Thank you. It gives me great pleasure, once again, to introduce the management team of Kerry, a presentation we always look forward to. And before we go any further, I want to thank them for the amazing dinner they had a couple of nights ago. What a wonderful dinner. Thank you. Kerry is a global leader in the specialty ingredients market. Under the tenure of CEO Edmond Scanlon, the group has transformed in recent years through a number of strategic business developments to be a pure play taste and nutrition company, uniquely positioned as an innovation partner with many of the food and beverage companies you've heard from so far this week, as well as many others. Here to tell us more is Edmond. Edmond, welcome. Thank you.
Thanks, Jonathan. Good morning, everybody. Unfortunately, we couldn't make the dinner event on Tuesday night as we were presenting our full year results back in Ireland, but delighted that everybody enjoyed it, and thanks to Elizabeth and Oliver and the rest of the Kerry team for managing it. We're very excited to be with you here today, and for everybody dialing in, we'd just like to thank you for the interest that you have in our company, so just to touch on the agenda here for a minute and give you an overview of our presentation, I'm going to start by profiling our taste and nutrition business today, which is underpinned by our science and technology platform, which we have significantly developed in recent years.
Then secondly, we see the food and beverage market and the food and beverage industry as being highly dynamic, with a huge market opportunity, especially here in the U.S., where we have a fantastic team. And Elizabeth Horvath, our North America Vice President of Marketing, is going to share with you some examples of how we are enabling our customers to create better food and beverage products. And finally, we create value for our customers, which in turn drives our business performance. And our CFO, Marguerite Larkin, is going to provide you with an overview of our financial track record, our balance model and targets, and how we strategically deploy capital across our business. So moving to a summary of Kerry today. Post the divestment of Kerry Dairy Ireland at the end of 2024, we're now a focused, dedicated taste and ingredients solutions provider.
We have a strong financial profile, with our continuing revenue of EUR 7 billion being one of the largest in the food and beverage B2B ingredients space, and we have a track record of consistent operational performance, with EBITDA of EUR 1.2 billion and a free cash flow of EUR 766 million in 2024. We are truly a global company, but with a strong local presence. We have 124 manufacturing facilities aligned to our customers in their markets. Our 70 technology and innovation centers support the development of positive and balanced ingredient solutions for our customers, which today reach almost 1.4 billion consumers globally, and our key growth differentiators here on the right-hand side of the slide. Firstly, and most importantly, is sustainable nutrition.
This is about convenience. It's about improving the nutritional profile of our customers' products. It's about improving taste, minimizing the environmental impact, and providing value for our customers.
Next is food service, which is a structural tailwind for Kerry. Our long-standing relationships and our unique ability to meet the needs of our food service customers means we have consistently outperformed growth in the channel by 300 to 400 basis points in recent years and feel confident about continuing that performance out into the future, and thirdly, emerging markets, where we have a strong track record of volume growth, so spending a moment on our history, which has been about growth and business evolution. We've highlighted before at CAGNI the various stages of our journey, from global expansion, building out our ingredients and flavors portfolio, to our business focus on integrating taste and nutrition, which has enabled us to better deliver more impactful solutions for our customers.
In the next slide, I'm going to focus on our recent business development, where we have increased our taste and nutrition revenue from 4 billion in 2017 to EUR 7 billion today, while at the same time, we have significantly transformed and invested in our portfolio at the same time. So firstly, on portfolio, we have completely transformed our business in recent years. We have divested of our consumer foods business, Dairy Ireland, and our sweet ingredients portfolio. We've also executed on a number of strategic acquisitions to develop our business from several dimensions. Firstly, we've built the foundations of our biotechnology solutions platform. And this comprises of ProActive Health, enzymes, and food protection and preservation. We've continued to add to our taste portfolio, and we've made a number of strategic acquisitions to build out our footprint in emerging markets.
Secondly, on organic investment, we've invested approximately EUR 3 billion into our science and technology ecosystem. We have developed new technologies that have fueled our growth and our business development, including the next generation of TasteSense, salt reduction, sugar reduction, and masking technologies, preservation systems for sorbate replacement, cocoa boosters to replace and extend cocoa, enzyme technology for egg replacements, as well as expanding our fermentation and biotransformation capability and continually evolving our broad library of taste profiles. Then thirdly, on business development, and specifically through the lens of our growth differentiators. On sustainable nutrition, the market has moved over the years to a situation where every new innovation or renovation project is addressing either nutrition, taste, cost, or sustainability. Supporting our customers across these areas has led our food service business to grow organically by 70% since 2017.
