Varun Beverages Ltd. (VBL), one of PepsiCo’s largest franchise bottlers, is expanding beyond its traditional soft-drinks business by entering the ready-to-drink (RTD) alcoholic beverages segment in India. The company’s board on August 25 approved the incorporation of a wholly owned subsidiary, KIVA Spirits and Company Ltd., to operate in RTD alcoholic beverages and allied products, subject to regulatory approvals.
The company has also appointed Prathmesh Mishra, a former Diageo executive, as chief executive officer and managing director of the proposed subsidiary. The move gives VBL an experienced alco-beverage executive to lead its diversification into a market that includes beer, spirits and emerging RTD formats. The company had already signaled its interest in alcoholic beverages in 2025, when it amended its corporate objectives to include the manufacture and distribution of a broad range of alcoholic products in India and overseas.
Varun Beverages Sets Up New Alcohol Subsidiary
The proposed KIVA Spirits and Company Ltd. will be fully owned by Varun Beverages and is intended to focus on RTD alcoholic beverages and related products. The subsidiary has a proposed authorized share capital of ₹10 crore and paid-up equity share capital of ₹9 crore.
The incorporation itself remains subject to prior approval from the Ministry of Corporate Affairs. This means the company has approved the strategic move and structure, but commercial operations will depend on the required regulatory permissions.
Key Details Of The New Business
| Particular | Details |
|---|---|
| Parent company | Varun Beverages Ltd. |
| Proposed subsidiary | KIVA Spirits and Company Ltd. |
| Ownership | 100% by Varun Beverages |
| Authorized share capital | ₹10 crore |
| Proposed paid-up equity capital | ₹9 crore |
| Target segment | Ready-to-drink alcoholic beverages |
| Additional focus | Alcoholic beverages and allied products |
| CEO & MD | Prathmesh Mishra |
| Board approval | August 25, 2026 |
| Regulatory status | Subject to required approvals |
The relatively modest initial paid-up capital suggests that the ₹9 crore figure represents the capitalization of the new corporate entity rather than the total investment VBL may eventually make in manufacturing, brands, distribution or market development.
Why Prathmesh Mishra’s Appointment Matters
VBL’s choice of Prathmesh Mishra is significant because the company is entering a category where regulatory knowledge, distribution relationships and brand-building expertise are particularly important.
Mishra most recently served as managing director and CEO for Korea and Japan at Diageo, where he was responsible for business growth and strategic leadership across the two markets. Before that, he spent seven years as chief commercial officer at Diageo India and three years as chief operating officer-West.
His experience extends beyond Diageo. Mishra spent several years with Pernod Ricard India in senior roles and began his career in 1993 as a management trainee at Inertia Industries before later working with Mohan Meakins.
Mishra’s Career At A Glance
| Career Stage | Role / Organization |
|---|---|
| 1993 | Management trainee, Inertia Industries |
| Later | Mohan Meakins |
| 2000 onward | Pernod Ricard India |
| Pernod Ricard | Multiple regional and national leadership roles |
| Diageo India | COO-West |
| Diageo India | Chief Commercial Officer |
| Diageo | MD & CEO, Korea and Japan |
| New role | CEO & MD, KIVA Spirits and Company |
Mishra also served as chairman of Royal Challengers Bangalore, giving him experience in building a consumer-facing sports brand.
VBL Had Already Signaled Its Alcohol Foray
The August 25 announcement is not VBL’s first move into alcoholic beverages.
In October 2025, the company said it saw an opportunity in RTD and alcoholic beverages and amended the objects of its Memorandum of Association to cover manufacturing, processing, brewing, distilling, bottling, packaging, marketing and distribution of alcoholic beverages.
The categories listed by the company included beer, wine, liquor, brandy, whisky, gin, rum and vodka, in India and abroad.
That earlier announcement established the strategic framework. The creation of KIVA Spirits now represents a more concrete step toward executing the plan within India.
