Mary Cotterman was 12 when she learned to throw clay on a potter’s wheel. In the decades since, that wheel has never stopped spinning for this accomplished teaware artisan. She describes the foundation of her work as functionality, “because for me, no matter how it looks, if I’m making a piece of teaware it needs to be a precise tool for pouring tea, so a lot of my design I take from traditional Chinese vessels, but I have learned small techniques and vernacular from all over.”
Caption: Mary Cotterman turning a teapot lid at her studio in Asheville, North Carolina
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Teaware Born from Native Mud
In 2015 Cotterman moved to China to learn from the old masters how to pour Chaozhou Gongfu at the Ming de Yuan production studio and to speak Mandarin. She spent two years there learning Cha Yi (tea arts) from a master in the Beijing school, becoming the first westerner to throw shou la hu teapots. She next studied at the San Bao International Ceramics Village in Jingdezhen, the home of porcelain for 1700 years. Her residency included helping run a gallery, curating shows, and translating for international artists.
In 2018 she returned to the United States after a long sojourn across Europe. She makes her home in Asheville, North Carolina where you will find her crafting water jars, pitchers, teacups, celadon gaiwans, and ash-glazed Japanese-style Kyusu teapots in a wood-fired kiln. By day she forages for local plants, studies traditional folkways and earth-based practices.
Dan Bolton: Your arrival in Asheville anchors the western end of a bridge that spans Europe and leads to ancient China where you spent several years learning Gongfu Cha style pottery and to speak the native language of porcelain and Yixing clay. Will you describe for listeners the state of artisan teaware in the US?
Mary Cotterman: Teaware in the US is a reflection of the amalgamation of different traditions from throughout the world, wherever tea goes, it creates its own unique culture based on how the people in the region live. In the US we’ve got the British teaware, a lot of us ceramicist make teaware and teapots in that style.
I don’t. I specialize in small Chinese teapots.
As the tea community gets more educated and broadens, people are getting excited about teaware from different places. So, Gong Fu Cha, the Chinese tea service is becoming quite popular in the United States and throughout the world.
To me, it’s a really lovely experience pouring tea in this way because it lends an aspect of ritual to people’s lives that I think we miss a lot in our quotidian daily lives because we’re rushing to and fro.
The Chinese tea service invokes this sense of process and ritual.
I also make Japanese-style Kyusu pots, which are side-handled teapots with big openings. They’re typically used for green tea so a lot of steam needs to be able to escape the opening. You don’t want your pot getting too hot.
As people get familiarized with the different styles of tea and regions, they’re starting to collect teaware from all over.
Dan: On your website you mention that every vessel contains the wisdom you absorbed from around the world. How do you see the wisdom manifest in your work?
Mary: That is a good question. The foundation is functionality, because for me, no matter how it looks, if I’m making a piece of teaware it needs to be a precise tool for pouring tea, so a lot of my design I take from traditional Chinese vessels, but I have learned small techniques and vernacular styles from all over.
I’ve been doing wood firing recently, which is a really magical process, very labor-intensive. That style of wood ash glaze was taken to its height in Japan. It’s done all over the world. But the particular long firings in very hot kilns for the buildup of wood ash to create this really natural glaze is a long-standing Japanese tradition.
I think of lineage a lot as a craftsperson. There’s a gift that you’re given by your teachers especially with pottery. It’s difficult, and it’s a steep learning curve, and you can practice for many, many, many years and still not be an expert.
Dan: Will you describe the artisan spirit and state of mind of those embracing native clay to make teapots and teaware in the US and elsewhere?
Mary: This is an interesting area of exploration because it is at once new in that we’re trying to be more ecologically friendly and our artists and practices, we’re trying to be climate-conscious in our practices so that we can continue making pottery, as humanity always has, but it is also something that is historical.
Throughout the world’s pottery, artisans gather around natural sources of clay. And each source of clay has its own life story. Yixing clay is very touted and it’s incredible, and it’s very good for what it is, but it is not special in its uniqueness. Every native clay has unique properties based on its life story, the mineral composition, and what bacteria is in the soil will affect how it can be worked.
Native clay is integral to pottery itself. Finding that relationship between the Earth and us between the life story of the clay began on the top of the mountain, rocks eroded over millions of years added plant material and bacteria, and then it gets deposited in a place where you can go and dig it.
There are many ways you can use this in the process; you can make things out of native clay, and you can also use them as slips or decorating or crush up rocks to use in glazes. It’s really all about coming back to the origins while also looking forward to a sustainable practice.
Dan: Asheville is a thriving community of artists. How has covid impacted the arts community there in general and you as a tea artisan.
Mary: The shift to lockdown personally wasn’t huge because I’m already kind of a hermit. It’s mostly just me in the clay all day, which continued throughout COVID.
Our studio, which is a big warehouse, subdivided into different studios, was shut down formonths, Not being able to get my hands on play was pretty tough. It’s a deep source of grounding and a spiritual connection did for me So that part was hard.
Once our studio opened back up, in the summer of 2020, it was pretty normal. My sales, thankfully, were doing pretty well.
I think people getting stimulus checks in the US were putting those to good use.
I haven’t met most of you, but you’re all online all over the world, and really just showed up for the small businesses in the tea community in a really inspiring way.
