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BUSINESS STRATEGY
PepsiCo opens new US$41m potato chip production line in South Africa
By our African Marketing Confederation News Team | 2024
Company says expanding its production capacity is an important move to meet the growing demand in SA for its snack brands.
PepsiCo South Africa has opened a new US$41–million (R746–million) potato chip production line at its factory in Isando, just outside Johannesburg.
Photo: PepsiCo South Africa
The investment will enhance local production and reduce demand for imported products into the Southern African market. It will also boost export opportunities for PepsiCo SA.
The company operates four potato chip production lines across three plants, all running at more than 85% capacity. Adding this new line will increase the production capacity of the facility by 29% and increase efficiency in the supply chain.
“Expanding our potato chip production capacity is an important move to meet the growing demand for South Africa’s much-loved snacks,” says Riaan Heyl, CEO of PepsiCo South Africa.
“Alongside creating new jobs, this new line shows our commitment to innovation and efficiency, as we continue to deliver high-quality products to people.”
The Isando plant is close to major potato-growing areas, and its central position eliminates the need for cross-country shipments of potato chips from the company’s Parow (Western Cape province) and Durban (KwaZulu-Natal province) operations.
New plant will deliver transport efficiencies
According to PepsiCo, this will deliver transport efficiencies and reduce greenhouse gas emissions by eliminating 2.2-million kilometres, or over 2,300 cross-country shipments, annually.
“This investment aligns with our long-term strategy to innovate and grow sustainably, ensuring that we are one of the leading food and beverage companies in South Africa,” Heyl says.
“We are excited about the potential for this investment to drive economic growth and job creation.”
According to Trendtype, the emerging markets consultancy, in March 2024, Indian-based Varun Beverages completed its acquisition of Southern African PepsiCo bottler, The Beverage Company (Bevco). Bevco is the PepsiCo bottler for South Africa, Lesotho and Eswatini and has the distribution rights for Botswana and Namibia.
In July this year, PepsiCo announced that it would sell the rights to its Marmite and Bovril spreads brands in South Africa to Anchor Yeast, part of Canada’s Lallemand group. The deal will close by the end of 2024. Although Marmite and Bovril are owned by Unilever, PepsiCo inherited the licence for the South African market when it acquired Pioneer Foods.
“PepsiCo is making a big push in Southern Africa,” Trendtype comments. “The combination of PepsiCo’s international brand portfolio, innovation and market capabilities with Pioneer Foods’ local manufacturing, strong Southern African brands and distribution network, is being used to reshape the broader food sector in the region, with a focus on added-value brands.”
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