And we've also added about EUR 1 billion of revenue in emerging markets. It's the combination of this systematic, strategic portfolio transformation, along with technology and capacity investment, and continued business development that underpins our growth model. So given the portfolio developments of recent years, we're now a pure play taste and nutrition company. And our growth algorithm is simple. We're looking to deliver at least high single-digit EPS growth going forward. And this will be delivered through achieving revenue volume growth in the mid-single-digit range and expanding our EBITDA margins by 50 basis points plus per annum across the coming years into that 20% zone by 2028. And Marguerite will outline this in more detail later on. It's important to understand and appreciate how we achieve these targets.
As a business that is focused on the food and beverage industry, we understand the complexities across all the dimensions you see here. We have a well-balanced business, which we manage aligned to our customers and markets within the different geographies. And this enables us to move quickly and to allocate resources faster to faster-growing areas, whether that be across geographies and markets, customers, or channels. And just to spend a moment on technology, which for us comprises firstly biotechnology solutions, with revenues of EUR 1.3 billion. And this portfolio has been built out significantly over the last six or seven years, with the lead technology groupings being ProActive Health, food protection and preservation, as well as enzymes. And secondly, our integrated taste technologies, totaling EUR 5.7 billion in revenues and including a range of technologies and integrated solutions to meet different local taste applications across the globe.
And we group these across different product application areas: savory, beverage, dairy, and sweet. When it comes to technology, we have one of the largest absolute food and beverage RD&A investments in our sector, fully leveraging our global scale. Our science and technology strategy is focused on the two key areas of taste and biotechnology. We have dedicated teams under each, focused on delivering the next generation of technology based on marketing insights and technology evolution. We've one of the leading teams in the industry with over 1,200 scientists focusing on research, developing new products and integrated solutions, and applications with our customers using our extensive portfolio. This team has generated over 1,200 patents and is connected to an extensive external network of suppliers, startups, and universities.
This broad capability enables us to deliver better science-backed ingredient solutions for our customers, designed to meet the various opportunities that exist within our markets. We spoke about our market and specifically the penetration opportunity at our investor day last year. And I'd just like to recap on some of the key points as it's really resonating, given the increased focus on regulation and reformulation within our industry. Firstly, we size our specialty ingredients and flavors market at EUR 85 billion, which has consistently grown and will continue to grow, based firstly on overall market dynamics, including a growing global population, rising incomes, and the expansion of the middle-class consumers. And secondly, strong consumer dynamics, including increased demand for health and well-being, convenience, natural trusted ingredients, local authentic taste profiles, and sustainability credentials.
What I'd like to talk about for a moment is the market penetration opportunity for the B2B industry, and especially for us at Kerry. Right now, a large percentage of innovation is focused on renovation or reformulation. And this is driving our market penetration opportunity through nutritional enhancements, cleaner labels, sustainability enhancement, or cost reduction solutions. And we've sized this market penetration opportunity at EUR 15 billion, and I'm now going to give you a few examples of these. So starting with nutritional enhancement of products and just taking salt reduction and sugar reduction. And together, we size this market opportunity at EUR 6 billion. Firstly, on salt reduction, WHO guidelines for across the snacking, meals, and meat end markets represent a significant opportunity. And in reality, many customers are setting themselves more aggressive targets over the next five to 10 years.
Kerry is known for its leadership and unique multi-layered technology capability, specifically in this area of salt reduction. This has been a key driver to our double-digit volume growth in snacks in 2024, and we continue to have a significant level of innovation in our pipeline. Next, on sugar reduction. Since 2019, the market for low/ no-sugar beverages has grown 5x the market for carbonated beverages. Customer innovation today is for more natural solutions that don't compromise on taste, and we have really strong capabilities here also. On sustainability, customers are looking to reduce their water, their electricity, their food waste, and in the last three years, we've seen a 20% increase in product innovation from customers in North America related to sustainability, and finally, integrated ingredient solutions to reduce firstly labor costs, simplify processes, or optimize recipes.
