Lahori Zeera maker to operate on an asset-light model, eyes next growth driver
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Archian Foods is transitioning to an asset-light business model to drive its future growth. The company plans to collaborate with co-bottling partners without seeking further funding. Archian is also exploring a second hero product to complement its main offering, Lahori Zeera. The firm faces ongoing cost pressures while maintaining competitive pricing in the market. India's ready-to-drink beverage market is projected to significantly expand over the next decade.
New Delhi: Private equity firm Verlinvest-backed Archian Foods, which owns Lahori Zeera beverages, will now operate on an asset-light business model as it plans its next growth phase, Nikhil Dodha, the company’s co-founder, told ET in an interview.“The business has transitioned to an asset light model; the intent is to grow with co-bottling partners. So there is no funding being planned as of now, since the primary business model doesn’t require any capital for now,” he said.
Archian Foods’ funding rounds so far have included around $23.6 million led by Motilal Oswal Wealth acquiring about 7.14% stake mid last year, and prior to that the beverage maker raising $15 million from Verlinvest in 2021.
Dodha said Archian Foods is “now looking for a second hero product”, to replicate the growth of its flagship brand Lahori Zeera. “We will stick to beverages; the idea is to find a second hero product.” The company has diversified to flavours and variants such as nimbu, masala cola and now sugar-free drinks.
Lahori along with Reliance’s Campa have together been challenging Coca-Cola and PepsiCo’s dominance in the Rs 60,000-crore soft drinks market, with competitive pricing and ethnic flavours.
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“The entire soft drinks industry is operating at an entry-level price point of Rs 10 despite continued cost pressures. This is a price point we started with from Day 1, and now legacy players are competing at this price to safeguard their market share,” Dodha said.
However, the industry has been battling inflation on multiple fronts, including packaging. “There are costs which cannot be passed on to consumers. We are taking a hit on margins but holding on to consumer prices, since the costs are expected to come down - they are unsustainable,” he said.
According to a report by strategy consulting firm Redseer, India’s ready-to-drink (RTD) beverages market is estimated to double in annual sales to $40 billion by year 2030, up from $20 billion in 2025. The report attributed the growth to shifting consumer preferences towards functional and healthier drinks options such as sugar-free or supplement-based variants. But despite the growth, per capita consumption of RTD drinks in the country remains only at 15-20 litres, trailing by a wide margin compared with 100-120 litres in the US, 70-80 litres in China and 60-70 litres in the UK.
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Figures reflect the source report and its stated period. This article is for information and is not investment advice.
