Kerry delves further into health space with Biosearch Life acquisition
Based in Grenada, Spain, the leading biotech company innovates, manufactures and distributes functional ingredients including premium probiotics obtained from human breast milk and a portfolio of science-backed botanical extracts and ultra-purified omega-3 oils.
The acquisition comes after Kerry's strategic review of its dairy production and consumer food assets to allow it to free up money for acquisitions in the fast growing health and wellness space.
Commenting on the acquisition, Neil Cracknell, President Kerry Applied Health & Nutrition, said: “Our acquisition of Biosearch Life is aligned with our strategic priorities to expand our branded, science backed ingredient portfolio, as well as developing our dietary supplement capabilities and market offering.
"Biosearch Life extends our probiotics offering with the addition of the science-backed Hereditum strains and further broadens our portfolio with the Exxentia range of functional botanical extracts and Eupoly-3 natural Omega-3 oils.
"These market-leading technologies allow us to address new health need states, enhance our credibility and leadership in science-backed branded actives and supports our ambition to be a leader in sustainable nutrition solutions.”
The acquisition will be integrated into Kerry’s global ProActive Health platform of science-backed branded ingredients. The growth of this portfolio allows the company to address a wider range of health need states, including healthy aging, joint health and digestive health and reflects the growing number of consumers becoming more proactive in their approach to managing their health.
Recent proprietary research completed by Kerry revealed digestive health support was the third most important health benefit consumers globally desired from heathy lifestyle products, an advancement in consumer priority from #4 in 2019 and demonstrates the growing importance of digestive health among consumers – one that probiotics are well suited to deliver on.
Moving with the mega-trends
NutraIngredients' sister title FoodNavigator recently reported that the company was planning a strategic review of its dairy business in Ireland and Britain, which accounts for just 10% of the business, to allow it to free up money for acquisitions in the fast growing health and wellness space.
Alex Sloane, an analyst at Barclays, said Kerry’s acquisition strategy would likely “continue to be based on a model of acquiring functional food technologies within smaller companies with focus on specific geographies and end categories through smaller bolt-on M&A.
“Kerry has had good success at scaling these acquired technologies across its broad base of customers and food and beverage end market categories – for example Ganeden the probiotics technology company acquired in 2017 has been leveraged geographically and into many new categories."
In a note to investors, the team of Barclays analysts added that Kerry’s ‘increasingly relevant model’ and expertise in food innovation areas supporting health and wellness and sustainability megatrends should underpin Kerry’s Taste & Nutrition unit’s growth targets over the next three years.
“The ongoing pandemic has increased consumer preferences towards immunity enhancement, authentic cooking and plant proteins. This is driving much of Kerry’s innovation pipeline with customers for brands at both retail and foodservice channels,” they wrote. The analysts expect the firm to continue investing in innovation and grow market share in healthy categories. “In 2020, the group has revisited its environments ambitions and now includes reductions in the supply chain, which we believe should be a focus along with pursuing certifications like RSPO for sustainability in the supply chain.”
