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PepsiCo scoops up Siete Foods in $1.2 bn deal

PepsiCo has announced its plan to acquire Mexican-American food company Siete Foods known for its heritage-inspired range of tortillas, salsas, seasonings, and sauces, marking PepsiCo’s first food-based acquisition in around five years.

In 2024, consumers' approaches to healthy eating are impacted by many competing factors, including a focus on preventive nutrition and increased attention toward the potential health risks of eating a diet high in ultra-processed products, alongside rising grocery prices and ongoing economic challenges.

While financial constraints have made healthy eating less of a priority for some consumers, Mintel market research notes that despite this, there is a global shift toward health-conscious eating, which has resulted in consumers increasingly prioritising natural ingredients and clean-label products.

With the increasing consumer demand for better-for-you (BFY) snacks, PepsiCo has seized the opportunity to expand its BFY range of offerings with this latest acquisition.

Siete’s clean-label offerings appeal to the health-conscious consumer

Siete Foods was founded in 2014 in Austin, Texas by seven (siete in Spanish) members of the Garza family. The idea for the company was born out of co-founder & president, Veronica Garza’s struggle with auto-immune diseases at a young age, which started a journey around how food can heal involving the whole family. Veronica Garza began making grain-free tortillas for her family before sharing the foods she and her family loved on a wider scale through her business.

What started as Veronica Garza innovating in her home kitchen with non-traditional ingredients such as almond flour, became a range of grain-free and dairy-free Mexican-American products carried by Whole Foods in 2016. Today, Siete’s products are available across 40,000 retailers in the US, with a product range spanning macro snacks and meals.

Siete’s tortillas come in a range of grain-free options. Its chickpea tortillas are made from an eight-ingredient blend, including chickpea flour, cassava four, water, tapioca flour, olive oil, apple cider vinegar, sea salt, and guar gum. It’s cassava flour tortillas made from seven: cassava flour, water, coconut flour, coconut oil, apple cider vinegar, sea salt, and xanthan gum. While its almond flour tortillas are made from only five: almond flour, tapioca flour, water, sea salt, and xanthan gum.

Siete also has a range of grain-free tortilla chips, enchilada and botana sauces, salsas, taco seasoning mixes, Mexican Cookies, vegan beans, and grain-free puffs.

These products also contain short ingredient lists, full of familiar items. Siete’s Mild Salsa includes roasted tomatoes, jalapenos, onions, roasted garlic, sea salt, coriander, and lemon juice concentrate. The company’s Chamoy Botana sauce, while containing a longer ingredient list than its salsa offerings, is full of natural and health-forward ingredients, including water, tapioca syrup, pear puree concentrate, apple juice concentrate, dates, apricot puree concentrate, lime juice concentrate, sea salt, guajillo pepper powder, New Mexico chile powder, and hibiscus powder.

PepsiCo aims to expand its ‘multicultural portfolio’ with acquisition

PepsiCo believes the acquisition, which is expected to close in the first half of 2025, will complement its portfolio with the addition of an authentic, Mexican-American brand, while at the same time expanding its better-for-you food offerings

Ramon Laguarta, chairman and CEO of PepsiCo, discussing the acquisition in a press release said: “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.”

Laguarta continued by outlining PepsiCo’s intention to continue the legacy created by the family by expanding the PepsiCo multicultural product portfolio.

Miguel Garza, CEO and co-founder of Siete Foods also commented on the acquisition. “Siete was created ten years ago to make heritage-inspired, Mexican-American food more widely available. Now we're excited to embrace a new era with PepsiCo and bring our inclusive, better-for-you products to more people,” he said, adding “We hope this next chapter for Siete serves as inspiration for other Latino businesses, showing that it's possible to build a thriving brand that honours our heritage and celebrates our culture.”

Strategic acquisition to diversify offerings

It appears that PepsiCo may be turning its attention back to the growing market of BFY offerings, as the company's latest food acquisition was around five years ago. In 2019 PepsiCo acquired snack brand BFY Brands, and the following year bought South African brand Pioneer Foods in a $1.7 bn acquisition.

As reported by Reuters in July 2024, PepsiCo’s second-quarter revenue was lower than expected, in part due to multiple price hikes and private label competition, which negatively impacted its snack and soda sales, across the US. Lagurata told Reuters at the time that consumers across all income groups are looking for value when it comes to product purchase choices. He added that the company, unable to continue pricing products up has been stepping up productivity and is putting more emphasis on efficiency.

The company also looked toward diversifying its brands, adding new flavours to its Lay’s, Doritos, and Cheetos brands to appeal to different consumers, alongside price tier diversification, offering varied-priced products to further enhance consumer appeal.