Kerry extends growing probiotic line with marketing deal covering spore forming ingredient

By Hank Schultz contact

- Last updated on GMT

© oatawa / Getty Images
© oatawa / Getty Images

Related tags: Probiotics, Gut health, Gut health claim, spore forming probiotics, M&A

Ireland’s Kerry Group has added to its stable of probiotics with a deal announced today in which it will distribute the proprietary OPTI-BIOME MB40 probiotic ingredient, made by Troy, VA-based biotech firm BIO-CAT Microbials, LLC.

The deal adds to Kerry’s breadth of probiotic capabilities.  Kerry first acquired Cleveland, OH-based Ganeden and its BC-30 Bacillus coagulans​ ingredient in 2017.  The company followed that with the acquisition of Canadian probiotic manufacturer Bio-K+ International in 2020​.  And it continued to build a powerhouse probiotic portfolio with the acquisition of Spanish probiotics developer Biosearch Life​ earlier this year.

The MB40 ingredient is a proprietary strain of Bacillus subtilis ​(strain no. ATCC122264), which like the BC-30 ingredient, is a spore-forming organism, which presumably will confer some formulation flexibility compared to standard probiotics.

A parallel-design study done with the ingredient in 2019​ showed that it reduced bloating vs placebo for some groups.  According to Kerry’s analysis, the study “demonstrated promising results for the probiotic strain to support gastrointestinal health.”

"Given the impressive performance of the MB40 strain and its potential to have a significant impact on the dietary supplement, functional food and beverage, and companion animal industries, we have decided to work with a partner who will help scale MB40 globally,"​ said Chris Schuler, CEO of BIO-CAT.

"Kerry's expertise, commitment to develop a leading probiotic platform, access to global resources, and plans to further scientifically support MB40 make them an ideal partner,” ​he added.

Brand ‘refresh’

As part of the deal Kerry will take over the brand presentation for MB40.  A ‘refresh’ of the brand will be undertaken, which reportedly will be completed within several months.  Then the brand will be offered through Kerry’s 150 sales locations in 31 countries around the globe.

"We are delighted to partner with Bio-Cat to further develop and market this unique and highly stable Bacillus strain, which will complement our growing portfolio of science-backed branded ingredients in our ProActive Health portfolio,”​ said John Quilter, vice president and general manager of Kerry’s ProActive Health business unit.

Quilter took on the management of Ganeden after the Kerry acquisition.  Prior to that he managed the Wellmune immune support ingredient business, which Kerry acquired from Biothera in 2015.

Focus on functional foods, beverages

The deal to market MB40 fits in with Kerry’s strategic focus on functional foods and beverages, as opposed to concentrating on the dietary supplement markets.

“Today, almost 40% of global consumers are actively seeking out functional food and beverages to help satisfy their specific health needs which means they're twice as likely to look for a food and beverage option over a nutritional supplement. And we're seeing this drive for functional food with consumers across all life stages and demographics. And these functional claims are also a key driver of growth across mainstream food and beverage products,” ​said Kerry CEO Edmond Scanlon in a recent earnings call with stock analysts.  A transcript of the call was posted on teh site seekingalpha.com.

Kerry recorded $8.6 billion (7 billion euros) in revenue in its fiscal 2020, which was a 3.3% year over year decline.

Editor's Note: This article was originally published with an image depicting M&A. However, the deal between Kerry Group and BIO-CAT Microbials, LLC is a licensing/supplier agreement​ and not an acquisition. We apologize for any confusion.

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