VBL’s Alcohol Strategy So Far
October 2025
↓
Alcoholic beverages added to business objectives
↓
Carlsberg distribution partnership in Africa
↓
Assessment of RTD and premium alcohol opportunity
↓
August 2026
↓
KIVA Spirits subsidiary approved
↓
Ex-Diageo executive Prathmesh Mishra appointed
↓
India RTD alcoholic beverage business
The progression suggests that VBL has been developing its alco-beverage strategy for several quarters rather than making an entirely sudden diversification decision.
Carlsberg Partnership Gave VBL An Earlier Entry Point
VBL had already gained exposure to the alcoholic-beverage category through its African operations.
In October 2025, certain African subsidiaries of VBL entered into an exclusive distribution agreement with Carlsberg Breweries to test-market the Carlsberg brand in their territories. The company said the partnership was part of its response to growing popularity of RTD and other alcoholic beverages.
This gives VBL a potentially useful learning platform outside India while it develops its own domestic strategy.
| Alcohol Initiative | Geography | Nature |
|---|---|---|
| Carlsberg partnership | Selected African markets | Exclusive distribution / test marketing |
| KIVA Spirits | India | Wholly owned subsidiary |
| RTD strategy | India and potentially overseas | New product and category expansion |
| Alcohol business objectives | India and abroad | Beer, wine and spirits included |
The company has therefore been pursuing both partnership-led and subsidiary-led approaches to the category.
Why RTD Alcohol Is Attractive
Ready-to-drink alcoholic beverages represent an adjacent category to VBL’s existing capabilities.
Unlike traditional spirits that are commonly sold as bottles for home consumption or served through bars and restaurants, RTD products can include pre-mixed alcoholic beverages designed for convenience and immediate consumption. The category can overlap with changing consumer preferences around convenience, portability and flavor variety.
For VBL, the attraction is also operational. The company already has experience in beverage manufacturing, bottling, distribution and cold-chain infrastructure through its non-alcoholic portfolio.
However, the company will need to build capabilities specific to alcohol, including state-level licensing, excise compliance, age-gated distribution and alcohol-specific brand positioning.
Existing Strengths Vs. New Requirements
| VBL’s Existing Capability | Alcohol Business Requirement |
|---|---|
| Beverage manufacturing | Alcohol-compatible production capabilities |
| Bottling and packaging | RTD-specific packaging |
| Large distribution network | State-specific alcohol distribution |
| Cold-chain infrastructure | Appropriate storage and distribution |
| Consumer marketing | Alcohol advertising and regulatory compliance |
| Beverage portfolio management | Alcohol brand development |
| International operations | Local liquor regulations |
The overlap creates an opportunity, but it does not eliminate the operational and regulatory differences between soft drinks and alcoholic beverages.
PepsiCo Relationship And Diversification
VBL’s move into alcohol also follows a significant change in its relationship with PepsiCo.
The company recently entered into a fresh agreement with PepsiCo that removed restrictions on its lines of business, according to reports cited by Business Standard. This has allowed VBL greater flexibility to diversify into adjacent beverage and consumer categories.
That flexibility is strategically important because VBL has historically been closely associated with PepsiCo’s beverage portfolio.
The company’s expansion into alcohol, therefore, is part of a wider effort to develop revenue streams outside its traditional PepsiCo franchise operations.
Earlier reports have also highlighted VBL’s interest in categories including dairy, energy drinks, snacks and other beverages.
VBL Is Building A Broader Beverage Portfolio
The company’s diversification strategy can now be viewed across several categories.
VARUN BEVERAGES
│
├── Carbonated Soft Drinks
├── Packaged Drinking Water
├── Non-Carbonated Beverages
├── Energy / Emerging Beverage Categories
├── Dairy Opportunities
├── Alcoholic Beverages
│ └── RTD + Other Alcohol Formats
└── International Beverage Distribution
The strategy could reduce VBL’s dependence on a relatively concentrated beverage portfolio over time.
