Soft- drink giant, Pepsico recorded a 16 percent decline in profit for the third quarter ended Sept. 7 to $2.1bn from $2.5bn a year earlier.
However, the makers of Pepsi’s net revenue surged 4.3percent to $17.19 billion in the third quarter, beating analysts’ estimates of $16.93 billion as increased spending on advert and other administrative expenses ensured more sales growth for the company.
According to the company, it has increased investment in advertising and marketing by 12% year-to-date.
Meanwhile, on the rationale behind the acquisition of Pioneer Foods, the management said it is putting capital against a market opportunity that will deliver itself in the next 20 years adding that the investment is a good one.
“What Pioneer gives us is more scale in a continent where you’re successful not only because you have good products, but you need to have very good infrastructure, very good go-to-market, very good manufacturing, clearly closer to the consumer and very good talent. I think from Pioneer, we get a very good set of brands across multiple categories, starting with basic food, but going all the way to more sophisticated breakfast solutions and juice solutions gives us great talent, great local talent that understands how to operate in Africa,”
The makers of Aquafina Water announced in July to acquire South Africa based Pioneer Foods for $1.7bn.
The deal is not yet closed. Management noted that Pioneer’s product portfolio was complementary to its own and would help Pepsico to expand in sub-Saharan Africa by adding manufacturing and distribution capabilities.
