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PepsiCo appoints SoftBev as new South African bottler

As has been widely anticipated, PepsiCo has announced the appointment of SoftBev, the national soft drinks company, as its sole licensed bottler in South Africa, Lesotho and Swazilandand with distribution rights in Botswana and Namibia.

The appointment will come into effect on July 15, 2015 and includes globally renowned brands such as Pepsi, Pepsi MAX, Mountain Dew, 7UP and Mirinda.

Alan Henderson PepsiCo South Africa BU GM

Alan Henderson (right), PepsiCo South Africa’s Business Unit GM, comments: “The appointment of SoftBev heralds a new era for our beverages in South Africa and opens up fantastic new growth opportunities.

“South Africa is an important and strategic market and in SoftBev we have found a bottling partner that shares our belief in focusing on innovation, brand building and marketplace execution to get results.

“SoftBev has a proven track record with highly effective route-to-market strategies and PepsiCo is in the business of building outstanding, engaging brands. Together we will establish a solid platform for future growth and take our beverages portfolio to the next level, in the same way as we’ve grownour snacks business in South Africa.”

PepsiCo’s snacks business leads the South African market and includes the much-loved national brand, Simba as well as globally successful brands such as Lay’s and Doritos.

With the distribution power of SoftBev supporting its world-class brand marketing campaigns, PepsiCo says it will seek to maximise the natural synergies in purchasing between its snacks and beverages portfolio.

SoftBev was created following the recent merger of Shoreline and Quality Beverages, both well established players in the carbonated soft drinks market with brands such Coo-ee and Jive.

Following the merger, SoftBev is a scale, national drinks operator in South Africa with three manufacturing hubs and national distribution reach, thus offering PepsiCo increased routes-to-market and the ability to realise the untapped potential for its beverage brands in the South African market.

Michael Brain, SoftBev’s chairman, comments: “We are excited to be adding PepsiCo’s portfolio of exceptional brands to our existing business. Time after time PepsiCo delivers first-class marketing both here in South Africa and around the world – it is great to be a part of this.

“SoftBev brings considerable expertise to the table and critical mass and we are confident these attributes position us as the ideal partner to support PepsiCo in delivering accelerated growth for its beverages brands.”

Alan Henderson concludes: “This is a very exciting time for our South African business; our snacks portfolio continues to grow, we’re the official beverage partner for Burger King and Pizza Hut and we have a new bottling partner with the reach to unlock significant growth opportunities.

“Mountain Dew has again been named the most talked-about brand on university campuses* and our Pepsi brands continue to partner with top-class sporting initiatives like the IPL and the UEFA Champions League. There’s a lot to look forward to – watch this space!”

Pepsi’s past SA history

Last  November, Pioneer Foods said it would exit the 2006 deal that gave it bottling rights for Pepsi in South Africa after making substantial losses and unable to compete with Coca-Cola SA’s distribution strengths.

Pepsi has had several challenges since the brand returned to SA with the collapse of apartheid. PepsiCo signed a bottling deal with New Age Beverages that ended after just three years, when, again, PepsiCo apparently decided New Age couldn’t compete against Coca-Cola’s distribution system.

And after all these years Pepsi has less than 10% of the retail market and low penetration in the informal market. Its misadventures in SA are largely due to a lack of brand recognition and marketing, and low penetration in the “township economy”, say analysts.

Coca-Cola, on the other hand, is ubiquitous, after decades of marketing with a market share over the past three years that has hovered between 82,1% and 79,2%.

Related reading:

Pepsi in SA: still out in the cold

Pioneer to exit its Pepsi business

SoftBev set to be SA’s No 1 locally-owned soft drink company