Select Harvests partners with PepsiCo to extend nuts and seeds business into China

Melbourne-based almond business Select Harvests (ASX: SHV) has stepped up its commercial efforts by signing a trademark license and distribution agreement with Chinese company PepsiCo Foods.

The deal means that Select’s Lucky brand of nuts and seeds will be marketed and distributed across China for a period of 5 years.

Select Harvests said it would publish its audited financial year results on 27 August which will provide a definitive account of the company’s operations and commercial achievements over the past 12 months.

According to PepsiCo, its products are sold to consumers “one billion times a day in more than 200 countries and territories around the world.”

PepsiCo generated approximately US$64 billion in net revenue last year, driven by a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. PepsiCo’s product portfolio includes a wide range of enjoyable foods and beverages, including 22 brands that generate more than $1 billion each in estimated annual retail sales.

Select Harvests confirmed that its products will be produced and supplied to PepsiCo who will, in turn, be responsible for marketing, sales and distribution.

Select Harvests will be co-investing with PepsiCo China in marketing to support the launch of the Lucky brand in China, with both parties making significant commitments to an advertising and marketing program over the first 18 months of the agreement.

“Entering the China market in partnership with PepsiCo is extremely exciting for Select Harvests and the Lucky brand. Lucky has been a favourite brand of nuts and seeds in Australia for over 60 years,” said Mark Eva, general manager consumer of Select Harvests.

“This allows Select Harvests to participate in the increased consumption of plant-based foods, nuts and seeds in China, which is accelerating as consumers become more affluent and knowledgeable about the nutritional benefits of nuts and seeds. Our partnership with PepsiCo, who are globally recognised for their marketing, sales and distribution capability, creates a remarkable opportunity for Lucky,” added Mr Eva.

Deal benefits

The deal is mutually beneficial given the significant advantages both Select Harvest and PepsiCo are expected to obtain.

For starters, Select Harvest is likely to expand its sales footprint in one of the most rapidly-growing consumer nations while PepsiCo wants to promote a Chinese-focused campaign that plays up to patriotic sensitivities in China.

“As a global corporate citizen fully embedded into the fabric of Chinese society, PepsiCo is committed to being truly ‘In China, For China, with China’. With the continued development of the Chinese economy, consumers have ever-more demand for healthy and nutritious products. Entering into China’s Nuts and Seeds market is a crucial piece of our growth strategy and we are delighted to be collaborating with Select Harvests to deliver this to China’s consumers,” said Mr Ram Krishnan, President and CEO of PepsiCo.