PepsiCo Plans To Sell Bottling Operation To franchisees In South And East

PepsiCo has announced its entry into a definitive agreement to acquire Bare Foods Co. (doing business as Bare Snacks), a U.S. based maker of baked fruit and vegetable snacks.

The deal will add to the company’s snacking portfolio and further deliver on its ‘Performance with Purpose’ vision to offer consumers more positive nutrition options.

“For nearly a dozen years, PepsiCo has been committed to ‘Performance with Purpose’, our vision of making more nutritious products, while also reducing added sugars, salt, and saturated fat. Bare Snacks fits perfectly within that vision,” said Indra Nooyi, Chairman and Chief Executive Officer of PepsiCo.

“The Bare Snacks leadership team has done an outstanding job building a top-tier organization and a strong brand with authentic roots, and I couldn’t be more excited to welcome Bare Snacks to the PepsiCo family.”

Bare Snacks was founded in 2001 by a family-owned organic apple farm in Washington, that began selling packaged baked apple chips in local farmers’ markets. Under its current leadership team, it has expanded steadily to become the leader in apple, banana and coconut snacks. It has recently expanded into vegetable chips and offers the industry’s broadest assortment of baked crunchy fruit and vegetable chips. Bare products are made from simple ingredients that are baked, not fried. They are Non-GMO Project verified, feature clean labels and are sold online and in natural and conventional retail channels across the United States.

“We are thrilled to work with the PepsiCo team to further our mission of bringing simplicity to snacking,” said Santosh Padki, CEO of Bare Foods.

“With a shared passion for crunchy, better-for-you snacks, PepsiCo is the right partner to help bring our simply baked fruit and vegetable snacks to even more consumers across the world and continue to grow our brand.”

Upon closing, Bare Snacks will continue to operate independently from its headquarters in San Francisco with its leadership reporting into Frito-Lay North America, a division of PepsiCo.

“Bare premium baked fruit and vegetable chips are an exciting expansion of Frito-Lay’s better-for-you snack offerings,” said Vivek Sankaran, President and Chief Operating Officer for Frito-Lay North America.

“While we will continue to offer the current Bare Snacks product line, we look forward to working with the Bare Snacks team to deliver new, innovative options, and ultimately expanded distribution, to meet the ever-growing consumer demands for authentic and nutritious snacks.”

Indian snacks firm Haldiram’s is making it concrete and branching into travel and tourism business to tap India’s booming tourism industry.

Haldiram’s has started a travel firm called Travhos Experience and hired half a dozen tourism professionals to spearhead the travel services foray of the eight-decade-old company famous for its Indian snacks and restaurants.

Siddharth Sharma, general manager of Travhos like SOTC or Thomas Cook said the newly formed company will sell everything from packaged tours to adventurous treks. “Our model is to make all kind of travel experiences accessible to the public.”

He said the company will offer services in heritage, spiritual, adventure, business and other travel packages for India and abroad.

Haldiram’s will start its travel services in the Delhi region in coming weeks and will market its travel products in its sweet outlets and restaurants. Later on, the company plans to sell its travel services from its outlets and restaurants.

Beginning with a small shop in Bikaner in 1937, Haldiram’s survived disputes and break-ups in the original Agarwal family. Haldiram’s is the biggest brand of those launched by the Agarwals.

The company has three distinct areas of operations with Haldiram’s Snacks and Ethnic Foods that clocked Rs 2,136 crore from the northern region last year, Nagpur based Haldiram’s Foods International that caters to western and southern Indian markets with annual sales of Rs 1,613 crore and a much smaller company, Haldiram Bhujiawala, for the eastern market with revenues of Rs 298 crore in FY16, data from Tofler, a company research platform, showed.

Indian snacks food company, Prataap Snacks has entered the category of sweet snacks market through its wholly owned subsidiary with the launch of its new brand ‘Rich Feast’, it said in a statement. The first product under the new brand is ‘Yum Pie’, a three-layered snack with sponge cake, flavoured jam, and chocolate.

The company has set up a fully automated manufacturing plant with its wholly owned subsidiary pure n Sure Food Bites in Indore Madhya Pradesh to manage the production of Yum-Pie.

