Motilal Oswal-Backed Lahori Zeera bets on Bisleri playbook to boost growth

File Photo

Ethnic soda brand Lahori Zeera is looking to move to an asset-light strategy, inspired by Bisleri’s co-bottling model, as it aims to reach more retail shelves and thereby more consumers, co-founder and chief operating officer (COO) Nikhil Doda told Moneycontrol in an interview. The homegrown brand, founded in 2017, reported revenues of Rs 535 crore in FY25 and aims to breach Rs 800 crore in revenues by FY26 as competition from Coke and Pepsi intensifies.

Young brands like Lahori are tapping into the growing demand in the non-alcoholic ready-to-drink (NARTD) segment, as disposable incomes rise in both rural and urban areas. While large conglomerates with deep pockets are flexing their distribution muscle and offering incentives to boost local presence, brands like Lahori are turning to outsourced manufacturing to avoid the heavy investments required to set up their own facilities.

The approach mirrors that of Bisleri, whose success lay in its hyper-local presence — it was available in virtually every store, big or small. Its reach was so widespread that ‘Bisleri’ became a generic term for bottled water in India.

"So Bisleri has a manufacturing unit every 200 kilometers in India. That's the kind of spread out footprint (they have) and they do it with different co-bottlers. We are going to follow that model. The intention is to have a local presence in almost every state and have a local plant. We have signed four co-bottlers so far and we plan to sign an agreement with 20 of them in the next two years," said Doda.

This asset-light approach allows it to scale rapidly with multiple facilities while retaining control of  over raw materials and sales.

"They (co-bottlers) just do the conversion. It's our raw material. We sell the product and eventually the capital allocation which used to go towards setting up a unit won't be required any longer and we can have multiple facilities coming in the pipeline at the same time.  The growth can be much more exponential," he added.

The beverage startup recently secured primary funding of Rs 200 crore from  Motilal Oswal Wealth, marking a threefold increase in its valuation to Rs 2,800 crore.

Lahori’s flagship product, Lahori Zeera — a cumin-flavoured carbonated drink — is available in 160 ml and 240 ml packs, with the smaller pack priced at Rs 10. The company also offers lemon-based beverages like shikanji, a popular choice in northern India.

Increased competition

Global giants like Coca-Cola, PepsiCo, and even domestic major Parle Agro have long dominated the Indian beverages market with their carbonated drinks. However, the landscape is now evolving, with a wave of Indian brands offering sugar-free, natural, and organic alternatives - challenging the traditional dominance of cola, lemon, and  orange-flavoured beverages.

The rise of traditional-flavoured beverages like Lahori Zeera has prompted legacy players such as Coca-Cola, Parle Agro, and Bisleri to enter the segment. Lahori, which primarily distributes through general trade, sees its strongest sales in North India, where consumers largely buy it for in-home consumption.

"We have seen consistent buying behaviour. Many of our consumers buy our products daily or weekly, making it a regular, repeat purchase. A large portion of our sales come from in-home consumption, with dedicated buyers picking up full packs to enjoy with their families or kids," Doda said.

"The competition is intensifying, but the market is too big, I think. And Indian beverage consumption is very underrated so far," he added.

Incumbents have also been tapping on the demand potential by incentivising the distribution and boosting retailer margins. Reliance Industries-backed Campa Cola offers retailers higher margins compared to its competitors, with reports indicating margins of 6-8 percent, while Coca-Cola and Pepsi typically offer 3.5-5 percent.

"We have created a model where we forward certain margins and there are new players, sizeable players who have come in, incentivised and given a lot more than what we are offering, but we are staying constant with our model," Doda added.