The increase in labor and other operational costs in the past years has been a real catalyst for the food and beverage industry to look at their end-to-end operations. We've been enabling our customers over many years to overcome these challenges. Just to close before I hand you over to Elizabeth, our business is all about enabling and supporting our customers by turning the industry's largest challenges into opportunities. Elizabeth now is going to show you exactly how we're doing this through a number of really interesting examples. Firstly, rejuvenating a center of store category with a healthier, natural, cleaner labeled great tasting product. Secondly, developing our technology solution to meet the industry supply challenge around citrus. Thirdly, helping food service customers to rapidly expand by supporting their innovation right across their menu. With that, I'll hand you over to Elizabeth.
Thank you, Edmond, and good morning. Over the next few minutes, I'm going to paint a picture of the macro dynamics impacting our business in North America and more specifically how these forces are creating new opportunities for Kerry to create better food and beverage products. The market in North America is facing a rapidly evolving landscape. We're going to dive into five unique dynamics that are creating this whirlwind of change. Firstly, consumer financial instability. With inflation still a factor for consumers, they are rethinking their spending habits. Consumers are tightening their belts, leaving brands to get creative and delivering quality without breaking the bank. Two, upcoming regulations and policies. From new labeling requirements to sustainability targets, companies are giving more transparency than ever before. As a result, the industry is scrambling to innovate and renovate, ensuring compliance and maintaining market share. Health and wellness.
The rise of GLP-1 drugs is turbocharging consumer interest in health and wellness. Health-conscious choices are on the rise, and the pressure is on to deliver products that meet the demand for reduced sugar, lower sodium, higher protein, and cleaner labels. Gen Z. Gen Z is no longer a niche market. They're becoming the driving force. This generation is craving authenticity, sustainability, and products that match their unique values. It's a digital first generation that's reshaping the future of food. And lastly, and most importantly, no compromise on taste. Despite all of these shifts, consumers will not budge on one thing. They refuse to sacrifice on taste. They want healthy, convenient products that are as delicious as the originals. And this creates an enormous challenge for brands on the shelf, but it also creates huge opportunity for those that can get it right.
Our industry is in the middle of a perfect storm. These dynamics are forcing companies to innovate fast and adapt. And because of this, we see three key opportunities emerging. Firstly, core offering renovations. This is all about reformulation and improvement on core product lines. Two, LTO offering innovations. Bursts of new product introductions meant to attract new consumers or new segments. And third, joint partnerships across the industry for broader value creation. These are long-term partnerships designed to think differently about solving business challenges. I will now take a moment to touch on a few case studies that give examples of each. What happens when a beloved brand is faced with new labeling regulations that could impact its market leadership? Do they compromise on taste? Do they lose consumer trust? Or do they find a partner who can turn this challenge into an opportunity?
This is about a leading marinara sauce brand, one found within pantries across America, and how we helped them stay ahead of the curve. As we all know, sodium regulations are looming. This customer needed a way to reduce sodium by 30% without sacrificing the rich, authentic flavor that their beloved brand is known for and meeting consumers' expectation on price in this highly competitive category. Kerry was their partner of choice to tackle this challenge. Leading with our regulatory and consumer insights on front-of-pack labeling, we highlighted how their entire portfolio stacked up against their competition and the real business risks if they didn't act. The takeaway was clear. This wasn't just about compliance. It was about protecting market leadership, brand equity, and consumer trust.
Working side by side with our R&D application specialists and savory flavorists at our innovation center in Beloit, Wisconsin, we deployed Kerry's cutting-edge sodium reduction expertise to create a solution at pace and together we identified a breakthrough: a new-to-industry, unique concentrated version of our TasteSense salt technology created from proprietary fermentation processes and paired with onions, spices, and seasonings already present in the recipe to ensure a seamless, clean label transition, so what was the outcome? A consumer-approved sodium-reduced marinara sauce priced competitively on the shelves for the value-seeking consumer, now fully commercialized and ready to launch, but this just wasn't about this one project. This was about setting a new standard. Creating a healthier, great tasting product is a win for the entire industry. This one leading brand will now challenge the category to reformulate and pave the way for future innovation.
