PepsiCo and Strauss Group Announce North American Joint Venture

10/12/07 PepsiCo and Strauss Group announced the signing of an agreement to form a joint venture partnership to operate Sabra, the top-selling and fastest-growing maker of hummus, with sales approaching approximately $56 million through September of this year. Last year, total U.S. sales of hummus grew to $180 million.

The Sabra joint venture will produce and sell fresh dips and spreads in the U.S. and Canada, while drawing on both Strauss Group and Frito-Lay North America's (FLNA) marketplace expertise to continue building this growing business. Sabra will expand FLNA's role in providing healthier snack options and highlights the company's commitment to the on-trend fresh category. PepsiCo's FLNA division and Strauss will each own 50% of the business.

The joint venture will leverage Sabra, the number one brand of hummus in the U.S. True to its Mediterranean heritage, Sabra's hummus is made with healthier oils and has no trans fat or cholesterol. Sabra products also include eggplant dips, babaganoush spreads, and Mediterranean salsa available in individual and family packs. These products, which have a strong presence in the Northeastern U.S. and Florida, are currently distributed through a combination of independent sales brokers and distributors and its own refrigerated direct-store-delivery system.

"Sabra is a wonderful opportunity to expand PepsiCo's role in providing healthier options in snacking and the joint venture fits perfectly with PepsiCo's 'Performance with Purpose' agenda by demonstrating our commitment to fresh dips and spreads," said Al Carey, president and chief executive officer of Frito-Lay North America. "Sabra is already the leader in hummus, and I anticipate other Sabra fresh dips and spreads to make a similar positive impact on consumers. Sabra products are a perfect complement to Stacy's pita chips for any dipping occasion."

"Thanks to its experience and know-how in the development, manufacturing and marketing of fresh food products, Strauss Group has been developing a new food experience in the U.S. by identifying the potential in the fresh dips and spreads business. I am convinced that the partnership between FLNA and Strauss will create a complementary set of competencies and expertise that will allow Sabra to lead the fresh dip category and offer consumers in North America a range of fresh dips that meets their desire for healthier, fresh foods," said Erez Vigodman, president and chief executive officer of Strauss Group. "Sabra will lead the freshness 'revolution' in the United States and Canada, consistent with notable emerging consumer trends in the world today."

Terms of the transaction were not disclosed. The transaction is expected to be finalized in early 2008.