Indian group enters UAE tea market

Dubai: India's largest privately held tea company is entering the UAE's retail market for the first time, hoping to cash in on the diverse taste of consumers.

Wagh Bakri Tea Group forayed into the Middle East during the Gulfood Exhibition last week and appointed the Al Maya Group as its UAE distributor.

The company has an annual turnover of $65 million and sells more than 20 million kilos of tea worldwide each year.

The Wagh Bakri Group plans to make its spice-blended tea a bestseller among the expatriate population and promote its organic blends among the health-conscious Arab tea drinkers. Containers of new stocks of the group's tea have arrived in the UAE and will soon be on supermarket shelves.

Already catering to 300,000 outlets across India and operating in major markets such as the US, Canada, Australia, Singapore and Japan, the company hopes to expand its operations in the Arab and African regions with Dubai as a base.

New machinery

"In the next five years, we will set up a teabag machine in one of the free trade zones in Dubai. We will cater to the entire Arab and African region here," said Parag Desai, director, Wagh Bakri Tea Group.

The company recently purchased a Dh50 million tea bag machine from Italy. The machine can make 250 staple-free teabags a minute.

Although the UAE's retail industry is dominated by popular international brands, Desai said the local market is always open to competition and ready to accommodate new brands.

"To face huge competitors is a challenging task. We have to be on our toes. We will have a good team and we are hoping that Al Maya supports us in distribution. In the UAE, distribution is the key," said Desai.

"We're operating in a segment where people understand taste. We're not operating in the economy category where price is the main driver. We are in the higher end of the spectrum," he added.

Desai said the group earlier commissioned a team to do a retail study in the UAE and found that UAE consumers were tired of the popular tea brands and looking for something new.

"People are tired of the leading tea brand in the UAE. They don't think it caters to their expectations. It's a very good brand, but because the migrant population comes from various backgrounds, they have different tastes," Desai said.

"In India, all these people drink something called 'masala tea' [masala is the Hindi word for spices]. We're the only company in India that offers authentic tea blended with Indian spices. Our research has shown that expatriates find the tea here to be very bland without masala. So, our masala tea is going to fill a huge gap in the market," Desai said.