What Does Siete's Billion-Dollar Deal Mean For Your Brand?

0:10Hello friends and thanks for tuning in to taste radio the number one podcast for anyone building a business in food or beverage. I'm Ray Lateef, the editor and producer of Taste Radio. And with my co-host for this episode, John Craven, Jackie Brugliera, and Mike Schneider. It's a massive show. A lot going on in this show. Massive. Lots to talk about, so we'll get right to it. London Calling. You guys have been hearing us talk about our upcoming travels to London in the United Kingdom, also known as Great Britain. Do you want to give some quick history notes? Are they? It's also England, right?

0:48Are they? Yeah. Well, it's the country of England. Can we just say London? Is the UK and Great Britain, are those interchangeable? No, it's not interchangeable. I'll explain it to you later. What a numpty. All right, fine. Anyway, let's get back. You know you need British pounds over there, right? Let's get back to my intro voice. Yes, we are going to be planning some meetups, or we are planning meetups in London. They're planned. They're planned. They're planned, yes. They're happening. They're happening. Let's get back to my intro voice. I love it. All right. As you know, we've been talking about this.

1:21We're going to be attending a drinks event, aptly titled Cheers! The Drinks Summit by Bread and Jam. That's happening on Tuesday, October 15th. It's beginning at 9 a.m. I have a feeling we're going to be there right at 9 a.m. I can't wait. Exciting stuff. I can't wait outside until they let me in. Yes. Lots of sampling, lots of networking, lots of speakers, lots of competitions. Actually, it's the only one competition, but we're going to be there. We're going to be there in full force, the four of us, that is. Excited for that. And then later that day, from 6 to 8 p.m., we will be hosting our own networking event at Lucky Saints, Lucky Saints Pub, that is, in the London.

2:02Very excited for that, 6 to 8. And we're going to be hosting a couple short interviews. But, you know, it's going to be a very fun cultured affair with some beverages, non-alc. elk maybe some snacks it's gonna be fun this is a dream come true i love lucky saint so much and tell them about the ticket prices right the ticket prices it's a great deal just hold it is amazing it's amazing our charging folks nada zip zero to attend nil so yes nil so uh if you're interested and you should be head to taste radio.com slash london to register but that's not all, folks. Much more, much more to come the following day, October 16th.

2:43That's a Wednesday from 5 to 7 p.m. We will be at the offices of Trip. Trip, the leading CBD beverage in the UK, also a maker of functional beverages. They've got some big news to announce, but we're just going to be there to talk to them and talk to a whole bunch of other folks who are going to be attending. Trip's offices are in Notting Hill. Wasn't that a movie, Notting Hill? Yes, it was a movie with Hugh Grant. That's where you got all your English history from. It is. Exactly. That's where I learned that Great Britain and the UK are the same thing. This is a dream come true. I love Tripp so much.

3:15Yes. Hugh Grant's the prime minister in your mind. Well, what's really interesting about Tripp is... Might as well be the manager of Manchester United. I remember... Or a player, too, right? Right. We're going to be named later. I remember when John and Mike visited London in 2019. Jackie and I weren't invited at the time. No. But anyway, and I texted you all the awesome drinks and such that we had. Yeah. One of them was Tripp. I remember that. Remember I was slacking you that day, Jack? And I was like, I'm out. I'm done. I'm quitting. It's like those memes, like slams laptop shut. Exactly. Then I poured water all over it.

3:53Anyway. Again? Again. No, it's amazing because I remember when you guys met Tripp and they just launched at that time in 2019. This was five years ago. And now they are the fastest growing non-strategic aligned drink brand in the UK. An easier way to say it is that they're the only independent or the fast growing independent soft drink brand in the UK. They're doing amazing things with CBD and with other functional ingredients. They're doing pretty well here in the States too. We're going to be talking to those folks about how they are building their brand in England, in the Europe, as well as in the United States.

4:34So very exciting stuff. We're also going to be sitting down with one of the founders of a brand. Now, this is actually happening at Lucky Saint. We're going to be sitting down with one of the founders from Dash, Dash Sparkling Water. Yes, it's a dream come true. I love Dash so much. Even more details to be shared. But if you want to know about how to register, sign up, meet us there, please go to tasteradio.com slash London. done. I mean, the trip thing just takes me back to that trip in 2019 when I first saw Trip on the shelves and it just stood out for its simplicity. They've always made really, really good choices about not only what goes in the can, but what they put on the outside of the can and they continue to do so.

