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The Street
The Street
Patricia Battle

PepsiCo’s plan to buy a popular brand draws threats from consumers

PepsiCo.  (PEP)  which owns top food brands such as Lays, Quaker, Gatorade, etc., has its eyes locked on adding another popular brand to its portfolio, but some consumers are fearful of the outcome of the acquisition.

The food giant announced in a press release on Oct. 1 that it is set to buy Siete Foods, a Mexican-American brand that is popular for having clean ingredients in its products, which include cookies, snacks, tortillas, spices, etc.

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PepsiCo is putting down a whopping $1.2 billion to acquire the brand, and the deal is expected to be completed during the first half of 2025.

Related: Coca-Cola pulls the plug on a brand-new flavor amid criticism

"PepsiCo believes in the spirit and authenticity of the Siete brand, and we're excited to carry on the legacy created by the Garza family,” said PepsiCo CEO Ramon Laguarta in the press release.

Shortly after the announcement, many consumers took to social media to express outrage over the decision, fearing that PepsiCo will alter the ingredients of Siete’s food products by adding in cheaper, undesirable chemicals that can pose a threat to human health. Some have even threatened to stop buying Siete products over these concerns.

In an emailed statement to TheStreet responding to the recent backlash, a spokesperson for PepsiCo did not specify whether or not the company plans to change the ingredients in Siete's products, but claimed that PepsiCo looks forward to working with Siete's owners on the acquisition. 

“We appreciate the passion of Siete’s loyal consumers," said the PepsiCo spokeperson. "We share their love of Siete products just as they are, and are looking forward to working with the Garza family to bring their inclusive, better-for-you products to more people.”

Why consumers are protective over Siete's ingredients

Siete was founded in 2014 by Veronica Garza, a University of Texas graduate. She created the company after she was diagnosed with “multiple debilitating autoimmune conditions,” according to Siete’s website. Seite’s ingredients were inspired by the low-inflammation diet she had to adopt as a result of these conditions.

Related: Tupperware sounds the alarm on a trend that led to bankruptcy

Recently, consumers have been paying closer attention to the ingredients in their food products, avoiding those they deem unhealthy. This shift in consumer behavior aligns with the current trend of individuals becoming more health-conscious about the food and drinks they consume, a trend that sparked after the Covid pandemic.

Seed oils such as canola, vegetable, sunflower, rapeseed, etc., are some of the many ingredients that have recently drawn scrutiny from consumers for being overly processed and contributing to inflammation in the body.

@bobbyparrish

❌Bad Oils❌ #eatthisnotthat #healthyliving #bobbyapproved #seedoils

♬ original sound - Bobby Parrish

Synthetic dyes such as Red 40, Yellow 6, etc., which are commonly found in processed foods, have also come under fire for being linked to health issues such as cancer and hyperactivity in children, despite being approved by the U.S. Food and Drug Administration.

Amid this criticism, brands such as Siete have been uplifted and promoted by consumers for containing clean ingredients. Instead of using seed oils to make its food, Siete uses avocado oil, which has anti-inflammatory effects.

@healthwithhunter

@Siete Foods is an amazing alternative to Doritos! #health

♬ original sound - HEALTH WITH HUNTER

All of Siete’s products are also grain free, non GMO, gluten free, dairy free, soy free, paleo and vegan, which has attracted many health-conscious consumers. While the company’s products aren’t certified organic, many of them also contain organic ingredients.

Seed oils and synthetic dyes have been found in the ingredients list of multiple PepsiCo food products, so it is no surprise that some consumers are concerned about the company acquiring Siete Foods.

More Retail:

PepsiCo has recently been suffering from dwindling sales

The move from PepsiCo comes after it reported in its second-quarter earnings report for 2024 that it faced weak U.S. sales for its Frito-Lay and Quaker Foods brands. Volume for Frito-Lay declined by 4% during the quarter, while Quaker Foods decreased by 17%.

During an earnings call on July 11, which discussed the earnings report, PepsiCo CEO Ramon Laguarta claimed that the decrease in sales comes during a time when consumers are restricting their spending on food due to inflation.

“The consumer is much more price conscious, (and) is looking for more value,” said Laguarta during the call.

Related: Veteran fund manager sees world of pain coming for stocks

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