PepsiCo Agrees to Acquire Stacy’s Pita Chip Company

November 21, 2005

Pita Chip Sales Leader will Operate as Separate Unit of Frito-Lay North America


PURCHASE, New York – PepsiCo announced today its agreement, pending government approval, to purchase Stacy’s Pita Chip Company -- the top-selling maker of pita chips with sales approaching $60 million this year. Stacy’s, which will continue to be based in Randolph, MA, with more than 100 employees, is planned to operate as a separate unit and report to Frito-Lay North America chairman and chief executive officer Irene Rosenfeld.

Stacy’s is an all-natural snack company with strong growth potential that supports Frito-Lay’s desire to participate more broadly in the $90 billion macrosnack category. It compliments the company’s growing portfolio of healthier snack options. Stacy’s pita chips are distributed nationwide and have become the sales leader in the rapidly growing pita chip category. The company’s pita chips come in five flavors and qualify for PepsiCo’s Smart Spot, a symbol on select products to make shopping easier for families looking for healthier snack and beverage choices. Stacy’s pita chips are baked, all natural and have no cholesterol or trans fats. Like Frito-Lay, Stacy’s offers snack chips without trans fats and includes trans fat information on its packaging.

“I am delighted to welcome Stacy’s employees to the Frito-Lay family. Stacy’s has enjoyed tremendous success since it was founded nine years ago,” said Irene Rosenfeld, Frito-Lay Chairman and CEO. “Stacy’s enables Frito-Lay to be a leader in the pita chips category, while supporting our plans to expand our snack offerings to meet consumers’ changing needs and lifestyles. Stacy’s has created a unique entrepreneurial identity, which has been instrumental to its success, and we plan to preserve that identity, while providing access to Frito-Lay’s resources.”

Stacy’s Pita Chip Company was founded in 1997 by a social worker and a psychologist with a passion for good food and a commitment to healthy living. With a desire for a career in the food industry, but without the capital to open a restaurant, Stacy Madison and Mark Andrus began serving healthy pita bread roll-up sandwiches in Boston’s Financial District. As an incentive for customers waiting in line, they baked the leftover pita bread to create different flavored chips and so the Stacy's Pita Chip Company was born.

“We all know there is tremendous potential for Stacy’s, because we have lived and breathed it for many years,” said Stacy Madison, Stacy’s co-founder. “We knew what our plans were, and now with a company like Frito-Lay behind the Stacy’s brand, the growth possibilities are far beyond what we might have imagined.”

“We feel this is a tremendous opportunity for Stacy’s people and a huge benefit for consumers,” added Mark Andrus, Stacy’s co-founder. “Our number-one complaint here at Stacy's is ‘difficulty finding your pita chips,’ and now we will finally be able to get our chips into the mouths of those consumers who have been patiently waiting.”

Terms of the transaction were not disclosed.

About Stacy’s Pita Chip Company Mark and Stacy always shared a passion for good food and a desire to open a restaurant. However, with large student loans and no capital they decided to take a risk by designing a food cart and serving healthy pita bread roll-up sandwiches. As an incentive, baked pita chips were served to customers waiting in line and they became an instant hit and the lines grew longer each day. Customers loved pita chips so much; they were encouraged to get the pita chips into stores. Thanks to loyal customers, Stacy’s chips are now available nationwide.

About Frito-Lay North America Frito-Lay, based in Plano, TX, is the $10 billion convenient food division of PepsiCo, which is based in Purchase, NY.

About PepsiCo PepsiCo is one of the world's largest food and beverage companies with annual revenues of $29 billion. Its principal businesses include Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods. Its portfolio includes 16 brands that generate $1 billion or more in annual retail sales.

Cautionary Statement This release contains statements concerning PepsiCo’s expectations for future performance. Any such forward-looking statements are inherently speculative and are based on currently available information, operating plans and projections about future events and trends. As such, they are subject to numerous risks and uncertainties. These risks include the ability to achieve business plans, successfully executing and managing the proposed acquisition and the receipt of regulatory approvals. Actual results and performance may be significantly different from expectations. Please see our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, for a discussion of additional risks that may affect our performance.