As far as the tea places everyone shifted, I think everyone sort of had to suddenly become more online and do different things like subscription services, and, you know, selling more loose tea. I know, for some of those sit-down businesses, it was quite rough, but I think everybody made it to the downhill side intact from the tea businesses that I know.
As a creative person, it was really nice to have the social pressure taken off, because I have some social anxiety, and so being social definitely takes a lot of energy for me.
During COVID, I went into a monk-like creative state because all I was doing was staying at home with my dog and my sweetheart and then sort of meditating for hours on end in the studio, silent and almost nobody else in there.
It was a really lovely time where the whole world slowed down like I feel when I’m working late at night in the studio, and I could just tune in and listen deeply to the craft.
| Ekaterra Tea CEO John Davison Gets Underway | India Steps up Efforts to Halt Illegal Tea Imports | Chinese Archaeologists Discover Oldest Tea Yet
Seven-minute Tea News Recap
Features
This week Tea Biz travels to Singapore for a conversation with John Davison, CEO of ekaterra tea, soon to be the largest tea company in the world. Ekaterra is currently a division of Unilever that houses 34 tea brands including Lipton, PG Tips, TAZO, Brooke Bond, Lyons, and Red Rose. In November CVC Capital Partners, a multi-billion private equity firm headquartered in Luxembourg, paid $5.1 billion for Ekaterra tea, outbidding several competitors and establishing a valuation based on 14x earnings before taxes and depreciation.
Ekaterra Tea CEO John Davison discusses his plans for re-energizing the Unilever tea portfolio.
Ekaterra tea CEO Re-energizes World’s Largest Tea Company
By Dan Bolton
John Davison joined Unilever in March 2021 to carve out the company’s underperforming tea portfolio. Davison was formerly CEO at Zuellig Pharma, a $13 billion pharmaceutical distribution company employing 13,000 workers in 12 Asian countries. Davison, who is British, is a graduate of Cambridge University and Harvard Business School. He began his career with UK retailer Marks & Spencer before joining McKenzie & Co. in 1991. He was global head of strategy at Diageo in 1995 during the Guinness merger and a regional president at Danone for 11 years beginning in 2003. Davison, who lives in Singapore, will relocate to Europe after Christmas. Davison discusses the urgency of improving tea quality and adopting sustainable initiatives along the entire supply chain. Listen to his plans for re-energizing the world’s largest tea company. Read more…
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John Davison on re-energizing the world’s largest tea company
India Steps up Efforts to Halt Illegal Tea Imports
By Dan Bolton
India’s food safety and customs officials have stepped up inspections of tea imports targeting Nepal and citing complaints that large quantities of Himalayan grown tea are being illegally passed off as origin protected Darjeeling tea.
It is not clear how great a quantity is involved but CBIC is asking for proof of export license and sanitary and phytosanitary certificates after customs authorities discovered that only 23.4 million kilos of the 60.4 million kilos imported into India during the past three years for re-export had been re-exported. The Darjeeling Tea Association asserts most of this tea arrived from Nepal and was sold as if India produced it.
Growers describe a porous border that makes it possible for raw tea leaves to cross from Nepal. Unscrupulous factory owners can confidently process the leaf and pass it off as Darjeeling in the domestic market, reaping a significant difference in price. Tea vendors are in on the game, offering as little as 600 rupees [about US$8] per kilo to producers and then doubling the price for unsuspecting customers.
Larger quantities of bulk processed tea can also cross the border as a bilateral trade agreement waives tariffs and prevents arbitrary inspections that could be viewed as harassment.
India is the largest market for Darjeeling with 5 to 6 million consumers. As India’s premier growing region, Darjeeling has focused mainly on controlling overseas exports to protect its name and reputation for purity and taste. Joining us today is Sparsh Agarwal a fourth-generation Darjeeling grower at Selim Hill Tea Estate who articulates a domestic threat, which is the import of teas blended to dilute the Darjeeling brand.
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Sparsh Agarwal explains how a porous border with Nepal dilutes the Darjeeling brand
Agarwal reports “The crux of the problem is that if you have spent any time in Darjeeling, you know that the border between Nepal and Darjeeling is super porous, right? So there’s a large problem of green leaves being smuggled in and then being produced in Darjeeling tea factories. The second-degree problem is that tea shops are buying Nepal teas at a fraction of the price of Darjeeling teas. This is not the problem of the growers, to be honest, it’s not the grower’s fault that this is happening. Ultimately we will all have to go towards better, more established sourcing of teas using technology. We are looking into how technology like blockchain can be used to be able to improve these things. We are right now in advanced conversations with one particular company to be able to do better sourcing for our customers so that they know that this tea is not only coming from Salem Hill, it’s coming from these sections within Selim Hill.”
Biz Insight – India is also aggressively challenging importers to monitor Kenyan tea, threatening to cancel their operating license for violating new rules that require labeling by origin. Kenya had hoped that India would establish a minimum import price, a solution endorsed by the Indian Tea Association. Instead, India stepped up inspections taking a closer look at quality and quantities to slow a recent surge of low-value teas. Kenya shipped to India 2.8 million kilos of tea from January through June, up from 1.5 million kilos in the same period last year.
Tea remains unearthed from ancient tombs in Zoucheng, Jining City, Shandong Province, China. /CMG
Chinese Archaeologists Discover the Oldest Tea Yet
Archaeologists extended the age of prepared teas to the early stages of the Warring States, circa 453 to 410 BC, a period 2,400 years ago, according to a report by the Xinhua News Agency.
