PepsiCo, Inc. (PEP) and Strauss Group entered an agreement to form a joint venture partnership to primarily produce and sell fresh dips and spreads in key markets outside North America. Since 2007, the two companies have operated a successful North American joint venture under the Sabra brand.
Sabra is a top brand of hummus and is also a leader in the chilled dips and spreads category. The financial terms of the deal were not disclosed.
The new joint venture focuses primarily focuses to promote health and wellness throughout its product portfolios. Of late, there has been an increasing awareness among consumers to shift toward healthy lifestyle. Therefore time of formation of the joint venture is just appropriate and the products further compliment the same.
Both the companies are expected to leverage their existing infrastructures, along with new investments in manufacturing plants, technologies and employees to set up local operations on a national or regional level. Both partners will own 50% of the new entity.
The top management at Strauss stated that PepsiCo’s excellent global infrastructure combined with Strauss’s knowledge, innovation and expertise in the fresh food category, 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.
Sabra commands almost a 50% share of the hummus and dips category in North America. The products under the Sabra brand primarily consists hummus, fresh salsa and eggplant dips. Sabra’s 2010 revenues totaled $159 million, which surged approximately 45% from the prior year period.
Headquartered in Purchase, NY, PepsiCo, Inc. is the leading global snack food company and the second largest soft drink company, providing food and beverage products in more than 200 countries. The company currently has Zacks #4 Rank which translates into short-term Sell rating, however over the long term we remain Neutral on the stock.
Strauss Group is the second-largest Food & Beverage Company in Israel and today is an international corporation with about 13,000 global employees operating 19 production sites in 20 countries.
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