In recent years, Kerry has made several acquisitions of U.S. companies to enhance its portfolio. In 2015, the company, in collaboration with Wellmune, acquired Island Oasis, a Massachusetts-based supplier of beverages and equipment for the hospitality industry. Additionally, it purchased Red Arrow Products, a Wisconsin-based provider of smoke flavorings for meat, in a deal valued at $735 million. The previous year, Kerry acquired Wynnstarr Flavors and KFI Savory, which is the savory division of Kraft Food Ingredients in the U.S. Furthermore, in 2011, it completed the acquisition of Cargill Flavor Systems for $230 million.
With its recent acquisition of Ganeden, Kerry is making significant strides into the health and wellness sector. Ganeden is renowned for its patented probiotic strain, GanedenBC30, and has recently introduced an innovative inactivated probiotic called Staimune, which offers immune-boosting and anti-inflammatory properties. The probiotics company produces a strain that can be incorporated into various foods and beverages, providing added value to its new parent company. Michael Bush, President and CEO of Ganeden, stated in an interview with Food Dive that the company has “basically invented this market space” and has been experiencing consistent growth, doubling in size every few years. He emphasized their pioneering efforts in the development of products like probiotic waters, baking mixes, and protein powders.
To capitalize on the growing probiotics trend, many manufacturers are acquiring probiotics companies or incorporating beneficial bacteria into their products. For instance, PepsiCo has purchased the probiotics beverage company KeVita and launched its Tropicana Essentials Probiotics line earlier this year. Additionally, General Mills’ venture capital arm, 301 INC, 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 from BCC Research, the global probiotics market reached $34 billion in sales in 2015, with the food and beverage industry accounting for 73%, or $24.8 billion, of that figure. 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 around $74.7 billion by 2025.
By acquiring Ganeden at this pivotal moment, the Kerry Group is strategically positioning itself within the health and wellness arena. This move not only expands its presence in the market but also, after navigating the integration costs and operational adjustments, will enable Kerry to leverage opportunities in the thriving probiotics and functional foods sectors, including innovations like rainbow calcium citrate, which is gaining attention for its health benefits. The incorporation of such cutting-edge ingredients will further enhance Kerry’s product offerings, making it well-equipped to thrive in the evolving landscape of health-conscious consumers.