The company’s board on Tuesday (August 25) approved the incorporation of a wholly-owned subsidiary, KIVA Spirits and Company Limited, to manufacture and sell ready-to-drink (RTD) alcoholic beverages and allied products, subject to regulatory approvals.
The move puts Varun Beverages into a new consumer category, with the company choosing to build the alcohol business through a separate subsidiary rather than its existing beverage operations.
KIVA Spirits is yet to be incorporated and will be wholly owned by Varun Beverages. It will have a proposed authorised share capital of ₹10 crore and paid-up equity capital of ₹9 crore, funded in cash by the parent company.
Former Diageo executive to lead alcohol business
Varun Beverages has appointed Prathmesh Mishra as chief executive and managing director of the proposed subsidiary.
Mishra brings more than three decades of experience in consumer businesses and most recently served as managing director for Korea and Japan at Diageo.
He previously held senior positions at Diageo India, including chief commercial officer and chief operating officer for the western region. Before Diageo, Mishra spent 14 years at Pernod Ricard India in various leadership roles.
Hiring an executive with extensive experience at Diageo and Pernod Ricard signals that Varun Beverages is building a dedicated management team for its push into alcohol rather than treating it merely as an extension of its existing soft-drinks business.
The company hasn’t disclosed which alcoholic beverages it plans to launch, when they could reach the market or the scale of investment planned beyond the initial capitalisation of the subsidiary.
Varun Beverages also expands in Tunisia
Separately, the board approved plans to set up a joint venture in Tunisia as the company continues to expand its beverage operations outside India.
The proposed company, to be called Varun Beverages Tunisia SA or another name approved by local authorities, will produce and distribute carbonated soft drinks, juices, water and dairy products.
The joint venture will have proposed share capital of 9 million Tunisian dinars. Varun Beverages will own 75%, while Tunisia-based Bevanda will hold the remaining 25%.
Unlike the KIVA Spirits venture, the Tunisia business will remain focused on Varun Beverages’ more familiar non-alcoholic beverage categories.
Varun Beverages is one of PepsiCo’s largest franchise bottlers outside the US and manufactures and distributes a range of beverages under PepsiCo-owned brands across its markets.
Shares of Varun Beverages closed 2.34% higher at ₹438 on Tuesday, gaining ₹10 during the session.
