Report – Gujarat Tea Processors & Packers Ltd.

INTRODUCTION

Tea Market in India

Hot drinks manufacturers in India are faced with a highly mature market with
long established traditions and product preferences among consumers. In total
volume sales terms, India was the largest market for tea in the world and the
fifth largest market for other hot drinks in 2009. As tea and coffee already have a
very high penetration in India, companies have sought to increase their market
share by developing innovative distribution strategies to reach new consumers.
For packaged hot drinks players, the consumers of unpackaged tea and coffee in
rural areas represent a potential new consumer base.

While conventional distribution channels such as kiranas (small grocery retailers)

and supermarkets account for over 90% of the sales of tea and coffee,
companies continue to experiment with new channels to expand their consumer
base into less accessible rural areas and consumer groups consisting of affluent
youth.

With urban markets approaching saturation, national companies increasingly

seek to expand their distribution footprint to rural regions while regional players
are making an effort to enter neighbouring regions.

Statistical facts about the Indian Tea Industry:

• The total turnover of the tea industry is around Rs. 10,000 crores.
• Since independence tea production has grown over 250%, while
land area has just grown by 40%.
• There has been a considerable increase in export too in the past few
years. Total net foreign exchange earned per annum is around Rs.
1847 crores.
• The labour intensive tea industry directly employs over 1.1 million
workers and generates income for another 10 million people
approximately. Women constitute 50% of the workforce.
COMPANY PROFILE

Wagh Bakri is a family owned tea company in Gujarat, India. Sir Narandas
Desai, the founder, believed that the Company is not just about tea, but
more a confluence of his values and beliefs of co-existence and harmony
and of the strong and the meek. The same beliefs are reflected in
Corporate Philosophy even today.

o Build long lasting relationships through trust and fair play towards all
associates.

o To continue to be result oriented and Contribute positively.

 o Be progressive and lead from the front. Change with the times.

o Be socially responsible. Return to the society a share of the gains from

commercial enterprise.

Sir Narandas Desai started Waghbakri Tea Company in the year 1892, which
then was represented by small company retail shop at kalupur Ahmadabad,
Gujarat. Since then the growth of the endeavor has been phenomenal and
presently Waghbakri Tea Company has an employee base of more than 400
professional managers and skilled personals with ever increasing space for more,
to tend to the expanding group enterprise in India and abroad.

Waghbakri tea house markets various tea brands in loose leaf cartons and tea
bags for tea lovers all over the globe – the finest certified black teas from
Darjeeling tea estates, Assam and Nilgiri. The company sells organic black and
green tea for the health conscious.

The production base is at Dholka (Dist . Ahmedabad) in a impressive spread of

14 acres with a modern manufacturing plant and state of art production and
packaging unit that conforms to International norms in producing, blending and
packaging of the finest tea leaf for worldwide consumption.

WaghBakri Tea Group, India largest privately held packet tea company, launches
its worlds latest and India’s first staple free `Hygienic Tea Bags in Middle East’ at
the Gulf Food 2009.

JOURNEY TILL TODAY...

Year 1892 – Procurement of tea estate

Year 1919 - Establishment of business in Gujarat, namely ‘ The Gujarat Tea
Depot Co.’ with first retail outlet for wholesale teas
Year 1925 – Wagh Bakri brand was launched
Year 1944 – The Good Morning brand of premium blended tea leaf was
introduced
Year 1980 – The group established ‘Gujarat Tea Processors & Packers Limited’
to meet a growing demand for quality blends of branded teas and with the aim of
selling quality tea products
Year 1986 – The Standard Tea Processing Co. Limited was established with a
view to avail the benefits of mechanized operations and meet with demands for
bulk teas
Year 1989 – Year 1994 – ‘Darjeeling tea’ and ‘Mili tea’ were launched
Year 1998 – Yea4 1999 – The Wagh Bakri brand launched in Rajasthan and
Madhya Pradesh.
Year 2004 – Company received ISO : 9001 : 2000 and HACCP Certification.
Year 2006 – Tea Processing Co. Ltd. merged into Gujarat Tea Processors &
Packers Ltd.
Year 2007 – Company started office at Mumbai (India) to expand its operations
Company acquired the land admeasuring 25,748 sq.meters adjoining to existing
Dholka factory and also 12,595 sq. meters at village Tundel, Taluka Nadiad,
Gujarat for the purpose of
expansion / setting up of Tea Blending factory and storage facilities.

