Goodricke Group is aiming to increase the share of branded and instant tea to ride out the volatility of the commodity cycle and rising cost due to wage revision.
About 35 per cent of its revenue is now accounted for by the two segments and the company is pushing to raise the share to 45 per cent.
“That’s how we can survive in the industry. Branded tea fetches premium in the market and gives us more margin,” said Atul Asthana, managing director of the company. The company, which had its annual general meeting on Wednesday, has recently launched ready-to-drink organic Darjeeling tea in five different flavours in an attempt to diversify and lure younger generations to tea drinking.
“The response has been very good, demand is outstripping the supply at this moment,” Asthana said.
The Camellia PLC-owned company hopes diversifications such as RTD and new varieties would be a way to push up sales from branded and instant tea division. The UK-based group has 29 gardens in India, spread among four companies. About 18 of them, including three Darjeeling gardens, are under the listed entity Goodricke. Speaking about the ongoing season, Asthana said the operating margins are under pressure due to the recent wage hike (Rs 30 a day) announced in Bengal. Gardens were asked to pay higher wages from January 1. The company has guided that it will be looking to increase production from the last year’s 15.63 million kg even though it would still be short of 2019, the last year of normal production.