5:18Totally. And a huge thanks to Daniel and Olivia Corey, the founders of Trip for hosting us at their office. Once again, that's on Wednesday, October 16th from five to 7 p.m. Our event at Lucky Saint will be on the prior day, Tuesday, October 15th from six to 8 p.m. All the details. Once again, tasteradio.com slash London. I think I said that three times. That's tasteradio.com slash London. That's four times. Go to our webpage, please. We're going to need a geography lesson of London to know where we're going for all of these meetups. Exactly, yes. Central London, West London. We got to cover it.

5:54Well, we know that the trip offices are in Notting Hill. We know that for sure. Correct. Yes. Okay. As I mentioned, it's a massive episode because there's massive news in the food and beverage world. Siete, the Mexican-American brand of snacks and foods is being acquired by PepsiCo for 1.2, Mike is going to do it, billion dollars. That's huge. Amazing stuff. Congratulations to the Siete family who have built an incredible brand that's really focused on authentic ingredients and really honing in on this idea of being a traditional yet modern Mexican-American food brand. It was founded in 2014. Here we are 10 years later, a billion dollar, over a billion dollar acquisition.

6:46As you might know, Siete Siete produces tortillas, salsas, seasoning sauces, cookies, snacks. You can find their products pretty much everywhere in the United States. I'm going to read from the press release. Ramon Lagarta, the chairman and CEO of PepsiCo, said that PepsiCo believes in the spirit and authenticity of the Siete brand. We're excited to carry on the legacy created by the Garza family. And yeah, once again, I got to say, I think we had a hand in this, John Craven, because Do you remember this was in March of this year? And I stood up my soapbox and I was yelling and screaming and kicking.

7:26Again, this was in an episode titled, Why Isn't Big CPG Acquiring More Better For You Brands? PepsiCo was listening and they did it, damn it. They did it. Here we go. Yes. But I am sure there's going to be folks in this business, the food and beverage business, that is, who are going to look at this deal with a little bit of a side eye. I don't know if that's the right thing or wrong. A side eye. Yeah, they're like, you know, is PepsiCo going to change the formulations? Are they going to make it use cheaper ingredients? Are they going to take the beauty and the charm and all the great things that Ciete was founded on and make it very corporate?

8:00I don't know. Maybe. I feel like that's what always happens when a emerging brand gets acquired. That's always the fear. That's always, you know, something that people are keeping an eye on as that happens. But it is a natural evolution, I guess, of a brand once you get to that size. It's like, where do you go from here? And hopefully they still have some sort of hand and advisory role. Or I don't know. We will see what kind of how this plays out. Well, look, I mean, any brand from when it starts to scaling to that size and beyond, for sure, probably has to make some evolution of the product. you know, really to make it be able to do that.

8:44You know, I mean, I think we, a lot of times see entrepreneurs who are starting out and it's like, Oh, I made this in my kitchen and yeah, it's awesome. Cause you made it in your kitchen and it's not scalable in any way. And I think with this, I don't know. I mean, I think there's a lot in the Siete brand that I feel like they've already gone through that. I mean, I think they're, you know, certainly like their chip products, like, I don't know what, what are they going to do to that? I mean, it seems like pretty good. just give it more points of distribution, you know, put some money behind it.

9:13And there's probably economies of scale that PepsiCo is going after with that. But no matter what they do, I still, you know, going back to your point about the podcast back in March, I think it was. I mean, you know, there's been a lot of people who are like big M &A and CPGs like over. And, you know, I think what we talked about back then is this stuff, it just is a cycle. And it'd be great if they're back in buy mode, because I think there are some brands out there that fill the need or avoid that exist within these big CPG companies portfolios. And, you know, they don't want to miss out on that.

9:55So I mean, it's, you know, congrats to Siete for what they built and for that awesome exit. And I think anyone out there who's got a CPG brand that's listening, you are going to benefit from this. Like this has a renewed, like, wow, gee whiz, there is a big financial upside for the top of CPG M &A. So I think this gives some confidence there and should be that, you know, grease on the investment wheels at all levels. Probably won't happen like, you know, totally overnight, but I suspect this is not the last big deal we're going to see in the coming months. There might be some consolidation of the brand or as John, you know, as John was saying, increased distribution means maybe more focus on certain Siete product lines that are more profitable or better loved.

10:42I think, you know, hopefully this is more like a perfect snack style acquisition where the product stays largely what it was and they have, you know, new interesting SKUs that they try or they, you know, they try a bit of innovation here and a bit of innovation there and they don't, you know, DFIU. I mean, I think to be honest, the thing that they should do with it is take a good hard look at the stagnant brands that are in their existing portfolio and let those sort of go off to the sunset and take Siete, which is modern. It's a really well branded product. Like it's got momentum. Just give it a push, you know, build off of that rather than I think, you know, to what Jackie was saying, I think a lot of times it's almost just maybe easier to keep sticking with the legacy brands.

