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November 16, 2016

Pioneer Food Group buys into Weetabix east Africa unit

South Africa's Pioneer Food Group has acquired a 49% stake in the east African business of UK breakfast cereal group Weetabix.

South Africa’s Pioneer Food Group has acquired a 49% stake in the east African business of UK breakfast cereal group Weetabix.

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The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
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The deal, struck for an undisclosed sum, will see Pioneer buy a 49.8% stake in Weetabix East Africa from the Kenya-based unit’s managing director, Ahsan Manji.

Weetabix East Africa had been a joint venture between Manji and Weetabix. Manji will remain as Weetabix East Africa’s managing director.

In a filing with the Johannesburg Stock Exchange, Pioneer said the investment offers an “opportunity to build a significant breakfast position in the region, by targeting consumption growth of Weetabix”. The South African group said Weetabix was “the number one breakfast cereal in the region”, with “a significant market share” but did not provide data.

The South African company believes the deal, which subject to regulatory approval in Kenya, will also give it a “platform to introduce a wider Pioneer Foods basket of products, given an established and well developed route to market in various east African countries”.

Phil Roux, the CEO of Pioneer, added: “This acquisition represents a rare opportunity for Pioneer to enter the east African market with a credible partner and a highly-profitable branded business.”

Pioneer and Weetabix, majority-owned by China’s Bright Food, already work together on a venture in South Africa, Alpen Food Company SA.

Weetabix said the business in east Africa “has seen rapid growth, a product range expansion, significant capital investment in processing facilities and is now the most recognised cereal brand in Kenya”.

Giles Turrell, the CEO of Weetabix, added: “We’re delighted to have Pioneer Foods join us to continue to drive the success of our business in Kenya and beyond. Weetabix sees this market as a strategic opportunity and is excited by the new opportunities that will arise through partnering with Pioneer Foods.”

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Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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