Kerry Sells Sweet Ingredients, Focused On Nutrition Wellness

Irish ingredient maker Kerry Group announced last week that it was in exclusive negotiations to sell its sweet ingredients portfolio in order to further focus on nutritional, functional ingredients and innovative biotechnology in food.

Last Wednesday, Kerry announced that Italian specialty ingredient company IRCA is expected to purchase the portfolio for over $540 million comprising over $400 million in cash and the remainder in an interest bearing vendor loan note. The portfolio includes a range of products spanning sweet particulates, chocolate confections, baked inclusions, variegates and fruit purées used in bakery, cereal, confectionery, dairy and ice cream brands throughout Europe and the U.S.

Kerry’s sweet ingredients have an operational footprint of four manufacturing facilities in the U.S. (in Illinois, Kansas, Missouri, and California), and six facilities across the U.K, the Netherlands, Germany and France. More details of the deal will be available when it is finalized in the first half of 2023.

“The Sweet Ingredients Portfolio is a high-quality business with a differentiated set of technologies,” said IRCA CEO Massimo Garavaglia in a statement. “This acquisition would represent a strong fit with our portfolio, with its highly complementary product and technological capabilities, and help us to become a truly global player.”

IRCA was acquired by global private equity company Advent International from investment firm Carlyle in April 2022 for an undisclosed sum. The proposed sale of Kerry’s sweet ingredients portfolio is expected to strengthen IRCA’s position in the U.S. and generate over $1 billion in revenue. It will be IRCA’s third acquisition since Advent took control of the specialty ingredient company.

Advent International managing director Francesco Casiraghi called the Kerry deal to be “a major step in our goal of creating a genuine global leader in semi-finished food ingredients.”

Kerry has made a number of acquisitions in recent years bolstering its Applied Health and Wellness division. The moves – in addition to the expected divestiture of its sweet ingredients – seem to be refocusing Kerry’s portfolio on pharmaceutical, nutraceutical and functional foods; especially in digestive health, wellness and biotechnical innovation in acquiring Mexico-based Enmex and enzyme engineering company c-LEcta for food applications.

Kerry acquired Spanish probiotic and functional ingredient maker Biosearch Life in July 2021 expanding Kerry’s dietary supplement capabilities. Last year, the multinational food provider bought Ayurvedic botanical ingredient maker Natreon in April, adding a host of wellness-focused ingredients to the portfolio. In December, an exclusive licensing agreement with Kameda Seika for a Japanese rice-derived postbiotic showed Kerry’s increasing interest in gut and digestive health.

When the Kameda Seika agreement was announced, Applied Health and Nutrition Lead for Kerry APMEA Dan Benson said that the deal “builds on our core strengths in digestive and immune health” and is a welcome addition to Kerry’s “growing portfolio of science-backed, branded ingredients, which includes solutions to improve digestive, immune, cognitive, infant and women’s health.”