The samples were discovered in tombs excavated in Shandong Province in the remains of a city built 2,800 years ago. [during the Spring and Autumn period (770-476 BC)]. Stem and leaf carbonized residues were found in an inverted porcelain bowl. Researchers led by Professor Wang Qing at Shandong University said the residue is likely dregs left by ancient people after boiling tea. Tests for theanine confirmed the substance as tea. The findings advance the age of prepared teas by more than 300 years in a study published in the Chinese-language Journal of Archaeology and Cultural Relics. –Dan Bolton
Read more…links indicate the article continues. Learn more… links to additional information from reliable outside sources.
Nov 27 – Sale 47
India Tea Price Watch | Sale 47
Tea Biz caught up with tea exporter Pranav Bhansali of Bhansali and Company to review the Indian tea industry’s past year. He said, “Quality teas have been selling at fantastic premiums for CTC and Orthodox teas, even at this late stage of the season. This is surprising, especially for CTC teas, since it is unusual to see the major packeteers and blenders being this aggressive and active on quality produce at this time of the year.” Bhansali says, “Indian tea exports have taken a hit due to high CTC prices and weather disruptions.” The Tea Board estimates a decline of 8-10% in calendar 2021 compared to the same period last year. “Supply chain disruptions and container shortages are expected to continue into 2022. On the bright side, Iran continues to be the largest consumer of Indian Orthodox teas,” says Bhansali. Read more…
Aravinda Anantharaman
Aravinda Anantharaman introduces the two-part series Frugal Innovations with Abhijeet Hazarika and Indian tea growers Saurav Berlia and Shekib Ahmad who describe cost-efficient experiments and pilots that demonstrate why tea producers should embrace simple technologies with scalable impact. Listen to Episode 47 of the Tea Biz Podcast | Friday, Dec. 10
Upcoming Events
December 2021
Sips & Bites: Exploring the World of Artisanal Tea | December 15 | Virtual | Director Dr. Katharine Burnett will share an overview of the Global Tea Initiative. Manik Jayakumar, Founder of QTrade Teas & Herbs, and Rona Tison, Executive Vice President of Corporate Relations at ITO EN, North America, will discuss their work in the tea industry and walk attendees through a tasting of their exquisite teas. The Global Tea Initiative (GTI) for the Study of Tea Culture and Science was established in 2015 to promote evidence-based knowledge about tea. | Register FREE (Zoom) | 6-7 pm PST | Sponsored by the Robert Mondavi Institute for Wine and Food Science, University of California, Davis.
In November Luxemburg-based private equity firm CVC Capital Partners, with investments totaling more than $100 billion, out-bid several competitors to acquire Unilever’s tea portfolio, re-branded as ekaterra tea. Lipton Yellow Label, Brooke Bond, Lyons, PG Tips, and 30 more tea brands, many regional, have a combined turnover of $2.3 billion (€2 billion). The agreement is subject to regulatory review and will not close for several months, but there is no time to waste as CEO John Davison takes on the task of re-energizing the largest tea company in the world.
Caption: John Davison was the only passenger on the plane from Singapore to Judah, Saudi Arabia
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Ekaterra tea CEO John Davison
“I’m much more of a grower than a cutter,” says ekaterra tea CEO John Davison
Re-energizing the World’s Largest Tea Company
By Dan Bolton
The Singapore sun is high and the room alabaster bright when ekaterra tea CEO John Davison answers the Zoom call. It is the dark of night and snowing heavily outside my Winnipeg window in central Canada. Davison, 58, is energized. Singapore was quick to instituted mass lockdowns in early 2020, becoming one of Asia’s most stringent COVID-zero economies, largely sealing off its borders, and testing. After 18 months of isolation Davison has just returned from the COP26 Glasgow Climate Summit in Scotland and would soon depart for Judah, Saudi Arabia and to visit the company’s massive tea packaging operation in Jebal Ali, near Dubai, UAE.
In March 2021 Davison was named to oversee a “carve-out” of the least desirable tea brands from the Unilever portfolio. Unilever CEO Alan Jope announced in January 2021 that the company would jettison underperforming legacy brands Lipton, PG Tips, Lyons, Brooke Bond, Red Rose ? all black tea stalwarts acquired in the 1980s and 1990s ? along with more recently acquired and fiscally promising T2 retail in Australia, TAZO, an American packaged good brand formerly owned by Starbucks, and Pukka, a fast-growing herbal tea brand founded in 2001 in a home kitchen in Bristol.
Davison spent his first nine months at Unilever reorganizing billions in assets including 11 factories across four continents that employ 4,000 workers doing business in more than 100 countries. A big portion of Unilever’s suppliers and partners will transition to ekaterra at the close of the sale. Ekaterra will operate company owned tea estates in Kenya, Rwanda, and Tanzania and contract with thousands providing a livelihood for one million people.
Davison, a Harvard Business School Graduate with a master’s from the University of Cambridge, spent five years at Diago as a strategy director during the merger with Guinness and worked for 11 years as a senior executive with Danone. His last job was managing the Asian division of Zuellig Pharma, a $13 billion global leader in pharmaceutical distribution. After leading a turnaround that he initiated in 2014, Davison spent the first year and a half of the pandemic focused exclusively on resolving formidable distribution challenges brought by COVID-19.
