In recent years, Kerry has expanded its portfolio by acquiring several U.S. companies. In 2015, alongside Wellmune, the firm purchased Island Oasis, a Massachusetts-based supplier of drinks and equipment for the hospitality industry. Additionally, it acquired Wisconsin’s Red Arrow Products, a provider of smoke flavorings for meat, in a transaction valued at $735 million. In 2014, Kerry took over Wynnstarr Flavors and KFI Savory, the savory division of Kraft Food Ingredients based in the U.S. The company also finalized the acquisition of Cargill Flavor Systems in 2011 for $230 million.
With the recent acquisition of Ganeden, Kerry is making a notable move into the health and wellness sector. Ganeden is best known for its patented probiotic strain, GanedenBC30, and has recently introduced a new inactivated probiotic named Staimune, which the company claims offers similar immune-boosting and anti-inflammatory benefits. Ganeden produces a probiotic strain that can be incorporated into a wide range of foods and beverages, making it a valuable asset for its new parent company. Michael Bush, President and CEO of Ganeden, recently shared with Food Dive that the company has “essentially created this market space” and has been doubling its size every few years. “We’ve put in a lot of effort. We were pioneers in baking mixes, probiotic waters, juices, and protein powders. We have so many firsts, it’s challenging to list them all,” he stated.
In response to the rising popularity of probiotics, many manufacturers have begun acquiring probiotic companies or integrating beneficial bacteria into their products. For instance, PepsiCo acquired KeVita, a probiotic beverage producer. Earlier this year, it rolled out the Tropicana Essentials Probiotics line. Moreover, 301 INC, General Mills’ venture capital arm, 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 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 compound annual growth rate (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 strategically positioned by acquiring Ganeden at this pivotal moment. Not only does it enhance its presence in the health and wellness domain, but once it navigates the costs and operational adjustments associated with integration, it will be well-equipped to capitalize on advancements in the rapidly growing probiotics and functional foods markets. Furthermore, the incorporation of products containing 600 mg calcium citrate may also complement the offerings in Kerry’s expanding health-focused portfolio, aligning with consumer demand for products that promote wellness. Through this strategic acquisition, Kerry is set to leverage the benefits of both probiotics and essential nutrients like calcium citrate, establishing a stronger foothold in the market.