PepsiCo Targets Online Snacks Growth In China; Enters Definitive Agreement To Acquire Be & Cheery
Source PepsiCo, Inc.
SHANGHAI, February 23, 2020 -- PepsiCo, Inc. (NASDAQ: PEP) (“PepsiCo”) today announced that it has entered into a definitive agreement to acquire Hangzhou Haomusi Food Co., Ltd. (“Be & Cheery”), one of the largest online snacks companies in China, from Haoxiangni Health Food Co., Ltd. (002582.SZ) (“Haoxiangni”) for US $705 million. PepsiCo has been operating in China for nearly 40 years and this transaction marks an important step in the company’s goal to become China’s leading consumer-centric food and beverage company.
Based in Hangzhou, Be & Cheery has many product offerings across nuts, dried fruits, meat snacks, baked goods and confectionery, and predominantly sells online through the major e-commerce platforms in China. The company’s strong data-led innovation capability and flexible manufacturing and sourcing enables it to quickly adjust its product portfolio to respond to changing consumer trends.
“Be & Cheery is highly complementary to our existing China business with its broad product portfolio, asset light model, and focus on e-commerce,” said Ram Krishnan, CEO of PepsiCo Greater China. “As we look to accelerate growth in key markets around the world and further grow ‘in China, for China, with China’, Be & Cheery adds direct-to-consumer capability, positioning us to capitalize on continued growth in e-commerce, and a local brand that is able to stretch across a broad portfolio of products, through both online and offline channels. We also expect to leverage Be & Cheery’s innovation and consumer insights capabilities to drive innovation in other key PepsiCo growth markets.”
“We are pleased to reach the agreement with PepsiCo. PepsiCo is a global leading food and beverage company with deep roots in China, and with its extensive route-to-market and innovation capabilities, PepsiCo can continue to further advance Be & Cheery’s growth. Haoxiangni will focus on developing red dates and local specialty agricultural products in the future. We aim to expand our value chain and supply chain, in the purpose of supporting rural revitalization and achieving win-win outcomes for all,” said Jubin Shi, Chairman of Haoxiangni.
“We are thrilled to be joining the PepsiCo family,” said Haoqun Qiu, Chairman of Be & Cheery. “Be & Cheery was founded to bring more people convenient and nutritious snacks. We believe PepsiCo’s strong branding and route-to-market capabilities as well as global supply chain network will help us deliver and expand on that mission. PepsiCo and Be & Cheery are jointly confident in the prospects for China’s snacks industry and share a commitment to invest in consumer-led and digitalized capabilities. We are excited to join forces with them as we look to expand our reach and grow Be & Cheery to the next level.”
The transaction is subject to a Haoxiangni shareholder vote, certain regulatory approvals and other customary conditions.
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 $67 billion in net revenue in 2019, driven by a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. PepsiCo's product portfolio includes a wide range of enjoyable foods and beverages, including 23 brands that generate more than $1 billion each in estimated annual retail sales.
Guiding PepsiCo is our vision to Be the Global Leader in Convenient Foods and Beverages by Winning with Purpose. “Winning with Purpose” reflects our ambition to win sustainably in the marketplace and embed purpose into all aspects of the business. For more information, visit www.pepsico.com.
About Be & Cheery
Founded in 2003 and headquartered in Hangzhou, Be & Cheery is one of the largest online snacks companies in China and reported revenues of approximately RMB 5 billion in 2019. The company’s mission is to provide more people with nutritious snacks, and it is committed to developing the leisure snacks segments to improve people’s lifestyle and consumer experiences via an omni-channel, new retail model that encompasses a broad spectrum of value chain activities and product portfolios. For more information, visit www.vipbcw.com.
About Haoxiangni
Founded in 1992, Haoxiangni Health Food Co., Ltd is mainly engaged in research and development, sourcing, manufacturing and distribution of healthy foods such as its jujubes series, nuts and dried fruits. Haoxiangni was listed on the Shenzhen Stock Exchange (002582.SZ) in 2011. For more information, visit www.haoxiangni.cn.
Editor's Note: PepsiCo, Inc. published the transcript of its Q4 2019 PepsiCo Inc Earnings Call here and its presentation at the Consumer Analyst Group of New York (CAGNY) Conference here.