Conversations with businessmen like Parag Desai are rare these days. It is not often you find business leaders that are as straight-talking and unassuming like the Wagh Bakri Tea Group’s Executive Director. Leading a 100-year-old brand with a fascinating history and legacy behind it is no mean task and Desai is clear that his primary objective is to uphold the brand’s reputation. Drawing parallels with the Tata brand, Desai says, “I would relate myself to someone like a Ratan Tata. He has a reputation to defend. He cannot be seen doing something which is not at par with the ethos of the Tata brand. Likewise, since we are a tea company, we cannot be seen doing something that goes against our brand ethos and core competencies – which basically include high quality tea, excellence in advertising, marketing and direct customer loyalty.” He adds that while there may be multinational companies that operate in the tea or beverage category, those companies also work in a host of other categories. As a company that specialises in tea therefore, Wagh Bakri must stay more energetic and compliant to customer needs than anyone else.
100 YEARS YOUNG
Reflecting on how far the brand has come, Desai tells us that the brand has evolved to adapt to the way people shop today. Consumers have gone from mom-and-pop stores to standalone outlets, and from modern trade and cash-and-carry to e-commerce. “The brand has remained successful through all of that. We have reached out to our customers with the same passion throughout these transitions, and till date we engage with our customers in much the same way as my grandfather did when he started out. That is a big achievement!” The product offering has also played a big role in the Wagh Bakri story. The brand has moved from putting out just one variant of tea when it originated to giving the consumer a huge variety – green teas, instant teas, tea bags and iced teas. “Today’s consumers know what they want. Everyone has their own preferences. Some want a strong brew, others prefer a light one with no milk and we try to ensure there is something for everyone. Desai believes the brand has really excelled in the expansion of its portfolio. Another thing that has changed for Wagh Bakri is its media plan. “From doing plain vanilla newspaper ads at one point of time, to airing our ads on TV channels and then changing our advertisement content to make it relevant to all channels like sports and news, and then adapting it for YouTube, Google or Instagram, our media and advertising strategy has changed quite a bit,” he says. The consumer remains the same though. Therefore, the one thing that he and his team focuses on in a big way is reaching out to the consumer in a manner and platform that is most relevant and effective.
The brand may be 100 years old but Desai believes that it should continue to stay young. “We should remain a young brand and more grounded. There is no place for arrogance. We should not enter into a zone where we become complacent with our market-share and see no possible growth opportunities.” The brand enjoys a good 40% share in Western India and between 7%-10% pan-India, so Desai believes there is definitely room to grow.
What’s in a name?
For the uninitiated, the name Wagh Bakri may seem odd for a tea brand. Literally translated, it refers to a tiger and goat and the brand logo depicts the two animals drinking from the same cup of tea. There is a story behind that name, Desai tells us. It all started with his great-grandfather, who had a vision to launch a tea store. “My great-grandfather, grandfather and his brothers went up to a saint and told him that they wanted to open a tea store, but that the store should reflect the message of equality. Yet, it had to be something the British (who were still ruling India at the time) should not know about. The saint then took a piece of charcoal, drew a tiger and a goat both drinking from the same cup of tea, with a wrestler standing in between to ensure the friendship remains. The tea is so good that they forget the enmity, and become friends. That’s the story of Wagh Bakri!” Today, it a wonderful thing to see that legacy continue to live in the brand, Desai beams with pride. Present in over 45 countries, he points out that the company makes tea that brings people together, helping them bond and forget their differences. He adds, “It is that cup of tea, which brings together the driver and his employer, the CEO and his team, agencies and clients! The Wagh Bakri story lives in the way our consumers enjoy their tea today.”
