PEPSICO TO ACQUIRE FULL OWNERSHIP OF SABRA AND OBELA

Rhea-AI Summary

PepsiCo (NASDAQ: PEP) has announced plans to acquire the remaining 50% stake in Sabra Dipping Company and Obela, making it the sole owner of both companies. These joint ventures, previously shared with Strauss Group since 2008 and 2012 respectively, manufacture and distribute refrigerated dips and spreads. Sabra, operating in the US and Canada, has grown to become a leading hummus brand with nearly $400MM in retail sales. Obela operates in Australia, New Zealand, and Mexico. The transactions are expected to close by end of 2024.

Positive

• Sabra generates nearly $400MM in retail sales in the U.S.
• Full ownership allows PepsiCo to accelerate innovation in fresh dips category
• Acquisition expands PepsiCo's presence in growing refrigerated dips market
• Geographic expansion across multiple markets (US, Canada, Australia, New Zealand, Mexico)

Negative

• None.

Insights

Financial Analyst

This strategic acquisition strengthens PepsiCo's position in the growing fresh dips and spreads market. With Sabra generating $400 million in retail sales in the U.S., the full ownership acquisition represents a meaningful addition to PepsiCo's portfolio. The move aligns with the company's strategy to diversify beyond traditional snacks and beverages into healthier options, which typically command higher margins.

The timing is particularly strategic given the growing consumer demand for healthier snacking alternatives and fresh, refrigerated products. By taking full control of both Sabra and Obela, PepsiCo gains complete operational control and the ability to accelerate innovation and market expansion without requiring joint venture partner approval. This could lead to faster product development and market responsiveness, potentially driving growth in this category.

Market Research Analyst

The refrigerated dips and spreads market represents a high-growth segment within the broader food industry. Hummus, in particular, has seen substantial growth as consumers increasingly seek plant-based protein options. Taking full ownership of Sabra, the market leader in hummus, positions PepsiCo to capitalize on several key market trends:

• Growing demand for healthier snacking options
• Rising popularity of Mediterranean and plant-based foods
• Increasing consumer preference for fresh, refrigerated products over shelf-stable alternatives

The international presence through Obela in Australia, New Zealand and Mexico provides additional growth vectors and geographical diversification.

Enables PepsiCo to Accelerate Innovation in Refrigerated Fresh Dips and Spreads to Meet Growing Consumer Demand

Further Expands Company's Positive Choice Portfolio

PURCHASE, N.Y., Nov. 22, 2024 /PRNewswire/ -- PepsiCo, Inc. (NASDAQ: PEP) today announced its agreement to acquire the remaining 50% interest in Sabra Dipping Company, LLC (Sabra) and PepsiCo-Strauss Fresh Dips & Spreads International GmbH (Obela) and become the sole owner of these companies, which make Sabra and Obela products.

Sabra and Obela are currently 50/50 joint ventures that had been formed between PepsiCo and Strauss Group to manufacture, distribute, and sell refrigerated dips and spreads. The Sabra joint venture is based in New York and operates in the U.S. and Canada. The Obela joint venture is based in Geneva and operates in Australia, New Zealand and Mexico.

PepsiCo has focused on the fresh dips category for over 15 years, forming Sabra and Obela as 50/50 joint ventures with the Strauss Group in 2008 and 2012, respectively. Sabra has become a leading hummus brand with nearly $400MM in retail sales in the U.S. This transaction will enable PepsiCo to continue to transform its portfolio and drive accelerated innovation to develop more products that meet the growing demand for positive choices from North American consumers.

"As we evolve our food portfolio and bring people more choices for more occasions, our aim is to meet the growing demand for positive choices and on-the-go options," said Steven Williams, Chief Executive Officer, PepsiCo Foods North America. "Nutritious, simple foods like refrigerated dips and spreads represent a space we have long desired to expand in the U.S. and Canada. We are grateful to the Strauss Group for our long and successful partnership and look forward to this next chapter for the Sabra and Obela brands, as well as the PepsiCo food portfolio."

