India’s Varun Beverages, PepsiCo’s bottling partner, reports a significant shift toward low and no-sugar carbonated drinks, which accounted for 55% of sales volume in H1 CY2025. Despite a decline in Indian sales, strong growth in African markets and strategic investments in new production lines and snack categories highlight the company’s diversification and expansion efforts.
Varun Beverages Limited (VBL), PepsiCo’s Indian bottling partner, has recorded a significant consumer preference shift toward low sugar and no added sugar carbonated drinks, which comprised 55% of its total sales volume in the first half of calendar year 2025 (H1 CY2025).
According to company data, Varun Beverages sold 386.1 million cases of low/no sugar beverages out of 702 million total cases in H1 CY2025, underscoring a marked increase from the 44.4% share these products held in CY2024. This shift reflects evolving Indian consumer health consciousness and regulatory pressures favoring reduced sugar consumption.
Chairman Ravi Jaipuria noted, “Every product will slowly move into mid-calorie and no-sugar segments. Our no-sugar variants such as 7 Up, Pepsi Black, and Gatorade have seen strong acceptance in the Indian market.”
Despite a 7.1% decline in Indian sales volume during this period, the company offset some pressure through international market growth, particularly in Africa, where sales volumes rose by 15.1%. South Africa led this expansion with a 16.1% volume increase, supported by investments in new production capacity and backward integration.
Also Read: PepsiCo India Defies Market Odds to Post Massive Gains in 2024
Strategic diversification is underway as Varun Beverages recently commenced commercial production of PepsiCo’s snack brand “Cheetos” in Morocco, marking an expansion beyond beverages into high-potential snack categories to broaden revenue streams.
The company also invested Rs. 4,500 million in African operations during the last quarter, including establishing a new PET bottle production line in Congo, a canning facility in South Africa, and capacity enhancements in Morocco. Plans to acquire land adjacent to its South African plant in Boksburg await regulatory approval to facilitate further expansion.
Domestically, Varun Beverages commissioned four greenfield production facilities across India in Prayagraj (UP), Damtal (HP), Buxar (Bihar), and Mendipathar (Meghalaya), adding ten carbonated soft drink lines, six lines for juices and dairy beverages, and two water lines. This greenfield expansion represents an investment of Rs. 14,500 million, part of a total capex of Rs. 25,000 million since January.
The company also enhanced capacity at existing facilities with Rs. 1,200 million invested in brownfield expansion at Sricity, India, and spent Rs. 4,800 million on supportive infrastructure including visi-coolers, glass bottles, pallets, and vehicles.
Varun Beverages remains focused on leveraging health trends in India’s beverage sector while broadening its international footprint, particularly in Africa, where currency strength and operational efficiencies have contributed to improved profitability.
As of the latest trading session, Varun Beverages’ shares were priced at Rs 521.55, up 1.83%, reflecting positive investor sentiment amid strategic growth initiatives.
READ MORE ON
