PepsiCo Targets Online Snacks Growth in China with Definitive Agreement to Acquire Be & Cheery



SHANGHAI, February 23, 2020 -- PepsiCo, Inc. (NASDAQ: PEP) (“PepsiCo”) today announced that it has entered into a definitive agreement to acquire Hangzhou Haomusi Food Co., Ltd. (“Be & Cheery”), one of the largest online snacks companies in China, from Haoxiangni Health Food Co., Ltd. (002582.SZ) (“Haoxiangni”) for US $705 million. PepsiCo has been operating in China for nearly 40 years and this transaction marks an important step in the company’s goal to become China’s leading consumer-centric food and beverage company.

Based in Hangzhou, Be & Cheery has many product offerings across nuts, dried fruits, meat snacks, baked goods and confectionery, and predominantly sells online through the major e-commerce platforms in China. The company’s strong data-led innovation capability and flexible manufacturing and sourcing enables it to quickly adjust its product portfolio to respond to changing consumer trends.

“Be & Cheery is highly complementary to our existing China business with its broad product portfolio, asset light model, and focus on e-commerce,” said Ram Krishnan, CEO of PepsiCo Greater China. “As we look to accelerate growth in key markets around the world and further grow ‘in China, for China, with China’, Be & Cheery adds direct-to-consumer capability, positioning us to capitalize 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. We also expect to leverage Be & Cheery’s innovation and consumer insights capabilities to drive innovation in other key PepsiCo growth markets.”

“We are pleased to reach the agreement with PepsiCo. PepsiCo is a global leading food and beverage company with deep roots in China, and with its extensive route-to-market and innovation capabilities, PepsiCo can continue to further advance Be & Cheery’s growth. Haoxiangni will focus on developing red dates and local specialty agricultural products in the future. We aim to expand our value chain and supply chain, in the purpose of supporting rural revitalization and achieving win-win outcomes for all,” said Jubin Shi, Chairman of Haoxiangni.

“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.”

The transaction is subject to a Haoxiangni shareholder vote, certain regulatory approvals and other customary conditions.

About PepsiCo
PepsiCo products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world. PepsiCo generated more than $67 billion in net revenue in 2019, driven by a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. PepsiCo's product portfolio includes a wide range of enjoyable foods and beverages, including 23 brands that generate more than $1 billion each in estimated annual retail sales.

Guiding PepsiCo is our vision to Be the Global Leader in Convenient Foods and Beverages by Winning with Purpose. “Winning with Purpose” reflects our ambition to win sustainably in the marketplace and embed purpose into all aspects of the business. For more information, visit www.pepsico.com.

About Be & Cheery
Founded in 2003 and headquartered in Hangzhou, Be & Cheery is one of the largest online snacks companies in China and reported revenues of approximately RMB 5 billion in 2019. The company’s mission is to provide more people with nutritious snacks, and it is committed to developing the leisure snacks segments to improve people’s lifestyle and consumer experiences via an omni-channel, new retail model that encompasses a broad spectrum of value chain activities and product portfolios. For more information, visit www.vipbcw.com.

About Haoxiangni
Founded in 1992, Haoxiangni Health Food Co., Ltd is mainly engaged in research and development, sourcing, manufacturing and distribution of healthy foods such as its jujubes series, nuts and dried fruits. Haoxiangni was listed on the Shenzhen Stock Exchange (002582.SZ) in 2011. For more information, visit www.haoxiangni.cn.

PepsiCo Cautionary Statement
Statements in this release that are “forward-looking statements” are based on currently available information, operating plans and projections about future events and trends. Terminology such as “believe,” “expect,” “intend,” “estimate,” “project,” “anticipate,” “will,” or similar statements or variations of such terms are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in any such forward-looking statement. Such risks and uncertainties include, but are not limited to: future demand for PepsiCo's products, as a result of changes in consumer preferences or otherwise; changes in laws related to the use or disposal of plastics or other packaging of PepsiCo’s products; changes in, or failure to comply with, applicable laws and regulations; imposition or proposed imposition of new or increased taxes aimed at PepsiCo's products; imposition of labeling or warning requirements on PepsiCo's products; PepsiCo's ability to compete effectively; political conditions, civil unrest or other developments and risks in the markets where PepsiCo's products are made, manufactured, distributed or sold; PepsiCo's ability to grow its business in developing and emerging markets; uncertain or unfavorable economic conditions in the countries in which PepsiCo operates; the ability to protect information systems against, or effectively respond to, a cybersecurity incident or other disruption; damage to PepsiCo's reputation or brand image; water scarcity; business disruptions, including health epidemics or pandemics or other contagious outbreaks, such as the recent coronavirus; failure to successfully complete, integrate or manage acquisitions and joint ventures into PepsiCo's existing operations or to complete or effectively manage divestitures or refranchisings; changes in estimates and underlying assumptions regarding future performance that could result in an impairment charge; loss of, or a significant reduction in sales to, any key customer; disruption to the retail landscape, including rapid growth in the e-commerce channel and hard discounters; climate change or legal, regulatory or market measures to address climate change; other factors that may adversely affect the price of PepsiCo's publicly traded securities and financial performance; and risks related to the proposed acquisition, including the inability to satisfy the conditions to the closing of the proposed acquisition and risks that the proposed acquisition disrupts current plans and operations of Be & Cheery and the potential difficulties in employee retention as a result of the proposed transaction.

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 Securities and Exchange Commission, 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.