Varun Beverages Limited (VBL), one of PepsiCo’s largest bottling partners globally, has announced a major strategic expansion that marks its entry into the alcoholic beverage segment. The company has joined hands with Carlsberg Breweries A/S for exclusive beer distribution across select African markets and is also setting up a new subsidiary in Kenya to bolster its presence in the continent.
Entering the Alcohol Market with Carlsberg
Under the partnership, VBL’s African subsidiaries will test-market Carlsberg beer in their respective territories. The company said this move aligns with growing global demand for ready-to-drink (RTD) and alcoholic beverages.
With this partnership, Varun Beverages aims to diversify beyond soft drinks, expanding into beer, wine, whisky, rum, vodka, and other spirits—both in India and international markets.
New Subsidiary in Kenya
As part of its global expansion strategy, VBL is establishing a wholly-owned subsidiary in Kenya, which will oversee the manufacturing, distribution, and sales of beverages.
This development strengthens VBL’s footprint in Africa, where it already operates in countries like Zimbabwe, Zambia, and Morocco. The company views Africa as a key growth driver, given its young population and rising beverage consumption.
New Joint Venture for Refrigeration Business
In India, VBL announced a joint venture with Everest International Holdings Limited to form White Peak Refrigeration Private Limited.
The JV will manufacture visi-coolers and other refrigeration equipment, boosting VBL’s cold chain infrastructure and supporting its expanding retail network. This initiative also enhances the company’s backward integration strategy.
Q3 2025 Performance Highlights
Varun Beverages reported a strong financial performance in the third quarter of 2025, with notable growth in profitability and efficiency improvements.
- Revenue: ₹48,966.5 million (up 1.9% YoY)
- Sales Volume: 273.8 million cases (up 2.4%)
- EBITDA: ₹11,473.8 million (slightly down from ₹11,511.2 million in Q3 2024)
- PAT: ₹7,451.9 million (up 18.5% YoY)
While India’s sales volumes remained flat, international volumes grew 9%, driven largely by strong performance in South Africa.
The gross margin improved by 119 basis points to 56.7%, supported by cost efficiencies and a higher share of packaged water in the sales mix.
However, EBITDA margin slightly declined to 23.4% from 24.0% due to higher employee and production costs.
Nine-Month Growth Snapshot (2025)
For the first nine months of 2025, Varun Beverages delivered robust growth across key metrics:
- Revenue: ₹174,809.6 million (up 7.1% YoY)
- EBITDA: ₹44,101.1 million (up 6.8% YoY)
- PAT: ₹28,020.4 million (up 14.9% YoY)
Notably, low-sugar and no-added-sugar products accounted for 56% of total sales, with 45% coming from India—reflecting the company’s shift toward healthier beverage options.
Outlook
Varun Beverages’ latest moves highlight a strategic pivot toward portfolio diversification and global expansion. By entering the alcoholic beverage market and strengthening its refrigeration infrastructure, the company is positioning itself as a comprehensive beverage powerhouse across segments and geographies.
The expansion reflects strong investor confidence and underscores VBL’s ambition to move beyond soft drinks into a broader, fast-growing beverage landscape.
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