Food Matters Live sat down with the world’s leading taste and nutrition company, Kerry Group, as they revealed to us further (previously unshared) details about their recent acquisition of Spanish biotech company Biosearch Life.
Acquired for €126.9 million, Biosearch Life is a leading biotech company specialising in the innovation, manufacturing and distribution of science-backed functional ingredients such as botanical extracts, premium probiotics, and ultra-purified omega-3 oils.
What’s Kerry’s ambition behind this acquisition?
Kerry’s current ambition is to expand its portfolio of science-backed, branded health ingredients to address the growing needs of consumers of both dietary supplements and functional foods and beverages. In fact, John Quilter, VP of Global Portfolio at Kerry revealed that their “focus is on science-backed and branded ingredients because they offer health benefits consumers can trust while adding value to our customers by empowering them to leverage our leading brands to transparently communicate about the ingredients used in their finished products.”
How has the pandemic changed consumers purchase behaviour?
Kerry’s acquisition of Biosearch Life allows the company to expand its portfolio within the health and wellness space and address the growing number of consumers becoming more proactive in their approach to managing their health. When asked why consumer trends towards health and wellness are on the rise, Quilter stated that “consumers were adopting increasingly proactive, holistic attitudes to health, wellness, and nutrition long before 2020 but the pandemic has massively accelerated this trend.” In fact, the company carried out a survey of 13,000 consumers across 16 countries and found that “more than four in ten consumers have increased their purchases of functional foods, beverages and supplements since the start of the pandemic.”
Why are consumers purchasing health-focused products?
In the same vein, when Kerry asked respondents to choose from a predetermined list of categories, providing answers as to which were the reasons people purchased healthy lifestyle products, globally nearly six in ten (58%) respondents said they purchased these products in order to improve their immune system. This demonstrates that consumers are looking for core benefits from functional products.
How is this trend having an effect on manufacturers?
Quilter further reported on the topic and stated that “with a growing understanding of the relationship between the impact of nutrition and our health, and the boundaries between food and traditional supplementation blurring, we see this trend continuing to grow. But this has increased the burden of responsibility on manufacturers. As demand for functional or benefit driven products increases, they need to earn the trust of consumers by communicating transparently about product benefits and using proven ingredients supported by high-quality research.”
How important is scientific evidence in health products?
Given how Kerry expect post-pandemic consumers, both now and into the future, will continue to place greater scrutiny on the functional products that they reach for, their acquisition of Biosearch Life becomes more significant than ever before. These growing consumer trends mean that it is important for products to be formulated with ingredients backed by well-documented scientific evidence that support their benefits. Many of the Biosearch Life products, including their Hereditum® range of probiotics and several Exxentia® botanical extracts are supported by both clinical science and strong brands. Quilter says Kerry expect their portfolio “to have even greater relevance with consumers in the coming years due to the emergence of additional health need states and see a great opportunity to expand the reach of the entire portfolio globally.”
What else is Kerry capitalising on?
Other prominent consumer trends Kerry plan to capitalise on with their acquisition of Biosearch Life is the strong growth of botanical ingredients over the past several years. The company report that “there has been a 46% increase in beverages containing botanical extracts between 2017 and last year, and the market for herb & botanical supplements in the U.S. alone is approaching $10 billion and growing at nearly 10% CAGR.” Quilter further announces that “our recent research shows botanical flavours connect with consumers at a very positive level, beyond flavour and taste, appealing to over 97% of consumers globally.”
Do consumers rely on brands, or do they do their own research?
The VP of Global Portfolio goes on to explain how “this growth can be attributed to the rise of consumers interested in using botanicals to support their health.” The acquisition of Biosearch Life thus support’s Kerry’s strategic move to meet growing consumer health and wellness needs. Quilter says that “while many botanical extracts are associated with perceived health benefits, we’re pleased to be able to offer our customers several branded botanical extracts in the Biosearch Life portfolio which are supported by science to deliver many health benefits, including joint health, woman’s health, and heart health. Our latest consumer research shows that 43% of consumers are more likely to purchase a healthy lifestyle product after doing their own research on the product’s ingredients and benefits. Having science-supported ingredients that demonstrate safety and efficacy are key to product success, as well as building trust and transparency with consumers.”
What does this acquisition mean for the future?
As can be understood, Kerry’s recent acquisition of Biosearch Life holds immense promise when it comes to the expansion of its health and wellness portfolio. The acquisition allows Kerry to meet certain growing industry consumer trends such as the search for science-backed ingredients and innovative ingredients such as botanical extracts. The acquisition of Biosearch Life thus seems to put Kerry in a strong position to propel the company forward and bring even more health and wellness ingredients to consumers all over the world, while simultaneously progressing our ingredients community as a whole.