Pepsi has purchased Be & Cheery, a Chinese company that sells online snacks, for a reported $705 million, according to a report Monday (Feb. 24) by CNN.
The move, if approved by Haoxiangni shareholders and China’s top market regulators, would make Pepsi “China’s leading consumer-centric food and beverage company.”
China’s snack market is very profitable and grew 400 percent from 2006 through 2016, according to a study in 2019 by China’s Ministry of Commerce. The market is predicted to be worth $427 billion this year.
The move comes as many companies in China are trying to recover from weeks of lost work due to the coronavirus outbreak, which forced the closures of factories and stores all across the country.
Officials have asked that people do more online shopping to reduce their chances of exposure to the virus.
Be & Cheery is based in Hangzhou, and it sells mostly dried fruits, nuts and other snacks. The company posted $24.3 million in net profits last year, which is a 32 percent jump from 2018.
Be & Cheery is currently owned by Haoxiangni Health Food, which bought it in August of 2016 for $136.5 million, which means it’s now worth over five times that amount.
Pepsi has been in China for many years, and it’s always trying to expand and make deals in the region. The company took a stake in a large natural food producer to help it gain a foothold in the global health food market.
The soft drink company said that it made “strong double-digit growth” in 2019, but it didn’t share the specifics of its revenue.
“One of the critical opportunities for PepsiCo is to develop the international business,” PepsiCo Chairman and CEO Ramon Laguarta said to investors during an earnings meeting earlier this month, per reports. “And China, of course, is a huge market, where we have a good business. It’s growing very well … But the opportunity is much, much higher.”
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