PepsiCo will buy Siete Foods parent company Garza Food Ventures for $1.2 billion, the company said on Tuesday.
The snacks and drinks giant made the move in an attempt to broaden its snacking portfolio amid a shift to private-label brands among cost-conscious customers.
The Wall Street Journal reported on Monday that PepsiCo was in advanced talks with the company – which is backed by actor Eva Longoria – to purchase it for a sum in excess of $1 billion.
Garza Food Ventures is known for grain-free tortilla chips and taco shells, as well as products such as enchilada sauce and Mexican wedding cookies.
Siete’s products are distributed across 40,000 retail outlets in the US, including Target and Whole Foods.
The Texas-based company, founded in 2014 by Veronica Garza, is owned and run by several members of the Garza family.
Costs
Consumers have turned to more affordable private-label brands for their snacking needs in recent years following several quarters of price hikes by packaged food makers.
Companies such as PepsiCo and Nestlé hiked the prices of popular snacks in an effort to offset high input costs caused by inflation and global instability.
Meanwhile, deal-making in the packaged food industry has also been robust.
Mars bought Pringles-maker Kellanova in a nearly $36 billion deal in August.
PepsiCo has been working to diversify its price tiers, and offer new flavours under popular brands such as Lays, Doritos and Cheetos to help enhance appeal.
Volumes for its snacking business in North America fell 4% in the most recently reported quarter in July.
The company is scheduled to release its third-quarter earnings next week.
The transaction with Siete Foods is expected to close in the first half of 2025.
PepsiCo’s shares were up nearly 1% in late-morning shares on Tuesday, following the announcement.
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