Varun Beverages reportedly in talks with PepsiCo to enter India’s alcoholic RTD market
Varun Beverages explores potential entry into low-alcohol RTD category amid rising demand and recent global expansion moves.
INDIA – Varun Beverages Ltd (VBL), one of PepsiCo’s largest bottling partners, is reportedly evaluating a strategic entry into the alcoholic beverages market in India.
According to industry sources cited by ET Retail, the company is in discussions with PepsiCo to introduce low-alcohol ready-to-drink (RTD) beverages, expanding beyond its traditional non-alcoholic product range.
Ravi Jaipuria, chairman of VBL’s parent company, confirmed the exploratory talks, noting strong global performance for low-alcohol RTD products and describing India as a market with similar growth prospects.
The potential collaboration would combine VBL’s extensive production and distribution capabilities with PepsiCo’s brand strength and product development expertise.
Industry analysts say both companies are currently assessing product formats, regulatory requirements, and manufacturing feasibility. The move would represent a significant diversification for VBL, which currently produces and distributes carbonated soft drinks, packaged water, and other non-alcoholic beverages in partnership with PepsiCo.
The development aligns with an ongoing shift in India’s beverage sector, where brands are broadening portfolios to meet evolving consumer preferences for convenient, lower-alcohol beverages. If finalized, the venture would mark VBL’s first expansion into the alcoholic drinks category in India.
The news follows VBL’s recent distribution partnership with Carlsberg Breweries for select African markets. Under the agreement, VBL subsidiaries will pilot Carlsberg beer in their respective territories, further strengthening the company’s foothold in the alcoholic beverages space internationally.
The discussions come on the heels of VBL’s third-quarter (Q3 2025) financial results. The company reported a 19.62% year-on-year increase in net profit to Rs 741.19 crore, compared to Rs 619.61 crore in Q3 2024. Revenue from operations rose 1.9% to Rs 48,966.5 million.
Consolidated sales volume increased by 2.4% to 273.8 million cases, supported by a 9% rise in international markets, particularly South Africa, while domestic volumes remained resilient despite widespread rainfall.
Carbonated soft drinks contributed 74% of total sales, non-carbonated beverages 4%, and packaged water 22%. VBL’s EBITDA stood at Rs 11,473.8 million, marginally lower than the previous year, though gross margins improved by 119 basis points to 56.7%, aided by cost efficiencies and a higher packaged water mix in global operations.
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