Varun Beverages bets on Africa

Holding on

- Manyi Agarwal

Varun Beverages Ltd (VBL)’s acquisition of South Africa-based Twizza (Pty) is less about shoring up near-term earnings and more about extending its growth runway beyond India.

While the domestic business is resilient, stiff competition creates challenges. Africa offers scale, even if payback is slower.

Twizza manufactures and distributes nonalcoholic beverages and operates in a mature yet sizeable ready-to-drink market, which is about 40% India’s volume. “Though the market is mature, we are confident of a market share-driven double-digit volume growth in the geography, basis VBL’s strong track record for turnarounds in Zimbabwe and Nepal (+50% share),” said Emkay Global Financial Services on 22 December.