Varun Beverages signs exclusive deal with PepsiCo over Zimbabwe, Zambia

ZAMBIA- Indian-based non-alcoholic drink company Varun Beverages Limited (VBL) has announced an exclusive agreement with PepsiCo Inc. to manufacture, distribute, and sell ‘Simba Munchies’ in Zambia and Zimbabwe. 

According to Varun Beverages, the deal is expected to take effect on October 1, 2025, in Zimbabwe and April 1, 2026, in Zambia once a production facility is constructed and becomes fully operational.  

The exclusive terms of the agreement will be implemented by VBL’s subsidiaries, Varun Foods (Zimbabwe) and Varun Beverages Zambia (VBZ). 

PepsiCo will implement its own responsibilities in regard to the deal via its subsidiary Premier Nutrition Trading LLC. 

The deal features an initial investment of Rs 60 crore (US$7 million) in the manufacturing facility, expected to produce around 5,000 tons of Simba Munchies in various SKUs in both Zambia and Zimbabwe. 

Varun Beverages highlighted that the deal would go a long way in strengthening its relationship with PepsiCo, broadening its market access in terms of location and product diversity, and leveraging its distribution network. 

The beverage company also revealed it entered into the deal with PepsiCo because of its reputation and performance in the snacks sector. VBL reiterated that PepsiCo reports around 59% of its revenue from its snack wing. 

The deal is a continuation of the two companies’ relationship in the African continent, the second manufacturing and distribution partnership this year.  

In February, VBL announced another distribution deal with PepsiCo Inc. through its Varun Beverages Morocco SA subsidiary and PepsiCo’s Premier Nutrition Trading LLC subsidiary to manufacture, distribute, and sell Cheetos in Morocco.  

The deal featured an initial investment of Rs 100 crore (US$11.9 million) for a dedicated manufacturing facility. Commercial production for this new facility is set to begin on May 1, 2025.  

These deals are viewed as part of the reason for VBL’s impressive performance over the years. The company’s total income increased by 49% year-on-year (YoY) in 2023 to Rs 1,550 crore (US$184.45 million). The company also recorded a net profit increase of 24.9% in Q1 2024.  

The deal’s announcement received a mostly positive reaction from the market, with shares rising 1.88% to Rs 1613.40 (US$19.31).

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