'This Is A Very Worrying Time For Indian Tea Market'

Fourth generation tea baron Parag Desai believes the tea market in India today is what he made it. Which is no less than fashionable. Wagh Bakri tea which has been established a brand in India for centuries has now taken a leap to be in the game with their Wagh Bakri Tea lounges, the latest addition to the group being in New Delhi. Desai talks to BW Businessworld about the tensed situation in the tea market right now, competition and tea market post-GST.

Excerpts:

What is the per capita consumption of tea in India? Do you see any change in the way Indians consume tea? 
We base our market assessment on the data from the government as well as from our customised research, and we can say that tea is the lifeline of India. With more information available on the variety of teas and people seeing the benefits there has been a shift from coffee drinkers to tea lovers. Tea is in for the revival. From our own endeavours, we have the lounges, we are targeting the youth, the non-tea drinkers. We do see the tea drinkers on a rise. Tea in the form of green tea, lemon tea, ice is definitely adding to the per capita consumption.  

How do you look forward to 2017 as a fiscal year for profits and turnover?
2017 is going to be a difficult year for FMCG community, because of two earth shattering events GST and demonetization. I am looking at 2018 as a very promising year for FMCG sector.  

With the likes of cafes like Chaos coming to the fore, where do you think Waag Bakri stands?
We have the distinction of being the first mover in this category of tea lounges. We are the first people to make tea fashionable. On our lines businesses like Chaayos and tea trails have come up and have considered selling tea as a business model. They are also now contributing in doing what is necessary to the tea industry and that is to make tea fashionable.

What is your market share in the tea business?
We are in the premium packaged tea segment. Research shows our market share at 7-8 % on an all India level. We are technically available in only 9-10 states. The sales in these places are so high that it gives us a strong position.  Recently Maharashtra has become the highest selling state for us. We are very strong in central and western India. We have just launched in the North. And I believe that the market share will now improve drastically.

Where is the tea market heading?
This is a very worrying time for the tea market and the political scenario has to improve. Right now with the issues going on in West Bengal, Darjeeling and the issue with the China border. If anything goes wrong with China, its direct impact will be on the tea trade. In terms of quality tea planters are planting better teas, India is regaining its name in the tea market internationally. There is hope for betterment and better days to come.

What is your stance on GST roll out?
GST is a wonderful move by the government. It will be some time before people and traders will realise that. All the citizens are likely to benefit from GST. I am very hopeful. With this move, we have really ambitious plans but right now we are just waiting for the system to settle in.