Varun Beverages and PepsiCo Revise Licensing Deal
Varun Beverages Limited (VBL), the largest franchise bottler for PepsiCo outside the US, has updated its exclusive bottling appointment and trademark license agreement with PepsiCo and its affiliates in India, prolonging the partnership for an additional ten years.
According to the updated agreement, the duration of the Exclusive Bottling Appointment (EBA) has been prolonged until April 30, 2049. The earlier agreement was established to stay in effect until April 30, 2039.
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The updated terms eliminate a provision that had restricted VBL's activities exclusively to acting as a special purpose vehicle for PepsiCo-related operations. The filing states that this restriction has now been removed from the agreement.
In the first quarter of calendar year 2026, Varun Beverages reported impressive financial results, bolstered by demand in both domestic and international markets and an increasing inclination towards low- and no-sugar drinks.
Revenue generated from operations for the quarter was Rs 6,574.2 crore, reflecting an 18.1 percent rise from Rs 5,567 crore in the same period last year. Combined sales volume increased by 16.3 percent to 36.3 crore cases, with India achieving 14.4 percent growth and international operations advancing at a quicker rate of 21.4 percent.
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A significant consumer trend in the quarter was the increasing preference for healthier drink options. Company filings indicated that low- and no-sugar items accounted for almost 63 percent of total sales volume, showcasing evolving consumer preferences in various markets.
Chairman Ravi Jaipuria stated that the quarterly results were bolstered by "strong demand, disciplined execution, and ongoing advancements in various markets," noting that India persisted as a key growth driver supported by distribution growth, capacity enhancements, and targeted product strategies.
Varun Beverages has been expanding its footprint in Africa via a number of acquisitions. In October, Varun Beverages ventured into the alcoholic beverage sector by securing a distribution agreement with Carlsberg in Africa.
The team has secured a few agreements with PepsiCo in Africa. In 2024, Varun Beverages declared the complete takeover of the US group's bottling activities in Ghana and Tanzania. A year prior, the firm concurred to spend Rs13.2bn (approximately $158m at that time) for The Beverage Company (Bevco), obtaining PepsiCo franchise rights in South Africa, Lesotho, and Eswatini, as well as distribution rights in Namibia and Botswana.
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In 2025, Varun Beverages reported operational revenue of Rs222.25bn ($2.40bn), an increase of 8.5 percent compared to the previous year. EBITDA climbed 7.2 percent to Rs50.49 billion, whereas net profit following tax grew 16.2 percent to Rs30.62 billion.
In the initial quarter of this year, the company's operational revenue reached Rs65.74bn, reflecting an 18.1 percent increase compared to the equivalent period last year, while net profit after tax surged 20.1 percent year-over-year to Rs8.78 billion.