Companies

Wagh Bakri Tea brews expansion plan with wider product range, greater volume sales

Shobha Roy Kolkata | Updated on September 13, 2019 Published on September 13, 2019

Ahmedabad-based packaged tea maker Wagh Bakri Tea Group expects a 10 per cent growth in volume sales backed by product expansion and geographical diversification. The company registered volume sales of around 40 million kg last year.

Wagh Bakri, which currently has 13 tea lounges across the country, is looking to set up 30 more over the next 12 months.

“We are currently present in 17 States. We have been growing slowly and gradually and are looking at 10 per cent growth in volume sales this year,” Paras Desai, Executive Director, Wagh Bakri, told BusinessLine. He was in the city to attend the trustea council meeting on Thursday.

Per information available on the company’s website, it has a turnover of over ₹1,100 crore. Exports account for nearly 5 per cent of its volume sales and have been witnessing a steady growth. The company exports to over 40 countries in North America, Europe, Africa and West Asia.

Wagh Bakri, which has been witnessing rising demand for its instant tea range, is looking to roll out more products aimed at the health and wellness segment, said Desai while refusing to share further details. Wellness teas usually incorporate herbs, spices, and other ingredients to offer health benefits.

Packet tea segment

The ₹10,000-crore packet tea market accounts for roughly 50 per cent of the country’s total tea consumption of 1 billion kg. The segment is currently dominated by brands such as Tata Tea, Brooke Bond and Wagh Bakri.

Packet tea, which is essentially considered to be value-added tea, ensures higher margins compared to bulk tea.

According to a study conducted by the Tea Board of India, the demand for packet tea is on the rise — it is preferred by close to 80 per cent of urban and around 75 per cent of rural households. The perception that packet tea is adulteration-free and has better storage options are the key factors driving its growth.

Favourable demographic factors such as an increase in disposable incomes and aspiration levels and rising health consciousness have contributed to the shift from loose tea to packet tea, the study said.

Tea lounges

According to Desai, the company’s tea lounges have found great acceptance among consumers. It is therefore looking to set up about 30 more of them.

“Our lounges are currently in Ahmedabad, Goa, Mumbai and Delhi, among others. As we expand our lounges we would like to target North India,” he said.

Published on September 13, 2019
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