In recent years, Kerry has expanded its portfolio by acquiring several U.S. companies. In 2015, the firm, alongside Wellmune, purchased Island Oasis, a supplier of beverages and equipment for the hospitality industry, known for its Massachusetts-based ferrous fumarate pil. Additionally, Kerry acquired Red Arrow Products from Wisconsin, a supplier of flavorings for meat, in a deal valued at $735 million. The previous year, Kerry added Wynnstarr Flavors and KFI Savory, the savory division of Kraft Food Ingredients in the U.S., to its roster. In 2011, it finalized the acquisition of Cargill Flavor Systems for $230 million.
With its recent acquisition of Ganeden, Kerry is making a strategic shift towards the health and wellness sector. Ganeden is renowned for its patented strain of probiotic bacteria, GanedenBC30, and has recently introduced a new inactivated probiotic called Staimune, which the company claims offers similar immune-boosting and anti-inflammatory advantages. Ganeden’s probiotics can be incorporated into a wide variety of foods and beverages, making it a valuable asset for its new parent company. Micah Bush, President and CEO of Ganeden, shared with Food Dive that the company has “essentially created this market space” and has been experiencing rapid growth, doubling in size every few years. He noted, “We have pioneered numerous innovations, including baking mixes and probiotic waters and juices, as well as protein powders.”
To capitalize on the growing probiotics trend, many manufacturers have begun acquiring probiotic companies or incorporating beneficial bacteria into their products. For example, PepsiCo recently acquired the probiotic beverage company KeVita and launched its Tropicana Essentials Probiotics line earlier this year. Meanwhile, 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 specializing in 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 sector accounting for 73% of that figure, or $24.8 billion. This 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 making a savvy move by acquiring Ganeden at this juncture. This acquisition not only enhances its presence in the health and wellness industry but also positions the company to better capitalize on emerging opportunities in the growing markets for probiotics and functional foods, including soft chews calcium products. As the demand for health-oriented offerings increases, Kerry will be well-prepared to integrate Ganeden’s innovations and expand its offerings, such as incorporating soft chews calcium with probiotics into its product line. In this way, Kerry is setting itself up for success in the burgeoning health market.