PepsiCo seeking Australian snack acquisitions, report

By Dominique Patton

- Last updated on GMT

Related tags Snack foods Meal Vegetable

US beverage and snack food giant PepsiCo is hunting for
acquisitions in Australia after spending A$215 million on New
Zealand's Bluebird Foods earlier this month, according to a report.

PepsiCo Australia's chief executive Alex Stevens told the Australian Financial Review​ that it was looking at second-tier snack brands for sale in Australia. "We're constantly looking at acquisitions in emerging areas as well as anything of scale,"​ Stevens told the paper. "PepsiCo has free cash flow in excess of $US5 billion a year and for the right acquisition there's always capital available. "​ Challenging industry conditions are leading smaller players to look for exit strategies, according to Stevens. PepsiCo has achieved double-digit volume growth in snack foods in the past few years and has increased its share of Australia's $A1.1 billion savoury snacks market from 42 per cent to 58 per cent, said the paper. It has grown through acquisitions including Sakata Rice Snacks in 2005, The Smiths Snack Food Company from United Biscuits in 1998 and the launch of the Red Rock Deli brand in 2002. The Bluebird acquisition has now given it a presence in the New Zealand market, where it plans to follow a similar strategy. Bluebird has 50 per cent of the salty snacks category and about 40 per cent of nutritious and fruit snacks. "The New Zealand market is relatively underdeveloped from an innovation, quality and consumer offer point of view and we see lots of upside in the business,"​ Stevens told the paper. PepsiCo will spend more on marketing to build brands, filling gaps in the Bluebird portfolio with its Frito-Lay and Quaker Foods ranges.

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