{"id":2628,"date":"2013-06-30T07:30:35","date_gmt":"2013-06-30T07:30:35","guid":{"rendered":"http:\/\/www.franchisemart.in\/franchise\/?p=2628"},"modified":"2013-06-30T07:30:35","modified_gmt":"2013-06-30T07:30:35","slug":"wagh-bakri-eyes-big-buys-to-enter-coffee-juice-biz","status":"publish","type":"post","link":"https:\/\/www.franchisemart.in\/franchise\/wagh-bakri-eyes-big-buys-to-enter-coffee-juice-biz\/","title":{"rendered":"Wagh Bakri eyes big buys, to enter coffee, juice biz"},"content":{"rendered":"

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Wagh Bakri Tea Group is going to buy four to six big tea gardens in Assam or West Bengal with a war chest of Rs 800 crore this year. Besides setting up a pan-India footprint first, the Ahmedabad-based packaged tea major will also embark on diversifying its business into coffee and fruit juice verticals by creating separate brands. Consulting major Deloitte, Wagh Bakri’s present adviser on HR strategies, would be entrusted for all its projects on the anvil. <\/p>\n

Wagh Bakri chairman and managing director Piyush Desai said, “We have earmarked another Rs 700 crore for entering coffee and fruit juice businesses , which will be funded partly through internal accruals and rest via equity participation . In packaged tea, we are expanding to new states like UP, Chhattisgarh, Himachal and Chandigarh now. Our sales volume has grown 8%- 10% annually over the years.” The company’s current annual turnover is Rs 750 crore. Desai has no plans for an initial public offering ( IPO) now. <\/p>\n

Taking a dig at the “lackadaisical attitude” of the organized tea producers, Desai told, “Big tea producers do not possess any vision to face the changing paradigm of tea business , which has steadily been challenged by the coffee giants like Barista and Starbucks. It seems that they have not yet planned a strategy for growing organic and green tea cultivation or market in India. Organized majors always put a blame on erratic weather, impact of Sri Lankan and Kenyan markets. Out of more than 5,000 tea producers in India, a handful of just 50 are engaged in organic or green tea business . This is shocking. So, we plan to get into this space.” <\/p>\n

To take on challenges from coffee retail major, Wagh Bakri , which is already into tea lounge and tea-vending business , is giving a thrust on tea varieties like ice, tea, peach and pre-mix ones to catch the fancy of the youths and travellers . Targeting states such as Rajasthan and Madhya Pradesh , Wagh Bakri’s vending machines would soon be set up in offices and at railway platforms in Tier-II , -III cities such as Jodhpur, Udaipur, Jaipur and Indore. According to a senior company official, “Vending machines have a demand from smaller towns and rural markets where MNCs like NestleBSE -1.00 % and HULBSE -0.67 % are yet to reach.” <\/p>\n

The packaged tea player, which buys 32 million kg of tea annually from around 25 producers , is ready to assist the Tea Board of India on their initiative to help small tea growers with funds for setting up factories and infrastructure for the same.<\/p>\n