Unilever, ranked 175 on the Fortune 500 with 400 brands and turnover of $58 billion, kept its most profitable and fast-growth tea gardens and factories in India, Nepal, and Indonesia and in North America remains in a joint venture with PepsiCo to manufacture and market Lipton tea in bottles and cans. The portfolio’s remnants are expected to generate more than $800 million annually, making it the world’s fourth largest tea company, according to Euromonitor.
One man’s cast off is another man’s treasure. Davison is eager to make the most of CVC Capital’s $5.1 billion investment.
Dan Bolton: John, when a private equity firm puts $5 billion to work they expect sizeable returns. In general, two patterns have emerged, one in which the management team cuts their way to profitability, trimming staff, investing in automation, and introducing efficiencies. The second is spurring growth.
John Davison: Why would a company like CVC want, as you say, to invest $5 billion in taking ekaterra out of Unilever?
It boils down to three key points: Number one, it’s a growth category. Tea is on trend, I think COVID, if anything has reinforced the dynamics that tea is a healthy beverage. It has a lot of medicinal qualities, as you well know, in terms of heart health, digestion, you name it. Investors like to be in categories that are on trend and have long term potential.
Secondly, if you look at ekaterra, we are the largest, by some stretch, I think three times larger than the next player. So, we have a leadership position. That leadership stretches across 10s and 10s of markets ? 3,040 different markets. It’s not been something we’ve built on and really capitalized on.
I think Capital Partners, CVC has seen that opportunity to capitalize and drive that leadership position to greater heights and with that bring the category into faster growth. That’s the second big reason, the strength of our competitive position, relative to the rest of the peer group in the industry.
The third thing is the management team. I’m the rookie and just joined nine months ago, but the team we’ve put together in at ekaterra is highly experienced. Our R&D team is really strong. We have 3,540 tea tasters. When you put all that organization together, on top of a great brand portfolio in a growing category, it’s clear to see why CVC or anyone else would be interested in investing in the business.
Now that said, we’ve now got to deliver on all the promise to your point. And that will be something top of mind as we start to engage with our future owners. And of course, these transactions take time to go through the process. There’s a few months now of anti-trust filings, regulatory processes and approvals to go. We won’t see the close of this deal probably till mid next year.
Davison at his home office in Singapore
Dan: At COP26 you sent a clear message that sustainable tea at large scale is doable. So, do you intend to be a tea company that is ethically mindful? Or an ethical firm that sells tea?
John: That’s a trick question. I think you can be ethically mindful and kind of watch from the sidelines, right?
We need to get in the game and drive the rules of the game. I don’t mean that in a threatening way, I think part of the reason we wanted to step out at COP26 was to make that point, which is that the status quo ? having a nice program to share with your customers and partners and consumers ? probably isn’t enough at this stage.
If we don’t get beyond that, towards driving real change, and not just change inside of our business system, but industry wide, as well as with consumers, in 10 years time we’ll be really panicking about what we can do to reverse things that are probably irreversible by that stage.
We need to get beyond watching and following. We need to get into the game and lead. We have the technologies discussed by the Ethical Tea Partnership, and a bunch of new technologies that are in development that were mentioned at COP26.
We need to deploy that technology as soon as possible into pilots, which we’re doing. And as soon as we get them into pilot, we need to get them into action on our own tea estates and as soon as possible thereafter, broaden that to the entire supply base. And as soon as possible thereafter, the entire supply base of the industry. If there are technologies that can help other players, you know, I think we need to make them available. There’s no point in jealously guarding a technology that you deploy to 5% of the tea crop of the world, if 50% of the tea in the entire world is at risk.
We need to develop proper resilience in climatic challenging circumstances, which you know, are becoming more and more difficult, as you said earlier, already affecting crop yields.
If we can get these technologies properly piloted and properly rolled out, then we should be able to help our tea farmers manage much more productively much more resiliently in the face of real dramatic climate change. And that can only be a good thing, not only for ourselves, but for them and for the industry. And that’s something we’re going to work very hard to deliver.
So, in that sense I think the answer to your question is that we need to be both an ethical company, as well as a tea company acting ethically.
Unilever already set us on a wonderful course. It’s a great company. I think in many respects, we’re sorry to be leaving, and they are sorry to be losing us. But at the same time, it is for the best reasons to give us this chance to drive a leadership that I think would be difficult to do inside such a large multinational.
Davison taking tea with the ekaterra staff
Jebel Ali United Arab Emirates
Dan: So, let’s talk about the core product. In this case, making tea that people are willing to pay a premium price to drink. I don’t think any brand wants to be known for making tea so heavily discounted that it is perceived as cheap or market blends that taste worse than in years past. Ekaterra tea inherits several brands on the rise, market leaders in 58 regions, but in the west sales are stagnant.
Senior Beverage Consultant Matthew Barry at Euromonitor writes that “mass-market black tea bags are in consistent decline in nearly all developed markets. Unilever saw retail sales of black tea decline by $27 million from 2015 to 2020 in these countries, even with the benefit of a large 2020 pandemic-related retail spike.”
Last year Unilever CEO Alan Jope set the dominoes in motion by declaring “insanity is carrying on doing the same thing and looking for different outcomes, and for 10 years we have been trying to ignite growth into our tea business unsuccessfully.” Black tea drinkers were blamed for getting older and starting to fall over, and that is the fundamental problem… said Jope, “younger consumers are looking for novel experiences, and the consumer of ‘builders’ tea’ was someone who was born out of habit and was not into experimentation and trying new products.”
