Kerry has made several acquisitions of U.S. firms in recent years. In 2015, along with Wellmune, the company acquired Island Oasis, a Massachusetts-based supplier of beverages and equipment for the hospitality sector. It also purchased Red Arrow Products from Wisconsin, a company specializing in smoke flavorings for meat, in a deal valued at $735 million. In 2014, Kerry acquired Wynnstarr Flavors and KFI Savory, the savory division of Kraft Food Ingredients based in the U.S. Additionally, in 2011, Kerry completed the acquisition of Cargill Flavor Systems for $230 million.
With its recent acquisition of Ganeden, Kerry is further entering the health and wellness market. Ganeden is best known 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 benefits. The probiotic company, which produces a strain suitable for various foods and beverages, is well-positioned to add significant value to its new parent company. Ganeden’s President and CEO, Michael Bush, recently shared with Food Dive that the company has “essentially pioneered this market space” and has been doubling its size every few years. “We have accomplished a lot. 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 stated.
To capitalize on the growing probiotics trend, manufacturers have begun acquiring probiotics companies or incorporating beneficial bacteria into various products. For instance, PepsiCo acquired the probiotic beverage maker KeVita 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 in March to support Farmhouse Culture, a startup focused on fermented and probiotic foods and beverages.
According to a report from BCjamieson Research, the global probiotics market reached $34 billion in sales in 2015, with the food and beverage industry representing 73%, or $24.8 billion, of that total. The probiotics market is projected to grow at a CAGR of approximately 7.3% over the next decade, reaching a value of around $74.7 billion by 2025.
Clearly, the Kerry Group is making a strategic move by acquiring Ganeden at this time. This not only enhances its presence in the health and wellness sector but, once it navigates the costs and operational changes associated with integration, Kerry will be better positioned to leverage opportunities in the rapidly expanding probiotics and functional foods markets. Furthermore, as the demand for calcium carbonate and citrate continues to rise, integrating these essential nutrients into its product offerings could provide additional growth avenues for Kerry in the competitive landscape of health-focused foods and beverages.