Varun Beverages Limited (VBL), one of PepsiCo’s largest bottling partners, has announced a significant expansion plan that includes entering the alcoholic beverage segment in Africa and setting up a new refrigeration venture in India. These moves mark the company’s growing ambitions to diversify its portfolio and strengthen its global presence.
Partnership with Carlsberg in Africa
VBL has entered into an exclusive distribution agreement with Carlsberg Breweries A/S to market and distribute Carlsberg beer in select African countries. This collaboration marks VBL’s first step into the alcoholic beverage category, a space that has been witnessing strong global growth, particularly in Ready to Drink (RTD) and premium beverage segments.
Through this deal, VBL plans to expand its range beyond soft drinks and enter new categories such as beer, wine, whisky, rum, and vodka, both in international markets and eventually in India. The company believes this partnership will help it tap into emerging consumer trends and broaden its business base across multiple beverage categories.
As part of its global expansion strategy, VBL is establishing a wholly owned subsidiary in Kenya. The new unit will handle the manufacturing, distribution, and sale of beverages in the region. This move further strengthens the company’s foothold in Africa, where it already has operations in countries such as Zimbabwe, Zambia, and Morocco. With the Kenyan expansion, VBL aims to enhance its production capabilities and improve supply chain efficiency across the continent.
Joint Venture for Refrigeration Business in India
In addition to its international ventures, VBL has announced the formation of a new joint venture in India called White Peak Refrigeration Private Limited, in partnership with Everest International Holdings Limited. This venture will focus on manufacturing visi-coolers and other refrigeration equipment. The initiative will help VBL support its expanding cold chain and retail network, ensuring better product storage and distribution efficiency across its growing beverage portfolio.
Strong Q3 2025 Performance
Varun Beverages reported a steady performance in the third quarter of 2025, with profit after tax rising by 18.5 percent to Rs 7,451.9 million, compared to Rs 6,288.3 million in the same period last year. Revenue from operations increased slightly by 1.9 percent to Rs 48,966.5 million, up from Rs 48,046.8 million in Q3 2024. The company’s consolidated sales volume also grew by 2.4 percent, reaching 273.8 million cases.
While sales in India remained relatively flat, international markets performed strongly, recording a 9 percent growth mainly driven by increased demand in South Africa. The net realisation per case stood at Rs 178.8, marginally lower than last year due to a higher share of packaged water sales in global markets.
Margins and Product Mix
In Q3 2025, carbonated soft drinks accounted for 74 percent of total sales, while non carbonated beverages contributed 4 percent, and packaged drinking water made up 22 percent. The company’s gross margin improved by 119 basis points to 56.7 percent, aided by cost efficiencies and a greater share of packaged water in its international operations. Despite rising expenses related to employee costs, power, and manufacturing overheads, VBL maintained stable operational performance. Its EBITDA stood at Rs 11,473.8 million, slightly lower than Rs 11,511.2 million last year, while EBITDA margins dipped marginally to 23.4 percent from 24 percent.
Nine Month 2025 Results
For the first nine months of 2025, VBL’s revenue grew by 7.1 percent year-on-year to Rs 174,809.6 million. The company’s EBITDA rose by 6.8 percent to Rs 44,101.1 million, and profit after tax increased by 14.9 percent to Rs 28,020.4 million. One of the key highlights of the period was the company’s continued shift toward healthier beverage options low sugar and no added sugar products accounted for 56 percent of total sales volumes, with nearly half of this demand coming from the Indian market.
With its entry into the alcoholic beverage market through the Carlsberg partnership and the establishment of a new refrigeration joint venture in India, Varun Beverages is taking strategic steps toward diversification and long-term growth. The company’s African expansion and focus on sustainable product innovation suggest a clear intention to strengthen its global presence while catering to evolving consumer preferences at home and abroad.
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