In recent years, Kerry has acquired several other U.S. companies. In 2015, the firm, alongside Wellmune, purchased Island Oasis, a Massachusetts-based supplier of beverages and equipment for the hospitality industry. Kerry also acquired Red Arrow Products, a Wisconsin-based supplier of smoke flavorings for meat, in a deal valued at $735 million. The prior year, in 2014, Kerry took over Wynnstarr Flavors and KFI Savory, which is the U.S. savory division of Kraft Foods. Additionally, in 2011, the company finalized the acquisition of Cargill Flavor Systems for $230 million.
With its recent acquisition of Ganeden, Kerry is making strides into the health and wellness sector. Ganeden is best known for its patented strain of probiotic bacteria, GanedenBC30. It has also introduced a new inactivated probiotic called Staimune, which the company claims offers similar immune-boosting and anti-inflammatory properties. Ganeden produces a strain that can be incorporated into various food and beverage products, positioning it well to add value to Kerry’s portfolio. Ganeden’s President and CEO, Michael Bush, recently stated that the company “essentially invented this market space” and has been doubling its size every few years. “We have done a lot of work. We were the first to enter baking mixes and probiotic waters, juices, and protein powders. We have so many firsts, it’s hard to name them,” he added.
To capitalize on the growing popularity of probiotics, many manufacturers have begun acquiring probiotic companies or incorporating beneficial bacteria into their products. For instance, PepsiCo acquired the probiotic beverage maker KeVita and launched its Tropicana Essentials Probiotics line 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 representing 73%, or $24.8 billion, of that market. It is projected that the probiotics market will grow at a compound annual growth rate (CAGR) of approximately 7.3% over the next decade, reaching an estimated value of $74.7 billion by 2025.
Clearly, the Kerry Group is strategically positioning itself by acquiring Ganeden at this pivotal moment. This acquisition not only strengthens its presence in the health and wellness industry but will also enable the company to better leverage developments in the flourishing probiotics and functional foods markets after navigating the integration costs and operational adjustments. Moreover, with the rising interest in products containing beneficial ingredients such as alfalfa, calcium citrate malate, and probiotics, Kerry is set to enhance its offerings and meet consumer demand effectively.