Varun Beverages Limited, the world’s second-largest bottler of PepsiCo products and the largest outside the United States, is deepening its African presence with two major moves: the incorporation of a wholly owned subsidiary in Kenya and a strategic partnership with Carlsberg Breweries A/S to enter the continent’s alcoholic beverages market.
The company announced in its third-quarter 2025 financial statement that it had established Varun Food and Beverages (Kenya) Ltd, a subsidiary tasked with manufacturing, distributing, and selling beverages in East Africa.
The expansion aligns with the group’s broader strategy to tap into high-growth emerging markets, strengthen its distribution network, and diversify product lines across both non-alcoholic and alcoholic segments.
Chairman Ravi Jaipuria described Africa as a key growth driver for Varun Beverages, citing robust performance in existing markets such as South Africa, Zimbabwe, and Morocco.
“In line with our growth strategy, we are incorporating a wholly owned subsidiary in Kenya under Varun Beverages Limited to carry on the business of manufacturing, distribution, and selling of beverages,” Jaipuria said in a statement.
The Kenyan subsidiary will act as a production and distribution hub for the region, strengthening Varun’s footprint in East Africa, a region with one of the continent’s fastest-growing consumer markets.
Kenya’s beverage industry, valued at over $3 billion, has seen a surge in both soft drink and beer consumption driven by urbanisation and a youthful population.
Varun Beverages’ move into Kenya is expected to increase competition in the local beverage market, where players such as Coca-Cola Beverages Africa and East African Breweries Limited (EABL) currently dominate.
In a diversification push, Varun Beverages also revealed that some of its African subsidiaries would begin testing the beer market through an exclusive distribution agreement with Carlsberg Breweries A/S for the Carlsberg brand.
The partnership represents Varun’s first formal entry into alcoholic beverages, a significant step for the PepsiCo franchisee traditionally focused on soft drinks, bottled water, and juices.
The collaboration will enable Carlsberg to leverage Varun’s established distribution network across Africa, while Varun gains access to the growing alcoholic beverage sector, which is projected to exceed $64 billion in annual sales across Africa by 2030, according to Euromonitor data.
“These developments collectively reflect our continued commitment to broadening our product base and strengthening our presence across key growth markets,” Jaipuria added.
Varun Beverages reported steady consolidated sales growth of 2.4% during the third quarter of 2025, buoyed by a 9% expansion in international markets, even as domestic volumes in India were affected by prolonged monsoon rains.
The company’s international operations, spanning Africa, Asia, and Europe have emerged as a stabilising force amid India’s volatile consumption trends.
Performance in South Africa remained particularly strong, with management highlighting continued investment in capacity expansion and backward integration to improve operational efficiency.
Meanwhile, Varun’s snacks facility in Morocco has scaled to full production, and its Zimbabwe plant is nearing commissioning.
Jaipuria reaffirmed the group’s long-term confidence in Africa’s beverage industry, pointing to “sustained demand recovery and higher operational resilience” across key territories.
The launch of Varun Beverages Kenya is seen as a strategic anchor for the company’s broader African ambitions.
With Kenya serving as a major logistics hub for East Africa, the subsidiary is expected to facilitate access to neighbouring markets, including Uganda, Tanzania, Rwanda, and Ethiopia.
The investment also signals growing investor confidence in Kenya’s manufacturing sector, which the government has prioritised under its Bottom-Up Economic Transformation Agenda to boost exports and create jobs.
Varun Beverages has been progressively diversifying beyond traditional soft drinks into snacks and other fast-moving consumer categories. The company is also investing heavily in cold-chain infrastructure, distribution technology, and on-ground expansion to support long-term growth.
“Despite temporary headwinds in domestic markets, our international growth story remains strong,” Jaipuria said. “With rising per capita consumption and expanding distribution reach in semi-urban and rural areas, we see immense opportunity for sustained expansion.”
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