PepsiCo is betting $1 billion on tortilla chips as a ‘healthier’ snack

On Tuesday, PepsiCo agreed to acquire grain-free Mexican-American brand Siete Foods for $1.2 billion, adding to its roster of healthier food and snack offerings, according to the Wall Street Journal.

The billion-dollar bet comes amid growing consumer preferences for healthier food, snacks, and drinks like bottled water, seltzer, juices, and sports beverages.

Siete Foods makes grain-free, high-quality tortilla chips, soft tortillas, and sauces. The purchase comes as PepsiCo focuses on offering snacks with lower sodium, saturated fat, and sugar.

The Mexican-American staples add to PepsiCo’s already diverse food and drink portfolio, which includes Aquafina bottled water, Naked Juice, Tropicana fruit juices, and Gatorade. In addition, it sells Frito-Lay corn and potato chips and Quaker Oats granola bars. It also bought fruit-snack startup Bare Foods in 2018.

According to an analysis from Seattle-based investment platform Kavout, the acquisition of Siete Foods “would significantly enhance PepsiCo’s portfolio by adding a range of health-oriented, culturally authentic products. . . . By integrating Siete Foods’s products, PepsiCo can tap into the growing demand for grain-free and gluten-free options, thereby expanding its market reach.”

PepsiCo’s acquisition of Siete Foods comes at a time when its competitors are also consolidating, and companies are making big purchases to stay competitive.

Late this summer, Mars, which makes M&M’s and Snickers, struck a nearly $30 billion deal to buy Cheez-Its and Pop-Tart owner Kellanova (formed when Kellogg Co. split three ways). As a result, Mars has expanded its reach even further with household brand names Eggo, Town House, MorningStar Farms, and Rice Krispies Treats all under its roof.