Kerry to purchase preservative company Niacet for $1B

16 Jul 2021

Irish ingredients giant Kerry Group has entered into an agreement to buy the clean-label preservatives manufacturer Niacet from the private equity group SK Capital for $1 billion. The transaction is expected to close in the third quarter of this year.

Following the acquisition, Niacet will be integrated into Kerry’s global food protection and preservation platform, which the company is diligently expanding to focus more acutely on clean-label alternatives.

Kerry to purchase preservative company Niacet for $1B

Kerry intends to double its reach by 2030 and have its products used by 2 billion people worldwide every day. To achieve this aim, the Irish company is steadily enhancing its capabilities in clean-label ingredients across a variety of categories. Now, its acquisition of Niacet helps further its objective in a big way.

Niacet says it has “clear leadership” position in preservatives in bakery and pharma. However, Food Dive reported that the company has the largest capacity in North America for the production of preservation solutions, including organic acid salts, including sodium acetate, sodium diacetate, and calcium propionate. Its clean-label preservation options extend further and the company offers several vinegar-based solutions to its clients that span 75 countries.

Even with its already global reach, Niacet CEO and significant minority owner Kelly Brannen said in a statement that this acquisition “will allow Niacet to grow at a much faster rate and sell in new markets around the world.” Ostensibly, this growth will include a significant amount of clean-label preservatives since Brannen said, “our constant focus on innovation has been key to the development and success of our new clean label products.”

Having an unwavering focus on clean-label ingredients is likely to play in Kerry’s favor. Consumers are becoming hyper-aware of the ingredients being used in their food and beverage products, and are consistently seeking out options that are better-for-you and have cleaner labels. In fact, the International Food Information Council revealed through research that preservatives are particularly important to consumers and that four in 10 consumers seek out natural preservative options.

In the U.S., the need for alternative natural preservative solutions has become even more urgent in recent months following a ruling by the USDA’s Food Safety and Inspection Service (FSIS) decision last December to require products processed using any source of nitrates or nitrites — either synthetic or natural – to not use “natural” claims. This coupled with the findings from the IFIC that natural preservatives are “far preferred” over artificial versions, indicates that Kerry has the stage set for a grand entrance into the natural preservatives space.

Niacet will bring a substantial portfolio to Kerry with which to begin the expansion into natural preservative alternatives. In 2021, Kerry said it anticipates the company to have sales of approximately $220 million. With this substantial slice of market share as the springboard from which it will begin, Kerry will undoubtedly have a head start when it comes to working toward dominance in the natural preservation ingredients space.

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