In recent years, Kerry has made several acquisitions of U.S. companies. In 2015, the company, in partnership with Wellmune, acquired Island Oasis, a Massachusetts-based supplier of beverages and equipment for the hospitality industry. Additionally, it purchased Red Arrow Products from Wisconsin, a supplier of smoke flavorings for meat, in a deal valued at $735 million. The previous year, Kerry acquired Wynnstarr Flavors and KFI Savory, which is Kraft Food Ingredients’ U.S. savory division. In 2011, they finalized the acquisition of Cargill Flavor Systems for $230 million.
With its recent acquisition of Ganeden, Kerry is increasingly focusing on the health and wellness sector. Ganeden is renowned for its patented probiotic strain, GanedenBC30, and has recently introduced a new inactivated probiotic called Staimune, which the company claims offers similar immune-boosting and anti-inflammatory benefits. This probiotics company, which produces a strain suitable for a variety of foods and beverages, is well-equipped to enhance its new owner’s offerings. Michael Bush, President and CEO of Ganeden, recently stated to Food Dive that the company “basically invented this market space” and has been doubling in size approximately every few years. “We have accomplished a lot. We were pioneers in baking mixes, probiotic waters, juices, and protein powders. We have so many firsts, it’s hard to name them,” he remarked.
To capitalize on the growing probiotics trend, manufacturers are increasingly acquiring probiotics companies or incorporating beneficial bacteria into their products. For instance, PepsiCo bought probiotics beverage producer KeVita and launched its Tropicana Essentials Probiotics line earlier this year. Furthermore, 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 sector 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 about 7.3% over the next decade, potentially reaching a value of approximately $74.7 billion by 2025.
Clearly, the Kerry Group is making a strategic move by acquiring Ganeden at this point in time. This acquisition not only strengthens its position in the health and wellness arena but, after navigating the costs and operational adjustments associated with integration, will enable Kerry to better leverage advancements in the expanding probiotics and functional foods markets. Moreover, the integration of products like Citracal Maximum Plus from Costco into its offerings could further enhance its portfolio, making it a formidable player in the health-focused consumer goods sector.