New Delhi-based multinational Varun Beverages says its acquisition of South African entity BevCo and its subsidiaries, valued at close to R3-billion, is set to expand its African footprint and bring global expertise to a market characterised by growing consumer sophistication and demand for variety.
BevCo is a bottler of all PepsiCo branded non-alcoholic beverages in South Africa.
BevCo CEO Pieter Spies says the strategic move underscores the significance of international investment in bolstering local brands, driving innovation and, ultimately, elevating consumer experiences.
He notes that, from an economic standpoint, the acquisition promises substantial benefits in terms of job creation and stability in the beverage sector that can potentially have ripple effects across the entire supply chain.
“Varun’s commitment to investing in the local market will likely lead to an expansion in production capabilities and distribution networks, meaning a larger workforce will potentially be required. By expanding its footprint in South Africa, Varun is not only creating job opportunities but also fuelling economic development and prosperity within the region.
“At the heart of this acquisition lies the promise of creating a powerhouse of global brands. By integrating BevCo's portfolio with Varun's Pepsi portfolio focus, the market will certainly see the emergence of an unparalleled array of beverages that cater to varied tastes and preferences,” says Spies.
He posits that the injection of competition into the South African beverage market is expected to drive innovation.
BevCo’s local brands, including Refreshhh, Reboost, Coo-ee and JIVE, are expected to benefit from increased visibility following the acquisition.
Further, given Varun’s global presence, BevCo’s brands will have the opportunity to tap into wider markets, expand their distribution networks and access crucial resources for research and development.
Moreover, with greater scale and resources, Spies says, the company has the opportunity to enhance efficiency and potentially drive down costs, making products more affordable without compromising on quality.
“For a price-sensitive market like South Africa, affordability remains a crucial factor in consumer choices and brand loyalty.”