Bottlers of PepsiCo and Coca-Cola are spending big bucks to ramp up manufacturing capacities in the country with the beverage industry clocking scorching sales this summer.
Leading bottler of PepsiCo, Varun Beverages, is set to invest about ₹1,200 crore to expand its production capacity in India till next year. At the same time, Coca-Cola India’s bottlers are in the process of investing nearly $1 billion to expand beverage capacity by 30-40 per cent till March 2023.
₹1,200-cr capacity expansion
At an earnings’ call, Ravi Jaipuria, Chairman, Varun Beverages Ltd, said the company is set to invest about ₹1,200 crore till 2023-end. This will be invested in setting up two large greenfield plants in Madhya Pradesh and Rajasthan, besides enhancing capacity at its newly-constructed Bihar plant. “This will help increase our total capacity by 30 per cent in India,” he added.
Varun Beverages has franchise agreements with PepsiCo for 27 States and seven Union Territories besides other international territories. Total sales volumes in the June quarter were up 96.9 per cent y-o-y at 300 million cases as against 152 million cases in the year-ago period, on account of strong demand during the peak season, said the company.
The early onset of summer, scorching temperatures and strong recovery of the out-of-home channel helped the industry witness strong sales during the quarter. This comes after two challenging years hit by the pandemic.
$1-b investment
Recently, Coca-Cola stated that the second quarter (ended July 1) was its best-ever in terms of volumes in India. Last week, Sanket Ray, President-India and South West Asia, Coca-Cola, stated that the company’s bottling partners are increasing production capacity by 30-40 per cent with commitments to invest about $1 billion in India till March 2023.
“This year, already 14-16 new lines have been added and next year, too, a large number of lines will be added. So overall, this will increase the production capacity of our bottlers by 30-40 per cent in the country,” Ray added.