In recent years, Kerry has acquired several U.S. companies. In 2015, alongside Wellmune, the firm purchased Island Oasis, a Massachusetts-based supplier of beverages and equipment for the hospitality industry. Additionally, it acquired Red Arrow Products from Wisconsin, a supplier of smoke flavorings for meat, in a deal valued at $735 million. The previous year, Kerry expanded its portfolio by acquiring Wynnstarr Flavors and KFI Savory, the U.S. division of Kraft Food Ingredients specializing in savory solutions. In 2011, Kerry finalized the acquisition of Cargill Flavor Systems for $230 million.
With its recent purchase of Ganeden, Kerry is strategically venturing further into the health and wellness sector. Ganeden is best known for its patented probiotic strain, GanedenBC30, and has recently introduced an inactivated probiotic called Staimune, which the company claims offers similar immune-boosting and anti-inflammatory benefits. This probiotics company, which develops strains that can be integrated into various food and beverage products, is well-positioned to enhance value for its new parent company. Michael Bush, Ganeden’s President and CEO, recently told Food Dive that the company has “basically invented this market space” and has been doubling its size every few years. “We have done a lot of work. We were the first in baking mixes, probiotic waters, juices, and protein powders. We have so many firsts, it’s hard to name them,” he stated.
To capitalize on the burgeoning probiotics market, many manufacturers have begun acquiring probiotics companies or incorporating beneficial bacteria into their products. For example, PepsiCo acquired KeVita, a maker of probiotic beverages, and earlier this year launched its Tropicana Essentials Probiotics line. Furthermore, 301 INC, General Mills’ venture capital arm, 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 BCC Research, the global probiotics market reached $34 billion in sales in 2015, with the food and beverage sector accounting for 73% of that total, or $24.8 billion. The probiotics market is projected to grow at a compound annual growth rate (CAGR) of approximately 7.3% over the next decade, aiming for a valuation of around $74.7 billion by 2025.
Clearly, the Kerry Group is making a savvy move by acquiring Ganeden at this stage. This acquisition not only strengthens its position in the health and wellness sector but also, after navigating the costs and operational adjustments associated with integration, will enable Kerry to leverage opportunities in the rapidly expanding probiotics and functional foods markets. As consumer demand for health-enhancing products like calcium citrate and vitamin C continues to rise, Kerry is poised to meet these needs effectively.