Wagh Bakri Ltd-Company Analysis REPORT INDIA
Strategic Direction
·
Wagh Bakri is expected to focus
on expanding its presence outside of Gujarat, beginning by moving to other
states such as southern states like Karnataka. The company is also expected to
continue brand awareness building activities such as celebrity endorsements and
tea lounges. The company is also predicted to launch RTD tea in the forecast
period and buy its own tea plantations over the forecast period.
Key Facts
|
Full name
of company:
|
Wagh Bakri
Ltd
|
|
Address:
|
WaghBakri
House, Opp. Parimal Garden, Ambawadi, Ahmedabad, INDIA - 380 006.
|
|
Tel:
|
91- 79 -
2640-9631 to 36
|
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Fax:
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91 - 79 -
2640-9640
|
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www:
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www.waghbakritea.com
|
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Activities:
|
Tea
|
Source: Company Website
Company Background
·
Wagh Bakri is an independent
family-owned company that was set up in South Africa in 1892 and later
relocated to Gujarat in India due to apartheid. In 1934, the trademark Wagh
Bakri was incorporated. Wagh Bakri operates via three companies: Gujarat Tea
Depot Co Ltd, which owns the Wagh Bakri brand name, Standard Tea Processing,
which focuses on tea buying and blending, and Gujarat Tea Processors &
Packers, which markets the tea.
·
The company operates solely in
tea.
·
Wagh Bakri is dominant in
Gujarat with some presence in Maharashtra, Madhya Pradesh and Rajasthan. It is
actively seeking to expand its business in key urban markets such as Mumbai and
is expected to move into Karnataka and other southern states in the forecast
period.
·
The company is not known to be
seeking funding to realise its growth strategies.
·
In 2008, Wagh Bakri used
outdoor advertising on Mumbai trains to communicate its brand message –
“Perfect Rishtey Banaye” (Builds perfect relationships). Wagh Bakri has
launched its premium brands in Mumbai to increase its value share of the
market.
Production
·
The company purchases tea at
domestic tea auctions and then processes, blends and packages the tea for sale
in India and for export.
·
The company focuses on branded
packaged tea, although a small amount of its tea is sold loose through its own
branded outlets. It has six branded outlets in Ahmedabad, and it is the leading
player in tea in Gujarat.
·
Wagh Bakri exports to the US
and Canada, although its main focus is the domestic market.
·
The company is not known to
undertake third party manufacturing.
Competitive Positioning
·
Wagh Bakri ranked seventh in
hot drinks in India. It is the fourth leading player in tea in India, with the
majority of its sales derived from Gujarat, Rajasthan and Madhya Pradesh. In
these states, Wagh Bakri is providing tough competition to national branded tea
giants such as Hindustan Unilever and Tata Tea. The extensive use of a regional
communication platform alongside a strong distribution network in both rural
and urban areas has ensured the company’s dominance in West India. Wagh Bakri
is focusing on its premium brands to drive value and volume growth in urban
areas such as Mumbai.
·
The company’s share of tea has
stagnated over the review period until 2007 as its presence was restricted to a
fraction of the West India region. With its intensive push on expanding to
other regions starting with Maharashtra in early 2008, the brands’ share of tea
has grown in 2008 and is expected to continue growing via the expansion of its
distribution network.
·
The company only operates in
tea, which is a mature, slow volume growth range within hot drinks. However,
its high advertising expenditure and concerted efforts to expand its presence
to other regions is expected to drive its volume and value growth. The company
was also present in the slowly emerging, fast growing green tea category in
2007.
·
The company has a wide brand
portfolio consisting of various price and taste variants.
·
The company is positioned in
the mid-priced and premium segments.
·
Wagh Bakri has shown good
capacity for innovation by launching a Tea Lounge which offers consumers the
opportunity of trying various branded as well as unpackaged premium teas in a
relaxed environment.
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Product
type
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Value share
|
Rank
|
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Tea
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3%
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4
|
Source: Euromonitor International
