In recent years, Kerry has expanded its portfolio by acquiring several U.S. companies. In 2015, the firm, alongside Wellmune, purchased Island Oasis, a Massachusetts-based provider of beverages and equipment for the hospitality industry. Additionally, it acquired Red Arrow Products, a Wisconsin supplier of smoke flavorings for meat, in a transaction valued at $735 million. The previous year, Kerry had acquired Wynnstarr Flavors and KFI Savory, the savory division of Kraft Food Ingredients in the U.S. Moreover, in 2011, the company completed the acquisition of Cargill Flavor Systems for $230 million.
With the acquisition of Ganeden, Kerry is further stepping into the health and wellness sector. Ganeden is renowned for its patented probiotic strain, GanedenBC30, and has recently introduced a new inactive probiotic called Staimune, which is said to offer similar immune-boosting and anti-inflammatory advantages. The probiotics firm produces a strain that can be incorporated into a wide variety of foods and beverages, making it an 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 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 difficult to list them all,” he remarked.
To capitalize on the growing popularity of probiotics, manufacturers have begun acquiring probiotics companies or incorporating beneficial bacteria into various products. For example, PepsiCo purchased KeVita, a probiotic beverage maker, and launched its Tropicana Essentials Probiotics line earlier this year. Additionally, 301 INC, the venture capital arm of General Mills, led a $6.5 million Series D investment round 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%, or $24.8 billion, of that total. The probiotics market is projected to grow at a CAGR of about 7.3% over the next decade, potentially reaching a value of approximately $74.7 billion by 2025.
By acquiring Ganeden, the Kerry Group is making a strategic move at a pivotal time. This acquisition not only strengthens its position in the health and wellness domain but also, after navigating the integration costs and operational adjustments, will enable Kerry to capitalize on advancements in the expanding probiotics and functional foods markets. Furthermore, the incorporation of innovative products such as calcium citrate with magnesium into their offerings could enhance their competitive edge in this thriving sector. Thus, Kerry is well-positioned to leverage opportunities that arise from the increasing consumer demand for health-oriented ingredients like calcium citrate with magnesium and probiotics.