PepsiCo dares to go Bare
- Food and beverage giant PepsiCo recently announced plans to acquire Bare Foods, which makes baked fruit and vegetable snacks, for an undisclosed price, according to a news release. The purchase expands Pepsi's healthy snacking portfolio.
- Bare Snacks will continue to operate independently at its San Francisco headquarters under the direction of Frito-Lay North America. Bare Snacks was founded in 2001 by a family-owned organic apple farm in Washington that started selling baked apple chips in order to extend its selling season.
- For more than a dozen years, PepsiCo has worked to make more healthful products while reducing added sugars, salt and saturated fat, and Bare Snacks “fits perfectly within that vision,” PepsiCo CEO Indra Nooyi said in the news release. “The Bare Snacks' leadership team has done an outstanding job building a top-tier organization and a strong brand with authentic roots,” Nooyi said.
As FONA International reported last year, more than 80% of consumers snack every day, and about one in four noshes between meals to treat herself. As schedules become increasingly busy and consumers continue to look for healthful food options, it seems brands such as Bare Snacks are on the cusp of something big.
According to market research firm IRI, sales in snacking rose to $89 billion in 2016, posting an annual growth rate of 3%. Nielsen found growth has occured in all snacking categories from 2013 to 2016 — led by bars, jerky and cookies/crackers.
This trend has food companies looking to gain a foothold or a increase their footprint in the snack and convenience niche. In December, Campbell Soup spent about $5 billion to acquire Snyder’s-Lance, which makes brands such as Pop Secret, Kettle, Cape Cod and Emerald. Kellogg bought the owner of RXBar protein bars for $600 million last year, and Hershey announced plans to take over Amplify Snack Brands, maker of SkinnyPop popcorn.
The focus on snacks does not come without risks for food companies. Today’s young consumers are looking for new and interesting flavors, and are not necessarily loyal to a particular brand. Bare Snacks has been in business for nearly two decades and has a proven track record that should appeal to PepsiCo investors, although no one can predict how well the snacks will scale to global customers.
Still, the purchase of Bare Snacks seems to hit many right notes for PepsiCo. Its product line fits with Pepsi’s mission to offer healthful alternatives. The move comes at a time when consumers are looking for nutritious options, and the snacking trend isn’t slowing down any time soon. But as larger companies continue to gobble up smaller snack makers, only time will tell which snacks will stick and which will end up as momentary fads.