Varun Beverages plans to buy Pepsi’s bottling distribution operations in South & West India.
Published Date | 2019 January 31
Varun Beverage’s tie-up with PepsiCo for bottling distribution Franchise in South and West India will push the India Soft Drink market.India: Diversified group RJ Corp-owned Varun Beverages (VBL) is set to acquire PepsiCo’s company-owned bottling, sales, and distribution operations with an investment of INR 2,400- INR 2,700 Crore in South and West India for its carbonated drinks business. VBL who is already the franchise partner for PepsiCo’s bottling operations in the North and East and accounts for over 51% of its sales volume in India will now also have national franchise ownership of the New York-based PepsiCo’s India bottling operations. The business is all about 130 million cases of carbonated soft drinks and water. PepsiCo will continue to use the brand name and will sell concentrates to franchisees where the sales and distribution will only be operated by the franchisees. RJ Corp which holds for $1.6-billion, one of the PepsiCo’s top three bottlers globally, has been associated with the beverage and snack maker since last three decades. The businesses includes franchisee operations for Yum Restaurants-owned Pizza Hut, KFC, and Coca-Cola-owned coffee chain Costa Coffee — both are operated under RJ Corp’s other group company Devyani International (DIL). According to BlueWeave Consulting, The Indian beverage industry is booming and so is drink technology in India because of the availability of new products with unique flavors, less sugar, low calories, and natural sweeteners is one of the key trends providing an up thrust to the market. The multiple reasons behind the growth are economic growth and social change on the Indian subcontinent is causing the beverage, dairy and liquid food industry to boom. Today all beverage sectors are growing at double-digit rates, which will also benefit the drink technology in India. Also, the Indian markets for soft drinks and alcoholic beverages, such as beer, wine, and spirits, are developing extremely well. The other factors are the trade fair for the beverage, dairy and liquid food industries have grown rapidly and will now be held yearly. The government has also taken initiative to promote the soft drink market. In addition, the advertisement campaign, creative ads on digital media is also adding the awareness among consumers. Some other majorly contributed factors are increased urbanization, rising disposable income and growing health consciousness among the Indian youth has increased the demand for carbonated drinks. At the same time, long and erratic working hours as well as the trends of social gatherings are driving Indian consumers towards the consumption of energy drinks. According to BlueWeave Consulting upcoming report, Tilted-“India Soft Drinks Market, By Product (Carbonated Drinks, Packaged Water, Iced/RTD Tea Drinks, Fruit Beverages, Energy Drinks) By Region (North, South, East, West), Size and Forecasts, 2018 – 2025”- India Soft Drink market is expected to witness rapid growth owing to growing need for premium drinks and increasing population over the forecast period. These beverages are packed in cans or bottles and are readily available to consumers and are also available with new feature products with unique flavors, less sugar, low calories, and natural sweeteners are helping the market in India to gain significant momentum.