VENTURES: ... And What About Pepsi?
Recent Western Cape Business News
PIONEER’s latest annual report reveals very little about the performance of soft-drink Pepsi – which is incorporated in the Ceres Beverage group.
For years now the market has been intrigued as to whether Pioneer could make a profitable run with Pepsi – a soft-drink brand that twice previously has lost its fizz in the local market.
The annual report reveals that Ceres Beverages’ carbonated soft drink sales volumes grew in difficult market conditions.
It notes that with the 2010 World Cup competitor activity increased substantially – but adds that “irrespective of difficult market conditions, Pepsi volumes performed well and achieved good growth”.
While no revenue or profit numbers are put forward, Pioneer contends that “the profitability in this category improved compared with the previous year and contributed to the improved financial performance of the segment.”
Ceres Beverages’ turnover was only up 3% to R2.5 billion in the year to end September 2010, but operating profits were up a hefty 67% to R165 million.
So even if Pepsi is not burning into Coca-Cola’s market share, it does seem the business is being superbly managed. So much so that Ceres Beverages has been able to add to well-known the Lipton Ice tea brand to its portfolio.
Further evidence that the Pepsi arrangement is going to plan comes with news that the deal includes the signing of a franchise agreement with Pepsi Lipton International – which Pioneer reckons is of strategic importance.
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