I know from personal experience tea quality is an issue. Do you agree? And what are you going to do to make better tea?
John: The tea category within Unilever has been subject to a focus on bringing down costs to manage exactly what you described, declining pricing or stagnant pricing in the market. Any multinational would probably deal with that kind of spiral of decline on value by R&D engineering the product, so I think certain things we are absolutely going to put right very quickly. Other things may take longer to fix.
We’re going to work very hard at making sure we get our blends back to the top of the tree, in terms of quality and in terms of value to consumers. We can’t live in an industry if we are the leader in that industry, with second rate teas or teas that are not absolutely the best they can possibly be.
So, I think we’ve got a job still to do. We started that program in the last 12 to 18 months before I showed up and it’s something that we’re now accelerating. That will require clear investments in certain key areas, but also in the way we communicate benefits to consumers. I don’t think we’ve done a very good job on that, either. Historically, I think we’ve tended to pull back on consumer communications. And we’ve not played the powerful cards we have in our portfolio.
“We’re going to work very hard at making sure we get our blends back to the top of the tree, in terms of quality and in terms of value to consumers. We can’t live in an industry if we are the leader with second rate teas or teas that are not absolutely the best they can possibly be.”
– John Davison
Dan: When asked by the online polling site YouGov, consumers say they are willing to pay more for products that are sustainable, and to reward manufacturers who close the loop; traders who reduce transit emissions and growers who conserve water and regenerate soil. So, on one hand we have a price premium of perhaps 20-30% at retail. The premium is similar to that paid for organic goods and by consumers who have demonstrated their willingness to pay more for fair trade goods.
On the other hand, tea manufacturers face significant additional costs to cultivate and process premium tea. There is the expense of adapting to a changing climate, costs to comply with requirements set by third party certifiers, new equipment and more expensive plant-based tea bags and earth-friendly packaging, and set-asides to pay for carbon credits. Is the premium consumers are willing to pay sufficient to cover the cost of sustainable production? The desire is there, and there’s money on the table, can you operate ekaterra tea in a way that it’s both sustainable and profitable?
John: That’s a great question. I think sustainability, and ESG [Environmental, Social, and Governance] philosophies and beliefs are at different stages of development and relevance in different parts of the world. At COP26, you could absolutely feel that the world’s eyes were on everything that was happening. But it’s a difficult balance to strike.
I would like to believe consumers would sit down and say, ‘yeah, we understand all the packaging, we understand all the accreditations, we get it, here’s an extra 20%, 30%, no problem.’ But I don’t believe that’s going to happen overnight. And I don’t believe that will happen across the world, I think it may happen in certain societies. But it’s not going to be a wholesale phenomenon at this stage, maybe hopefully, in years to come.
Which means we develop sound business cases to surround the decisions we take to drive a more sustainable approach to business process.
This is why technology R&D is so important, because to remove plastic from your packaging, you must put in an investment to machines and the X number of factors needed to make that happen.
If you had the technology to design a fully recyclable or biodegradable pack instead, one that can be made at a lower unit cost, then that’s a win-win.
But there will be moments where we have to make tough decisions and say, ‘there’s an extra capex’ [capital expenditure] to fit this factory to be able to do X, Y, and Zed in a completely different way.
I think we’ve got to be courageous enough to make those decisions and figure out how to make the pay back with or without the 20% to 30% extra help from the consumer.
Right now, and you hear this from anyone you interview in consumer products, or any product category, there’s an enormous escalation in input costs, not only from commodity crops, but also from logistics supply chain, from packaging, all over the world, big tidal wave effects coming out of COVID and the disruption caused to the planet. We’re digesting those changes, as well as thinking ahead how we motor on, on climate change.
It’s a VUCA world [Volatility, Uncertainty, Complexity and Ambiguity] a lot of volatility, a lot of uncertainty. Because we’ve generally operated in so many different economies with those kinds of unusually volatile trends, historically, I think we’ve got a team that’s pretty creative, pretty versatile, and is well equipped to deal with challenges that often contradict each other.
That’s why we are employed to do what we do, if it was that straightforward, it wouldn’t be challenging. It wouldn’t be fun. It wouldn’t be the adventure it is to be in this business.
Davison signing a distribution agreement with Sheikh Abdullah Binzagr in Judah, Saudi Arabia. Binzagr Group has distributed Unilever products since the 1920s.
| In the Black: Holiday Sales Surge | CVC Capital Pays $5.1 Billion for Unilever’s Tea Portfolio | Weather Stations: A Climate Change Adaptation Essential for Tea
Seven-minute Tea News Recap
Features
This week Tea Biz travels to Brisbane, Australia where East Forged Tea co-founder Kym Cooper reminds us that innovation need not be at the expense of the timeless taste of tea. East Forged preserves that taste ? with no sugar, coloring, or artificial flavoring ? in a convenient, slightly fizzy, nitro-infused, cold-brewed iced tea that pours a craft-brew-like head of foam.
… and then to Boston, Mass. to learn how Evy Chen, facing an 82% decline in foodservice sales of her signature cold-brewed tea, reformulated, rebranded, and relaunched online as a successful direct-to-consumer brand.
