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Varun Beverages is making a serious push into alcoholic beverages. Yet, its stock fell 3% intraday after the announcement.
What’s happening: the company plans to enter the ready-to-drink (RTD) alcohol market through a new wholly owned subsidiary, KIVA Spirits, subject to approvals. It has also appointed former Diageo executive Prathmesh Mishra as CEO and MD.
Why now: the timing is key. In June, Varun renewed its bottling and trademark agreement with PepsiCo until 2049, extending it from 2039.
More importantly, PepsiCo removed a clause that had restricted Varun from doing business beyond PepsiCo products. That gives Varun greater freedom to enter new categories, and alcohol looks like one of its biggest bets yet.
So, why did the stock still fall: the 3% drop doesn’t appear to signal analyst concern. CLSA remains bullish, while Morgan Stanley has maintained its ‘Overweight’ rating.
The bigger issue is uncertainty. Investors are wondering how much will Varun spend? How will it enter the market? When will products launch? And how quickly could this new business start making money?
They are more focused on the cost, execution and payoff timeline.
The bigger picture: India is the world’s sixth-largest alcoholic beverage market by revenue, with annual sales of around 1.1 billion cases. Beer and IMFL (Indian Made Foreign Liquor) each account for roughly 400 million cases. IMARC estimates the market was worth $148.3 billion in 2025 and expects it to reach $176.2 billion by 2034.
For Varun, the alcohol move fits into a broader strategy: grow beyond PepsiCo, enter more beverage categories and expand into new markets.
Its recent moves include a CALPIS partnership with Japan’s Asahi Group and a Carlsberg beer distribution deal in select African markets.
And alcohol isn’t its only new bet. Varun is also setting up a joint venture in Tunisia to manufacture and distribute soft drinks, juices, water and dairy products.
IMARC
