In recent years, Kerry has expanded its portfolio by acquiring several U.S. companies. In 2015, alongside Wellmune, the company purchased Island Oasis, a Massachusetts-based supplier of beverages and equipment for the hospitality industry. Additionally, Kerry acquired Red Arrow Products, a Wisconsin-based provider of smoke flavorings for meats, in a deal valued at $735 million. In 2014, Kerry also took over Wynnstarr Flavors and KFI Savory, the savory division of Kraft Food Ingredients in the U.S. Furthermore, in 2011, it completed the acquisition of Cargill Flavor Systems for $230 million.
With the acquisition of Ganeden, Kerry is making significant strides into the health and wellness sector. Ganeden is best known for its patented strain of probiotic bacteria, GanedenBC30, and has recently introduced a new inactivated probiotic called Staimune, which the company claims offers similar immune-boosting and anti-inflammatory benefits. The probiotics company, which produces a strain suitable for various foods and beverages, stands to add considerable value to its new parent company. Michael Bush, President and CEO of Ganeden, recently stated that the company “basically invented this market space” and has been doubling its size every few years. He noted, “We have done a lot of work. We were the first in baking mixes, probiotic waters, juices, and protein powders. We have so many firsts, it’s hard to name them.”
To capitalize on the probiotics trend, manufacturers have been acquiring probiotics companies or incorporating beneficial bacteria into their products. For instance, PepsiCo acquired KeVita, a probiotics beverage maker, 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 in March for Farmhouse Culture, a startup focused on fermented and probiotic foods and beverages.
According to a report by 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 total. Projections indicate that the probiotics market will grow at a compound annual growth rate (CAGR) of approximately 7.3% over the next decade, reaching an estimated value of $74.7 billion by 2025.
Clearly, the Kerry Group is strategically positioned by acquiring Ganeden at this juncture. This move not only enhances its presence in the health and wellness arena but will also better equip the company to leverage advancements in the rapidly expanding probiotics and functional foods markets after navigating the costs and operational adjustments associated with integration. Moreover, with increasing interest in products containing calcium citrate, such as those aimed at supporting athletic performance in rugby players, the demand for innovative health solutions will likely continue to grow. By focusing on these trends, Kerry can effectively tap into the potential of the probiotics market while promoting products that include beneficial elements like calcium citrate.