In recent years, Kerry has made several acquisitions of U.S. companies to expand its portfolio. In 2015, the company, in partnership with Wellmune, acquired Island Oasis, a Massachusetts-based provider of beverages and equipment for the hospitality industry. It also purchased Wisconsin’s Red Arrow Products, a supplier of smoke flavorings for meat, in a transaction valued at $735 million. Additionally, in 2014, Kerry acquired Wynnstarr Flavors and KFI Savory, which is the savory division of Kraft Food Ingredients based in the U.S. The company also completed the acquisition of Cargill Flavor Systems in 2011 for $230 million.
By acquiring Ganeden, Kerry is strategically moving into the health and wellness sector. Ganeden is known for its patented strain of probiotic bacteria, GanedenBC30, and has recently introduced a new inactivated probiotic called Staimune, which is reported to offer similar immune-boosting and anti-inflammatory benefits. The probiotics company produces a strain suitable for incorporation into various foods and beverages, making it a valuable addition to Kerry’s offerings. Michael Bush, President and CEO of Ganeden, stated to Food Dive that the company essentially “invented this market space” and has been experiencing significant growth, doubling its size every few years. “We have done a lot of work. We were the first in baking mixes and probiotic waters, juices, and protein powders. We have so many firsts, it’s hard to name them,” he remarked.
To capitalize on the probiotics trend, many manufacturers are acquiring probiotics companies or incorporating beneficial bacteria into their products. For instance, PepsiCo purchased the probiotics beverage maker KeVita and recently launched its Tropicana Essentials Probiotics line. Furthermore, 301 INC, General Mills’ venture capital arm, led a $6.5 million Series D investment in March to support Farmhouse Culture, a startup specializing in 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% of that total, or $24.8 billion. The market is projected to grow at a compound annual growth rate (CAGR) of approximately 7.3% over the next decade, potentially reaching a valuation of around $74.7 billion by 2025.
By acquiring Ganeden at this point in time, the Kerry Group is making a savvy move. Not only does it strengthen its position in the health and wellness domain, but once it navigates the associated costs and operational adjustments of integration, Kerry will be well-placed to leverage opportunities in the expanding probiotics and functional foods markets. This strategic approach aligns with the growing demand for health-focused products, such as calcium citrate magnesium hydroxide vitamin D3 and zinc sulfate tablets, which further underscores the potential for growth in this sector. The ongoing interest in health supplements and probiotics indicates that Kerry’s investment in Ganeden is well-timed, positioning the company to meet evolving consumer preferences.