PepsiCo has reached an agreement to buy the Chinese snack retailer Be & Cheery from Haoxiangni Health Food for $705 million, the companies said.

Be & Cheery, founded in 2003, is one of the largest online snack companies in China selling nuts, dried fruits, and other snacks, mainly on Chinese e-commerce platforms. It recorded $24.3 million in net profit last year, up 32% from 2018.

“Be & Cheery adds direct-to-consumer capability, positioning us to capitalize on continued growth in e-commerce, and a local brand that is able to stretch across a broad portfolio of products, through both online and offline channels,” Ram Krishnan, chief executive officer of PepsiCo Greater China, said in a statement. “We also expect to leverage Be & Cheery’s innovation and consumer insights capabilities to drive innovation in other key PepsiCo growth markets.”

The brand’s current owner, Haoxiangni Health Food, bought Be & Cheery in August 2016 for $136.5 million. In a statement, the company said it wanted to focus on the jujube business.

PepsiCo’s snack food division has been growing at a faster rate than its beverage division. The deal could signal the potential for continued growth in that market in developing countries.

In July, PepsiCo announced it was buying a 26% stake in one of China’s largest natural food producers, Natural Food International, for $131 million, citing its, “determination in accelerating its development in China.”

During an earnings call earlier this month, PepsiCo Chairman and CEO Ramon Laguarta said the company’s international business represented a critical opportunity. “And China, of course, is a huge market, where we have a good business. It’s growing very well … But the opportunity is much, much higher,” he said.

Pepsi’s investment in China comes as fallout from the coronavirus continues to impact the global economy. Major indices fell sharply Monday on concerns the epidemic would hamper growth.

Zhang Peng/LightRocket via Getty Images

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