Manufactured in a brewery and then canned, the teas get a burst of CO2 for fizz and nitrogen to add texture and a creamy head. Photo courtesy East Forged
A Fizzy, Foamy Innovation in Tea
By Dan Bolton
East Forged teas, launched in Australia in 2020, are nonalcoholic sparkling adult beverages cold-brewed for 12 hours from organic whole leaf green, black, and white teas and blended with low-sugar Calamansi, Pitaya, or Yuzu juice. Manufactured in a brewery and then canned, the teas get a burst of CO2 for fizz and nitrogen to add texture and a creamy head. The black tea tastes of citrus and is dry, not sweet, the Fujian-grown white tea is flavored with calamansi, a mild, wild citrus-hybrid from the Philippines ideal for social occasions. Read more…
Listen to the interview
Kym Cooper describes the importance of making teas that taste like tea
Resilient & Resourceful
The tea industry globally demonstrated its ability to recover quickly during two years of disruption. Less is said about individuals who overcame pandemic-related obstacles and the resourcefulness of people that grow, process, and trade tea. To remedy that, Tea Biz is sharing stories of resilience, reinvention, pivots, and clever workarounds that exceeded expectations.
Evy founder Evy Chen
A Story of Reinvention
By Dan Bolton
In 2020 US restaurant and foodservice sales declined by $240 billion (22% for the year) placing unprecedented stress on food and beverage suppliers. In Boston, Evy’s Tea founder Evy Chen watched as standing orders for her organic, sustainable, artisan cold-brewed bottled teas cease overnight. Revenue fell 82%. She persevered, observing that COVID lockdowns led to a surge in online transactions and altered long-established consumer buying habits. Within a year she had reformulated, rebranded, and relaunched online as a successful direct-to-consumer brand known as Evy. Read more…
Evy Chen on bouncing back after a dramatic drop in sales of her namesake cold-brewed tea.
News
Unilever spent the past year consolidating its 34 tea brands into a single division launched as ekaterra Tea.
CVC Capital Pays $5.1 Billion for Unilever Tea Portfolio
By Dan Bolton
CVC Capital Partners last week paid $5.1 billion to acquire legendary tea brands Lipton, PG Tips, Brooke Bond, Lyons, Bushells, and Red Rose as well as relative newcomers TAZO, T2, and Pukka Herbs culminating Unilever’s corporate carve-out.
The portfolio of 34 brands was christened Ekaterra Tea following a year-long restructuring with the intent to either sell or separate the division from Unilever’s core offerings. Ekaterra is now the world’s largest tea company with approximately 10% global share and the leading tea brand in 58 markets. Unilever retained its tea business in India and Indonesia along with the PepsiCo-Lipton partnership headquartered in the US.
Ekaterra CEO John Davison welcomed the acquisition: “ekaterra is a strong business with positive momentum and has an exciting future ahead under the new ownership of CVC Fund VIII. We look forward to the next stage of our journey as the world’s leading Tea business.” Read more…
Biz Insight – Bold big-scale investments in tea companies are rare. Five years ago Unilever spent a combined $500 million acquiring retail chain T2 in 2013, completing the roll-up in 2017 when it bought the TAZO brand from Starbucks and Pukka Herbs.
But these acquisitions were tactical and defensive, designed to stimulate revenue in light of a moribund black tea category by diversifying an aging stable of legacy brands from Lipton to Lyons. The $5.1 billion deal announced by Luxembourg-based CVC Capital this week is 10x greater, signaling an intent to revitalize and elevate the portfolio. Unilever spent the past year shaping a new corporate model for the large-scale production of sustainable tea but was unwilling to finance it. Ekaterra’s vision could only be realized if the corporate carve-out attracted aggressive bidding. Fortunately, it did. Finalists CVC Capital, Carlyle, and Advent International each spent time and money evaluating the potential rewards for investors. The low bid of $4 billion demonstrates that independently they agree that Ekaterra is headed in the right direction. CVC’s winning bid was 14 times (EBITDA), a measure of the portfolio’s basic contribution to Unilever’s earnings. All three bids embraced the complexity of re-imagining tea at scale. Insiders say CVC won the day with determination and grit.
Ekaterra Tea CEO John Davison and Dan Bolton met virtually for an hour-long interview last week in which Davison discusses the urgency of adopting sustainable initiatives along the entire supply chain. Listen to his plans for the company in Episode 46 of the Tea Biz Podcast | Friday, Dec. 3
Restaurant reservations are up 4% in the US and are now 7% higher globally compared to 2019, according to OpenTable. Recovery is uneven. During the past two years, 90,000 US restaurants closed permanently and the omicron variant has heightened concerns about future lockdowns.
In the Black: Holiday Sales Surge
By Dan Bolton
Shoppers are exceeding expectations for the holidays.
Americans spent an estimated $5.1 billion on Thanksgiving Day and nearly twice that on Black Friday sales that extended through Sunday. Adobe’s Digital Economy Index estimated total sales will reach $9.2 billion. Small business Saturday will net $4.5 billion. Toy sales are up 256%. Barclaycard Payments reported a 16.7% increase in volume compared to the same period on Cyber Monday 2020 and a 4.5% increase in payments compared to pre-pandemic levels.
US consumer spending online rose 20% in the first three weeks of November, according to the Adobe Index which predicts a record $207 billion in e-commerce sales this holiday season, up 10% compared to 2020. The US Census Bureau tallied $214.6 billion in third-quarter e-commerce sales, which now account for 13% of total US retail sales. The National Retail Federation projects holiday sales will increase 8.5% to 10.5% totaling $859 billion over the forecast period, compared to 2020.
