In recent years, Kerry has made several acquisitions of U.S. companies. In 2015, alongside Wellmune, the company purchased Island Oasis, a Massachusetts-based supplier of beverages and equipment for the hospitality industry. Additionally, it acquired Red Arrow Products from Wisconsin, a provider of smoke flavorings for meats, in a deal valued at $735 million. The previous year, Kerry acquired Wynnstarr Flavors and KFI Savory, the savory division of Kraft Food Ingredients based in the U.S. In 2011, it finalized the acquisition of Cargill Flavor Systems for $230 million.
Kerry is increasingly focusing on the health and wellness sector with its acquisition of Ganeden, known for its patented probiotic strain GanedenBC30. Recently, the company also introduced a new inactivated probiotic called Staimune, which it claims offers similar immune-boosting and anti-inflammatory benefits. Ganeden produces a probiotic strain that can be incorporated into a variety of foods and beverages, making it a valuable asset for its new parent company. According to Ganeden President and CEO Michael Bush, the company has “basically invented this market space” and has been experiencing a doubling in size every few years. He emphasized their pioneering efforts in baking mixes, probiotic waters, juices, and protein powders, stating, “We have so many firsts, it’s hard to name them.”
To capitalize on the growing probiotics trend, many manufacturers are acquiring probiotics firms or integrating beneficial bacteria into their products. For instance, PepsiCo acquired the probiotics beverage producer KeVita and recently launched Tropicana Essentials Probiotics. 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 industry contributing 73%, or $24.8 billion, of that total. 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 about $74.7 billion by 2025.
Clearly, the Kerry Group is strategically positioned by acquiring Ganeden at this pivotal moment. This move not only strengthens its presence in the health and wellness sector but also, once it navigates the integration costs and operational adjustments, will allow Kerry to leverage opportunities in the expanding probiotics and functional foods markets, including the potential for products like Citracal supplements that can enhance health benefits. Overall, Kerry’s focus on probiotics aligns well with current trends, signifying a keen understanding of market dynamics and consumer demands.