ZIPPING DOWN THE BROAD, tree-lined avenues of Lutyens’ Delhi — shaded by sacred fig, banyan, and jamun trees — it’s easy to mistake Jaipuria House on the A.P.J. Abdul Kalam Road for just another government bungalow, the kind allotted to ministers or senior bureaucrats. But the modest gates open to a driveway leading to a lush lawn where stone-sculpted busts of Gautam Buddha and other artefacts play hide and seek among trees. Alongside the lawn is the stately residence and a glass house of the Jaipuria family, promoters of Varun Beverages Ltd, one of PepsiCo’s largest global franchisees outside the U.S., having revenues to the tune of ₹20,008 crore.

As you walk into the bungalow’s living room, you’re greeted by a more eclectic collection of artefacts inspired by African and Southeast Asian art, and awe-inspiring paintings adorned wall to wall. Varun Jaipuria, promoter, executive vice chairman and whole-time director of Varun Beverages, tells Fortune India with a smile that while sketching, cooking, and sports are among his personal hobbies, art is a shared passion that runs deep in the family. “Art is a good investment, too,” he quips

But Jaipuria finds real euphoria in spearheading his company to new heights. His vision — create “long-term, sustainable value for the company, investors, and people”. “I am the third generation [entrepreneur], and a very hardcore operator. But I need to ensure that by the time my innings is done, I have structured the company so well that for the next 100 years, my systems and processes are so strong that they are taken care of,” he says.

Jaipuria banks heavily on his “great” team to achieve this. He stresses on setting a clear vision and aligning synergies to work towards that common vision or goal. That said, he is one of the corner office occupants of India Inc. who is equally concerned about work-life balance. Jaipuria believes in the power of family time. That’s why office hours at Varun Beverages begin at about 8 am and end early evening. “We believe in long-term associations. I believe that one needs time with family to get rejuvenated,” he emphasises.

For long-term value creation, according to Jaipuria, there are three key buckets: culture, sustainability, and growth. “The cultural bit is all about building world-class systems in a fast-moving world. And we have done a lot of work around sustainability since I took over the company in 2022,” Jaipuria says, adding that growth is something he is not worried about. Being bullish on India’s prospects, he is confident that growth is likely to occur over the next 10-15 years.

This conviction comes from his trait of keeping an ear to the ground. “I travel a lot to the rural markets. The places I visit are like villages with population of 200, 300 or 500. To understand consumption in those markets, you have to be there to see what is happening. For example, I did a road trip around Uttar Pradesh almost three-four months ago. I went from Delhi to Lucknow, Lucknow to Gorakhpur, Varanasi, and Allahabad, and back. I did the entire circuit,” he says.

One of the key factors driving consumption in the beverages category is ensuring the product is served chilled. And that depends on the quality of infrastructure like electricity and road network. Jaipuria says what used to take six hours earlier now takes only four. “Plus, there is safety at night. I am in the market at 9 p.m. or 10 p.m., which I could not do five years ago. I am giving you the example of Uttar Pradesh. But it is the same with every state now.”

He says that retailers in the hinterland now have electricity for up to 22-24 hours. “This means I can go deeper in the market and deploy coolers for cold beverages and ice cream,” he adds.

Once the basics are in place, the opportunity reveals itself. “Consumption hai, bijli hai, road hai [there is consumption, there is electricity and then there are roads]. There is an opportunity that you see in the market. So, you can push the team and say, ‘deploy coolers over here or there’,” Jaipuria says.

According to Systematic Institutional Equities, India’s per capita consumption of carbonated beverages is low and there is no dearth of opportunities to grow.

Under Jaipuria’s leadership, the company has tapped into these opportunities by deploying capital expenditure. “We are very pro-capex. In the past three years, we have invested more than $1 billion in capex, as we believe in the India growth story. We have done both greenfield expansion and added lines to the existing facilities. Capex is the starting point to get revenue growth,” he says.

No wonder Jaipuria’s efforts have added a lot of fizz to the company’s top line as well as bottom line. The company has reported a CAGR of 55.2% in profit after tax in three years up to CY24, according to data from Capitaline. It has registered a 31.4% CAGR growth in net sales in three fiscals up to CY24.

Carbonated beverages is one of the price-sensitive sectors. But strategies such as the right pack price architecture, category expansion, and volume play have worked in favour of the company. In addition to carbonated beverages, the company also offers products in the energy drinks, juices, dairy, and hydration categories.

“It is not that a consumer will prefer only Pepsi. They may opt for Nimbooz or Sting or Tropicana. It is all about what portfolio we are offering in which market and what works. Earlier, if one was having carbonated soft drinks, they may now be consuming something else. Consumer needs are changing but not going away. And we have a different product portfolio available for the consumer every time,” he says. Varun Beverages is now expanding its global footprint by adding more markets in Africa.

Analysts, meanwhile, are bullish on the company. “The company delivered a resilient performance driven by robust execution, expanded distribution, and operational ramp-up of new plants. The management is focussed on strategic international expansion, backward integration, snack diversification, and premiumisation, supported by strong visibility in rural and emerging markets. Sustainable initiatives such as electric vehicles and eco-cooling are enhancing long-term efficiency,” said Geojit BNP Paribas in a research note issued in August this year after Q1 results.

Echoing similar views, Anand Rathi noted: “We expect VBL to see strong growth going forward due to many factors such as strategic investment in enhancing production capabilities and making new acquisitions, which have significantly strengthened their global presence and increased their presence in the domestic market”.

Meanwhile, GST 2.0 reforms have presented Varun Beverages with an opportunity to enter new market segments, including water and soda. With a lower GST slab of 5% on soda and water, where local players may not be playing by the rules, the organised sector has an opportunity to expand. Jaipuria says this offers a huge opportunity for market expansion. He also adds that the income tax relief of zero tax on annual income up to ₹12 lakh may also come as a major “boost”.

“People have income. GST has also been lowered. This is a double effect,” he adds.

So, should one expect more investment from the company in anticipation of the demand? Even though the company has invested a lot in the past three years, any further investment will depend on growth, says Jaipuria. “Say we are planning a double-digit growth, but end up doing more than that. We will, of course, do capex simultaneously [then]. This is not a saturated industry.”

That said, competition is an emerging reality in the sector. Reliance Consumer Products has relaunched Campa Cola. Competition is healthy — it keeps everyone on their toes and pushes them to do better, Jaipuria reasons.

“When there is more investment in a certain category, it grows much faster. All competing players will advertise and instal coolers simultaneously. This means that there will be more freezing infrastructure available in the market. People will consume more, and there will be more accessibility and distribution penetration.”

As the country charts its path towards GST 2.0 reforms, Jaipuria’s focus remains firmly on the long-term goal of creating sustainable value, guided by his conviction in the India growth story.