The transactions are subject to customary closing conditions and are expected to close by the end of 2024. Additional terms of the acquisitions were not disclosed.

About PepsiCo
PepsiCo products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world. PepsiCo generated more than $91 billion in net revenue in 2023, driven by a complementary beverage and convenient foods portfolio that includes Lay's, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker, and SodaStream. PepsiCo's product portfolio includes a wide range of enjoyable foods and beverages, including many iconic brands that generate more than $1 billion each in estimated annual retail sales.

Guiding PepsiCo is our vision to Be the Global Leader in Beverages and Convenient Foods by Winning with pep+ (PepsiCo Positive). pep+ is our strategic end-to-end transformation that puts sustainability and human capital at the center of how we will create value and growth by operating within planetary boundaries and inspiring positive change for planet and people. For more information, visit www.PepsiCo.com. 

PepsiCo Cautionary Statement
Statements in this communication that are "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. Terminology such as "believe," "expect," "future," " "intend," "may," "plan," "position," "potential," "should," "will" or similar statements or variations of such words and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: the risks associated with the deadly conflict in Ukraine; future demand for PepsiCo's products; damage to PepsiCo's reputation or brand image; product recalls or other issues or concerns with respect to product quality and safety; PepsiCo's ability to compete effectively; PepsiCo's ability to attract, develop and maintain a highly skilled and diverse workforce or effectively manage changes in our workforce; water scarcity; changes in the retail landscape or in sales to any key customer; disruption of PepsiCo's manufacturing operations or supply chain, including continued increased commodity, packaging, transportation, labor and other input costs; political, social or geopolitical conditions in the markets where PepsiCo's products are made, manufactured, distributed or sold; PepsiCo's ability to grow its business in developing and emerging markets; changes in economic conditions in the countries in which PepsiCo operates; future cyber incidents and other disruptions to our information systems; failure to successfully complete or manage strategic transactions; PepsiCo's reliance on third-party service providers and enterprise-wide systems; climate change or measures to address climate change and other sustainability matters; strikes or work stoppages; failure to realize benefits from PepsiCo's productivity initiatives; deterioration in estimates and underlying assumptions regarding future performance of our business or investments that can result in impairment charges; fluctuations or other changes in exchange rates; any downgrade or potential downgrade of PepsiCo's credit ratings; imposition or proposed imposition of new or increased taxes aimed at PepsiCo's products; imposition of limitations on the marketing or sale of PepsiCo's products; changes in laws and regulations related to the use or disposal of plastics or other packaging materials; failure to comply with personal data protection and privacy laws; increase in income tax rates, changes in income tax laws or disagreements with tax authorities; failure to adequately protect PepsiCo's intellectual property rights or infringement on intellectual property rights of others; failure to comply with applicable laws and regulations; and potential liabilities and costs from litigation, claims, legal or regulatory proceedings, inquiries or investigations.

For additional information on these and other factors that could cause PepsiCo's actual results to materially differ from those set forth herein, please see PepsiCo's filings with the SEC, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

Media Contact: 
Andrea Foote
andrea.foote@pepsico.com 

 

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SOURCE PepsiCo, Inc.

FAQ

How much is PepsiCo (PEP) paying for the remaining 50% stake in Sabra and Obela?

The financial terms of the acquisitions were not disclosed in the announcement.

What are Sabra's current retail sales for PepsiCo (PEP)?

Sabra has nearly $400 million in retail sales in the U.S.

When will PepsiCo (PEP) complete the acquisition of Sabra and Obela?

The transactions are expected to close by the end of 2024, subject to customary closing conditions.

In which markets do Sabra and Obela operate under PepsiCo (PEP)?

Sabra operates in the U.S. and Canada, while Obela operates in Australia, New Zealand, and Mexico.