Wagh Bakri Tea looks to expand footprint; launch more variants in health segment

Ahmedabad-centered packaged tea maker Wagh Bakri Tea Group is wanting to bolster its distribution footprint and roll out far more variants beneath the well being and wellness segment to increase its sales. The organization is also wanting to set up tea lounges across the state to enhance out-of-property tea usage.

According to Parag Desai, Govt Director, Wagh Bakri Tea, 2020 was a rather “challenging” calendar year as there was a mismatch concerning demand and provide and that pushed up tea prices. Out-of-property usage of tea was also impacted on the back of the Covid-19 pandemic.

“Our sales were being practically stagnant due to absence of availability of fantastic high-quality tea and the lockdown. So, we are expecting to conclude the latest fiscal far more or a lot less flat. But factors are bouncing back, and if Covid-19 does not engage in out then we are wanting to increase by close to 20 per cent in 2021-22,” Desai explained to BusinessLine.

As per generation estimates available on the Tea Board of India web-site, tea generation in North India in 2020, which involves the gardens in Assam and Bengal, was down by nearly 137.eighteen million kg (mkg) at one,033.73 mkg, in comparison with one,170.91 mkg in 2019. Considering that North India accounts for nearly eighty four per cent of the country’s whole generation, any drop in generation in the area adversely affects the provide of tea in the program.

The drop in generation pushed up prices. On the other hand, it was not feasible to move on the overall price tag to individuals.

“As an field, prices went up by nearly 50 per cent but we were being ready to move on only close to thirty per cent the rest we had to soak up. But prices at the latest degree are reasonably stable,” he reported.

With demand reviving and with improved traction on the ground, the tea field need to be ready to complete superior in the course of FY22.

Packet tea field

Wagh

Bakri Tea, which has an approximated turnover of close to ₹1,five hundred crore, is thought of to be the third-major packaged tea organization in the state with around forty million kg of tea distribution.

The ₹10,000-crore packet tea industry accounts for about 50 per cent of the country’s whole tea usage of just one billion kg. The segment is currently dominated by models these types of as Tata Tea, Brooke Bond and Wagh Bakri.

Packet tea, which is in essence thought of to be benefit-added tea, ensures higher margins in comparison to bulk tea.

According to a examine conducted by the Tea Board of India, the demand for packet tea is on the increase — it is preferred by shut to 80 per cent of city and close to seventy five per cent of rural households. The notion that packet tea is adulteration-free of charge and has superior storage solutions are the essential variables driving its advancement.

Favourable demographic variables these types of as an enhance in disposable incomes and aspiration degrees and rising well being consciousness have contributed to the change from unfastened tea to packet tea, the examine reported.

Wagh Bakri, which currently has 15 tea lounges, is wanting to add 50 far more lounges in the following 15 months. These would be in the important metro metropolitan areas.

“We are attempting to carry tea back in vogue. Individuals have upgraded to higher high-quality tea and are wanting for far more benefit-added choices. We are setting up to add far more products and solutions in our wellness range,” he reported.