There is more to PepsiCo than our good old carbonated drink Pepsi. The company is the second biggest food and beverage company globally and first in North America. Not only this, it has exceptional brands in its portfolio, including the cult favorite Pepsi, Gatorade, Mountain Dew, 7up, Cheetos, Fritos, Quaker Oats, Aquafina, and Tropicana, to name a few.
Pepsi strongly believes in spreading smiles with, as they say, “every sip and every bite”. And how does Pepsi do that? It does that by the acquisition of some popular companies that added our favorite brands to its portfolio.
Let’s explore a few popular companies Pepsi owns and also what these companies add to the Pepsi portfolio. We will also try to answer why Pepsi decided to acquire them.
Pepsi Fun Facts
It will be such a shame if we do not pay a little homage to this centuries-old soft drink brand. So, allow us to discuss intriguing facts about Pepsi that most of you might not know.
- In the 1880s, a pharmacist and industrialist created Pepsi’s formula.
- The drink was supposed to be used for medicinal purposes, especially for stomach-related ailments.
- The first name of Pepsi was “Brad’s Drink”.
- Fast forward to 1890, Brad’s Drink became “Pepsi Cola”, and sold successfully everywhere.
- PepsiCo is the second biggest food and beverage company after Nestle.
- The company sells its products 1 billion times daily in more than 200 countries.
- The company has a brand value of US $14 billion in 2021 ($18.2 billion in 2020)
Now, let’s learn some notable companies Pepsi owns and why does it own them?
A Look into Some Popular Companies Pepsi Owns & Why
PepsiCo is a multinational company with North American, Latin American, North African, Europe Sub-Saharan Africa, Asia, Middle East, and North African segments selling, distributing, and marketing various food, beverages, and snacks products based on their regions.
PepsiCo has some cult favorite leading brands in its portfolio that we devour almost daily.
When we wake up, we start our day with Quaker Oats because they are supposedly “healthy” — a product from one of the companies Pepsi owns. We are almost snacking most of the time with either potato chips like Lays or corn chips like Fritos, Doritos, or Cheetos — all Pepsi, fellows!
What snacks without a beverage? You would go for a juice like Tropicana or any carbonated drink like Mountain Dew — all from companies Pepsi owns! Then if you open your kitchen cabinet to make some tea, perhaps Lipton tea — again from Pepsi.
It feels that you cannot run away from Pepsi even if you try. It is not a coincidence as Pepsi acquired some important companies to diversify its portfolio. These companies helped PepsiCo to venture into the food and snacks segment and even healthy snack options.
The monologue has gone pretty long; let’s come to the point! Here are a few selected companies that Pepsi owns. These companies added our favorite products to Pepsi’s portfolio.
Frito-Lay – 1965
Frito-Lay was the first food industry acquisition of Pepsi Co. Frito-Lay itself is the merger of the two companies Fritos the manufacturer of corn chips — and potato chips maker, Lays. Frito and Lays both merged in 1961 to become Frito-Lay, which in 1965 merged with Pepsi. The company produces iconic snacks, such as Lay’s, Fritos, Doritos, Cheetos, Ruffles, and others.
The merger with Pepsi expanded the market for Frito-Lay from a mere presence in the USA and Canada to distribution in more than 200 countries worldwide.
Pepsi wanted to pursue this merger as it wanted to market potato chips with Pepsi as an inseparable thing, like a match made in the heavens. According to PepsiCo CEO back then Donald Kendall,
Potato chips make you thirsty; Pepsi satisfies thirst.
Currently, Frito-Lay is the most profitable subsidiary of Pepsi Co.
Quaker Oats Company – 2001
Pepsi acquired Quaker Oats Company, a more than 100 years old breakfast Cereals Company. Pepsi Co acquired this oatmeal, breakfast cereals, and granola bar company for $13.8 billion in stock.
There are two reasons why Pepsi has supposedly acquired Quaker Oats Co. First, Pepsi wanted control of the most coveted sports drink in Quaker Oats Co portfolio, called Gatorade. It is because of the growing consumer demand for energy drinks.
According to an article on Forbes, Gatorade was a $2 billion-a-year sports drink in 2001. Naturally, Pepsi had eyes on it as it perfectly matched its aspirations of tapping the healthy snacks market.
Then, Pepsi had a great interest in Quaker granola bars. Again, the rising consumer trend urged Pepsi to introduce a healthy snack line to meet the need of health-conscious consumers.
Sabra Dipping Company (Joint Venture) – 2008
PepsiCo and Strauss Group co-own Sabra Dipping Company. The company sells Middle Eastern-style food products and other refrigerator dips and spreads. Sabra Dipping Co. is famous for its delicious hummus, salsa, and guacamole. Sabra is known for its hummus as it is the No.1 hummus brand in the US.
PepsiCo slowly shifted its energies to healthy snacks and beverages, and Sabra Dipping Company perfectly matched its aspirations. Sabra’s products contain healthy oils, are fresh, and have no cholesterol and trans fat — which is the dream of all health-conscious consumers.
Pepsi capitalized on the existing market of Sabra Dipping and further enhanced the reach of Sabra Dipping due to its sales and distribution capabilities.
Two Misfits in PepsiCo Portfolio: Tropicana and Naked Juice
The next two companies Pepsi owns were enthusiastically bought, but now it is in talks to sell them. These are juice companies — Tropicana, Naked, and other juice brands. These companies were hip back in the day, but now consumers are savvier than before and strongly despise the sugar content in these packaged juices.
Due to this rising trend of new customers, these brands struggled financially. These companies also no longer fit with PepsiCo’s portfolio as before. Therefore, Pepsi has decided to sell these companies to private equity fund PAI partners for $3.3 billion, while it will retain a 39% non-controlling stake in the new joint venture.
These two prominent juice companies Pepsi owns are Tropicana and Naked.
Tropicana – 1998
An Italian immigrant Anthony T.Rossi founded Tropicana in 1947. This acquisition in 1998 was supposedly the biggest acquisition of Pepsi Co to date.
Why did Pepsi do it in the first place? Well, it’s all due to its rival brand Coca-Cola’s Minute Maid.
Naked Juice – 2007
Naked Juice produces healthy juices and smoothies. The company had a loyal customer base due to its successful marketing and innovation strategies, with more than 25 healthy juices in its portfolio.
So, seeing its market and Pepsi’s growing interest in the healthy snacks and beverage sector, Pepsi acquired it. The company perfectly matched PepsiCo’s mission to provide nourishing products to its customers. Unfortunately, customers realized Naked juices are not as healthy as they perceived as they have high sugar and calories.
The Final Words
Wherever you go, in which part of the world, you are bound to come across one or two Pepsi products. So, we decided to discuss handpicked amazing companies Pepsi owns that produce cult-favorite products that we have been devouring for ages.