PepsiCo acquires South African juice maker Pioneer Foods in an expansion drive into Africa

PepsiCo, Inc, U.S.-based food and beverage giant has agreed to acquire Pioneer Foods of South Africa in a deal valued at US$1.7bn, both companies said on Friday in South Africa.

The acquisition gives PepsiCo a foothold for expansion into the rest of Africa. PepsiCo will gain brands and manufacturing facilities in Nigeria, Kenya, and South Africa.

In 2015, Pioneer took a 50.1% stake in the Baked Goods Division of Nigerian firm, Food Concepts Plc, owners of Chicken Republic, Butterfield Bakery and Free Range Farms as part of the South African firm’s expansion drive into the Nigerian market. Its brands include Weet-Bix, Liqui-Fruit and Ceres. With the acquisition by PepsiCo, it gains ownership rights of Butterfield Bakery, sausage-roll, and Yum Yum brands, all of which are produced by Food Concepts Pioneer in Nigeria.

“Pioneer Foods forms an important part of our strategy to not only expand in South Africa but further into sub-Saharan Africa as well,” said Pepsi chairman and chief executive Ramon Laguarta.

Laguarta, who took over from Indra Nooyi at PepsiCo in 2018 has aggressively stepped up investments into products such as juices, teas and sports drinks as consumers shift their tastes into healthier products.

PepsiCo exited South Africa under Apartheid and then returned in 1994, only to file for voluntary liquidation in 1997 after a fierce battle with its global rival Coca-Cola saw it lose significant market share.

The acquisition rekindles a partnership between PepsiCo and Pioneer that ended in 2015 when they went their own separate ways. In 2006, Pioneer signed a franchise agreement with PepsiCo and slowly started to re-introduce its soft drinks back into the South African Market. Under that agreement, Pioneer was a bottler of Pepsi products in South Africa.

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