Amit Kumat, MD & CEO of Prataap Snacks said “Our new brand ‘Rich Feast’ marks our entry into sweet snacks category where we see a lot of untapped growth opportunity. With this, we will now get into a bigger macro-snack category from only being a salty snacks player. We intend to grow the Rich Feast brand further with new launches in the coming time”.

Haldiram's has regained the top spot as the country’s largest snack company after more than two decades, surpassing PepsiCo in sales thanks to increasing consumer preference for packaged namkeen over western snacks such as potato chips.

Haldiram's posted sales of Rs 4,224.8 crore in the year ended September, compared with PepsiCo’s Rs 3,990.7 crore from brands such as Lay’s, Kurkure and Uncle Chipps, according to the latest Nielsen data sourced from executives. A year earlier, PepsiCo’s sales stood at Rs 3,617 crore compared with Haldiram’s Rs 3,262 crore.

While the overall market grew 17% in the year, Haldiram’s pace was faster at nearly 30%, in contrast with 10-12% during 2012-16. It added nearly Rs 1,000 crore of incremental sales in the year to September.

Kamal Agarwal a fourth generation member of the Haldiram’s family “There was a sharp increase in raw material prices for several snacking products, especially nuts. However, we maintained our price tag and absorbed losses, which helped us gain share not just from existing players but also the unorganised segment since the price differential narrowed down. Consumers are also correlating healthy food with Indian snacks and namkeen but chips are perceived to be unhealthy.”

PepsiCo spoke person said “In the salty snacks segment, we continue to be the leaders, which is also the fastest-growing category in overall snacks. In the western salty category, with strong double-digit growth, Lay’s has been our fastest growing food brand in the last year on account of premiumisation and innovation with Lay’s Maxx and Shapes. In the nachos category, we scaled our presence with the ‘Made in India’ Doritos, and the product is seeing strong preference and traction amongst consumers. We have further expanded our salty snacks portfolio last year with Kurkure Triangles, which is also growing in double digits.”

In the past few years, branded namkeen varieties such as dal, chivra, bhujia and nuts have been increasing their contribution within the overall snacks market worth Rs 21,600 crore. Traditional snacks now account for more than half the market with both multinationals and homegrown companies pushing namkeen into the hinterland with attractive packaging and pricing.

Marketers say consumers have increased purchases of branded namkeen rather than unbranded products from local bakeries due to the hygiene factor, helping regional players gain share from Pepsi. For instance, Gujarat-based Balaji that clocked sales of Rs 2,121 crore in the year to September is the second-largest in terms of individual brands after Haldiram followed by PepsiCo Lay’s and Kurkure.

B Krishna Rao, category head at Parle Products said “A large part of the unorganised market has shifted towards namkeen as companies have increased availability and affordability. Also, increased reach and new product launches especially by local players have been driving most of the growth.”

The US candy maker Hershey's Co said it would buy SkinnyPop popcorn maker Amplify Snack Brands in a deal valued at $1.6 billion, including debt, to gain a firmer footing in the fast-growing market for healthy snacks.

The maker of Reese's Peanut Butter Cups and Hershey's Kisses said it would pay $12 per Amplify share, a 71.4 percent premium to the stock's close on Friday. Amplify's shares were at $11.96 in premarket trading, while Hershey fell 1 percent to $113.

Big U.S. food companies are snapping up smaller brands as they try to maintain dominance with consumers increasingly moving to smaller, healthier or more artisanal brands. Over the past two years, Hershey has acquired brands such as Krave meat jerky and Ripple Brand Collective's barkTHINS.

Amplify Snack owns brands such as SkinnyPop popcorn and Paqui chips which claim to have no artificial ingredients or transfats and come in dairy-free cheese and naturally sweet flavours that are popular among millennial consumers.

Hershey's Chief Executive Michele Buck said “Hershey's snack mix and meat snacks products, combined with Amplify's Skinny Pop, Tyrrells, Oatmega, Paqui and other international brands, will allow us to capture more consumer snacking occasions by creating a broader portfolio of brands.”

Hershey's offer values Amplify's equity at $920.95 million and it will also take on the company's debt, which was $590.5 million as of Sept. 30. Hershey will also incur a make-whole payment of $76 million related to a tax receivable agreement that Amplify entered into when it went public in 2015.

Amplify's largest stockholder, TA Associates, and key company insiders who collectively represent about 57 percent of outstanding shares have agreed to back the deal.