By Sabrina Lynch
- PepsiCo is snapping up Mexican-American Food Brand Siete Foods for $1.2B
- Siete Foods are currently distributed in 40,000 stores across the U.S.
PepsiCo (PEP -0.05%) is tapping into the purchase power of multicultural communities by snapping up Mexican-American Food Brand Siete Foods for a nifty $1.2 billion. Founded a decade ago, Siete’s specialty in producing nontraditional versions of traditional Mexican food with authentic-to-culture ingredients quickly took North America by storm. Having gained additional investment from South Texas-born actress Eva Longoria, the company is being added to PepsiCo’s portfolio to prop-up its “better-for-you” offerings.
Why This Matters: What works to gain profits may not work to keep customers as the Hispanic community has spoken, and they’re not happy. Loyal fans of the brand are voicing their concerns that the company’s approach to provide healthier, heritage-true ingredients in Mexican-American food will dissipate with the buyout. Siete was built on its appeal of being a family-run, independently-owned business. Developed by Veronica Garza, her parents and siblings, it became the family’s solution for healthy cultural nutrition with those experiencing dietary restrictions.
The company generated $400 million in sales last year – an impressive jump from $150 million in 2020 – so a conglomerate takeover is leaving consumers’ nerves on edge. Even Goya, one of the best-known Mexican brands in the U.S., reportedly rebuffed a $3.5 billion offer from private equity giant Carlyle Group to retain family leadership. It seems to be a trend as just a few months ago, the Mars’ $36 billion Kellanova acquisition was wrapped up. As a rising star in the CPG world, the grocery brand cannot afford to have the quality of its product called into question during the early stage of a PepsiCo acquisition. With 60% of consumers increasingly prioritizing nutritional value alongside flavor, Siete is in prime position to take over more shelves in the 40,000 retail outlets it occupies, including Costco, Target and Whole Foods. Such strides contribute to the growth of the healthy snack industry and its projected growth is 6.2% from 2024 to 2030.
What’s Next: Siete is continuing to assure its fanbase that PepsiCo will carry on its legacy of choosing ingredients they feel good to use and eat. With 65% of consumers planning to make dietary changes to improve their wellness, there’s too much money at stake to progress on shaky grounds.
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