Now let's talk about citrus, one of the most volatile commodities in the market today. Supply chain disruptions, extreme weather, and rising prices have made citrus a moving target for the food and beverage industry. And for a global beverage manufacturer, this was a massive challenge. Their core lime flavor, a critical ingredient across multiple beverage platforms, was putting their entire product line in jeopardy. They needed a solution fast, and not just any solution, one that guaranteed cost stability, availability, and long-term resilience. And that's when Kerry stepped in. Our technical flavorist team took a deep dive into their flavor profile, and within a tight window, we matched and optimized this lime flavor perfectly. No impact on product taste or performance while also outmaneuvering market volatility with a future-proof solution. How? Through our sustainable citrus extender technology, a game changer in citrus innovation.
Instead of relying on traditional citrus oils, which are high cost and vulnerable to supply fluctuations, we leveraged proprietary ingredients and our deep citrus expertise to create a more stable, cost-effective, and scalable solution. And this just wasn't about matching a flavor. It was about redefining how citrus flavors are built. The result? A taste just as vibrant, fresh, and true to fruit, but with less reliance on depleting citrus resources and more predictably for the customer's supply chain. The result was a success for the customer, for Kerry, and for the industry. The customer had limited disruption with improved product quality. Kerry grew a stronger partnership and collaboration with the customer, and the industry benefited from a more sustainable food system, reducing reliance on natural citrus oils. This project is more than an example of our citrus extension technology.
It is a hero example of what happens when Kerry combines technology, innovation, and sustainability. The next example is around the dynamic, exciting, vibrant, limitless world of the out-of-home food service marketplace and our unique advantage. The foods ervice marketplace is a living, breathing entity that thrives on innovation and creativity. From new emerging coffee chains serving colorful cold beverages for those Instagrammable moments to diverse ethnic eateries serving Mediterranean and Mexican delights with a twist to celebrity-endorsed chicken eateries, this industry is a testament to the power of human connection and the joy of shared experiences. It's an industry that never stands still, with new, emerging, fast-growing brands constantly evolving to meet the ever-changing tastes and preferences of consumers. Most importantly, the food service marketplace is an attractive place to play.
It has outperformed the retail channel in nine of the last 10 years, and we believe the fundamentals of the food service industry are strong and will continue at pace. Kerry is uniquely positioned to capture this vibrant opportunity through, one, our leading technology portfolio, two, our deep embedded customer innovation partnerships, and three, our unique food service business model. Before I highlight a success story, let's dwell just a moment on this unique food service business model. We have purposely built a dedicated, long-standing, multifaceted business model that is not easily replicable.
It includes the layering of multiple capabilities and people, starting from consumer and menu insights all the way through integrated supply chains, coupled with deep intimacy of both processors and operators, packaging and equipment partnerships, and back-of-house expertise, and serviced with our baristas, mixologists, and chefs, as well as dedicated R&D, nutrition, and sustainability teams, all working together to lead our peers in food service market share. Now to our success story and how this model enabled them to outpace the industry. This is a fast casual chain, one that started as a simple culinary concept and grew into a multi-billion dollar enterprise. At the start of our partnership, this customer had just over 2,000 units, now with plans to triple.
They needed partners that could grow with them at pace while meeting their nutritional and sustainability requirements and enabling them with a full menu innovation strategy, helping them to stay relevant in a cluttered channel. Leveraging our unique food service business model, we partnered with the customer on innovation almost across every item on their menu. From deploying unique dairy taste technology for clean and natural cheese solutions to partnering on LTOs that deliver authentic global flavor profiles in their meats to revolutionizing food service beverages past carbonated soft drinks with better-for-you alternatives. Our chefs work side by side, enabled by menu insights, a deep technology portfolio, a dedicated team of R&D scientists, and a network of food service processors, delivering exponential growth for both Kerry and the customer, highlighted by being awarded their Supplier of the Year in 2024.
This model is scalable across multiple customers just like this one. Whether it is an established, long-standing chain or a new, emerging challenger, we can deploy the business model in different ways to drive the industry forward. As you can see from these examples, there is an immense opportunity for Kerry with customers to create better food and beverage products that meet consumer needs and the evolving supply and regulatory landscape. I will now turn you over to Marguerite.
