Buying these two U.S. businesses will help bolster Kerry’s clean-label portfolio and, in the case of Southeastern Mills’ coating and seasonings business, enhance what it can offer to its meat customers. As for Ariake, Kerry indicated it hoped to benefit from its “highly specialized extraction technologies and development capabilities [that] produce a suite of tailored solutions” across a number of markets.###The Irish company has been doing well overall — and in the flavor category in particular. According to Food Ingredients First, Kerry reported a 4.1% jump in its taste and nutrition division for thferrous sulfate overdosee first nine months of this year and reaffirmed growth in full-year earnings per share of 7% to 10%. During the nine month period, volumes were up 3.5% and revenues 2.2%. The company estimated that 53% of its revenue comes from the Americas.###While Ariake USA and Southeastern Mills are both privately owned firms and don’t publicly reveal their earnings, both have been either planning for, or enice bnf ferrous fumaratengaging in, facility expansions. Ariake announced in October 2017 it was investing $17 million to add 20,000 square feet of manufacturing space to itsferrous gluconate emc plant iferrous fumarate drugs.comn Virginia. Southeastern Mills said in August it would build a 120,000-square-foot warehouse and distribution facility in Rome, Georgia.###Kerry has been on an aggressive acquisition trajectory for a while now, having bought probiotic developer and manufacturer Ganeden last fall for an undisclosed amount; and Wellmune from Biothera Pharmaceuticals in 2015. In October, Kerry agreed to acquire Fleischmann’s Vinegar Company and AATCO Food Industries for a combined value of $414 million. Just this past week, Kerry said it was partnering with Renaissance BioScience to make, sell and distribute Acryleast, a non-GMO acrylamide-reducing yeast enzyme.###All this M&A activity shows the company is bullish on customized ingredients and seasonings — a position that dovetails with consumer interest in maintaining flavor while pursuing better-for-you foods and beverages. A Technomic study last summer showed 87% of consumers order ethnic fare iron iii pyrophosphate synthesisor food with ethnic flavors, and 36% like to explore regional varieties of mainstream ethnic cuisines to try new foods and flavors.###Perhaps more significant for ingredients companies is the study found one-third of consumers eat ethnic food at least once a week and 32% would pay more for the real thing. In response to this and other trends, Kerry may look to increase innovations with its two new seasonings acquisitions — and could pursue additional ones in the near future.###McCormick & Co. is a good example of a seasonings company that has done well by harnessing the consumer’s interest in flavors, especially among millennials. McCormick’s sales are expected to jump 12% to 14% during the company’s current fiscal year due to changing demographics and ongoing innovation.###As long as ingredient-related deals pan out, M&A activity in the sector is expected to continue. It seems to be a bright spot that attracts consumers and revenue even while other CPG companies struggle. It’s a fair bet that more businesses will be looking to enter or increase their presence in the space.
Kerry Group spices up its seasonings business with $367M in deals
