PepsiCo Acquires Siete Foods

Case Code: BSTR698
Case Length: 6 Pages
Period: 2014-2024
Pub Date: 2025
Teaching Note: Available

Price: Rs.200
Organization : PepsiCo, Inc.
Industry : Food & Beverage
Countries : United States
Themes: Strategic Alliances, Diversification Strategy

Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

In October 2024, global food, snack, and beverage major PepsiCo, Inc. (PepsiCo) entered into an agreement to acquire Garza Food Ventures LLC, dba Siete Foods (Siete Foods), a Mexican-American food brand, for US$ 1.2 billion. The acquisition would enable PepsiCo to expand its food portfolio and offer its customers snacks with more positive choices and simple ingredients. Before the acquisition of Siete Foods, PepsiCo had acquired food companies such as Bare Snacks, Pop Corners, and Health Warrior. Analysts opined that the acquisition of Siete Foods was aligned with PepsiCo’s strategy of diversifying its product portfolio and would help it counter the competition in the market. Experts also stated that the acquisition would lead to increased growth and revenues for PepsiCo. However, others were of the opinion that the acquisition would lead to a compromise in the quality of the food products of Siete and that there was a likelihood of the prices of Siete Foods products being increased. It remained to be seen how the acquisition would help PepsiCo strengthen its position in the nutritious food segment.

Issues

The case is structured to achieve the following teaching objectives:

Discuss the various factors which influence the acquisition strategy of a company
Examine the risks involved in an acquisition
Explore the reasons for a company to go in for product diversification.

Introduction

Pepsico Background

Siete Background

The Snack Food Industry In The US

Why siete foods?

Challenges Ahead

Exhibits