Dive Brief:
- Ireland-based ingredients giant Kerry completed the acquisition of Natreon, a U.S.-based producer of ayurvedic botanic ingredients. No purchase price was disclosed, but in a July business update, Kerry said it reached an agreement to buy the company for 42 million euros ($45.74 million).
- The acquisition includes three Natreon facilities — its U.S. headquarters, an R&D site in India and a manufacturing plant in Nepal. Kerry will add the new ingredients to its ProActive Health portfolio, and said it would continue to invest in science and clinical evidence to bolster them.
- Kerry, which pledged to reach more than 2 billion people a day with its ingredients by 2030, has recently used M&A to add many new capabilities to its portfolio. In the last 12 months, Kerry has acquired biotech companies C-LEcta and Enmex, functional ingredients company Biosearch Life and clean label preservatives maker Niacet.
Dive Insight:
When Kerry launched its ambitious strategy to reach more than 2 billion people daily in 2020, CEO Edmond Scanlon said using M&A was key to reaching its goals. Through acquisitions of companies working in key areas, Kerry is expanding on the services it can provide and the way its ingredients can reach the world.
This latest acquisition brings the types of functional ingredients associated with the traditional Indian natural health practices known as ayurveda into Kerry’s portfolio. These ingredients, which are mostly herbal extracts, are said to provide natural functional benefits. Kerry says the ingredients made by Natreon can reduce stress and anxiety, help sports nutrition and healthy aging, provide cardiovascular support, maintain healthy blood glucose levels, provide bone and joint health benefits and keep a healthy uric acid balance in the body. The ingredients include Sensoril ashwagandha, PrimaVie shilajit, Capros amla, Ayuflex terminalia chebula and Ayuric terminalia bellirica extracts, as well as Crominex chromium complex.
While ayurvedic ingredients and practices are largely based in tradition, the efficacy of Natreon’s ingredients are bolstered by more than 50 scientific studies, Kerry said. Natreon also holds several patents in the U.S. and other countries, ensuring that its ingredients are unique.
A 2019 study from Kerry found 65% of consumers are looking for functional benefits as they choose what to eat and drink. This means an acquisition that brings this kind of on-trend natural boost to Kerry’s portfolio is likely to pay dividends. While ayurvedic ingredients may not truly bring the promised benefit, they have a bright health halo and appeal to consumers as nutritional solutions from nature.
Natreon is the second big acquisition in the past year to bring a variety of functional ingredients to Kerry’s ProActive Health portfolio. Last summer, the company bought Spain’s Biosearch Life — which makes probiotics isolated from human breast milk, oils containing omega-3s and botanical extracts — for 126.9 million euros.
Since Kerry’s 2017 acquisition of probiotics powerhouse Ganeden, the company has been trying to make its mark as a go-to provider of functional ingredients. And it’s apparent that Kerry is keeping up with trends. As the pandemic has receded, consumer interest in natural immune boosting has not, with concern about illness likely to drive innovation in functional food. And consumers are also starting to look for food and drink that can help them relax. Natreon’s ingredients and expertise give Kerry more to offer in this regard.
