(Reuters) – PepsiCo (NASDAQ:) will buy Siete Foods parent Garza Food Ventures for $1.2 billion, Frito-Lay’s owner said on Tuesday, strengthening its snack portfolio amid a shift to private label brands among price-conscious consumers.
The company, backed by actor Eva Longoria, is known for grain-free tortilla chips and taco shells. It also makes products such as enchilada sauce and Mexican wedding cookies.
Siete’s products are distributed through 40,000 retail locations in the US, including Target and Whole Foods.
Founded in 2014 by Veronica Garza, the Texas-based company is owned and operated by seven members of the Garza family.
Consumers have turned to more affordable private-label brands for their snacking needs after several quarters of price hikes by packaged food makers to soften the blow of higher input costs.
Meanwhile, good deals have also been made in the packaged food sector. Snickers maker Mars bought Pringles maker Kellanova in August in a deal worth nearly $36 billion.
PepsiCo has been working to diversify its price points and offer new flavors under popular brands such as Lay’s, Doritos and Cheetos to broaden their appeal.
Volumes for the snack business in North America declined 4% in the most recently reported July quarter. The company will report third-quarter results next week.
The transaction is expected to close in the first half of 2025.
The Wall Street Journal first reported Monday that PepsiCo was in advanced talks to acquire Siete Foods.
Shares of PepsiCo rose nearly 1% in late morning trading.
