Varun Beverages expands into alcoholic drinks with Carlsberg partnership, sets up operations in Kenya.

Varun Beverages Ltd (VBL), PepsiCo’s largest franchise bottler outside the United States, has announced a strategic expansion plan that includes venturing into the alcoholic beverage segment in Africa and setting up new operations in Kenya.

As part of the initiative, VBL has signed an exclusive distribution agreement with Carlsberg Breweries A/S for select African markets. Through this partnership, VBL’s African subsidiaries will test-market Carlsberg beer across their respective territories. The move aligns with the increasing global demand for Ready-to-Drink (RTD) and alcoholic beverages.

The company said the partnership represents a significant step toward diversifying its portfolio beyond soft drinks. It aims to introduce a range of alcoholic products, including beer, wine, whisky, rum, and vodka, across India and international markets. In addition to expanding its product range, VBL is strengthening its geographical footprint with the establishment of a wholly owned subsidiary in Kenya, Varun Food and Beverages (Kenya) Limited. The new entity will manufacture and distribute beverages locally.

The move underscores the company’s long-term commitment to the African market, where it already operates in countries such as Zimbabwe, Zambia, and Morocco. Kenya’s growing beverage sector and strategic market position are expected to provide new growth opportunities for the company.

In India, VBL has announced the formation of a new joint venture, White Peak Refrigeration Private Limited, in collaboration with Everest International Holdings Limited. The venture will focus on producing visi-coolers and refrigeration equipment, aimed at strengthening the company’s cold chain and retail infrastructure.

In its third-quarter (Q3 2025) financial results, VBL reported a 19.62% increase in net profit to Rs 741.19 crore (US$84.1M), up from Rs. 619.61 crore (US$ 70.3 Million) in the same quarter of the previous year. Revenue from operations rose 1.9% year-on-year to Rs. 48,966.5 million compared to Rs 48,046.8 million in Q3 2024.

Consolidated sales volume grew by 2.4% to 273.8 million cases during the quarter, despite widespread rainfall across India. International volumes rose 9%, driven largely by robust performance in South Africa, while domestic volumes remained stable.

Carbonated soft drinks accounted for 74% of total sales, non-carbonated beverages for 4%, and packaged water for 22%. The company’s EBITDA stood at Rs 11,473.8 million (US$130.12M), slightly lower than Rs 11,511.2 million (US$130.54M) a year earlier, while gross margins improved by 119 basis points to 56.7%, supported by cost efficiency and an increased water mix in global operations.

Varun Beverages plan to venture the Kenyan market has come at a crucial juncture, when arch rival Coca-Cola Beverages Africa (CCBA) – the largest bottler of Coca-Cola in Africa has ventured into Kenya in strategic partnership with Coca-Cola Bottling Company (ECCBC), and Coca-Cola Hellenic Bottling Company (HBC) have been overlooking the Upper-Tana and Mid-Galana basins, introducing agroforestry systems to support Nairobi’s primary water reservoirs and improve rainwater harvesting in groundwater recharge zones for Mzima Springs, which is a part of the broader Africa Water Stewardship Initiative launched by the Coca-Cola Africa Operating Unit in partnership with its three authorised bottlers   

Implemented in collaboration with The Nature Conservancy (TNC) and community-based organizations, the initiative aims to replenish water supplies, restore riparian zones by planting thousands of indigenous trees, and enhance water quality. It also seeks to promote sustainable land management practices by rehabilitating degraded farmlands and rangelands, constructing hundreds of farm ponds, and planting fruit orchards to improve food security and create alternative livelihoods.

The Africa-wide initiative represents nearly US$25 million in commitments to address water challenges across 20 countries by 2030. The initiative will be coordinated by the Global Water Challenge (GWC) and implemented with partners such as TNC, the International Union for Conservation of Nature (IUCN), and the World Wildlife Fund (WWF).

“As we face growing global water insecurity, with demand exceeding supply in many regions, including Africa, Coca-Cola is committed to accelerating efforts to address water stress, protect local resources, and strengthen community climate resilience”. said Alfred Olajide, Vice President of Franchise Operations, East and Central Africa at Coca-Cola Central, East and West Africa Limited.

James Bowmaker, General Manager of Coca-Cola Beverages Kenya (CCBK), highlighted the company’s duty to safeguard water resources in its operating regions.

TNC Kenya Country Director Ruth Masha emphasised the importance of collaboration with grassroots partners such as the Upper Tana-Nairobi Water Fund Trust, Green Generation Initiative, and Jumuiya Water Fund in ensuring sustainable water management.

CCBA, Coca-Cola’s largest bottler in Africa and the eighth largest globally by revenue, accounts for more than 40% of the company’s ready-to-drink beverages sold on the continent.

Team Maverick