Good morning, everyone, and thanks, Elizabeth. Some really excellent examples that demonstrate how we've been able to consistently outperform within our markets while highlighting the significant penetration opportunity that exists going forward. Today, I'm going to give you an overview of, firstly, our strong business performance. Secondly, our growth-led financial model that balances growth and return, and finally, our strategic capital allocation framework.
Starting first with our performance overview for 2024, I'm pleased to say we have delivered a strong performance right across our growth, return, and sustainability metrics. Firstly, on growth, taste and nutrition volume growth in 2024 was 3.4% and 4.1% in the fourth quarter. Group EBITDA margin increased by 120 basis points, driven by our accelerated operational excellence program, operating leverage, mix, portfolio, and the effect from pricing, with continuing business EBITDA margins of 17.1%, and constant currency-adjusted earnings per share growth was 9.7% in the year. Secondly, moving to returns, we had another year of strong cash generation with cash conversion of 95%, and we increased our return on capital employed by 60 basis points to 10.6% in the year, and thirdly, on sustainability, we continued to build our progress of recent years.
Firstly, on carbon, we had a strong performance with a 50% reduction in Scope 1 and 2 emissions versus our 2017 base year. On food waste, we have delivered a 38% reduction across our operations. And we increased our nutritional reach to 1.36 billion consumers in 2024, a measure of the number of consumers we impact with our positive and balanced nutritional solutions globally. Over the coming slides, I will take you through each of our financial metrics in turn. Beginning with volume growth, taste and nutrition volumes have averaged 4.1% across the last three years, reflecting our continued market outperformance given our unique strategic positioning within our customers.
On the right, you can see we have delivered strong performance across our key growth differentiators, including average food service volume growth of 5% within our channels and emerging markets average growth of 8% over the last number of years, which importantly highlights the resilience of our business across different dimensions. This strong record of growth across food service and emerging markets, combined with the increased focus on product renovation, gives us confidence that we will continue to deliver mid-single-digit volume growth over the medium term. Now turning to our EBITDA margin development. We have significantly expanded our EBITDA margin in recent years, and we have recently refreshed our 2026 EBITDA margin target of 18%-19% while adding our new group target of 19%-20% by 2028. Since 2021, we have expanded group margins by 240 basis points to 17.1%.
We've achieved this while managing significant input cost inflation in absolute terms, which has resulted in a mathematical margin headwind of circa 150 basis points. The divestment of Kerry Dairy Ireland resulted in a step-change margin improvement of 140 basis points, and over the past three years, we have delivered 150 basis points of margin expansion from operating leverage, mix, and portfolio benefits, together with 100 basis points from net efficiencies through our accelerated operational excellence program. Going forward, over the next two years, and in line with what we have previously communicated, we will expand our EBITDA margin by more than 100 basis points into the 18%-19% range by 2026 through further accelerated operational excellence program benefits combined with operating leverage and mix.
Beyond the current plan, we will deliver continued margin expansion through operating leverage and mix benefits, as well as our new business efficiency program, Accelerate 2.0, to achieve our 2028 EBITDA margin target of 19%-20%. We will continue to balance our business margin expansion with our business growth ambitions. Turning now to cash and returns, and starting with cash. We have made very good progress over the last couple of years in increasing our overall level of free cash flow generation and our cash conversion. This has been driven by improvements in our working capital enabled by our accelerated operational excellence program and the establishment of our two global business service centers. We feel confident that we can sustain this into the future, and we're expecting another strong year of free cash flow in 2025 with good cash conversion.
Moving to return on average capital employed, we delivered a 60 basis points increase in our returns to 10.6% in 2024, given our good earnings growth in the year. We plan to continue to build on this progress and increase our returns towards 12% over the coming years. Moving to our medium-term targets post the divestment of Kerry Dairy Ireland. As I've just outlined, we are well on track to achieve our 2026 targets. In addition, we have introduced two new financial targets up to 2028, the first being the EBITDA margin target of 19%-20%, and the second is our high single-digit plus adjusted EPS growth target that Edmond outlined earlier. We believe these targets clearly demonstrate how we aim to create value for shareholders over the coming years.
