PepsiCo launches US$41M new potato chip production line at Johannesburg plant

SOUTH AFRICA – PepsiCo South Africa, a prominent player in the country’s food and beverage sector, has unveiled a state-of-the-art potato chip production line at its Isando plant in Johannesburg, marking a R746 million (US$41.2 million) investment.

This development aims to bolster the company’s potato chip manufacturing capacity and meet growing local demand while improving supply chain efficiency by reducing the need for long-distance product distribution.

Operating in a competitive savory snack market, PepsiCo South Africa maintains a strong presence, rivalled by companies like AVI Limited.

The sector sees players leveraging innovative strategies such as product launches, expansions, partnerships, and acquisitions to sustain growth and capture market share.

The country’s savory snack market is set for significant growth, valued at USD 1.78 billion in 2024 and projected to reach USD 2.58 billion by 2029, with a CAGR of 7.74%.

This growth is fueled by shifting consumer trends, including the rising popularity of “snackification,” driven by demographic, cultural, and economic changes. Increasing disposable income and demand for convenient snack options further bolster the market.

PepsiCo’s journey in South Africa began in 1997 with its investment in Simba, focusing on streamlining and expanding its product portfolio over the years.

Recently, the company divested its Marmite and Bovril spreads business along with its Savoury Food Ingredients division to Lallemand Inc. through Rymco Pty Ltd., trading as Anchor Yeast.

Meanwhile, in beverage sector, an intense competition is also building up in South Africa since Varun Beverages Ltd, PepsiCo’s largest franchise bottler, completed the acquisition of one of the leading players in the country, Beverage Company (BevCo), along with its wholly-owned subsidiaries this year.

The acquisition was done after receipt of requisite approvals from PepsiCo Inc and Competition Commission South Africa and now BevCo has become a subsidiary of the company from March 26, 2024..

Varun Beverages has franchise rights from PepsiCo Inc, in South Africa, Lesotho and Eswatini. It also has distribution rights for Namibia and Botswana.

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