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“Following revenue of Rs 2,000 cr last fiscal, set to ride growth wave”
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Monday, 02 October, 2023, 08 : 00 AM [IST]
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 Wagh Bakri Tea is one of the leading packaged tea companies in India with a turnover of over Rs 2,000 crore. The group is a leading stride in tea exports and retail consumers all over the world.
Parag Desai, executive director at Wagh Bakri Tea Group, shares his views on challenges in the industry, research and development, types of brews in the market and more, in an email interview with Kimberley Almeida. Excerpts:
Tell us about the evolution of Wagh Bakri and how it was ideated.
For the longest time, tea has been more than just a unifying factor in India that cuts across caste, creed, religion, and regionalism: the beverage has, over the decades, become synonymous with one’s emotions. Thus, the very inspiration behind our fifth-generation enterprise has been deceptively simple since its inception in 1892: serving the consumer a heartwarming cup of tea. As for the evolution of the brand, our growth curve, almost in a storied manner, mimics the trajectory of the 20th century, especially that of India’s rise as a global economic powerhouse.
In 1892, we began as a 500-acre tea estate in Durban, South Africa, until the Apartheid made the then-business head of Wagh Bakri move back to India. After running a real tea shop named Gujarat Tea Depot Co in Ahmedabad for over 15 years, in 1934, Wagh Bakri was registered as a brand. In 1944, the brand launched itself into the premium tea niche with the Good Morning Tea label that came to be loved across Gujarat, cementing the company’s name in the Gujarat ecosystem. But the journey of the brand had just begun.
In the 1980s, the brand successfully rode the socio-political ambience of Gujarat and launched packaged tea, which was erstwhile deemed to be an inferior alternative. With relentless effort and branding, the brand successfully fought consumer bias as the packaged tea’s premium quality taste became a staple for consumers. Further, post-liberalisation we conquered various markets including international spheres while the spirit of the company remained the same: serving top-notch tea. Similarly, the presence of the brand grew further in the late 2010s with tea lounges spreading across major cities in India. In keeping with the times, these lounges now host some of the sought-after brews and ancillary food brands that have captured the imagination of our times.
Give us information about the company's product portfolio. What type of research goes into the development of these products?
The brand has always been about being a for-all brand, thus the price of our product range has constantly been affordable without compromising on the quality, which has now come to be loved across purchasing power parities. We understand that with time the need of the consumer has evolved and so have their tea-drinking and brewing habits. Having crossed the solid 130-year milestone in the market, we have always kept our ears to the ground and observed the consumption patterns of our customers to deliver the best brew in the most preferred form.
Take, for example, our range of organic and Darjeeling Tea. The product line comes in response to the rising awareness around sustainability, which has been a major consumer concern in the last decade. On the other hand, Darjeeling Tea has been ruling the nation’s taste buds for as long as one can remember, thus becoming an obvious niche to foray into. Similarly, in recent years, as the nation went fast-paced with a special preference for bite-sized, easy-to-carry sachets, we kept up with the aspirational, ever-busy buyer by launching our Instant Ice teas and Instant 3-in-1 combos.
The combos contain the well-loved ginger, masala and cardamom tea. These all-time favourites are also available in regular packets for households where tea drinking is a compulsion. Additionally, with our line of green teas, we have been engaged in the health-centric trend that has swept India. At the same time, we have not lost the beat with flavoured teas such as the timeless Earl Grey and the English Breakfast variety that have been steadily gaining traction with cosmopolitan Indians. We also have instant coffees for coffee lovers too.
What are the key factors that would differentiate your brand from the existing brands in the market?
The constant experiment that we do with our brews is unmatched by any other brand. Moreover, we have always been about steady growth and reasonable risk, which means we test the waters thoroughly before launching ourselves into a new regional market in full swing. The deliberate attempt to understand the consumer has led us to be nominated as the No.1 Trusted Tea brand in India. Moreover, the sheer range of products we offer at an affordable price always keep us ahead of the curve, catering to the multivarious tastes of the Indian population. In other words, from masala chai to Darjeeling Tea to Earl Grey, we have a brew for every taste.
What are the company’s long-term plans for sustainability?
We have since the beginning been focused on giving back to the community, long before ESG (Environmental, Social, Governance) became a buzzword in the commercial arena. For example, we have been an integral part of IDH, the Netherlands-based, Sustainability Trade Initiative. We are a funding partner of the Dutch organisation’s Trustea - The India Sustainable Tea Program, which seeks to foster not only sustainable practices among tea estates but also ensure the economic and social growth of the stakeholders involved. Similarly, our other CSR activities have always included green initiatives, along with efforts to strengthen the position of the underprivileged. Along with our growth, we envision becoming more and more socially and environmentally conscious, sensitive and competent to make a great impact.
What are the challenges you see your brand facing in the industry?
Cracking a new market is always challenging. Towards a successful foray into the regions, we are on our way to deciphering the consumers in West Bengal and South India. But this is not the only challenge we are facing. The phenomenal growth story that we have clocked in since the wake of the 21st century will be difficult to maintain, given how quickly the growth rates and preferences in the market are changing, but we are determined to brave the odds as we have since our inception. Also, we have the multi-generational brand name, wisdom and consumer trust to draw from in the face of any difficulties that are to arise.
What was your last fiscal year like and what are you expecting?
Following a revenue of about Rs 2,000 crore in the last fiscal year, we are planning to ride the growth wave of the Indian tea market, which is set to grow at 4.5% CAGR in the next 5 years. The brand has steadily become a market leader and is poised to top the chart in the coming years.
Do you plan on launching new products in light of the changing trends in the industry? Any plans for expansion and new collaborations?
We recently collaborated with well-loved chef Sanjyot Keer for our latest line of spiced teas with the hope of not just expanding our portfolio but also bringing to the consumer something new and exciting. We hope that the new brews will grow to be as appreciated as the classic beverage flavours and at the same time, we look forward to backing more and more innovative offerings that will match the evolving taste of the buyers.
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