After QSR, Bhartias and Jaipurias to battle it out in soft drink space

The Jubilant Bhartia Group on Wednesday announced that it has signed an agreement to buy out 40 per cent in Coca-Cola’s local bottling unit Hindustan Coca-Cola Beverages, coming again into competition with the Jaipuria family, which is the bottler for PepsiCo, housed under Varun Beverages.

 

The Bhartias and the Jaipurias are already competing in the quick-service restaurant (QSR) space as both have known global brands in their portfolios.

 

The Bhartias’ listed entity Jubilant FoodWorks is currently the largest QSR chain in the country, with Domino’s Pizza. Jubilant FoodWorks also has other QSR brands under its umbrella like Popeye, donut brand Dunkin’, Hong’s Kitchen, and Coffy.

 

RJ Corp, chaired by business magnate Ravi Jaipuria, has a significant play in India’s consumer business landscape, with two listed companies — Varun Beverages and Devyani International.

 

Varun Beverages, currently the largest bottling partners for beverage and snacks major PepsiCo, had received the licensing agreement from PepsiCo through a group company for trademark and bottling in 1991.

 

Devyani international, also owned by RJ Corp, operates outlets of QSR chains KFC and Pizza Hut, and British coffee chain Costa Coffee in India.

 

In the September quarter, the company announced that it has strengthened its brand portfolio with the exclusive master franchise agreements with Tealive, a southeast Asian lifestyle tea brand; New York Fries, a Canadian QSR chain; and Sanook Kitchen, a Singapore-based brand specialising in Thai and Asian cuisine. 

 

The new brands will be launched and rolled out from April 2025 onwards, the company had stated.

 

On the store front, Devyani International closed the second quarter of the current financial year (Q2FY25) with 1,921 stores while Jubilant FoodWorks ended the quarter with 3,130 stores.

 

Even on the revenue front, Jubilant FoodWorks leads as it closed FY24 at Rs 5,654 crore while its competitor closed at Rs 3,556 crore.

 

However, on the aerated drinks bottling side, the Jaipuria family has a slight leg up. Varun Beverages closed calendar year 2023 (CY23) with revenues at Rs 16,043 crore while Hindustan Coca-Cola Beverages closed FY24 at Rs 14,022 crore.

 

Analysts and experts say that while there are synergies to its own business, the Jubilant Bhartia Group’s entry into the bottling space means both families are vying for a bigger piece of the Indian consumer's growing appetite, which is pushing the food and beverage space to grow in the country.

 

An analyst, who spoke on the condition of anonymity, said that Jubilant Bhartia gains as it gives it easy access to Coca-Cola products at all its QSR chains. “There is still some steam left in the Indian consumer space and a lot of business families are looking at ways to expand their presence or get a better foothold there,” the analyst said.

 

Dhanraj Bhagat, partner at Grant Thornton India LLP, said: “There is a lot of action in the food and beverage space. Many are looking for good opportunities in the space and are jumping to invest in assets with strong brand backing.”