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 teasYear 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 teasYear 1989 – Year 1994 – ‘Darjeeling tea’ and ‘Mili tea’ were launchedYear 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 ServicesWagh Bakri Tea Specialized Retail Outlets

Good Morning Premium Tea Tea LoungeMili 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.