PepsiCo will buy tortilla-chip maker Siete Foods for $1.2 billion, the Frito-Lay owner said, beefing up its portfolio amid a shift among cost-conscious consumers to private label brands.
Texas-based Siete Foods, founded in 2014 by Veronica Garza, also makes products such as enchilada sauce and Mexican wedding cookies.
The transaction is expected to close in the first half of 2025, the company added.
"The Garza family has built a very special brand. Their passion for making and sharing food shines through in every Siete product, and that's a passion we share at PepsiCo," said Ramon Laguarta, chair and CEO of PepsiCo.
"PepsiCo believes in the spirit and authenticity of the Siete brand, and we're excited to carry on the legacy created by the Garza family. We look forward to expanding our multicultural portfolio with these incredible products and even more consumers discovering and enjoying Siete," he added.
Robust Dealmaking
The deal comes in the midst of robust dealmaking in the US packaged food sector as companies seek to scale their businesses at a time when inflation-weary consumers cut back spending and shift their purchases to private-label brands.
Demand for PepsiCo's snacks and soda, mainly in the United States, its largest market, has taken a hit from a series of price hikes and competition from private-label brands.
Recently, General Mills announced plans to sell its North America yoghurt business to French dairy firms Groupe Lactalis and Sodiaal in a $2.1 billion (€1.9 billion) deal.
The North American Yogurt business contributed about $1.5 billion (€1.4 billion) to General Mills’ fiscal 2024 net sales.
Elsewhere, confectionery giant Mars acquired Cheez-It and Pringles maker Kellanova in a nearly $36 billion (€32.7 billion) deal, making it the biggest buyout in the packaged food industry.
The deal is a bet on consumers continuing to indulge in branded snacks, and comes as packaged food companies face stalling growth after years of price hikes to cover sky-rocketing inflation.
