Pioneer Foods has entered into a joint venture with Futurelife Health Products as it looks to enhance its breakfast cereal offering.

Pioneer, which produces cereals, baked goods and beverages, on Thursday said it had bought 50% of the private company, which produces nutrient-dense functional food products. Futurelife has benefited from a growing demand for healthy eating globally.

The Paarl-based company will leverage off Futurelife’s health food expertise and offer a greater variety of products, including functional food products, which are more attractive to consumers.

Pioneer CEO Phil Roux said the joint venture would complement its existing brands. These include Weet-Bix, Bokomo, Liqui-Fruit, Sasko and White Star.

"As a leading fast moving consumer goods company, innovation is at the core of our business. This joint venture with Futurelife, an industry leader in the functional foods category, provides Pioneer Foods with an opportunity to shape a winning brand portfolio by fast-tracking product innovations and developing new product categories," Mr Roux said.

Founder and CEO of Futurelife, Paul Saad, said the venture would help Pioneer to develop healthier products itself. "Combining Pioneer Foods’ scale and experience in the food and beverage market together with our functional food expertise in creating the first smart food formulated range of products will result in exciting new health choices for the consumer," he said.

Vunani Securities analyst Anthony Clark said the deal would benefit both companies tremendously.

"This is a marriage made in heaven. Pioneer would have to spend a lot of money and take months of time if it were to launch a functional foods offering by itself."

But it had bought expertise. "On the other hand, Futurelife gets to enjoy access to Pioneer’s very strong distribution network."

Pioneer did not disclose how much the joint venture was worth. Mr Clark expected Pioneer to provide more details when it announced financial results next month.

Mr Saad would lead and manage the venture.

Pioneer’s share price rose 2.5% to close at R194.60 on Thursday. The company has a market capitalisation of about R45bn.