The rise of healthy and organic brands has transformed the food and beverage industry as we know it—and affected the bottom-line of companies like PepsiCo Inc. In recent years, PepsiCo has diversified its offerings with brands like Naked juice and Quaker oatmeal in its “Better-for-You” category. Yet, at its core, PepsiCo remains a beverage-oriented company, thus operating primarily in a stalling industry overcome with changes in consumer demand and pressing government regulations. Competitors like Hershey Co. and Campbell Soup Co. are focused on acquiring smaller healthy snack brands to appeal to consumers, posing a threat for Pepsi.
Vivaldi CEO and Founder Erich Joachimsthaler offered his insight to TheStreet on PepsiCo’s newfound competition with other corporations acquiring healthy snack makers, such as Hershey’s pending acquisition of Amplify Snack Brands Inc. “When Amplify stood alone, it wasn’t a problem for Pepsi because it lacked mass distribution channels. But now under Hershey, that’s no longer the case. … It will have to make a similar acquisition down the line.” The ball now lies in Pepsi’s court to either adapt to the rise of these smaller CPG products or risk being left in the dust.