Opened a Wagh Bakri Tea Lounge at Ville Parle [East], Mumbai, which serves Ice
Tea and all premium varieties of Tea manufactured / marketed by Wagh Bakri
Tea Group along with snacks.

PRODUCTS AND SERVICES

Products Services

Wagh Bakri Tea Specialized Retail Outlets

Good Morning Premium Tea Tea Lounge

Mili Tea Online Portal (overseas customers)

Wagh Bakri Perfect

Darjeeling Tea

Organic Tea Gift Packs

BRIEF NOTE ON SALES AND DISTRIBUTION NETWORK

A need was felt in the last 70’s by ‘Wagh Bakri group’ to make available fresh tea
in convenient packs to the discerning consumers of Gujarat, as a result,GTPPL as
a part of wagh bakri group was founded in 1980 with a objective to market
sealed packet tea in Gujarat. Since then GTPPL has satisfied the need of
more and more customers over a period of years due to its unmatched
consistency in quality and strong distribution system. Total average sale of
GTPPL is approx 19.5 lack kgs per month. Turnover is likely to exceed 350 crs
this yr. The company is operating in four states across India ie Gujarat,
Rajasthan, Madhya Pradesh and Maharashtra .

OPERATIONAL PROCEDURE

• ORDER

A scheduled day in a week is fixed to receive the orders from all the 4
states, subsequently order-wise production takes place at DHOLKA factory

• DESPATCH

The company delivers material on fixed day in a week across all 4 states
 DISTRIBUTION SYSTEM

GTPPL is its product available to its consumers through distribution system

consisting of dealers and retailers. The total number of dealers in Gujarat is 185
and the number of retailers are about 55,000. Overall GTPPL enjoys approx 65%
market share in Gujarat.

GUJARAT :

G.T.P.P.L

DIRECT DESPATCH AHMEDABAD LOCAL

SUPERSTOCKIST

TO DISTRIBUTOR DISTRIBUTORS

TRADE TRADE
TRADE

RAJASTHAN AND MADHYA PRADESH:

In Rajasthan, the company launches product first in Udaipur section and it was
launched subsequently in jodhpur / jaipur sections. Distribution section was
much similar to Gujarat.

And in Madhya Pradesh the company has super stockiest one at Indore and
another at Jabalpur.

FUTURE PLANS FOR GROWTH IN KEY MARKET AND EXPANSION

Newer Markets and expansion in the existing market:-

The company has formulated and implemented our strategy of going state by
state as far as launching of the product & setting up the distribution network is
concerned. In the last financial year the company have taken aggressive steps
to penetrate the entire Maharashtra market which they are aiming by 2010.

Mumbai

• Launching of mili dust 5kg bag & WaghBakri 1kg pouch in the last 6
months

• The company focuses on dust sku’s which is well accepted and very much
appreciated
 • The company launched the product in very strong local dominated
markets like Jalna(dominated by vikram tea) and Kolhapur(dominated by
hp tea) and got reasonably good response

Going ahead the company is planning to enter other “tier I & II” cities of northern
&Southern India and have launched the product in goa and delhi.

Delhi

• The company has launched WaghBakri in Delhi, Noida, Ghaziabad,

Gurgaon and Faridabad and in near future mili launch is planned

• The company has used Press, Radio and Television to create awareness of
brand

EXPORTS

• ‘Waghbakri wants to grow their export division by catering all Indians and
asian community wherever they are residing’ using this as a launching
pad, the company would like to cater to all the tea connoisseurs of the
main stream market all over the globe. Recently we have entered UK,
Australia, New Zealand and also having strong dialogues with some of the
European buyers and hoping to get good business from them

• Currently focusing in USA as a strong hold in New York, Chicago, Atlanta,

houstan etc.