However, diversification also increases execution complexity. Each new category requires different products, suppliers, regulatory processes and marketing strategies.
What The Move Means For VBL
The alcohol entry gives VBL access to a large consumer category that has historically been dominated by specialist alcoholic-beverage companies.
The appointment of a senior executive from Diageo indicates that VBL recognizes the need for category-specific expertise. Mishra’s experience spans both commercial and operational leadership in India and international markets, which could be useful as the company develops its initial portfolio.
The immediate financial contribution is unlikely to be significant because the subsidiary has only just been approved and still requires regulatory clearances. VBL has not disclosed a revenue target, product launch schedule or manufacturing investment for KIVA Spirits.
Therefore, investors are likely to evaluate the move initially as a strategic diversification rather than an immediate earnings driver.
Tunisia Joint Venture Adds Another Expansion Layer
VBL’s August 25 board decisions also included approval for a joint venture in Tunisia to manufacture and distribute beverages.
The proposed entity, Varun Beverages Tunisia SA or another regulator-approved name, will have a proposed share capital of 9 million Tunisian dinars. VBL will hold 75%, while Bevanda Tunisia will hold the remaining 25%.
The venture will cover carbonated soft drinks, juices, water and dairy products.
| Tunisia JV Detail | Proposed Structure |
|---|---|
| VBL ownership | 75% |
| Bevanda Tunisia ownership | 25% |
| Proposed share capital | TND 9 million |
| Products | Soft drinks, juices, water, dairy |
| Status | Subject to required approvals |
Taken together with the KIVA Spirits announcement, the developments show VBL continuing to expand both geographically and across product categories.
Competitive Implications For India’s Beverage Industry
VBL’s entry could increase competition in India’s RTD alcoholic-beverage market, particularly if the company leverages its established beverage distribution infrastructure.
The challenge will be developing brands that can compete with established alcohol companies. Distribution strength can help put products in front of consumers, but alcohol purchases are strongly influenced by brand identity, taste, pricing, availability and state-level regulations.
VBL will also need to determine whether it wants to manufacture its own products, enter partnerships, acquire brands or use a combination of these strategies.
The appointment of Mishra suggests that the company is placing category expertise at the center of its initial execution strategy.
The Bigger Picture
Varun Beverages’ entry into alcohol marks a significant evolution for a company historically identified with PepsiCo’s non-alcoholic beverage portfolio. The formation of KIVA Spirits, combined with the appointment of a former Diageo senior executive, gives the company a dedicated structure and experienced leadership to pursue RTD alcoholic beverages in India.
The move also fits a broader diversification strategy that has already included international alcoholic-beverage distribution through Carlsberg in Africa and expansion into other beverage categories. For VBL, the opportunity is to use its manufacturing and distribution strengths in new markets; the challenge will be adapting those capabilities to the substantially different regulatory and competitive environment of alcohol.
Looking Ahead
The immediate milestones will be incorporation of KIVA Spirits, regulatory approvals and decisions on the company’s first products, manufacturing model and distribution strategy. The ₹9 crore proposed paid-up capital establishes the subsidiary, but VBL has not yet disclosed the scale of investment it may ultimately make in brands, production capacity or market expansion. The appointment of Prathmesh Mishra suggests that the company intends to build the new business with dedicated alco-beverage expertise rather than simply add alcohol products to its existing operating structure.
Over the longer term, the success of VBL’s alcohol strategy will depend on whether it can convert its distribution and beverage-management capabilities into competitive alcoholic brands. Its existing scale provides an important starting point, but alcohol is a highly regulated, state-specific market with entrenched competitors. If VBL executes effectively, RTD alcohol could become another growth engine alongside its core soft-drink business; if not, the diversification could remain a relatively small experiment within a much larger beverage portfolio.
Get the day’s top stories in your inbox
One concise email. No spam, unsubscribe anytime.
