Varun Beverages Reports 55% of H1 2025 Sales from Low- and No-Sugar Beverages; Focuses on Global Expansion

In a sign of changing consumer preferences, Indian beverage major Varun Beverages Ltd. (VBL), the largest bottling partner of PepsiCo in India, has reported that over half of its domestic beverage sales in the first half of 2025 came from low-sugar or no-sugar drinks.

According to company data, 55% of total consolidated sales volumes in H1 CY2025—amounting to 386.1 million cases—were contributed by health-conscious offerings like Pepsi Black, no-sugar 7 Up, and Gatorade Zero. The total number of cases sold during this period stood at 702 million.

The trend reflects a steady increase over the last two years. In CY2024, low- and no-sugar products made up 44.4% of sales, up from 40.2% in CY2023.

“Every product will gradually transition to mid-calorie and zero-sugar categories. The consumer response so far has been very positive,” said Ravi Jaipuria, Chairman of Varun Beverages, underscoring the company’s intent to align with evolving health trends.

Soft Drink Volumes and Market Dynamics

In Q2 CY2025, VBL sold 390 million unit cases, with carbonated soft drinks continuing to dominate the portfolio at 75%, followed by packaged drinking water (18%) and non-carbonated beverages (7%). These category shares remained consistent with the Q1 CY2025 mix.

However, despite the strong performance of health-focused products, domestic sales volumes in India saw a year-on-year dip of 7.1%, prompting the company to accelerate its international diversification strategy.

Global Footprint: Snack Business, New Plants in Africa

To counter sluggish domestic growth, VBL intensified its international operations—reporting a 15.1% increase in overseas volumes, led by 16.1% growth in South Africa.

In a significant strategic shift, Varun Beverages has forayed into the snack segment through its subsidiary in Morocco, which began commercial production of PepsiCo’s snack brand Cheetos this quarter.

“This is a critical milestone for us as we diversify into the high-potential snack category, strengthening our global presence and complementing our beverage business,” said Jaipuria.

The company also invested Rs 4,500 million across international markets in the last quarter, including setting up a new soft drink PET line in the Democratic Republic of Congo, a CAN production line in Durban (South Africa), and snack manufacturing units in Morocco.

South African Expansion and Market Share Gains

VBL is actively investing in South Africa, with plans to procure land adjoining its Boksburg facility. The company awaits regulatory approval from the Competition Commission of South Africa for this land acquisition.

“We’re enhancing capacity and strengthening backward integration in South Africa. We’ve recently added a can line at our Durban unit to support future growth,” Jaipuria added.

In Zambia, VBL has increased its equity stake from 90% to 95%, aiming to further solidify its dominant position in the local soft drink market. “Strong currency and efficient backward integration have led to improved profitability across our African subsidiaries,” the chairman noted.

Domestic Expansion: Four New Plants Commissioned

Back home in India, Varun Beverages commissioned four new greenfield production units in Prayagraj (Uttar Pradesh), Damtal (Himachal Pradesh), Buxar (Bihar), and Mendipathar (Meghalaya). These facilities collectively add 10 new carbonated beverage lines, 6 lines for juice and dairy products, and 2 for bottled water.

Out of a total capital expenditure of Rs 25,000 million since January, Rs 14,500 million was invested in building these four new plants. Additionally, the company spent Rs 1,200 million on brownfield expansion at its Sricity facility and Rs 4,800 million on logistics and retail infrastructure including visi-coolers, vehicles, and packaging equipment.