Fast growth in China has just led beverage giant PepsiCo to purchasing a Chinese snack brand called Be & Cheery for $705 million. Known also as Hangzhou Haomusi Food Co., PepsiCo recently bought the company from Haoxiangni Health Food Co. in an effort to expand in the most populated country in the world.
Founded in 2003, Be & Cheery is one of the largest online snack companies in China. It reported revenues of about $711.7 million i 2019. Be & Cheery’s products includes nuts, dried fruits, meat snacks, baked goods as well as confectionery items that are sold mainly online through China’s major e-commerce platforms. Both companies announced that the deal would be subject to a Haoxiangni shareholder vote, certain regulatory approvals and other customary conditions.
It was in 2019 that PepsiCo experienced “double-digit” revenue growth in China. With a general decline in the consumption of sugary soft drinks worldwide, the company could rectify this with its latest acquisition. PepsiCo has said that the purchase of Be & Cheery was an important step in its goal to become China’s leading consumer-focused food and beverage company.
“Be & Cheery adds direct-to-consumer capability, positioning us to capitalise 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,” said Ram Krishnan, CEO of PepsiCo Greater China.
“We also expect to leverage Be & Cheery’s innovation and consumer insights capabilities to drive innovation in other key PepsiCo growth markets.”
Haoxiangni, based in the eastern city of Hangzhou, said in a filing that it had decided to sell as it wanted to focus on the jujube business.
“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.”
Pepsico had been working on the Be & Cheery acquisition since before the corona virus outbreak.