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Ahmedabad-headquartered Wagh Bakri Tea Group will set up a new plant in Gujarat with an investment of over Rs 100 crore to increase its raw material storage capacity and instant tea output, reported The Economic Times. CEO Sanjay Singal, who joined Wagh Bakri as its CEO in August last year, said that the new unit will expand its instant tea and raw material warehouse capacities.
The new warehouse will be equipped with Automatic Stock Retrieval System (ASRS), he said. “We are setting up a new manufacturing unit to basically meet our expanded demand, especially in the instant tea category, because convenience is a new driver for our consumers, and for that we are setting up additional capacity,” he said.
The new unit will come up at Dakor in Gujarat with an investment of over Rs 100 crore, and will be ready by the third quarter of 2025, he said. With the new plant, the company will increase its capacity to produce instant tea by five times from the current 3,000-4,000 packets every day. “With the new instant tea line, this will grow up to 20,000 packets per day,” he said.
Further, its storage capacity will increase by 50 per cent to around 15-18 lakh chests, with each accommodating 14-20 kg, he said. The company continues to launch new products every month and open new tea lounges in different cities. It also plans to increase its focus on e-commerce, quick commerce, digitisation, artificial intelligence in manufacturing and big data, etc., Singal said.
“We started in 2023-24 with around 34 tea lounges, and added 20 this year. We plan to add a couple of stores every quarter. We are not here to look at the crazy expansion of tea lounges. This business is an integral part of our vision for the tea category, so we would like to expand where we can give good experience and make tea interesting, exciting for consumers,” he said. Even when India’s tea production dropped 8-12 per cent compared to last year, the company’s volume growth has remained higher. “Our production has been higher than last year, with a double-digit growth compared to last year,” he said, adding that fresh pricing will be based on next year’s production.
“We assume that prices will rationalise, and we will see how we want to manage that. Having said that, the reason for price increases is that we will not compromise on the quality of a blend even for money,” he said. He said that as per AC Nielsen, Wagh Bakri enjoys 9 per cent market share. It is the largest selling premium tea brand, with roughly 60 million kg sales annually, out of which 12-15 per cent is exported, he said. “In volume-term, we are growing 4-5 times the growth of the category. Value growth will be around 10-12 per cent compared to last year,” he said.
