Intro: Piyush Desai, Chairman, Wagh Bakri Tea Group talks about how Wagh Bakri made the successful transition into a packaged tea player and his ambitions to take Indian tea global.
IBEF: What are the core competencies that have enabled Wagh Bakri to emerge as a strong player in the packaged tea segment and sustain its position over time?
Piyush Desai: Ours is a family owned company having rich experience of tea cultivation, tasting and marketing that we have inherited from our forefathers. The business is run by a team that comprises members of the company as well as professional managers. Great care is taken to ensure consistently good quality.
To ensure good and consistent quality, we constantly take samples from the market, taste and evaluate them. The tea goes to the packing section only after we ensure that its quality is ahead of the competition, otherwise we send it back to the blending section for improving the blend. Our blends should be good enough to satisfy the expectations of consumers.
IBEF: How has the shift to tea blending helped you take your business to the next level?
Piyush Desai: Earlier, when a customer came, you took out bulk tea and weighed it in his presence. But we took a call and developed a factory where we blend tea for which we have purchased machinery from West Bengal. Around 1,000 kg of tea is blended in that machinery in around one and a half hours. Today we blend around 150,000 kg of tea every day. No unblended tea is sold. After blending customers get desired attributes including taste, brightness, flavour, aroma, etc. Customers expect consistently good quality every year. But the fact is that in the tea plantations, quality changes with the changing months and with location and elevation. The art of a blender comes into play to ensure consistently good quality. Blending for consistent quality is the art of success. I am a tea taster myself since the last fifty years. By tasting different varieties of tea in my lab, I can tell which tea hails from which garden based on my tasting skills.
IBEF: Wagh Bakri has built a strong brand equity in Indian and overseas markets. How have you strategized your branding initiatives to achieve this objective?
Piyush Desai: Out of around 35 million kg of tea sold, some 28 million is sold in Gujarat, which is approximately 80 per cent of sales. We are also present in Maharashtra, Rajasthan, Madhya Pradesh, Delhi, Andhra Pradesh and Chhattisgarh. It takes around three years in a market to break even.
By 1990, we had also entered into exports. We are exporting our tea to US, UK and most European countries along with Gulf countries - Dubai, Muscat, Bahrain and UAE. Now we are also planning for the Russian market. Exports are currently around 5-7 per cent of our annual sales of 35 million kg. In all places overseas where we have Gujarati festivals, we send our agents and advise our distributors to plan for sampling in these areas. There are also a lot of Indian stores there. That is how we have developed our brand.
IBEF: As a leading tea exporter from India, what is your opinion about the brand perception of Indian origin tea in overseas markets?
Piyush Desai: India can certainly take pride in the quality of its tea. We are gaining a good market for Darjeeling tea in particular in Germany and Japan. As a company, we are looking to penetrate the Chinese market with strong CTC Assam tea and other CTC tea varieties, because Chinese consumers have not really experienced a strong cup of tea with good body and full strength. We can launch some tea lounges or cafes there as well. There is also significant potential to export green tea and organic tea. Wagh Bakri is looking to acquire some tea gardens in Assam and South India that we can convert to organic and green tea cultivation.
IBEF: What is your view on the changing tea consumption trends in India? How is Wagh Bakri preparing itself to capture market share and even grow the market?
Piyush Desai: Indian consumers have traditionally been fond of masala tea and a good strong cup of CTC tea. But now there are stores like Fabindia that sell good organic tea and green tea. Indian consumers are very much open to innovation. We have developed our value proposition over time from tea packets to tea bags and then to iced tea. We have also started premix tea, which can be prepared in just 15 seconds. There are 12 sachets of 15 grams each in one pack that includes different flavours including masala, ginger, lemon grass and cardamom. Suppose I wake up at five am in the morning and go for a morning walk. At that time I do not like to wake up my servant as he works so hard all day. Before sleeping, he just puts hot water in a flask in the kitchen. The sachet helps me prepare my tea quickly and conveniently. So these sachets are getting very popular and we also see a huge potential overseas for them.