Consumers appear to be heeding the advice to shop early. The Guardian reported a Deloitte survey that showed people spent 80% to 85% of their holiday gift budgets before Black Friday. Read more…
Africa has only one-eighth the minimum density of weather stations recommended by the World Meteorological Organization (WMO) leading to inaccurate forecasts and unreliable early-warning systems. Kenya’s government currently maintains only 22 rainfall stations in a country spanning 225,000 square miles.
Weather Stations: A Climate Change Adaptation Essential to Tea
The Glasgow Climate Pact calls for doubling the developed world’s investment in climate adaptations for poor nations.
Farm-level mitigation is underway as tea gardens dig ponds to capture rainwater and plant trees for shade but generalized weather forecasts focus on changes in average conditions and are of little help alerting growers to heatwaves and frost.
Africa has only one-eighth the minimum density of weather stations recommended by the World Meteorological Organization (WMO) leading to inaccurate forecasts and unreliable early-warning systems, according to the Washington Post.Kenya’s government currently maintains only 22 rainfall stations in a country spanning 225,000 square miles.
As it turns out, the gardens themselves are repositories of great volumes of “hidden” weather data used by the University of Leeds to develop high-tech computer simulations capable of providing climate information that is both useful and usable for tea growers in Kenya and Malawi.
The Conversation explains that understanding what future conditions will be like is particularly important for tea growers because the tea plant has a long lifespan, of more than 80 years. “That means it is critical to take decisions now that will continue to be sound in the future, like replanting with better and resilient cultivars, planting shade trees and crop diversification,” according to researchers.
The site-specific modeling establishes a temperature threshold specific to tea varieties. In Kenya’s Rift Valley growers are alerted when projections show several consecutive days of temperatures exceeding 27 degrees Celsius. In Malawi, the threshold temperature is 35 degrees Celsius.
“Projections from a suite of 29 global climate models offer projections for the 2050s and 2080s,” according to the Leeds University researchers.
Biz Insight – In January the Kenya Agricultural and Livestock Research Organization (KALRO) signed a two-year contract with aWhere of Denver, Colo. to monitor 6,787 virtual weather stations in Kenya that provide advanced weather data and analytics that support climate-smart agricultural decisions. aWhere maintains 1.7 million virtual weather stations worldwide according to CEO John Corbett, who writes that “Having accurate weather data and analytical tools to generate actionable insights for the food sector positions Kenya as a leader in climate adaptation.”
–Dan Bolton
Read more…links indicate the article continues. Learn more… links to additional information from reliable outside sources.
Nov 20 – Sale 46
India Tea Price Watch | Sale 46
This week saw good quantities of tea on offer, with an all-India sale percentage at 80%. Prices were marginally higher than Sale 45. Kolkata saw good demand for all CTC, Orthodox, and Dust. Hindustan Unilever was active for CTC while the Middle East was active for Orthodox. The quantity of Darjeelings on offer this week was higher and prices were up marginally. In Assam prices remained largely the same as the previous week, however, they are better than corresponding 2019 prices. Analyst Abhijeet Hazarika @TeaSigma notes that high sales volume in the last two weeks with increased offerings has eased pressure on supply. Read more…
Aravinda Anantharaman
Upcoming Events
December 2021
World Tea & Coffee Expo | Gandhinagar, India | December 2-4 Launched in 2013 and now operated by Messe Muenchen India, this hybrid virtual and in-person event for tea and coffee professionals is now scheduled for the Helipad Exhibition Centre, Gandhinagar, Gujarat, India. Website | Register Click to view more upcoming events.
In 2020 US restaurant and foodservice sales declined by $240 billion (22% for the year) placing unprecedented stress on food and beverage suppliers. In Boston, Evy’s Tea founder Evy Chen watched as standing orders for her organic, sustainable, artisan cold-brewed bottled teas cease overnight. Revenue fell 82%. She persevered, observing that COVID lockdowns led to a surge in online transactions and altered long-established consumer buying habits. Within a year she had reformulated, rebranded, and relaunched online as a successful direct-to-consumer brand known as Evy.
Resilient & Resourceful
The tea industry globally demonstrated its ability to recover quickly during two years of disruption. Less is said about individuals who overcame pandemic-related obstacles and the resourcefulness of people that grow, process, and trade tea. To remedy that, Tea Biz is sharing stories of resilience, reinvention, pivots, and clever workarounds that exceeded expectations.
Hear the interview
Evy Chen on bouncing back after a dramatic drop in sales of her namesake cold-brewed tea.
Evy founder Evy Chen
A Story of Reinvention
By Dan Bolton
Seven years ago Evy Chen pioneered small-batch, cold-brewed tea in bottles. Her tea bar at 253 Amory St., Boston doubled in size in 2018 serving cold tea on draft, kombucha, sparkling drinks, iced coffee, and bottomless boba, as well as treats sourced from local businesses such as Pain d’Avignon and Fomu. In early 2020 her carefully constructed venture nearly collapsed. During the months that followed Evy reinvented the product line as a fresh-brewed tea made from concentrate and sold in cans and available direct-to-consumer.
