VARUN Beverages plans to establish franchising opportunities for snack production and sales through its subsidiaries, Varun Foods Zimbabwe (VFZ) and Varun Beverages Zambia (VBZ), latest company presentations show.
The India-headquartered company has operations in India, Nepal, Sri Lanka, Zambia and Zimbabwe and through these subsidiaries, it aims to commence manufacturing, distribution and sales of Simba Munchiez, a popular PepsiCo snack brand.
“To further strengthen the relationship with PepsiCo and expand the footprint in PepsiCo snack portfolio, VBL [Varun Beverages Limited], through its subsidiaries VFZ and VBZ, has discussed with PepsiCo to enter into an exclusive snack franchising appointment with Premier Nutrition Trading LLC, Dubai (a PepsiCo Inc subsidiary) to manufacture, distribute and sell Simba Munchiez in the territory of Zimbabwe and Zambia,” Varun said.
“As per the understanding, an estimated investment in manufacturing facilities would be around US$7 million for an annual capacity of 5 000 metric tonnes for manufacturing of Simba Munchiez in multiple SKUs [stock-keeping units at each location of Zimbabwe and Zambia.
“As agreed, the appointment will be effective on or before October 1, 2025 for Zimbabwe and April 1, 2026 for Zambia once the respective manufacturing facilities come into operation.”
VBL subsidiaries shall leverage on its distribution prowess to introduce the new affordable range of snack products from the house of PepsiCo.
As part of the understanding, PepsiCo shall give a strong push in certain fast-moving stock keeping units through price initiatives.
Snack food industry size in Zimbabwe and Zambia is estimated to be US$177 million and US$156 million, respectively, and growing consistently.
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There are synergies in distribution with VBL’s existing beverage business, the company noted.
PepsiCo reports that 59% of its revenue (up from 55% in 2021) is from snack foods as per its latest filings.
Given the size of snack foods opportunity, VBL India, through its Morocco subsidiary, entered into an exclusive snacks appointment for Morocco territory on February 20, 2024 to manufacture Cheetos.
Commercial production is set to start on or before May 1, 2025.
Varun Beverages entered Zimbabwe in 2018, selling Pepsi’s soft drink brands such as Mountain Dew, Mirinda and 7-UP.
