PepsiCo, Inc. (PEP) is making a big move in the snack food industry. The company is in advanced talks to acquire Siete Foods, a popular tortilla chip maker, for over $1 billion, according to The Wall Street Journal. An announcement about the deal could come soon if negotiations continue smoothly.
This acquisition highlights a trend in the U.S. packaged food industry, where companies are looking to expand amidst inflation and shifting consumer preferences. As consumers tighten their belts, they are opting for cheaper private-label brands, forcing companies to find ways to grow their operations.
For PepsiCo, the deal aligns with its commitment to offering healthier snack options. Siete Foods is known for its unique tortilla chips made from almond flour, a healthier alternative to traditional corn-based chips. The company has been reducing sodium, saturated fat, and sugar levels in its chips, reflecting a growing consumer demand for healthier choices.
This isn’t PepsiCo’s first foray into the healthier snack market. In 2018, they acquired Bare Foods, a producer of baked fruit and vegetable snacks, and shortly after, they purchased BFY Brands, the company behind PopCorners snacks.
PepsiCo’s stock (PEP) has been relatively flat this year, with a slight decline year-to-date. Investors interested in PepsiCo can find exposure through ETFs like iShares U.S. Consumer Staples ETF (IYK) and First Trust Nasdaq Food & Beverage ETF (FTXG).
The news of the potential Siete Foods acquisition has sent PepsiCo’s shares slightly higher in pre-market trading. It remains to be seen how the deal will impact the company’s future and its position in the competitive snack food industry.
