Varun Beverages Ltd (VBL), the leading bottler for PepsiCo, said it is sharpening its focus on further ramping up manufacturing capacities especially in categories such as juices as well as deepening its overall distribution to tap into under-penetrated markets.
In a letter to shareholders in the annual report for CY2023, Ravi Jaipuria, Promoter and Non-Executive Chairman, VBL stated, “Central to our expansion strategy for CY2024 is the further development of manufacturing facilities with a focus on adapting to evolving consumer preferences and market trends. We are particularly concentrating on increasing our production capacities in the juices and value-added dairy product segments.”
Besides manufacturing and selling brands licenced by PepsiCo, the company is also known for its own brand Creambell in the dairy-based beverage space. The company has 40 production facilities; of these, 34 plants are in India, which it its largest market.
New facilities
Jaipuria said the company “successfully commissioned” new production facilities at Bundli, Rajasthan and Jabalpur, Madhya Pradesh. It has also ramped up capacity in six existing manufacturing plants Pathankot, Kosi, Bharuch, Tirunelveli, Begusarai and Guwahati.
“The commissioning of multiple greenfield and brownfield beverage manufacturing lines in CY2023 was a significant step in enhancing our operational capabilities. These expansions are vital for meeting increasing consumer demand and tapping into new market opportunities,” he said. The company, in its annual report for 2023, added that strengthening the distribution network and chilling infrastructure will also be essential to grow its presence in existing and under-penetrated markets.
In CY23, the company’s net revenues grew 21.8 per cent to ₹16,042.58 crore despite unseasonal rains impacting sales during peak Summer in parts of the country.
African expansion
In terms of geographical expansion, VBL also entered into a binding agreement to acquire 100 per cent stake in South Africa’s Beverage Company Ltd (BevCo). BevCo holds franchise rights from PepsiCo Inc in South Africa, Lesotho and Eswatini, along with distribution rights for Namibia and Botswana.
“This acquisition, which aligns perfectly with our strategic goals, offers an excellent opportunity to significantly enhance our presence in the African market — a region known for high demand for soft drinks and favourable demographics. The integration of BevCo into VBL’s operations is expected to yield substantial synergistic benefits in the future,” Jaipuria said in the annual report.