Turning now to our capital allocation priority framework, which is well balanced between reinvestment in our business and capital returns. Our first priority is capital investment. We will continue to strategically invest 4%-5% of our revenues to support our growth-led approach. Secondly, on dividends, we will maintain our track record of double-digit percentage per share growth. And thirdly, we will continue to evaluate M&A investment opportunities aligned to our strategy that enhance our technology portfolio, strategic positioning, or market access. And finally, we will continue to balance the evaluation of M&A investment opportunities with returning capital to shareholders through share buybacks. Our objective here is to have an efficient balance sheet while retaining the agility and flexibility to allocate capital to where we believe we can generate the greatest value. Finally, looking at our recent capital allocation under each of the four areas.
On capital investment, we have invested in expanding our manufacturing footprint as well as our technology and innovation infrastructure and capabilities to support the delivery of our business growth plans across the globe. In addition, we have invested capital to enable cost efficiency benefits and expand our business margins. Next to M&A, where we have significantly evolved and rotated our portfolio in recent years through a combination of strategic acquisitions and business divestments. As Edmond referenced earlier, through our strategic M&A and organic investment, we have significantly built out our technology platforms in the areas of ProActive Health, enzymes, preservation, and authentic taste through targeted acquisitions aligned to our strategic growth ambitions.
On dividends, in 2024, we paid dividends of over EUR 200 million and have grown our dividend at a consistent double-digit rate since Kerry went public in 1986, with EUR 1.3 billion paid out by way of dividends over the past 10 years. And on buybacks, during 2024, we repurchased over EUR 550 million of shares as part of the EUR 900 million share buyback programs announced over the last 18 months. So overall, on capital allocation, we will remain agile and flexible as regards balancing capital deployment between strategic reinvestment in our business and capital returns aligned to market conditions as we seek to generate value and deliver on our medium-term targets. And with that, I will hand you back to Edmond. Thanks, Marguerite.
So just to close out here with a short summary, we have continually evolved our business over the years, becoming a pure play taste and nutrition business that today is well positioned for growth in a highly defensive resilient sector. On top of this, we have a EUR 15 billion market penetration opportunity, which will be a key driver of our growth and a key driver of our goal forward market outperformance. We have a clear growth algorithm. Revenue volume growth in the mid-single-digit range combined with EBITDA margin expansion of 50 basis points plus and delivering at least a high single-digit EPS growth going forward, all as we continue to strategically deploy our capital to areas where we can best create mid-term and long-term shareholder value. So with that, I thank you for your time, and we'll open it for questions. Thank you. Thank you. Andrew Lazar, please.
We've heard some very mixed sort of pessimistic volume outlooks this week from North America-based at-home food and beverage leaders. You certainly sound quite a bit more optimistic. I know many of these are your partners, and I know you have a great food service business. I'd love to hear what kind of volume growth outlook on at-home food and beverage in North America sort of drives your plans in North America. Thanks so much.
Thank you, and I guess North America is a market for us that we feel is the most dynamic market geographically that we operate in. Whether it's emerging brands, whether it's established players, whether it's market leaders, category leaders, whether it's in private label, right across the board, we see that companies are trying to find ways to grow and expand their business.
I guess the biggest driver in our business that isn't reflected necessarily in the numbers of our customers is that penetration opportunity that I just touched on. A lot of this reformulation and renovation is done behind the scenes. So it's not always, let's say, visible to consumers. And that's deliberate in many instances. So in many respects, we don't need the overall market to grow actually while our business is growing. And we published our full results there on Tuesday. And I think there was quite a bit of surprise around the performance of our snack business, for instance, where we grew that snack and QSR market on a global basis, not just North America, but on a global basis by about 10%. I mean, clearly, the snack market is not growing at that level.
So that for us, really, and I think the feedback we're getting is that that's a proof point that our strategy is working, and it's a proof point that the renovation that's happening, especially around salt reduction, is driving growth in our business. That all said, look, we need market growth, and we believe the market in which we operate in totality, we haven't broken it out between, let's say, food service and retail. We believe that market today globally is growing at about 0.5%. We'd like to see that maybe growing in the 1% zone or between 1% and 2%, which has been the historic kind of levels. But that said, we feel confident that we can outperform the markets in which we play in by at least 300 basis points, somewhere between that 300 and 400 basis points that I referenced previously.
So as we think about the market, especially here in North America, it's that penetration opportunity that gives us the confidence we believe we can grow. Well, if there's no more questions, please join me once again.