Beverage giant PepsiCo (PEP) is in advanced talks to acquire Siete Foods, a popular Mexican-inspired food brand, for over $1 billion, the Wall Street Journal reported. This potential deal aligns with PepsiCo’s strategy of expanding its offerings to include healthier snack options, catering to evolving consumer preferences.
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Siete Foods, based in Austin, Texas, is a privately held company owned and operated by the Garza family. The company has attracted considerable interest from multiple parties, including private equity firms and other food companies, looking to acquire this promising brand.
It should be noted that over the years, Siete Foods has successfully grown its product range beyond its tortilla chips to include cookies, potato chips, enchilada mix, and dairy-free queso dips.
PepsiCo Addresses Changing Consumer Trends
The U.S. packaged food industry is seeing a rise in inflation-conscious consumers choosing healthier snack options. According to data by Technavio, the global health and wellness food market size is expected to grow by $541.5 billion between 2024 and 2028, with a compound annual growth rate (CAGR) of 9.27%, fueled by the rising trend of healthy eating habits.
In response, PepsiCo’s acquisition of Siete Foods aligns with a broader trend among food companies that are expanding their portfolios to adapt to changing consumer preferences.
This deal should allow PepsiCo to strengthen its position in the expanding market for healthier, grain-free snacks.
Is PEP a Good Stock to Buy?
Turning to Wall Street, PEP stock has a Moderate Buy consensus rating based on eight Buys and nine Holds assigned in the last three months. At $186.06, the average PepsiCo price target implies 9.41% upside potential. Shares of the company have gained 5.2% in the past three months.
