Pioneer Foods buys leading UK brand


Ayanda Mdluli

JOHANNESBURG- South Africa’s (SA) national food producer and FMCG Pioneer Foods announced that it had purchased a United Kingdom (UK)-based granola brand, Lizi’s to its stable of well – known breakfast cereals.

The company revealed in a recent results presentation that it has been struggling largely due to the negative impacts of a drought that rocked the agricultural sector for the better part of 2016 and early 2017.

Pioneer Foods is currently the largest breakfast cereal manufacturer in SA with household brands such as Weet-Bix, ProNutro, and Bokomo corn flakes among others. The purchase of Lizi’s has bee described by the company as part of its strategic objectives to bolster its presence in developed markets.

Last month, Reuters reported that the company had seen a 49% drop in full-year profit due to high maize prices during the first part of the year following a severe drought. That drought, which impacted the whole of Southern Africa crippled the production of maize, sugar and many other agricultural products.

Diluted and adjusted headline earnings per share (Heps) fell to 415 cents for the year ended September 30, from 820 cents in the same period last year.

HEPS is the main profit measure used in South Africa which strips out one-off items. The company declared a gross final dividend of 260 cents, equal to that of the prior year, according to Reuters.

In an announcement on the Securities exchange Service, the company said it would acquire 100% of the issued share capital of The Good Carb Food Company which owns the Lizi’s granola brand for an undisclosed amount.

Pioneer Foods UK, which is wholly owned by Pioneer Foods in SA has been manufacturing Lizi’s products under contract for The Good Carb Food Company, and has been instrumental in co-developing products for some time and as a result has gained significant product and market knowledge.

Commenting on the dynamics of the transaction, the company’s CEO Tertius Carstens said: “This purchase is in line with our strategic plans for acquisitions in geographies and categories where we have an existing presence. We are confident that this deal will benefit both the Lizi’s business as well as our own, given the synergies between the companies. Lizi’s granola is a very popular product thanks to its healthy and wholesome attributes and we’re thrilled to welcome it into the Pioneer Foods family.”

He added that in the UK, the cereal sector, granola is one of the fastest growing categories and this creates a unique and beneficial opportunity for Pioneer Foods.

“Lizi’s is the fastest growing brand in the UK’s fast accelerating granola category. The brand has shown exceptional growth over the last three years and is now the number two brand in its category.” said Carstens.