11:35You know, they already have like established teams and, you know, so on and so forth within these big companies. And this is, this is going to be different. They're widely distributed and pulling legacy brands off the shelf is pretty difficult. And this feels like, I mean, the Siete brand, I mean, it looks timeless. It looks evergreen. Like there's nothing about it where you're like, I don't know, this is just some hype that'll be gone, like it looks like a staple product. So, and you get inside what you're looking at on the outside too, which is really important. Like the quality is unmistakable for Siete.

12:08Yeah. They went into like the perfect categories with really delicious products with packaging that hit both like the heritage of Mexican American food while also, you know, being modern. So they just like did everything right. And that took time, but I think that it just provides for a great brand to just kind of keep pushing, like Craven was saying. But you're definitely not going to push Fritos off the shelf, you know, at least not immediately. Yeah, and I think the one thing that hasn't been brought up is that Siete was founded on the roots of being a better for you brand as well. Their ingredients are high quality.

12:51They're made for people who in some cases can't eat certain ingredients. They have grain-free tortillas. They make some of their tortillas with avocado oil. Their salsas are clean label. So, I mean, all these things that we wouldn't necessarily think of when we think of PepsiCo is now being adopted and incorporated into that brand. So all the things, it's interesting how Indra Nui from many years ago was really focused on bringing more better for you products to everyday Americans via the Pepsi portfolio. So she said. So she said in some ways. But I feel like this acquisition is doing that. It's closer to putting your money where your mouth is.

13:34So I will definitely give them credit for that. It will be interesting to see whether or not PepsiCo keeps a lot of the products that Siete offers, including things like tortillas, beans and seasonings and sauces, or whether or not they'll just discontinue those things and focus on the tortilla chips, the snacks, the cookies, things like that. I mean, that would be my guess is that if there's any shorter term change, it just comes with, you know, rationalizing the SKUs and which businesses they're in, because I'm sure PepsiCo probably has its eyes on some more than others, certainly chips for sure.

14:10But yeah we'll see the sauces and whatnot feel a little more outside but you know who knows yeah maybe it's an opportunity for somos to uh benefit from there you go there you go get acquired for a billion dollars too i mean they wouldn't turn that down one other winner in all this too i just want to point out is uh austin texas where siete foods is which you know has had a uh i mean obviously a lot of, I don't know, hype and whatnot there, but, you know, a nice little CPG scene there that for sure gets a really, I mean, not that they haven't had wins before with other brands, but I think it's a nice, you know, sort of stamp of approval and legitimacy of that CPG community.

14:55Shout out to Super Coffee. There you go. Yeah. Well, I mean, there's Super Coffee and there's about, I don't know, a hundred other brands that are based in Austin, Texas, and all of them, I think, benefit from being a part of that community. They can talk to each other, talk to investors who are based in the area, who are investing in brands in that area. But overall, I would say that this is a big win. I did see some stuff on LinkedIn about, you know, just people, I don't know, I don't want to call them haters, but just like people who are haters, who are nervous or like skeptical about PepsiCo getting involved.

15:29But again, I mean, this is something we talked about in March. Like if everyday Americans are going to eat better, it's going to be incumbent upon the big food companies to give them better food, to give them more affordable and accessible food that is better for you. And I think PepsiCo's acquisition of Siete does that, which is great. Yeah, I think also just the hate shows how respected the Siete brand is within the industry. Like people are trying to protect it and they don't want to see it diluted. So I think it just speaks to that. Haters always come out when you've arrived too. So, you know, this is a huge thing for them.

16:08It's a huge thing for the industry and people are going to, you know, spout their opinions. And let's hear it all. In this day and age, you think? Really? They're like sitting there waiting. They've been waiting for this to come. Online trolls. So, I mean, we're at peak troll. Hopefully it'll get better after November. Well, I don't want to, I'm not saying this to Tudor and Horn, but, you know, if you're thinking about selling your company to PepsiCo for a billion dollars and want to know the right strategy, the right foundation upon which to build. Is there a playbook that they could listen to?

