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PepsiCo targets sub-Saharan Africa with Pioneer Foods takeover - Juice in South Africa data

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Five years after the end of their franchise agreement in South Africa, PepsiCo and Pioneer Foods have reunited through the soft drinks group's US$1.7bn acquisition today.

As well as Pioneer Foods portfolio of food brands, PepsiCo will also take ownership of the Ceres and Liqui-Fruit juices

As well as Pioneer Foods' portfolio of food brands, PepsiCo will also take ownership of the Ceres and Liqui-Fruit juices

Described by PepsiCo as a "solid beachhead" into sub-Saharan Africa, Pioneer Foods will be folded into the company's operations early next year. The purchase includes Pioneer's Ceres and Liqui Fruit juice brands.

Beyond South Africa, Pioneer exports to around 80 markets and has joint-venture operations in Namibia, Botswana, Kenya and Nigeria.

PepsiCo will subsequently set up a specific division for the region, headed up by the company's current executive VP of global categories & franchise management, Eugene Willemsen.

"As we look to accelerate our growth in key markets around the world … we are absolutely thrilled to join forces with … one of South Africa's leading food and beverage companies," said CEO Ramon Laguarta. "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."

In late-2014, the pair agreed to terminate their ten-year tie-up in Pioneer's home market. Pioneer has been PepsiCo's brand bottler and distributor in the country since 2005, but had to take an impairment charge on the business, prompting the mutual decision to quit.

Juice in South Africa - Value Trends 2015-2024

Source: Company results

The juice category is not offering anything by way of value growth in South Africa. From a sales high of almost US$225m in 2015, GlobalData figures estimate sales last year were down to just under $223m. Forecasts from the group see juice sales fall further, to $210.5m in five years' time.

For Africa as a whole, however, juice is set to perform well in the years to come. Sales across the continent are expected to increase from $406.6m in 2018 to almost $477m in 2023, according to GlobalData.

How soft drinks can tap into meal delivery revolution - Click here for a just-drinks comment


Expert Analysis

Juice (Soft Drinks) Market in South Africa - Outlook to 2022: Market Size, Growth and Forecast Analytics

Juice (Soft Drinks) Market in South Africa - Outlook to 2022: Market Size, Growth and Forecast Analytics

Juice (Soft Drinks) Market in South Africa - Outlook to 2022: Market Size, Growth and Forecast Analytics...

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