PEPSICO AND VARUN BEVERAGES IN TALKS TO BRING ALCOHOLIC RTD DRINKS TO INDIA

PepsiCo and Varun Beverages Ltd are in early talks to introduce alcoholic ready-to-drink (RTD) beverages in India, marking PepsiCo’s potential entry into the country’s alcohol segment. The move would expand their three-decade partnership and tap into India’s fast-growing RTD market driven by young, urban, and lifestyle-conscious consumers.  

In what could mark a bold new chapter for one of the world’s biggest beverage partnerships, PepsiCo and Varun Beverages Limited (VBL) are reportedly in early discussions to introduce alcoholic ready-to-drink (RTD) beverages in India — a move that would represent PepsiCo’s first foray into the country’s alcoholic beverage segment.

According to industry sources, the discussions are still in preliminary stages, but both companies are exploring ways to tap into India’s rapidly expanding RTD alcohol market, which has seen strong double-digit growth over the past few years. The category, once considered niche, is now attracting global giants seeking to capture the attention of young, urban consumers looking for convenient, lower-alcohol drink options.

For PepsiCo, known globally for brands such as Pepsi, Mountain Dew, and 7UP, the move would mark a strategic shift — signaling a willingness to diversify its beverage portfolio in one of the world’s fastest-growing consumer markets. The company has already entered the alcoholic RTD space internationally, launching products like Hard MTN Dew in the U.S. through partnerships, and analysts believe India could be a natural next step.

Varun Beverages Limited, PepsiCo’s largest bottling and distribution partner outside the United States, would play a crucial role in the venture. With its extensive manufacturing, packaging, and distribution network across India, VBL is well-positioned to manage the operational and logistical aspects of such a launch.

A senior industry executive familiar with the discussions described the move as “a natural evolution” of the long-standing PepsiCo-VBL partnership. “With changing consumer preferences and a growing appetite for innovative beverages, both companies see significant potential in the premium RTD segment,” the executive said.

The collaboration could see the partners leveraging PepsiCo’s global expertise in product development and branding, while VBL would focus on local execution and market penetration. Analysts note that the companies are likely to adopt a cautious, phased approach, starting with pilot launches in urban centers where RTD consumption is rising sharply.

India’s alcoholic beverage landscape has evolved dramatically in recent years, driven by shifting cultural attitudes and the growing influence of millennial and Gen Z consumers. The RTD category — which includes pre-mixed cocktails, hard seltzers, and flavored alcoholic drinks — is expected to grow at a compound annual rate of over 12% in the next five years, according to industry estimates.

For global beverage majors, the segment offers a lucrative intersection of convenience, lifestyle, and innovation. Companies like Diageo, Bacardi, and AB InBev have already expanded their RTD portfolios in India, while domestic players have launched locally inspired blends to capture the evolving palate of Indian consumers.

PepsiCo’s potential entry would, however, come with its own set of challenges. Alcohol regulations in India vary across states, and marketing restrictions on alcoholic products could pose hurdles. Yet, the strength of the PepsiCo-VBL alliance — spanning more than three decades — gives the partnership a strong foundation to navigate such complexities.

Varun Beverages, which bottles and distributes PepsiCo’s beverages in India and several international markets, has been one of the key growth drivers for PepsiCo’s South Asia operations. The company’s extensive retail network and local market expertise could give PepsiCo a strategic advantage as it explores this new segment.

Market watchers view this development as a sign of PepsiCo’s broader global strategy to diversify its beverage offerings and align with evolving consumer preferences. As health-conscious consumers shift away from high-sugar soft drinks, and younger demographics seek lighter alcoholic alternatives, RTD beverages sit at the sweet spot of refreshment and recreation.

While neither PepsiCo nor VBL has issued an official statement, the mere prospect of their entry into the segment has already sparked interest among analysts and investors. The move could potentially reshape the competitive landscape of India’s beverage market — one that’s increasingly blending traditional categories and reimagining how India drinks.

If the discussions move forward, the partnership would not only extend PepsiCo’s global RTD ambitions but also reaffirm VBL’s role as a strategic growth engine. For India’s beverage consumers, it could mean a taste of global innovation — served conveniently, and perhaps, with a little fizz.