Cheetos For The World: Varun Beverages To Take Snack Production Global

Varun Beverages delivered a resilient second-quarter performance, highlighted by Chairman Ravi Kant Jaipuria during the second quarter earnings conference call. The focus of the company is on international expansion and diversification.

The company has commenced commercial production of Cheetos, a PepsiCo snack product, in Morocco. This move expands the company beyond its core beverage portfolio and capitalise on the high-potential snack category.

Addressing the second quarter results, Jaipuria acknowledged the domestic challenge, which led to a 3% decline in consolidated sales volume. However, he emphasised that the company "could keep our realisations per case and Ebitda margins intact," leading to a positive net profit.

This resilience, he noted, shows the company's ability to "successfully navigate such challenges in the past, and... emerge stronger."

The international segment was a key driver of growth for Varun Beverages, supported by a strong currency movement in international markets. In South Africa, the company is actively building its presence, with a new can line in Durban. The company is also waiting regulatory approval for a land parcel purchase in Boksburg for capacity enhancement, as per the concall.

The company has also strengthened its subsidiaries in Zambia, the Democratic Republic of Congo, and South Africa through equity infusions.

Looking ahead, Jaipuria said the company is "well-positioned to capture emerging opportunities and drive sustainable long-term value creation" through capacities, an expanding product portfolio, and its focused distribution network.