In recent years, Kerry has made several acquisitions of U.S. companies. In 2015, the firm, together with Wellmune, purchased Island Oasis, a Massachusetts-based supplier of beverages and equipment for the hospitality industry. Additionally, it acquired Red Arrow Products, a Wisconsin-based provider of smoke flavorings for meat, in a transaction valued at $735 million. In 2014, Kerry expanded its portfolio by acquiring Wynnstarr Flavors and KFI Savory, the savory division of Kraft Food Ingredients based in the U.S. The company also finalized the acquisition of Cargill Flavor Systems in 2011 for $230 million.
With its recent purchase of Ganeden, Kerry is strategically positioning itself within the health and wellness sector. Ganeden is renowned for its patented strain of probiotic bacteria, GanedenBC30, and has recently introduced a new inactivated probiotic called Staimune, which the company claims offers comparable immune-boosting and anti-inflammatory benefits. The probiotics firm produces a strain that can be integrated into a variety of foods and beverages, making it a valuable addition to Kerry’s portfolio. Michael Bush, President and CEO of Ganeden, recently mentioned to Food Dive that the company “essentially invented this market space” and has been experiencing growth at a rapid pace, doubling in size every few years. “We pioneered the use of probiotics in baking mixes, probiotic waters, juices, and protein powders. We have so many industry firsts that it’s challenging to list them all,” he stated.
To capitalize on the growing probiotics trend, many manufacturers have begun acquiring probiotics companies or incorporating these beneficial bacteria into their products. For instance, PepsiCo purchased the probiotic beverage producer KeVita and launched its Tropicana Essentials Probiotics line earlier this year. Additionally, 301 INC, the venture capital arm of General Mills, led a $6.5 million Series D investment round in March to support Farmhouse Culture, a startup focused on fermented and probiotic foods and beverages.
According to a report from BCC Research, the global probiotics market reached $34 billion in sales in 2015, with the food and beverage industry accounting for 73%, or $24.8 billion, of that figure. The probiotics market is projected to grow at a compound annual growth rate (CAGR) of approximately 7.3% over the next decade, potentially reaching a value of around $74.7 billion by 2025.
Clearly, the Kerry Group is making a savvy move by acquiring Ganeden at this juncture. This acquisition not only strengthens its position in the health and wellness sector but also, after navigating the costs and operational shifts involved in integration, will enhance its ability to leverage advancements within the rapidly expanding probiotics and functional foods markets. As Kerry continues to explore new opportunities, it may also consider innovations such as now calcium citrate caps to further diversify its offerings in the health space.