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PepsiCo to acquire full ownership of Sabra, Obela brands for $244M

November 22, 2024 from Food Dive:

• "PepsiCo is purchasing the remaining half of Sabra and Obela dip and spread brands that it doesn’t already own from Strauss Group. The Israeli food manufacturer said PepsiCo is paying $240.8 million for the rest of Sabra and $3 million for the remainder of Obela.
• "Pepsico and Strauss created Sabra as a joint venture in 2008, with each company owning 50% of the business. They replicated that model four years later with PepsiCo-Strauss Fresh Dips & Spreads International, which makes Obela. This joint venture operates in Australia, New Zealand and Mexico.
• "The transactions help PepsiCo expand its better-for-you food portfolio while giving it greater control over innovation, production, marketing and growth for Sabra and Obela. Sabra has nearly $400 million in U.S. retail sales."

"As consumers flock to healthy snacks, few brands have benefited as much from that uptick as Sabra.

"Still, despite its success, the hummus maker has had a rocky past. It struggled a few years ago with salmonella and listeria contamination which led to recalls going back to 2015. In December 2021, the brand received a warning letter from the FDA highlighting several violations at its Virginia plant that makes hummus.

"In September, Strauss reportedly was considering exiting the Sabra venture due to market share loss, declining sales and increased competition. Sabra’s market share is roughly 37% compared to more than 60% at one point.

"Still, with the hummus market expected to surge, PepsiCo has an opportunity to rebuild and further grow the Sabra brand. The North American hummus market was valued at $896 million in 2022 and is projected to reach $1.78 billion by 2030, according to data from Verified Market Research.

"Few food companies have the financial resources and deep understanding of consumers as PepsiCo. By owning Sabra entirely, PepsiCo will have more freedom to innovate and expand the brand."