16:40You know, they can go to an episode where I sat down with Miguel Garza, a Taste Radio episode, that is. Miguel Garza is the co-founder and CEO of Siete Foods, which we published in May of 2020. We'll include it in the show notes. It's titled, how about this, The Cornerstones of Siete's Billion Dollar Strategy. How about that? Wow. Yeah. You mean the future. I went all the way into the future. There you go. The year 2000. The Taste Radio time machine. Oh, my God. Look at his head. You can just see it blowing up in front of us. Yes, indeed, my head is blowing up. I hope it doesn't explode. That's where he keeps a hat on at all times.

17:20He's definitely going to be asking for it. Oh, shoot, it's on the table. It's getting too heavy. No, in all seriousness, it was a great conversation. Miguel is a brilliant guy, and I think there's a lot to learn from that episode. So seriously, take a listen. It is, I think, always interesting to hear the founder talk before the deal, because I'm sure there's going to be plenty of chances to hear the founder talk after the deal. And, you know, I think getting the more raw, you didn't know it was coming yet, conversations always, always fun. Absolutely. Now, another person who I had a conversation with on a previous episode of Taste Radio that I really enjoyed is Kat Cole.

18:05Kat Cole is the president and CEO of AG1. If you're familiar with AG1, or if you listen to podcasts, you're probably familiar with the brand. It's a maker of powdered greens, used to be known as Athletic Greens. I spoke to Kat when she was the president and COO of the company back in 2022. And since then, that is a brand that has been on fire. And it's been recently revealed that AG1 is partnering with Starbucks on a new line or a new, a couple products, that is, of green juice-inspired beverages. They're testing an iced AG1 coconut milk blend, an iced AG1 watermelon blend in four cities where Starbucks operates, Palm Springs, Palm Desert, Chicago, and Seattle.

18:56Apparently consumers or customers can also order a scoop of AG1 and their beverages if they want it. This is an interesting development, especially because when I think of green juice at Starbucks, I think of Evolution Fresh, but people are like, I can get green juice at Starbucks now. That's been available at Starbucks for 10 years. Well, that's kind of not, I mean, I don't know. I consume AG1. I don't really consider that green juice. It's just sort of stuff you mix in with stuff. I think it was positioned as green juice for a long time. I think it's more positioned as a nutritional blend nowadays.

19:30Yeah, which I think is much smarter positioning and seems to be working out pretty well for them. But the Starbucks, I don't know, that's good for brand awareness, sure. You know, I'm going to add it to my 16 pump venti mochi macchiato. I don't know. I don't even know the drink there. I'm sorry. I'm faking it bad. Macchiato. That's the thing. I feel like with Starbucks, the joke is that like people just customize the crap out of their drinks. So AG1 is just like another thing. They're getting the crap out of their drinks or? Yeah, no crap in the drink. Okay. All right. Jake, Jake, here's your latte.

20:06Jake, Jake, Jake. Yeah, and now you just add AG1 as another line item, you know, on your drink order now. I think it's just like smart for them to build on the AG1 brand awareness and offer it as another thing for their consumers. It is giving me Erewhon vibes, though, you know. Like, what is the price point? I know AG1 is kind of expensive. It's not Erewhon level. Okay, that's good. So for a grande of both, the coconut milk one and the watermelon one, a grande is$625, according to this signage here. i don't know what a normal minus the age you want i mean it's still pretty expensive let's be real here like not the everyday consumer is not going to be able to afford this yeah also where they're testing is interesting because you know palm springs palm desert those are probably a lot of la people they're going to spend money on it so i i could see it they're going to think it's cheap yeah you're used to air one yeah according to snack shot which is run by our favorite friend andrea hernandez the options are very low in sugar content it doesn't describe in her post here it doesn't describe exactly how much sugar is in these beverages but um i also wonder if the average starburst consumer like drinks green juice or drinks green beverages period i mean there's definitely consumers that go there and buy things that they perceive to be healthy a lot like they sell a lot of matcha lemonades and stuff, you know, so maybe it's like a green stuff is healthy.

21:36This green stuff must be healthy. Yeah, maybe I should add it to my drink. I don't know. I don't think they're all like purists like you, Ray, with your green juice every morning. And there may be looking at it just as purely like a functional add to their beverage. I honestly wonder who's going to benefit more from this AG1 or Starbucks. I got to think it's AG1, but I think Starbucks has really been lacking when it comes to innovation. Yeah, I mean, they could use any sort of buzz they could get. So, yeah, take it, do it. So you think Starbucks is going to get more out of this? I don't know. It can't be bad for them.