Dan: COVID lockdowns along the Eastern Seaboard shuttered foodservice operations and led to a surge in online transactions that altered long-established consumer buying habits. The impact on the beverage industry was severe. Tell us about those early days.
Evy Chen: Everybody was freaking out. Right? People were scared, people were binge eating. A lot of people’s insecurities came out during COVID.
I was sitting there watching everyone run around like crazy chickens thinking that’s been my world for, you know, the past 10 years.
I didn’t have a lot to work with, so I had to be very resourceful. Being a woman of color and an immigrant, and a younger person, I think that resilience was always there.
COVID really brought more of a focus and led me to say, ‘this is my game.” Looking around I said, “Okay, now it’s chaos, but within the chaos, where is the opportunity?’
This is hands down the hardest thing I’ve ever done. Everything I’ve established in the past 10 years gone, products gone, clients gone, people gone. I practically had to rebuild a company with not much money during COVID.
Evy Chen
Dan: So what were your first steps? Let’s get granular for our listeners.
Evy: Starting from retail pricing, you want to keep your costs at 25%. Right? You have to keep your margin at a certain level, and then it’s reverse engineering.
So, we do an eight-pack right now on Amazon and www.evytea.com.
That’s one single flavor so shipping costs exactly the same whether you buy one or two packs. The math becomes very simple. It’s not necessarily about cutting weight, per se, it’s about what kind of products and services can you provide to add value because your delivery cost is fixed. Our subscription service, for example, lets customers determine flavor and frequency and they are free to swap, pause or cancel at any time.
From a shipping perspective, where we caught cost wasn’t necessarily at the very end of shipping to customers, it’s chasing it all the way back to the beginning of the supply chain and saying, okay, the containers now cost, you know, 15x more than before. So, how do we engineer this map and identify whose truck we can get on that’s already coming this way, instead of hiring our own trucks? We got really, really creative.
We also had to figure out a way to raise more capital upfront and work out a contractual deal with our suppliers. You lock in costs where you can to control expenses. So, it’s a lot of tweaking the P&L [profit & loss statement], tweaking the clock, tweaking the engineering where it hurts the most.
“No one had thought to cold brew tea before, but it brought out all of the great attributes that were lacking in cheap iced tea.”
– Evy Chen
Dan: Describe for listeners your innovation in brewing a tea concentrate to trim costs. Previously you steamed the leaf to release flavor and aroma then relied on small-batch brewing for 16 hours before bottling.
Evy: We developed our own tea base that is a concentrate. It’s one thing I’m most proud of as a food scientist, to scale the exact sensory experience of a craft tea with the stability, the shelf life, and everything that you can imagine about being a larger manufacturer to capture the margin opportunity. So today we are shipping less water, shipping it less often to make more tea at one go. And then it’s a matter of just figuring out a way to stretch that supply throughout the year.
Every single drop of Evy Tea I engineered from the very get-go. But from now on even scaling to 100 million gallons, the product quality will remain consistent, exactly the same. And the sensory experience is just as, if not better, than when I made you a cup of tea at my tea bar.
Dan: How will your rebranding and direct-to-customer sales unfold in 2022?
Evy: I’m not interested in capturing 10 million people next year. That’s a typical play, right, you raise a lot of money, you throw stuff against the wall and see which one sticks, and what doesn’t work, and you move on.
And that becomes a very data-driven business and very data-driven marketing. I want none of that. I would like to capture people and keep them engaged. I want to keep that person as a lifetime friend because this is a long journey for me.
I prefer a lower velocity working with our retail partners online and offline so that we can really tell that story and prove that story-centric marketing works.
I’m looking at it as sourdough starters that I am naturally feeding. This is the best iced tea in the world hands down, I don’t have to sell them on that, all I need to do is to get the product to them and get them interested enough to taste it for the first time.
Tea is a wonderful ingredient in beverages and food, it has a huge amount of history and culture and a story of humanity within. So why is it being minimized? Why is ready-to-drink tea mainly sugar water? Why are we, in tea, only worth 20 cents a pound?
Grapes can be sold for $140 a pound. It’s not less labor-intensive, it’s, even more, labor-intensive, right? So why do we do all this work and don’t get the same value?
“So I’ve done nothing more than simply decide that I’m worth more and that truly is the driver behind this whole rebrand.” – Evy Chen
The only difference is that we’re not vocal and that we don’t think we’re worth it. Talk to any tea farmers, any distributor anybody you talk to in tea is the most humble human beings on earth, right?
We’re really nerdy, we’re serious. We truly love this. But who is out there is talking to people drinking tea bags? The perception of value isn’t there. What do we have to do to change their mind? That’s the work we’ve been putting in.
We need to figure out how to tell the same story in a different way, in a shorter format in a more heartfelt, emotionally filled format, and more truthful format, and throw that against the wall against all the other big companies who are nothing but marketing.
We need to bring the whole industry into the next century not just the individual entrepreneurs but the entire global community of tea drinkers.
So I’ve done nothing more than simply decide that I’m worth more and that truly is the driver behind this whole rebrand.
Cold brewed superberryEight pack 12oz cansEvy Palmer (tea+lemonade)Cold brewed tea on tap
Evy Cold brewed Sourced organic, small lot, direct trade 0 Cal (Unsweetened Green Tea) 40 Cal (Black Tea Superberry) 40 Cal (Hibiscus) 70 Cal (Evy Palmer) $27.99 Eight pack 12 oz. cans