Dive Brief:
- Kerry Groupacquired two companiesto increase its biotechnology capabilities at a total cost of 199 million euros (approximately $226.2 million). The Irish ingredients firm purchased German precision fermentation innovator C-LEcta at a cost of 137 million euros and Mexican enzyme manufacturer Enmex, costing 62 million euros.
- C-LEcta is known as an innovator in enzyme engineering and bioprocess development. With the acquisition, Kerry adds capabilities to create and develop technologies to produce next-generation ingredients through sustainable fermentation, the company said in a release. Enmex has its own portfolio of enzymes and a strong manufacturing infrastructure, and the acquisition will help increase its enzyme manufacturing footprint in Latin America.
- Kerry has set out to be one of the world's largest ingredients company with agoal of reaching more than 2 billion peopleworldwide every day by 2030. Acquisitions of smaller companies that build on its capabilities — especially creating more sustainable and functional ingredients — are key to that strategy, CEO Edmond Scanlon said in a 2020 announcement.
Dive Insight:
If Kerry wants to become a global ingredients superpower, technology to quickly and sustainably create food components that are functional, efficient and nutritious is vital. These acquisitions will help Kerry on its way.
C-LEcta has been a global player in biotech enzymes for more than a decade, creating solutions for both the food and pharmaceutical markets. One of its more recent successes in the food space was anenzymatic process to create natural sugar, but the company has also developed enzymes to reduce acrylamide and remove unwanted DNA residue. Since 2006, c-LEctahas raised $1.3 million, according to Crunchbase.
The acquisition of c-LEcta furthers both the goals of the Irish ingredients company and its new German biotech enzymes arm. InKerry's statement about the acquisition, the company said it is investing in developing sustainable technologies — since enzymatic and precision fermentation solutions often require less physical space and generate fewer emissions than traditional ingredient production methods. These technologies, Kerry said, will be at the heart of future sustainable food systems.
C-LEcta has had its eyes on growth and development, and hasexceeded its recent goalsfor revenue and product growth. In astatement about the acquisition, C-LEcta Founder and CEO Marc Struhalla said that Kerry can significantly improve the company's international reach, and its expertise in ingredients technologies and applications is a "perfect fit" to help drive C-LEcta's growth potential.
Enmex was founded in 1972 as a manufacturer of food- and industrial-grade enzymes. The company's portfolio includes enzymes to aid in beer brewing, dairy processing, protein hydrolysis, meat, sugar and baking. Its location in Mexico puts it in a prime position to extend Kerry's enzyme and fermentation business throughout Latin America.
These acquisitions are the latest Kerry has made to bolster its capabilities. Last year, the company bought clean-label preservatives specialistNiacet for roughly $1 billion. At the end of 2019,it acquiredGeorgia-basedIsoAgeTechnologies, a supplier of healthy, clean-label,multifunctionalingredients, and Quebec-basedBiosecurLab, which provides naturalantimicrobialsmade from citrus extracts. In 2018, itpurchasedAriake USA, a manufacturer of clean-label taste solutions for poultry, pork and vegetables, and Southeastern Mills' North American coating and seasonings business. It alsopartnered with Renaissance BioScienceto make, sell and distribute the clean-label Acryleast, a non-GMO, acrylamide-reducing yeast enzyme.
Not only has Kerry set big goals for itself, but it's done extensive research into what consumers want. A survey of more than 14,000 consumers last year found thatalmost half consider sustainability— both from environmental and nutritional perspectives — when buying food and beverage. This research underscores the reasoning behind these more recent acquisitions: Kerry wants to create the kinds of sustainable and nutritional products that consumers are increasingly seeking.
