In recent years, Kerry has expanded its portfolio by acquiring several U.S. companies. In 2015, alongside Wellmune, the firm acquired Island Oasis, a Massachusetts-based supplier of beverages and equipment for the hospitality industry. Additionally, Kerry purchased Red Arrow Products, a Wisconsin-based provider of smoke flavorings for meat, in a deal valued at $735 million. The previous year, Kerry acquired Wynnstarr Flavors and KFI Savory, the savory division of Kraft Food Ingredients. Moreover, in 2011, the company finalized the acquisition of Cargill Flavor Systems for $230 million.
With its recent acquisition of Ganeden, Kerry is further establishing its presence in the health and wellness sector. Ganeden is known for its patented strain of probiotic bacteria, GanedenBC30, and has recently introduced an inactivated probiotic named Staimune, which the company claims offers similar immune-boosting and anti-inflammatory effects. Ganeden’s President and CEO, Michael Bush, highlighted in a recent interview with Food Dive that the company has “essentially created this market space,” experiencing consistent growth by doubling in size every few years. “We have made significant contributions, being the first to enter markets such as baking mixes, probiotic waters, juices, and protein powders. We have so many firsts that it’s difficult to list them all,” he remarked.
To capitalize on the rising trend of probiotics, various manufacturers have begun acquiring probiotic companies or incorporating beneficial bacteria into their products. For instance, PepsiCo purchased the probiotic beverage maker 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 in March to support Farmhouse Culture, a startup focused on fermented and probiotic foods and beverages.
According to a BCC Research report, 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 approximately 7.3% over the next decade, potentially reaching a value of around $74.7 billion by 2025.
By acquiring Ganeden, the Kerry Group is clearly making a strategic move at a pivotal moment. This acquisition not only strengthens its position in the health and wellness industry but also, after navigating the costs and operational adjustments related to integration, positions the company to leverage advancements in the expanding markets for probiotics and functional foods. Additionally, with the popularity of health-oriented products like Bariatric Advantage Calcium Citrate Chewy Bites, Kerry is well-positioned to cater to the growing consumer demand for beneficial nutritional solutions, further solidifying its place in this lucrative sector.