Varun Beverages to expand capacity for juices, dairy beverages

The company also said that its growth strategy involves continuously strengthening the distribution network and chilling infrastructure. “This is essential for enhancing our presence in existing and under-penetrated markets,” the report said.

Varun Beverages manufactures and sells a range of non-alcoholic, carbonated and non-carbonated beverages, and serves nearly a sixth of the world’s population.

The company has presence in 27 states and 7 union territories in India and five other countries, namely Nepal, Sri Lanka, Morocco, Zambia and Zimbabwe. As of 31 December 2023, the company operated 40 manufacturing facilities (34 in India and six in overseas markets).

Three markets, India, Sri Lanka and Nepal, contribute to 83% of VBL’s net revenues.

The company, one of the largest franchisees of PepsiCo globally (outside the USA), commissioned new production facilities at Bundi in Rajasthan and at Jabalpur in Madhya Pradesh, as well as expanded capacity at six existing locations in Pathankot, Kosi, Bharuch, Tirunelveli, Begusarai and Guwahati in 2023.

“The commissioning of multiple greenfield and brownfield beverage manufacturing lines in CY 2023 was a significant step in enhancing our operational capabilities. These expansions are vital for meeting increasing consumer demand and tapping into new market opportunities and have set the stage for our continued growth in the beverage industry,” the company added.

Varun Beverages reported a 21.8% jump in revenues in calendar year 2023. The profit after tax grew by 35.6% on a year-on-year to touch ₹2,101.8 crore in 2023. It reported revenues of ₹16,042.6 crore during the year.

“This growth is primarily driven by the robust consumption pattern among our consumers which ultimately contributed in gaining 13.9% and 7% increase in consolidated sales volume and net realization per case, respectively,” it said.

In 2023, the Indian soft drinks industry encountered a challenging yet progressive year on account of unseasonal rains.

“Following substantial growth in 2022 attributed to the resurgence of out-of-home consumption, the industry confronted unseasonal rains that disrupted sales during the critical summer season,” it said. 

“Nevertheless, the sector adeptly adjusted to evolving consumer preferences and maintained a steady growth trajectory. This resilience was particularly evident in the energy drinks segment, which, after emerging as a growth category in 2022, continued its expansion through 2023. The broader soft drinks market, encompassing carbonates, juices, and bottled water, also sustained growth during the year,” it added.

Varun Beverages accounts for over 90% of Pepsi’s beverages sales volume in India. The company bottles and distributes brands such as Pepsi, Mountain Dew, Mirinda, Sting, 7UP, Gatorade, Tropicana, among others.

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Published: 07 Mar 2024, 07:22 PM IST