GROOT Draakenstein-based food brands conglomerate has beefed up its pie segment – the first deal since Pieter Hanekom was slated as the successor to long-serving CEO Bruce Henderson.
RFG last month confirmed it had acquired Pioneer Foods Wellingtons – a division of Stellenbsch-based Pioneer Foods. Pioneer Foods was taken over by multinational PepsiCo last year, and it was largely expected that the new owners would cull some of the brands portfolio.
RFG has essentially acquired – aside from the operations in Botswana and eSwatini – Pioneer’s frozen pies, pastry, sausage rolls, pizza and party packs. These include well-known brands like Today, Mama’s, Big Jack and Man’s Meal.
RFG already has a meaningful presence in the local pie market, and the new brands will give it a strong presence in the frozen pies and pastry segment. The pie and pasty manufacturing facilities are located in Atlantis, but the brands are distributed nationwide.
CEO Bruce Henderson said the acquisition is aligned with RFG’s strategy of expansion through value accretive acquisitions. “The frozen pie and snack category in the top end retail market complements RFG’s growing pies and pastries business. The acquisition has the potential to generate good synergies for the company while also diversifying our offering into the retail channel.”
RFG owns brands like Rhodes (fruit juice, canned fruit and jams), Bull Brand (tinned meat and, Magpie (pies) as well as niche brands like Squish, Bisto, Hinds and Pakco. The group increased operating profit by 14.9% to R185 million in the six months to end March.
In the interim period pies were a soft spot. RFG reported fresh foods sales down by almost 4% as the pie and bakery categories were adversely impacted by the reduced travel over the festive season (due to Covid-19 restrictions).
But RFG did report that its centralisation of the group’s pies and pastries business was successfully completed, and that the group was now positioned for growth in this key category.
The proposed deal still with Pioneer, however, needs approval by the South African Competition Commission.
The proposed deal follows new that Henderson, who has served as CEO of RFG for 22 years, is to retire in September this year. He will be succeeded by Pieter Hanekom, ironically an ex Pioneer executive and brother of former Pioneer CEO Andre Hanekom.
Hanekom joined RFG in 2015 as managing director of long life beverages. He has more than three decades experience in the food industry – including 20 years at Pioneer Foods where he was managing director of Ceres Fruit Juices and head of the Ceres Beverage Company.
Henderson, a significant shareholder in RFG, will still serve on the board in a non-executive capacity from October.
It will be interesting to see whether Hanekom keeps RFG on an acquisitive tack, and equally intriguing to see if Pioneer – as PepsiCo get to grips with operations – culls further brands in the months ahead.
