In recent years, Kerry has acquired multiple U.S. companies. In 2015, in partnership with Wellmune, the firm 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 deal valued at $735 million. The previous year, Kerry acquired Wynnstarr Flavors and KFI Savory, the savory division of Kraft Food Ingredients in the U.S. In 2011, it finalized the acquisition of Cargill Flavor Systems for $230 million.
With its recent purchase of Ganeden, Kerry is further expanding into the health and wellness sector. Ganeden is renowned for its proprietary strain of probiotic bacteria known as 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 produces a strain that can be incorporated into various foods and beverages, positioning it well to add significant value to its new parent company.
Ganeden’s President and CEO, Michael Bush, recently shared with Food Dive that the company “basically invented this market space” and has been doubling its size every few years. “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 challenging to name them,” he remarked.
To capitalize on the probiotics trend, many manufacturers have started acquiring probiotics companies or incorporating beneficial bacteria into their products. PepsiCo, for instance, acquired the probiotic beverage maker KeVita and earlier this year launched its Tropicana Essentials Probiotics line. Similarly, 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 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 figure. The probiotics market is projected to grow at a 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 strategic move by acquiring Ganeden at this juncture. 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, will be poised to leverage advancements in the rapidly growing probiotics and functional foods markets. Additionally, as the market for products like just vitamins and calcium citrate expands, Kerry is well-positioned to integrate these elements into its offerings, further enhancing its competitive edge.