. We believe, based on our business model, that we're well positioned to be able to enable them to do that. The third point, I would say that as we are, we'll say, coming through COVID, the trends are becoming more clear. Let's say the post-COVID trends, if I can say it, are becoming a little bit more clear maybe than they were in the at the half one. Health and wellness is, and I would say functionality, health, wellness, and functionality in food is really accelerating. Whether that's things like immunity or just better-for-you type formulations are certainly accelerating, and we're seeing it across so many categories, especially in snacking and beverage. Sustainability, I think, is just becoming even a bigger topic.
Like I said in the presentation, the level of engagement there is at an unprecedented level. Our biggest focus there, again, is moving customers or helping move customers and their products along that nutrition spectrum. The third point is convenience. I think we all understand that, and that continues to be a big factor. The fourth point that I probably didn't touch on in the half one is value. I think it's pretty well understood that we will be facing into a fairly significant recession here, perhaps. Value is becoming a bigger topic with customers.
The point here is that when I'm talking about value, the type of conversations with customers are more like designing to value, developing to value, formulating to value, as opposed to, let's say, just cutting down on the particular, let's say, elements of functionality in a product. It's designing and developing new products for value as opposed to just cheapening existing products. I hope that makes sense, John.
Yeah, that's helpful. Thank you.
We can now take our next-
On the second question.
Please go ahead.
On the second question on retail performance.
Oh, sorry. Yeah.
Okay.
Sorry about that. Yeah, look, we've seen volumes during the third quarter running at 4%, which is above our historic run rate of 3%. I guess, if we were to look back maybe towards the beginning of the year where our retail performance was in the zone of 2% in Q2, or sorry, in Q1, what we did say at the time was that in places like China, where we're relatively new into that market, we didn't have exposure to some of the traditional categories like noodles, for instance. 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 can tell you is that taking China as the example and noodles as the example, we've seen demand for products aligned to the trends that I just mentioned normalize over the most recent months. To a point that we've seen our retail business grow up to high single digits in China in the third quarter. Look, from our perspective, we feel that we will outperform our historic growth rates of the 3%. We're in the 4% right now, and we expect to be in that zone and to outperform our historic run rates into the future.
Okay. Thank you very much. Thanks for all that.
We can now take our next question from Heidi Vesterinen 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. 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. Do you still feel confident on delivering on that going forward? Lastly, what is your current thinking on further M&A, please? Thank you.
Good morning, Heidi. Maybe taking the last part of the question first. I would say from an M&A perspective, it continues to be quite busy on the M&A front despite the obvious challenges. The pipeline continues to be strong, and we continue to work on several projects. 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 Kerry perspective as it relates to M&A activity. In terms of the midterm targets. Look, I think we are where we are in terms of, let's say, a worldwide pandemic. Clearly, if you asked me that question back last February, we would say we were absolutely right on track. We have made a lot of progress over the course of the year when you consider where we were in April.
I think this is something perhaps we will come back at through the course of 2021. For right now, I think we're in the zone of getting through this year, and see how things look in 2021. In terms of the, let's say, the performance by region or the outlook by region. Obviously there's a lot of moving parts, but maybe taking a quick runaround. We would say we're starting in APMEA first, we're quite, let's say, pleased with the fact that we've moved into positive territory in the EMEA region. That has been driven primarily by China. 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, relatively well. With LATAM being a drag.
We do see LATAM continuing to be lagging by virtue of the fact that COVID was later coming to LATAM, and recovery will be a little bit later also. In terms of the European market, there was a significant recovery in Q3, and we expect that to continue into Q4.
Thank you. We will now take our next question from Cathal 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. Secondly, just on Christmas trading from the Consumer Foods perspective and a retail perspective, how seasonally important is that to the overall business?
Yeah, thanks, Cathal. On Georgia, we announced a significant investment at the beginning of March in that facility. Just to remind everybody, it is catered towards the meat and plant-based protein markets. I would say work continues there in terms of expanding that location just from a capital standpoint, whether it's that equipment or building, that continues. It's still more or less on track. Obviously, there's been a lot of, 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 was in line with our original timing. In terms of Christmas trading for our Consumer Foods business, it is an important part 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 Consumer Foods to trade a little bit better in Q4 than it did in Q3 from an underlying perspective based on a solid to strong Christmas period.
Edmond, is it meaningful for the T&N business, any call out?
Not really. Chinese New Year has probably got a bigger impact than Christmas.
Thank you.
As a final reminder, if you would like to ask a question, please press star one. We can now take our next question from Charles Eden from UBS. Please go ahead.
Hi, good morning. Just two questions from me, if that's okay. Firstly, you mentioned the strong growth in your meat-free brands, Originally Meat Free and Naked Glory. Are you able to update us just in terms of the growth rates you're seeing for these brands? Remind us what % of your Consumer Foods business today these brands combined represent. That's question number one. My second question is that you highlighted that larger customers are proving more successful in navigating the current challenges within the food service channel. Do you think this also holds for the balance of your T&M business? I ask because one of your key growth drivers in recent years has been a strong momentum with the regional and local customers.
Do you think we're seeing the balance of power shift back to the larger brands as a consequence of COVID, or do you see this as 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 just got into the market, I would say about exactly a year ago. In terms of quantum, I would say the scale of our plant-based business in Consumer Foods is in the zone of 2%-3% of our Consumer Foods business. It's grown significantly in a very short period of time, and I would say that there continues to be growth effectively week on week and month on month, and we continue to have a strong pipeline of new innovation coming on there, frankly, very much powered by our Taste & Nutrition technology and that in combination with our Consumer Foods, let's say, go to market and marketing capability. That's a good combination there, and we expect that to continue.
We have new technologies and new launches coming in towards the end of the year and into next year. In terms of your question in terms of, let's say, types of customers large or medium size or what have you, just to orientate our business is pretty much split, let's say a third, a third, a third global, regional, and local. 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 giants in developing markets. What we've seen so far is that certainly some of the global CPGs clearly are performing very well. Overall, when you take a step back, the reality is from a consumer perspective, going back to the trends that I just described, consumers are still looking for innovative products.
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 will be appreciated by consumers. Overall, from a Kerry 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. We've more than enough capability and enough agility in our business model to be able to pivot to wherever the growth is. We feel somewhat indifferent about what way it goes and feel we're well positioned to be able to meet consumer trends and enable customers regardless of size.
That's very clear. Thanks, Edmond. Thanks.
That concludes today's Q&A. I would now like to hand the call back to William for any additional or closing remarks.
Yeah, listen, thanks, everyone, for dialing in to the call. I think if there's any follow-up questions, please reach out to myself and our colleagues. Really, I suppose all that's left 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.