The Western Cape food and beverages sector promises to be baited with mouth-watering opportunities for 2013 – even though last year’s violent strikes by farm workers have left a rather ominous pall hanging over the fields.

The big question for the year ahead is whether Swartland consumer brands giant Pioneer Food Group – which will soon see its long-serving MD Andre Hanekom stepping down – will finish this year with a much changed operational recipe.

Pioneer’s year to end September financial results – released near the end of 2012 – showed that its traditional staple foods businesses, Sasko (bread) and Bokomo (cereals), remain the most robust segments of the group offering.

The agri-business (mainly the Tydstroom poultry business) and Ceres Beverages Company (fruit juices, cordials and Pepsi) are now causing a drag at bottom line.

The losses at the agribusiness hub (nearly R50m from turnover of R3bn) will surely prompt Pioneer to ‘go big or go home’. While it’s not a great time to be selling a poultry business, there have been murmurings around the farm gate that Tydstroom might look to bulk up for increased poultry efficiencies and bolster its geographic presence by seeking a merger with Afgri’s poultry business.

On the beverages side (where year to end September profits dipped to just R88m from turnover of R2.8bn it seems conceivable that Pioneer might (again) look at corporate action to increase profitability.

CBN sees two opportunities here. Firstly, the time may be right to approach plastics packager Bowler Metcalf around a possible deal involving soft-drink bottler Quality Beverages. With Bowler Metcalf battling to retain its historic trading margins in its core packaging business there might be a willingness to consider an offer for Quality Beverages, which is currently in the throes of a difficult push into a competitive Gauteng market.

The second option would need to cross some emotional issues, and would involve Pioneer having a second look at merging Ceres Beverages Company with liquor group KWV.

KWV – which has just launched its third ready-to-drink brand in the form of ‘KWV & Cola’ – is looking to expand its range of higher volume beverage offerings in order to overcome the current sag in its traditional brandy and wine markets (both locally and offshore).

Perhaps this time talks around merging Ceres and KWV can be handled in such a way that shareholders from both sides get to participate meaningfully in any new venture. For both Ceres and KWV being part of a more diversified beverages offering seems to make sense – in terms of costs, distribution and product development.

Naturally the big question in the local liquor sector is whether Stellenbosch-based Distell will pull off a major offshore acquisition in 2013. While the group already pulls major hard currency earnings from brands like Amarula and Bisquet as well as its fine wines, the company probably needs to own or build a major international brand to really gain global traction. Perhaps a secondary question around Distell is whether PSG-controlled agri-business investor Zeder – which is now ploughing as far afield as Zambia – might sell its significant minority stake in Distell.

Zeder – which will need additional capital to grow its Agricol seed business (now headed by Antonie Jacobs) is limited influence at Distell, and perhaps Remgro – the other major shareholder (along with SABMiller) – might pitch an offer for the Distell stake that cannot be refused?

Shifting attention to the high seas, all eyes are on whether one of the local fishing enterprises are going to dangle a hook for Foodcorp’s fishing interests.

Late in 2012 the Stellenbosch-based conglomerate Remgro pushed its poultry group Rainbow Chickens into a deal to take over Foodcorp (which owns a variety of best selling food brands). What was left on the table was Foodcorp’s fishing business.

Presumably cash flush operators like Oceana would definitely want to take a closer look at some of Foodcorp’s fishing businesses – but would it be more likely that empowerment companies like Brimstone (which controls Sea Harvest and is a minority shareholder in Oceana) and Sekunjalo (which controls Premier Fishing) pitch to buy the business in its entirety.

One, of course, might not want to write off the chances that Grand Parade Investments – which has already shown its appetite for food investments with a venture with Burger King – making a play for seafood. Or what about an aggressive food sector accumulator like Lonrho Africa (which already has a Cape presence) dropping a line for Foodcorp’s fishing business. Significantly Lonrho’s Cape-based Fish On Line recently launched its first roll-out of own branded goods.

This means Fish on Line will provide fish ranges throughout the 100 FLM stores in SA.

On a more tangible note for the local fishing sector, the year ahead might also see the resumption of canning activities at Saldanha if a joint venture proposed by Premier Fishing and Oceana gets the regulatory green lights. Talk around the docks is that Premier Fishing is talking to prospective investors regarding similar value adding ventures elsewhere in the Cape – which may raise a question around whether Premier is about to launch its own consumer brands.