PepsiCo forms partnership with Japanese snack company Calbee Foods

By Mike Stones

- Last updated on GMT

Related tags: Chief executive officer, Snack foods

Food and beverage giant PepsiCo has acquired a 20 per cent share of Calbee Foods Company; Japan’s largest snack firm.

Together they will jointly produce and sell a wide range of food products in Japan, such as potato chips, vegetable snacks, breakfast cereal and prawn crackers.

As part of the agreement PepsiCo, the parent company of Frito-Lay snacks and Quaker foods, will transfer its Frito-Lay Japan business plus an undisclosed sum to Calbee Foods Company. PepsiCo will also have a seat on Calbee's board.

The businesses currently generate annual combined revenues of about $1.4 bn.

Indra Nooyi, PepsiCo chairman and chief executive officer said: “Calbee and PepsiCo share many qualities that will contribute to our mutual success, including our collective drive to satisfy consumer expectations and contribute to healthy lifestyles."

Innovative technology

Nooyi praised Calbee’s use of innovative technology and its efforts to maximize the nutritional value of its products. “We're delighted at the prospect of creating a market-leading company that will provide a broad range of foods to address the changing needs of consumers across Japan," he said.

Yasuo Nakata, Calbee’s chief executive officer said: "We believe we have a huge opportunity to diversify our portfolio by offering products that reflect both Western and Japanese dietary cultures. By sharing experience and expertise with PepsiCo, we can enhance the quality of our products and quickly seize attractive growth opportunities."

The expanded company will produce and market a portfolio of brands, including: Calbee potato chips, Kappa Ebisen prawn crackers, Jagarico and Jagabee premium potato snacks, Doritos tortilla chips, Cheetos corn snacks and Mike popcorn. The company also will offer vegetable snacks and breakfast cereals.

Raw materials

The partnership will also benefit from joint research and development facilities including Calbee's R&D centre and PepsiCo's global snack innovation resources. Other synergies include: A sales and distribution system throughout Japan, a 13-plant manufacturing network and more efficient procurement of raw materials, said the companies. Based in Tokyo, Calbee employs about 5,000 people and posted revenues of about $1.3 bn during the fiscal year ended March 2009.

PepsiCo had annual revenues of more than $43bn last year and employs about 198,000 people worldwide.

The deal is subject to the approval of the Japanese government.

Related topics: Markets, PepsiCo

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