How The Wagh Bakri Group’s Fifth Generation Took This Century-Old Tea Brand Into The Digital Age

Led by its fifth generation, Wagh Bakri has gradually transformed into an omnichannel tea brand, building a ₹200 Cr+ digital business across ecommerce and quick commerce while retaining its strong offline distribution network

The company expanded beyond Gujarat through a market-by-market strategy focused on deep distribution, consumer feedback, product trials and long-term brand building rather than rapid national rollouts

To navigate climate volatility and demand uncertainty, Wagh Bakri is increasingly using AI and ML for forecasting, procurement planning and inventory management while continuing to rely on human expertise in tea sourcing and quality control

In 2016, the century-old Wagh Bakri Tea Group, incorporated in 1919, couldn’t ignore the power of the internet and decided to dip its toe into digital commerce. The plan was simple: a gradual layering of new-age channels atop a deeply entrenched offline distribution system.

The bearer of this torch was Priyam Parikh, the company’s whole-time director and a fifth-generation member of the founding family. Essentially, he is the son of the eldest daughter of Piyush Desai who is his maternal grandfather.

After completing his MBA, he joined the family business as a management trainee in 2011.

“I have done all sorts of jobs. I was made to sit with everyone in the office, across every department,” said Parikh, adding that the exposure later helped him understand digital channels like no other.

By the time Parikh stepped into leadership in 2014, the responsibility of carrying forward a century-old legacy came with an equally important mandate to modernise the business. And that seems to have gone well. Today, the company’s revenue mix comprises 60% general trade, 20% modern trade, 8% ecommerce and 10-12% exports.

For a business where FY26 revenue is expected to be around ₹2,500 Cr, an 8% digital share translates to more than ₹200 Cr. While it could appear small in proportion, it is growing faster than any other channel in the mix.

“We’ve seen fantastic double-digit growth, and it’s [ecommerce & quick commerce] our fastest-growing channel right now. For us, digital is not a competitive channel. It is a supportive channel to other channels where our presence is much stronger,” said Parikh.

The story of Wagh Bakri Tea Group did not begin in India. It began on a tea estate in South Africa in 1892, where a young Gujarati entrepreneur, Narandas Desai, learned the tea business from its roots.

At the time, tea was a colonial commodity controlled by a few powerful players. Desai wanted to break just that. He envisioned a product that could travel across social classes, cultures, and communities.

“Hence the name Wagh Bakri, where ‘Wagh’ represents a tiger or the affluent class, and ‘Bakri’ represents a goat or the poor community,” said Parikh.

When Narandas Bhai returned to India from South Africa, he did not have much material wealth, but deep industry knowledge and a letter from Mahatma Gandhi endorsing his honesty and experience as a tea planter.

In 1919, Desai founded Gujarat Tea Depot in Ahmedabad to make quality tea accessible to ordinary Indians, especially textile mill workers. The burden of the legacy then came on his three sons: Ramdas, Ochavlal and Kantilal Desai. He then had three grandsons: Piyush Desai – the son of Ochavlal Desai; Late Pankaj Desai & Rasesh Desai – the sons of Ramdas Desai.

Later, the fourth generation entered the business. Parag Desai, the son of Rashesh Desai and Paras Desai, the son of Pankaj Desai. It was then the company started expanding outside of Gujarat.

For this leap, the company built different strategies depending on the product format, consumption occasion, and target audiences. Today, Wagh Bakri operates with a multi-brand portfolio catering to different consumer segments and price points. The company currently has four key brands under its umbrella (Wagh Bakri, Good Morning, Mili and Navchetan), each positioned differently across markets and consumer preferences.

Beyond packaged tea, the company has also expanded across adjacent beverage categories over the years. Its portfolio today includes iced teas, tea bags, and hot water soluble products such as ready-to-drink tea premixes and powdered tea formats.

By the time Parikh joined the board in 2014, Wagh Bakri had already expanded well beyond Gujarat. Between 2005 and 2015, the company steadily grew its presence across Rajasthan, Madhya Pradesh, Maharashtra and Delhi. It had also built an export business spanning more than 60 countries, including the US and the Middle East.

Despite this expansion, its business model remained the same, relying on distributors, wholesalers and kirana stores, along with modern retail channels, to reach customers.

For context, even today, traditional kirana-led trade accounts for 85-90% of India’s FMCG and grocery sales, with modern retail and online channels forming a relatively small but growing layer.

Though the company launched its D2C website (www.buytea.com) in 2015, but like most FMCG players, it remained constrained by unit economics, small ticket sizes and limited repeat efficiency.

“We started selling on marketplaces in 2016, but it was only after the pandemic that marketplaces and quick commerce became a major focus area for us,” Parikh said.

But becoming omnichannel was only one part of the story. Behind Wagh Bakri’s expansion was a broader set of decisions that helped the company scale beyond its home market, enter new regions, adapt to changing consumer behaviour, and strengthen its position in an increasingly competitive tea market.

For a legacy brand like Wagh Bakri, which remained largely rooted in Gujarat for decades, growth did not come from rapid national rollouts or aggressive marketing spends. Instead, the company expanded by strengthening its distribution network in neighbouring states and gradually building a pan-India presence, while adapting to digital commerce and changing consumer preferences.

While the channels through which tea reached consumers changed over time, the underlying philosophy remained consistent: expand gradually, understand local markets deeply, and invest in long-term brand building rather than short-term gains.

