PepsiCo to Buy South African Snack Producer Pioneer Foods

PepsiCo has announced that it has entered into an agreement to acquire all the outstanding shares of Pioneer Foods Group for approximately USD1.7bn.

Pioneer Foods is strongly positioned on the local South African market of cereals, juices, and other African nutritional food staples, including brands like Weet-Bix, Ceres, Sasko, Safari, Spekko, and White Star.

The acquisition will help PepsiCo gain a solid beachhead for expansion into Sub-Saharan Africa by boosting the company’s manufacturing and go-to-market capabilities, enabling scale and distribution, the company says.

PepsiCo chairman and CEO, Ramon Laguarta, says: “Pioneer Foods represents a differentiated opportunity for PepsiCo and allows us to immediately scale our business in Africa. Pioneer Foods forms an important part of our strategy to not only expand in South Africa but further into sub-Saharan Africa as well. Our businesses are highly complementary, and we look forward to working with the Pioneer Foods team to successfully build and implement a shared vision in the region.”

This transaction creates a leading food and beverage company in Africa led from South Africa, with a commitment to supporting the broad socioeconomic imperatives of employment, talent development, and benefiting local suppliers. It will enable PepsiCo to expand its Sustainable Farming Program in Africa.

Tertius Carstens, CEO of Pioneer Foods, added: “As part of PepsiCo, we will have greater scale to expand our leading brands, greater capital to invest in local agriculture and people, greater access to leading global capabilities and a partner committed to taking our company to even greater heights.”

PepsiCo’s goal is to become more locally-focused, so the company will create a new operating sector for Sub-Saharan Africa (“SSA”). The new division will be led by Eugene Willemsen, who most recently served as executive vice president of global categories and franchise management. Willemsen, who has been with PepsiCo for nearly 25 years, has extensive experience in growth markets, having previously led the company’s businesses in Turkey and southeast Europe.

Photo: Tertius Carstens, CEO of Pioneer Foods, and Eugene Willemsen, CEO, PepsiCo Sub-Saharan Africa