Americans consume about 15 billion quarts annually of popcorn -- widely seen as a healthy snack -- while 1.5 billion pounds of not-so-healthy potato chips get chomped on every year. So snack giant PepsiCo has decided to get healthier with popcorn.
The maker of Lays potato chips and Doritos is buying BFY brands, the company behind PopCorners, which combines chips with popcorn. BFY -- which stands for "Better For You" -- was purchased from the private investment firm Permira Funds. Paul Nardone, the CEO of BFY, said in a statement on the deal that "with the fastest growing brand among better-for-you salty snacks, we look forward to leveraging PepsiCo's world-class resources and distribution platform."
PopCorners are made using proprietary heat compression technology that cooks the corn while shaping it before it moves to conveyor belts for seasoning for such flavors as "white cheddar" and "kettlecorn." In addition to PopCorners, Pepsi is also acquiring Flourish Veggie Crisps and Flex Protein Crisps. All fit into the company's Winning with Purpose initiative, which aims to "accelerate our top-line growth, whilst keeping our commitment to do good for the planet and our communities."
The push toward healthier snacks has been on for more than two years at PepsiCo. Last year it acquired Health Warrior, a maker of plant-based protein bars, powders and other snacks. Like the PopCorners deal, terms were not disclosed. Then the company paid $3.2 billion for carbonated beverage machine maker SodaStream. It fits into PepsiCo's Beyond the Bottle initiative, which has a goal to offer "consumers a range of great-tasting beverages while making (Pepsi) packaging more sustainable and fueling our future growth." Plus placing a bet that the demand for unsweetened bubbly water drinks will grow is likely a sound wager.
These moves -- especially in the snack area -- appear to be paying off as consumers continue to turn away from Pepsi and other sodas. Compared with a year ago, Frito-Lay North America posted 5.5 percent revenue growth, according to the company's most recent earnings report. The growth rate was not only the highest of all of PepsiCo's divisions, but all those snacks from Cheetos to Sun Chips to Lay's chips were also responsible for 45 percent of the company's operating profits.
According to Permira, PopCorners is the fastest-growing healthier salty snack brand in the U.S. -- and that growth fits right into Pepsi's plans.
*This article has been updated to reflect Frito-Lay-North America's brands.