Well positioned for strong recovery this year, says Varun Beverages

Varun Beverages says expanded capacity, a diversified portfolio and its Africa strategy support confidence in a strong recovery, despite last year's weather-led demand disruption

PepsiCo bottler Varun Beverages, with a diversified portfolio and elevated manufacturing capacities, is well positioned for a strong recovery this year, the company stated in its annual report released on Monday.

 

“Looking ahead, we remain confident in the long-term growth potential of the beverage industry in India and across our international markets. Low per capita consumption, favourable demographics, expanding distribution infrastructure, and increasing penetration across semi-urban and rural markets continue to provide a strong foundation for growth,” Ravi Jaipuria, promoter and non-executive chairman, stated in a letter to stakeholders.

 

“With powerful execution capabilities, elevated manufacturing capacity, diversified portfolio and a robust balance sheet, we are well positioned for a strong recovery,” he added.

 

 

An extended monsoon and heavy rains across the country played spoilsport for the beverages segment last year, leading to a drop in sales for all organised players.

 

“In India, volume growth was impacted during parts of the year due to unusually heavy and prolonged rainfall across several regions. While adverse weather conditions affected peak-season consumption, underlying demand fundamentals remained intact,” he stated.

 

The company’s move to strengthen its presence in Africa and foray into the alco-bev segment in the nation has helped its performance.

 

“A pivotal breakthrough this year was the proposed acquisition of Twizza (Pty) Limited in South Africa, through our subsidiary, The Beverages Company Proprietary Limited, subject to regulatory and other approvals,” he stated.

 

With three manufacturing facilities, Twizza presents the company an opportunity to boost its manufacturing capabilities and strengthen route-to-market presence in Africa’s largest soft drinks market.

 

“Once completed, the acquisition is poised to unlock substantial operational and commercial synergies with our existing platform,” he added.

 

The company also incorporated a wholly owned subsidiary in Kenya in 2025. Other than fortifying its position in East Africa, this move enables Varun Beverages to “capitalise on the region’s long-term growth potential, supported by favourable demographics and rising consumption trends,” Jaipuria further said.

 

The company also expanded its product portfolio during the year. This included entering an exclusive distribution agreement with Carlsberg Breweries A/S for their “Carlsberg” brand, which enables them to test-market the products in select African territories; ramping up the snacks business in Morocco; and gaining traction in distribution of PepsiCo’s snack products in Zimbabwe and Zambia.