BRAND EVOLUTION

Waghbakri has categorized the organic teas, all other form of double and single
chamber tea bags, Darjeeling teas and Nilgri teas as “Specialty Teas” and have
started various forms of sales promotion. Which has operationalised our vision
for catering to newer generation which traditionally was never our customers.
Going ahead in this segment we have launched last year wagh bakri organic
combo pack which has all the variable of the organic format with recipe booklet,
which has helped our customer to understand the teas better.

Tea Lounge

Wagh Bakri to go one step forward and entered in the service arena of serving
all forms of teas from single platform which we have discovered as “Tea
Lounge”. They have opened one tea lounge in Mumbai in November 07 and have
received an over whelming response and hence we are looking forward to go
ahead with this idea on pan India basis.

Vending Operations:-
Vending operation is also a newer version of having hot tea. There are lots of
opportunities and the company desires to cater to this business on pan India
basis.

Institutional Business

The company is expanding wings, by tapping huge potential i.e. institution

business. In this process the company is appointing distributors and setting up
distribution networks. The company has already started business with railways ,
authorized vendors in IRCTC, organized segments (i.e. corporate ) and also
tapped HTS ( Hot Tea Shops ) Highway Restaurants with organized efforts & now
we are in process of streamlining it.

EMPLOYEE FOCUS

As Wagh Bakri represents traditional culture and believes in close-tie values, it

treats the employees as extended family members. Employees are evaluated
annually and appreciated according to their performance. Annual Days are held
for employees to loosen up, and enjoy being part of the company.

Employees can walk up to their seniors to give their feedbacks about the
operations or to generate new ideas. The employee can discuss the problems
faced to the immediate seniors, if not satisfied can move to a step above.

MARKETING INITIATIVES

Wagh Bakri has gone to each and every customer be it an upper end customer or
the middle or lower level of customer in terms of socio economic class with
different forms & mediums of communication.

Advertising & Publishing Agency:

The company has hired nationally renowned agency for their different brands. “
Triton Communication”, “Hanmer MS & L” & “Percept Advertising” are working
on creative part to help them communicate to their “TG” i.e their target group. A
publishing agency is hired ‘Publicity Parlour’ for publishing creative’s made by
the agencies in print as well as in electronic medium.

Marketing Research:

Wagh Bakri always had belief in marketing research, which had been carried
forward by purchasing syndicated marketing research report ( lastly purchased
this type of report from A C Nielson) & conduct market research by marketing
companies.

Electronic Medium:

Last year they had presence on number of channels like colors, star Gold, Aaj
Tak, Star One, Star News, NDTV Imagine, Set Max, Sahara One, Zee etc. The plan
behind broadcasting on these channel is to communicate the brand value to a
particular customer, who will recall their already known brand like “ Wagh Bakri”,
Wagh bakri Perfect” or “Milli”. The company wants to break periphery of four
states i.e MP, Rajasthan, Gujarat, & Maharashtra to communicate to their future
customers across India. In short they want to spread in PAN India where where
their distribution has still not reached and this is the best possible way to reach
their prospective customers and make them aware about the brand.

Print Medium:

This is the medium which they think is the second most effective medium after
broadcasting as they can communicate to their “TG”. This medium is being used
for two main agendas i.e to communicate for the ongoing consumer promotion
schemes & for brand building activity. They have good presence in this medium
be it local newspaper or national newspapers.

Internet Selling:

Wagh bakri is now catering to customers seeking tea online. Their online selling
portal have all the enmities required for the online selling portal. This initiative
has kept them on global platform. www.premiumtea.com and www.buytea.com
are the two websites which are catering to tea lovers seeking packed tea over
the net.

Organized Retail Network:

WaghBakri have accepted the importance new form of retailing i.e organized
retail network. This retail network is growing up rapidly and would start catering
many customers who are used to go to next door retailing. They have started the
activity of gondola displays, floors stack displays and also used promoters at the
select outlets where they can interact with the end customers.

Customer & Trade Promotion (CP & TP):

Customer promotion is given for two reasons; one is to motivate a customer to

change and second is appreciating customers choice to continue using the
particular product. They are also providing CP on their selected SKU for the same
reason.
Trade promotion is being given traditionally as a helping hand for the sale of a
particular product & to get the self space in a particular retail outlet. It is like
getting a license from a retailer to enter their shop. But at the end of the day CP
& TP are given to improve the Top line i.e Sales.