In recent years, Kerry has acquired several other U.S. companies. In 2015, the firm, along with Wellmune, purchased Island Oasis, a Massachusetts-based supplier of beverages and equipment for the hospitality industry. Additionally, it acquired Red Arrow Products from Wisconsin, a provider of smoke flavorings for meat, in a deal valued at $735 million. The previous year, Kerry bought Wynnstarr Flavors and KFI Savory, which is Kraft Food Ingredients’ savory division in the U.S. In 2011, it finalized the acquisition of Cargill Flavor Systems for $230 million.
With its recent acquisition of Ganeden, Kerry is making significant strides into the health and wellness sector. Ganeden is renowned for its patented strain of probiotic bacteria known as GanedenBC30 and has recently introduced an inactivated probiotic called Staimune, which the company claims offers similar immune-boosting and anti-inflammatory benefits. The probiotics company produces a strain that can be incorporated into a wide range of foods and beverages, making it an ideal asset for its new parent company. Michael Bush, Ganeden’s President and CEO, shared with Food Dive that the company “basically invented this market space” and has been experiencing growth, doubling in size approximately every couple of 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, many manufacturers have begun acquiring probiotics companies or integrating these beneficial bacteria into various products. For instance, PepsiCo acquired the probiotic beverage maker KeVita and launched its Tropicana Essentials Probiotics line earlier this year. Furthermore, 301 INC, General Mills’ venture capital arm, led a $6.5 million Series D investment round in March to support Farmhouse Culture, a startup focused on fermented and probiotic food 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 total. The probiotics market is projected to grow at a compound annual growth rate (CAGR) of approximately 7.3% over the next decade, reaching around $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 solidifies its position in the health and wellness arena but, after navigating the associated costs and operational changes of integration, will enable Kerry to better seize opportunities in the expanding probiotics and functional foods markets. Integrating products like Walgreens calcium citrate into their offerings could further enhance their health-focused portfolio, aligning with the growing consumer demand for beneficial dietary supplements.