New Delhi, March 9 The Indian soft drink industry, which was severely impacted in 2025, is well-positioned for a healthy recovery this year, according to Varun Beverages, the leading beverage bottler of PepsiCo, in its latest annual report.
Furthermore, 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, and sports and energy drinks are gaining 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.
VBL stated that factors such as a young demographic, rising disposable income, and increasing urbanization will help the industry grow.
"Looking ahead, the Indian soft drink industry remains well-positioned for a healthy recovery, with a stronger season on the horizon, supported by low per-capita consumption, favorable demographics, and sustained investments in manufacturing capacity, distribution reach, and cold-chain infrastructure," VBL said.
As weather patterns normalize, 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 favorable long-term fundamentals such as a young population, rising disposable incomes, and increasing urbanization, 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.
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, favorable 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.