• Friday, March 29, 2024
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BusinessDay

Pepsi expands operation acquires Pioneer Foods makers of Butterfield Bread

Pepsi

Soft drink giant, Pepsi, has acquired Pioneer Foods Group Limited, the company that owns Nigerian bread brand, Butterfield. In a deal worth around $1.8billion and according to Pepsi, Pioneer Food’s product portfolio is complementary to its own and would help PepsiCo to expand in sub-Saharan Africa by adding manufacturing and distribution capabilities.

Analysts say Pepsi is using the acquisition to make an inroad into the Nigerian confectionary market, while existing brand should poise for intense competition as Pepsi has the capital to invest in research and development. 

Bread is a staple food in most homes, a fast food for a population of 200 people.

According to a KPMG report, Nigeria’s bread market is growing at a faster rate with 72percent of the $621million-industry dominated by small and medium scale bakers.

“The Nigerian bread market and other baked goods segments are highly fragmented, with 72percent of the market is controlled by artisans and other relatively small players.

Notable bakers are Magnified Bread, Excellent Bread, Salama Bread just to mention few. Retail stores such as Shoprite and other small retail outlets also produce their bread considered as fresh by many Nigerians.

For many without much insight into the industry, the business of bread making is very lucrative; however, a major challenge facing the industry is the saturation of that space with too many players.

This explains the many bakeries-both certified by NAFDAC and non-certified by NAFDAC-in all nooks and crannies of the country. Closely related to this is the activities of unregistered, unlicensed and undocumented producers of bread, who are not under any obligation to adhere to NAFDAC’s health and other safety standards. They pose a risk not just to the regulated bakers but to the final consumer, as well.

Pioneer Foods International expanded its footprint in the Nigerian market through the acquisition of a majority stake in Food Concepts Pioneer, a leading baked goods company. With its primary focus on bread, the company owns the well-established Butterfield brand, distributed in key markets in the country from its bakeries.

 

OLUFIKAYO OWOEYE