Here are some strategies that shaped Wagh Bakri’s growth across different stages of its expansion:

The company followed a phased expansion model where each state was treated as a long-term investment rather than a short-term market entry. Instead of scaling rapidly across India, leadership prioritised building deep roots in one region, strengthening distribution networks and then moving to the next geography.

Every new market follows the same playbook: engage directly with consumers, gather feedback, and use it to improve the product, even when the feedback is critical. The idea is to refine the offering while preserving its core taste and quality before moving to the next stage of expansion.

“That’s how Maharashtra happened, then Delhi NCR, then the South, UP, now the East. This year we’ll be going deeper in Kerala,” he added.

India’s tea market is highly localised, with regional brands enjoying strong customer loyalty. As a result, converting consumers takes time. Wagh Bakri relied on product trials, smaller pack sizes, on-ground engagement, and sustained retailer outreach to gradually build trust and attract new customers.

To reinforce adoption, the company invested heavily in direct consumer engagement methods such as wet sampling, fairs, and even door-to-door product experiences.

When Parikh joined as a management trainee in 2011, the company was present in Gujarat, Rajasthan and Madhya Pradesh. Maharashtra was on the anvil.

“Our chairman, my grandfather, used to take me and a small team to Mumbai’s walking gardens at 4 am and would serve our tea to people,” Parikh said.

When Wagh Bakri entered online marketplaces around 2016, limited pincode coverage and weak demand planning created early execution challenges. Later, discounted online pricing also began to affect the general trade, prompting the company to balance pricing and differentiate SKUs across channels.

As Wagh Bakri expanded across states and channels, demand planning became critical to maintaining scale without losing operational control. The company focused on aligning inventory with actual demand, closely tracking retail movement, and reallocating slow-moving stock to maintain freshness and consistency.

Technology systems like SFA, SAP, and internal analytics strengthened forecasting and visibility, while decisions continued to rely heavily on ground-level market understanding.

“We don’t chase top-line growth at the cost of discipline; we protect unit economics, maintain quality consistency and build trust over time,” said Parikh.

Wagh Bakri’s tea lounge journey first began in Jaipur, though the initial attempt did not work out. The modern lounge expansion restarted around 2014-15 with Mumbai. The idea was driven by a strong belief in the power of consumer experience and word-of-mouth marketing.

“My grandfather had this thought that if I spend ₹10 Lakh on a newspaper ad, it will fade away in a day. But if someone tastes a cup of tea, they will share their experience with others,” said Parikh.

The first successful lounge in this phase opened in Vile Parle and still operates today. Over time, lounges became important consumer touchpoints across metros, helping consumers experience the brand and access the full product range. Location strategy focused on high-footfall areas, malls, highways and prominent city locations like Connaught Place and Safdarjung Development Area in Delhi.

Tea lounges were also designed to make tea feel more modern, social and experiential, while remaining accessible and affordable.

For Wagh Bakri, the core challenge in scaling tea operations lies in managing extreme agricultural variability across a highly fragmented supply base. As Parikh explains, tea is not a stable industrial input but an agri-product shaped by weather cycles, seasonal shifts and unpredictable yield patterns.

This makes forecasting both supply and demand inherently complex, requiring a system that can continuously learn from changing ground realities.

The company sources tea from a massive network of 14,000–15,000 plantations across Assam, West Bengal, South India, Sri Lanka, and parts of Africa. Procurement follows a hybrid structure — part direct sourcing from gardens and part through auction centres across India. Every batch undergoes sampling, sensory evaluation, and selective lab testing before procurement decisions are made, ensuring quality consistency across such a wide base.

To manage this complexity, Wagh Bakri has been increasingly using AI and ML models for seasonal forecasting, yield estimation, demand planning and tracking. These systems help interpret patterns across multiple “tea seasons” and climate variations, enabling better visibility into both supply fluctuations and market demand cycles.

According to Parikh, this has become especially valuable in improving planning accuracy and procurement efficiency.

While AI is becoming a strong backbone for forecasting, Parikh is clear that its role is augmentative, not substitutive. The company still relies heavily on human tasting, auction judgment and field-level intelligence to validate decisions. In his view, AI delivers the most value when it enhances decision-making speed and accuracy and not when it replaces the experiential expertise that defines tea sourcing.

The biggest challenge for the tea industry today is the weather, as it directly affects both the quality and availability of tea, leading to raw material price volatility and difficulty in securing a consistent supply of good-quality tea.

Alongside this, margin pressure from quick commerce and other channels continues to intensify due to deep discounting across marketplaces and modern trade. Changing consumer preferences further add complexity, as consumers today are more value-aware and quick to shift choices based on perceived quality and pricing.

Despite these pressures, the company continues to scale, operating four factories with over 60+ Mn kg output last year, while deepening distribution in Eastern India and strengthening its presence in South India.

Currently, the business remains tightly cost-structured, with raw material costs forming the bulk of expenditure and leaving limited room for inefficiency. Every cost line is closely monitored, with efficiency, vendor partnerships, and long-standing operational discipline playing a key role in sustaining growth and managing external volatility.

Overall, the road ahead for Wagh Bakri is about balancing scale with discipline. As it deals with climate uncertainty, channel shifts and changing consumer behaviour, the company remains focused on efficiency, consistency and preserving its 100-year-old legacy.

Source: Inc42 - Startups