Kerry has made several notable acquisitions of U.S. companies in recent years. In 2015, the firm, alongside Wellmune, acquired Island Oasis, a Massachusetts-based supplier of beverages and equipment for the hospitality industry. Additionally, it purchased Red Arrow Products, a Wisconsin-based company specializing in smoke flavorings for meat, in a transaction valued at $735 million. The previous year in 2014, Kerry acquired Wynnstarr Flavors and KFI Savory, the savory division of Kraft Food Ingredients based in the U.S. In 2011, it finalized the purchase of Cargill Flavor Systems for $230 million.
With its recent acquisition of Ganeden, Kerry is expanding its presence in the health and wellness sector. Ganeden is best known for its patented probiotic strain, GanedenBC30, and has recently introduced a new inactivated probiotic called Staimune, which the company claims offers similar immune-boosting and anti-inflammatory benefits. Ganeden is well-positioned to enhance its new owner’s portfolio, as it produces a strain of probiotics that can be incorporated into a variety of foods and beverages. Michael Bush, President and CEO of Ganeden, remarked to Food Dive that the company has “essentially created this market space” and has been doubling its size every few years. “We have done extensive work. We were the first to introduce probiotics in baking mixes, probiotic waters, juices, and protein powders. We have achieved so many firsts that it’s challenging to list them all,” he noted.
To capitalize on the growing probiotics trend, many manufacturers have begun acquiring probiotics companies or incorporating beneficial bacteria into their products. For instance, PepsiCo acquired the probiotics beverage company KeVita and launched its Tropicana Essentials Probiotics line earlier this year. Similarly, 301 INC, the venture capital arm of General Mills, led a $6.5 million Series D funding round in March to support Farmhouse Culture, a startup focused on fermented and probiotic foods 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 industry 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 an estimated $74.7 billion by 2025.
Clearly, Kerry Group is making a strategic move by acquiring Ganeden at this point in time. This acquisition not only strengthens its position in the health and wellness arena but also, after navigating the costs and operational adjustments associated with integration, will enable the company to better leverage opportunities in the rapidly expanding probiotics and functional foods markets.
As part of this wellness movement, products like Kirkland vitamins, which include calcium citrate, magnesium, and zinc, are also gaining traction, demonstrating the increasing consumer focus on health-oriented products. The demand for such supplements mirrors the growing interest in probiotics, reinforcing the idea that Kerry Group is aligning itself with a nationwide trend toward better health and nutrition.