PepsiCo and Strauss Group to Establish Joint Venture to Bring Healthier Dips and Spreads to Markets Outside of North America
PURCHASE, N.Y., March 16, 2011 /PRNewswire/ -- PepsiCo, Inc. (NYSE: PEP) and Strauss Group (TASE: STRS) today announced their commitment to form a joint venture partnership that will produce and sell fresh dips and spreads in key markets outside of North America. The two companies have operated a successful North American joint venture since 2007 under the Sabra brand. In North America, Sabra is the number one brand of hummus and the leader in the chilled dips and spreads category.
PepsiCo and Strauss will leverage their existing infrastructures and invest in manufacturing plants, technologies and employees to set up local operations on a country or regional level. Each partner will own 50 percent of the new entity. Financial terms were not disclosed.
"Making healthier snacking options more accessible to consumers is a huge global opportunity, and we're well positioned to be a leader in this space," said Jaya Kumar, President of Global Nutrition Platforms, PepsiCo Global Nutrition Group. "This agreement will enhance our efforts to ensure that products made from vegetables and other fresh ingredients are both enjoyable and affordable, which supports PepsiCo's global nutrition strategy."
Gadi Lesin, President and CEO of Strauss Group, said, "PepsiCo's excellent global infrastructure combined with Strauss's knowledge, innovation and expertise in the fresh food domain, will result in an international company whose products meet the daily needs of consumers in various countries and help to improve their quality of life."
"The explosive popularity and considerable year-to-year growth of Sabra provide the momentum we need to bring similar good-for-you foods into new countries and retailers across the globe," said Giora Bar Dea, current CEO of Strauss North America. Bar Dea will take on the role as CEO of the new enterprise. "Strauss and PepsiCo are well-equipped to apply what we've experienced in the United States on a global level."
With nearly 50 percent category share in North America, Sabra's products include hummus, fresh salsa and eggplant dips. Sabra's 2010 revenues totaled $159 million, up nearly 45 percent from the prior year.
The new joint venture follows recent efforts by both PepsiCo and Strauss to promote health and wellness throughout their product portfolios. In October 2010, PepsiCo formed its Global Nutrition Group to accelerate product development in the areas of fruits and vegetables, whole grains, dairy and functional nutrition. PepsiCo has set a goal of tripling its annual revenues from nutritious and functional foods from approximately $10 billion in 2010 to $30 billion by 2020.
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PepsiCo offers the world's largest portfolio of billion-dollar food and beverage brands, including 19 different product lines that generate more than $1 billion in annual retail sales each. Our main businesses -- Quaker, Tropicana, Gatorade, Frito-Lay, and Pepsi Cola -- also make hundreds of other enjoyable and wholesome foods and beverages that are respected household names throughout the world. With net revenues of approximately $60 billion, PepsiCo's people are united by our unique commitment to sustainable growth by investing in a healthier future for people and our planet, which we believe also means a more successful future for PepsiCo. We call this commitment Performance with Purpose: PepsiCo's promise to provide a wide range of foods and beverages for local tastes; to find innovative ways to minimize our impact on the environment, including by conserving energy and water usage, and reducing packaging volume; to provide a great workplace for our associates; and to respect, support, and invest in the local communities where we operate. For more information, please visit www.pepsico.com.
About Strauss Group
Strauss Group, Israel's second-largest Food & Beverage Company, is today an international corporation with around 13,000 global employees operating 19 production sites in 20 countries. In the last seven years the Group has consistently achieved growth, generating around $1.83 billion in turnover at the end of 2010, of which 46% came from international activities. Strauss Group is comprised of four core business units: Strauss Israel, Strauss Coffee, Strauss North America and Strauss Water.
The Group is a leading player in coffee markets in Central and Eastern Europe, Brazil and Israel for Roast & Ground (R&G) coffee and other coffee related products and services. Strauss Group is traded on the Tel Aviv 25 Index, which lists the largest public companies in Israel and has achieved a top AA+ credit rating from Maalot, an affiliation of Standard and Poor's. Strauss Group is in partnership with leading multinationals Danone and PepsiCo; and Strauss Coffee recently entered into a partnership with TPG Capital, a leading private equity fund.
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PepsiCo Cautionary Statement
Statements in this communication that are "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: changes in demand for PepsiCo's products, as a result of changes in consumer preferences and tastes or otherwise; damage to PepsiCo's reputation; PepsiCo's ability to grow its business in developing and emerging markets or unstable political conditions, civil unrest or other developments and risks in the countries where PepsiCo operates; trade consolidation or the loss of any key customer; changes in the legal and regulatory environment; PepsiCo's ability to build and sustain proper information technology infrastructure, successfully implement its ongoing business transformation initiative or outsource certain functions effectively; unfavorable economic conditions in the countries in which PepsiCo operates; fluctuations in foreign exchange rates; PepsiCo's ability to compete effectively; increased costs, disruption of supply or shortages of raw materials and other supplies; disruption of PepsiCo's supply chain; climate change, or legal, regulatory or market measures to address climate change; PepsiCo's ability to hire or retain key employees or a highly skilled and diverse workforce; failure to successfully renew collective bargaining agreements or strikes or work stoppages; and failure to successfully complete or integrate acquisitions and joint ventures into PepsiCo's existing operations.
For additional information on these and other factors that could cause PepsiCo's actual results to materially differ from those set forth herein, please see PepsiCo's filings with the SEC, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. PepsiCo undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE PepsiCo, Inc.