Indian soft drinks industry well-positioned for healthy recovery, non-fizz drinks gain traction: VBL

New Delhi, Mar 9 (PTI) The Indian soft drinks industry, which was badly hit in 2025, is well-positioned for a healthy recovery this year, Varun Beverages, leading bottler of beverage major PepsiCo, has said in its latest annual report.

Moreover, the industry continues to see a gradual "diversification of consumption" with carbonated soft drinks remaining the largest category, while non-carbonated beverages, juice-based drinks, sports and energy drinks continue to gain traction, it said.

Brands are expanding their portfolios with low- and no-sugar options, juice-based functional beverages, and differentiated offerings, enabling them to cater to evolving consumer preferences.

"The growing focus on health is further driving innovation in organic and natural ingredient-based drinks, supporting sustained category relevance and growth," it said.

These segments are being supported by evolving consumer preferences, broader product portfolios, and improved availability across retail channels, as brands expand their offerings to cater to a wider range of consumption occasions, Varun Beverages Ltd (VBL) said.

Over the industry growth, VBL said it will be helped by factors including young demographics, rising disposable income and growing urbanisation.

"Looking ahead, the Indian soft drinks industry remains well-positioned for a healthy recovery, with a stronger season on the horizon, supported by low per-capita consumption, favourable demographics, and sustained investments in manufacturing capacity, distribution reach, and cold-chain infrastructure," VBL said.

As weather patterns normalise, the sector is expected to benefit from stronger on-ground execution, deeper market penetration across urban and rural markets, and continued innovation across products and formats.

"While the sector continues to be supported by favourable long-term fundamentals such as a young population, rising disposable incomes, and increasing urbanisation, domestic demand during the year remained subdued due to weather-related disruptions," it said.

Despite these transient challenges, the underlying structure of the market remains intact. Expansion of retail reach, improved electrification, and investments in cold-chain infrastructure, strengthening product availability, and on-ground execution are helping growth.

While addressing shareholders, VBL's Promoter & Non-Executive Chairman Ravi Jaipuria said the company remains confident of the long-term growth potential of the beverage industry in India and across its international markets.

"Low per capita consumption, favourable demographics, expanding distribution infrastructure, and increasing penetration across semi-urban and rural markets continue to provide a strong foundation for growth," he said.

The company will have a "steadfast focus" on operational efficiency, disciplined capital allocation, and thoughtful expansion, which will continue to serve as strategic levers for sustained growth and long-term value creation. PTI KRH DRR