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 fortify its distribution footprint and roll out additional variants below the health and fitness and wellness segment to expand its sales. The company is also wanting to set up tea lounges across the nation to boost out-of-dwelling tea usage.

According to Parag Desai, Executive Director, Wagh Bakri Tea, 2020 was a somewhat “challenging” calendar year as there was a mismatch concerning need and provide and that pushed up tea rates. Out-of-dwelling usage of tea was also impacted on the again of the Covid-19 pandemic.

“Our sales were being virtually stagnant thanks to deficiency of availability of good good quality tea and the lockdown. So, we are expecting to stop the present-day fiscal additional or a lot less flat. But points are bouncing again, and if Covid-19 does not enjoy out then we are wanting to expand by around 20 per cent in 2021-22,” Desai told BusinessLine.

As per production estimates out there on the Tea Board of India site, tea production in North India in 2020, which features the gardens in Assam and Bengal, was down by just about 137.18 million kg (mkg) at 1,033.seventy three mkg, when compared with 1,170.91 mkg in 2019. Considering that North India accounts for just about 84 per cent of the country’s full production, any fall in production in the location adversely impacts the provide of tea in the technique.

The fall in production pushed up rates. Nonetheless, it was not possible to move on the complete expense to individuals.

“As an sector, rates went up by just about fifty per cent but we were being able to move on only around thirty per cent the rest we experienced to absorb. But rates at the present-day degree are quite steady,” he mentioned.

With need reviving and with enhanced traction on the floor, the tea sector need to be able to conduct improved in the course of FY22.

Packet tea sector

Wagh

Bakri Tea, which has an estimated turnover of around ₹1,five hundred crore, is considered to be the third-most significant packaged tea company in the nation with over 40 million kg of tea distribution.

The ₹10,000-crore packet tea sector accounts for about fifty per cent of the country’s full tea usage of 1 billion kg. The segment is now dominated by brand names these as Tata Tea, Brooke Bond and Wagh Bakri.

Packet tea, which is basically considered to be price-additional tea, makes certain better margins when compared to bulk tea.

According to a examine done by the Tea Board of India, the need for packet tea is on the increase — it is most well-liked by shut to 80 per cent of urban and around seventy five per cent of rural households. The notion that packet tea is adulteration-totally free and has improved storage possibilities are the critical aspects driving its progress.

Favourable demographic aspects these as an boost in disposable incomes and aspiration ranges and rising health and fitness consciousness have contributed to the shift from loose tea to packet tea, the examine mentioned.

Wagh Bakri, which now has fifteen tea lounges, is wanting to include fifty additional lounges in the following fifteen months. These would be in the main metro towns.

“We are attempting to convey tea again in manner. Individuals have upgraded to better good quality tea and are wanting for additional price-additional offerings. We are preparing to include additional items in our wellness array,” he mentioned.