As the market for colas in the Americas matures, PepsiCo, by means of its subsidiary Frito-Lay, is expanding aggressively in the Latin American snack food sector. Recently Frito-Lay made public its plans for major expansion in Colombia through the acquisition of the snack food companies within Colombia’s Margarita group. Even though the government initially expressed concerns regarding monopolistic implications of the buyout, in late August Colombia’s Superintendent of Trade and Commerce gave its approval. As a result of this acquisition, Frito-Lay’s Colombian sales will increase dramatically to approximately US$45m per annum. Sales of the Margarita group snacks totalled approximately US$34m in 1999, as opposed to US$11m for Frito-Lay’s Colombian brands. Their combined sales are more than double those of their leading competitor.
Frito Lay entered the Colombian market in 1996 with the purchase of snack food brands Cronch and JackSnacks. After competing aggressively with each other in the Colombian market for nearly four years, Frito-Lay and the Margarita snack companies decided that the best way to take a solid lead in the market was to join forces as one powerful entity. Margarita group companies acquired by Frito-Lay include Productos Alimenticios Margarita, Pasabocas Margarita Antioquia, and Productos La Marquesa S.A.
Frito Lay and the companies it is acquiring are destined to be very strong contenders in Colombia’s snack food sector. Frito Lay has extensive international experience and corporate backing, while the Margarita companies control some of Colombia’s most popular snack brands. By means of Frito Lay, PepsiCo already dominates the snack food sales in Mexico and Venezuela. The Colombian acquisition highlights Pepsico’s steady progress toward achieving its stated goal of being the undisputed leader in the Latin American snack food market.