22:08But you'd just be a pundit for a second and let me know. What do you think? I don't know. I don't know. I don't know. It's my job. I do know you're going to go in there and just be like, just give me the line of AG1. Just put it on the counter. Yeah. That's terrible. To be fair. They're a giant international coffee shop there of course ag1 is going to be the one that benefits more than starbucks fair enough i i will say this and no offense ag1 i ton of respect for cat cole i will not be behind this product at starbucks if i want something that's better for you or healthy i'm going to go to the actual when is green juice when's the last time you went to starbucks that's a good question it's been a while yeah yeah i've been to starbucks in a while i mean he's more of a burger king guy Lately, it's been Arby's, actually.

22:51They have one of those in Brooklyn? Extra meat. You like the meats? They have the meats. We like the meats? Yes, I mean, they have the meats. Anyway, we'll be following the development of that partnership. Whether it goes national or not remains to be seen. But, hey, we're talking about it, so it means it's important, right? We don't talk about anything unless it's important. All right, let's try some products. Quick break. If this episode has you thinking about what's next in food and beverage, explore BevNet and Nosh Insider, our subscription platform with deeper insights from the BevNet team.

23:20Visit tasteradio.com slash insider to learn more. All right. Does Starbucks sell pretzel bites? I don't know, but people love pretzel bites and I think they probably should. Why haven't we opened those yet? I feel like they should. Anyway. They sell cake on a stick. My kids love that. Yeah, they sell the cake pops. I ask because I'm holding in my hand right now a new product launched by King's Hawaiian. You might know King's Hawaiian for their delicious soft rolls that pretty much go with anything. You can eat those for breakfast, lunch, and dinner. Do you just keep them next to your bed? Under the bed, actually.

23:54These you might keep them next to your bed. You can sleep on them. They're so soft. I'm not a huge soft pretzel person, but I love this. So, yeah, so they launched Soft Pretzel Bites. These come in a little bin. I'll call it that. They are 170 calories per serving. A serving size is six pieces. Everyone's seen a pretzel bite. They're not too, too big. The flavor is described as original Hawaiian sweet. And yeah, I like this because kids love this kind of stuff. Are we opening these? Do you have any hand sanitizer? I don't. Do you? I might. No, not with me. It looks like you should put a little teeny tiny baby smash burger on those.

24:31You know, perhaps. Or like a teeny tiny fried chicken nugget sandwich. I don't know. I got to tell you, though. I'm sorry. you're supposed to either microwave or put these in an air I love nuked food I love nuked food I mean I guess don't touch every single one they look like a pretzel buckeye the ingredients on this are microscopic and cover about nine lines yeah there's a lot of ingredients in this I won't necessarily say that this is a clean label product but I'm sure it's delicious so kings wine did they did a big cart takeover they did pretzel cart takeovers all over new york city uh when they launched this so instead of people selling those big pretzels you get in new york city they were selling or giving away these kings hawaiian soft pretzel bites which i like you know what's giving them out to freaking eli manning was he throwing people's head yes he was throwing people's heads and hoping they catch it because that's perfect for a food fight and David Terry.

25:34See, I mean, these would not work the way a New York pretzel does, because you can't put mustard on these. Speaking of haters, you can dip it. No mustard or butter? You don't have the chestnut smell burning, you just have the container opening. I definitely want to try that. I just hate that smell. I hate that smell. It's the best. Yeah, we're gonna have some toaster oven. We're gonna taste the toaster oven. They'll be good that way. Yes. Can we move on to something with fewer ingredients? Yes. You have that, how about that? Did they send that to you, did you buy that? You know, I emailed that.

26:03What's his name? That guy, Matt Weiss? No, I'm kidding. I did not email him. I just was like, I'm going to go buy this. Okay. It was, well, I guess technically it's a Graza product. So emailing Matt Weiss from Rind would have been weird, even though that I think this is a, it says collaboration with Rind. I think it's from their granola facility that they've got now. In Vermont. Yeah. Here, you want a little? Yes. You didn't even explain what this was. Yeah. What is this product? This is a limited edition product. Sorry, I just got to hit all the bullshit out of the way. I yielded. I yielded, John.

26:36You get all flustered. This product is called Grazola. It's granola by Graza. It's made with extra virgin olive oil. And it is powered by rind, as it notes here on the package. Nothing but oats. E-V-O-O, which stands for? Extra virgin olive oil. Salt and maple syrup. It's sweet and salty. Or evoo. Evoo. This one has very few ingredients. gluten-free rolled oats maple syrup graza extra virgin olive oil and salt it's uh it's definitely here i'll take a little little scotch it's a uh a different taste in granola which i appreciate definitely and i will say for matt weiss it it is dns he'll be wondering but um do we have a sticker yeah we can put a sticker on there um but it's it's definitely got a different like sort of savory taste to it.