A still from the Wagh Bakri film, titled ‘Two Cups of Togetherness’ created by Scarecrow M&C Saatchi earlier this year to celebrate the brand’s 100th anniversary
From a brand campaign, which was a light-hearted take on arranged marriage back in 2007
From the ‘rishton ki garmahat’ film created by Scarecrow M&C Saatchi in 2015
Towards a robust advertising strategy
Throughout the decades of the brand’s existence, the company has aligned its messaging and campaigns according to the time. Desai points out that along with creative agency partner Scarecrow M&C Saatchi, the brand does a lot of research to remain connected with the pulse of the Indian consumer. “All our campaigns have been relevant to the time. So around ten years ago, we showcased the relationship between the mother-in-law and daughter-in-law and now in keeping with the times, our ad films are showing the relationship between a husband and wife or relationships among friends. So we have been extremely conscious about where India is going, and where our relationships are going today,” explains Desai. “We are like a Bollywood film, but the only thing is we make our advertisements a 32 second, and we remain relevant to the generation. The mood of the nation is reflected in our ads. Our advertising always remains deeply connected with the pulse of the Indian consumer,” he adds. Looking back at some of the ads that were released nearly a decade ago, he points out that consumers shouldn’t feel like the messaging is from a bygone era or too ahead of their times.
Speaking about the brand’s five year plus relationship with Scarecrow M&C Saatchi, Desai tells us that he couldn’t be happier with the work the agency has done on the brand. “We used to work with them when they first became entrepreneurs because we believed in all the three partners at the agency. Most creative people tend to have ideas, but they cannot hear what the brand is saying.” However, he points out that Manish Bhatt, Founder & Director, Scarecrow M&C Saatchi has always been part of brand meetings, research and is a keen listener, paying attention to what people say. “We are happy with the way our relationship has evolved. Our team also often travels to the Scarecrow office and sits with the creative Scarecrow team, and that is where they make the winning creative combinations,” he smiles. The company devotes a good Rs 40 to Rs 50 crore towards its advertising every year on an average.
GOING DIGITAL IN THE COVID-19 ERA
Another big priority for Wagh Bakri is to crack the Digital code. Desai tells us that the COVID-19 lockdown has resulted in a complete revamp of Wagh Bakri’s marketing and distribution strategy. “We are now more focussed on e-commerce channels than ever before. We have put a hold on all our national campaigns. Our campaigns are running only for live events – the stock market is one such example. The situation is difficult because we are seeing a demand that is perhaps ten times more than we can meet, because we are facing logistical challenges during the lockdown.” Even while other brand prepare for the post-COVID-19 phase, he tells us that the company’s priority for now remains to reach out to consumers wherever possible despite the many limitations it faces. This also means a huge focus on digital advertising. “We have moved very quickly on the Digital front right from the start of this lockdown and we have earmarked around 15% to 20% of our budgets to Digital.” The company is working extensively to increase its presence on digital and social media platforms with messaging that revolves largely around the health benefits of different brews, particularly green tea. Desai believes this will be the new state of affairs for his company and many others at least for a few months more. Speaking about how things have changed so rapidly since India moved into lockdown at the end of March, Desai adds, “Going forward, I think this will be the new normal. We will have to keep working within this disruption.”
From a family business to international shores
Going by the past five years, Desai says the company has been growing at a CAGR of around 12% to 15%. The company has an employee strength of around 700 and today has forayed into new ventures like tea lounges. “We have more than 100 kiosks and over 15 tea lounges, and are scaling up really fast! We have three factories and operate in around 17 states of India today and in 40 countries outside of India.” He adds that the company has in fact seen a higher international growth rate than domestic and the reason for that is tea is rapidly becoming the beverage of choice in those markets, especially for those looking for health and wellness benefits. “A clear example of this is that green tea has seen great sales in India and overseas – our sales of green tea are tripling every year. Everyone now knows the health benefits of green tea and that’s why we’re seeing good demand and sales.”
The company’s international success is something Desai is particularly proud of. Having stepped into the family business three decades ago, he is pleased with the strides the company is making today. “When I took over the company, I was very young. One of the discussions we had at the company then was how to make the brand name, a very Indian one that refers to the names of animals, a glamorous business. In the last 30 years that I have handled the brand, my success has been in making it nothing less than a multinational one. Consider this – we are in Saudi Arabia, Germany, Australia, and in America. Everywhere people pay a premium than the regular brand to buy Wagh Bakri. That means the brand has achieved a premium status in those markets. It is the single largest achievement I can put against my name,” he states with pride