Indian Teas Recognized at Golden Leaf Awards in Dubai
By Dan Bolton
DUBAI, UAE – India’s great wealth of tea gardens and expertise extends far south of the fabled Himalayas.
Golden Leaf India Judge Kurush Bharucha (foreground) and Sanjay Sethi (background) sip and slurp.
Last week, judges of the Golden Leaf India Awards announced 34 outstanding teas in multiple categories as winners of the annual competition. Judging took place at the 5th Global Dubai Tea Forum April 9th. Categories include traditional fannings and orthodox black pekoe and broken pekoe teas along with a test of skill in green tea making.
Kanan Devan Hills Plantation won six Golden Leaf Awards, three each from both CTC and Orthogox categories from its factories located in the High Ranges of Munnar in Kerala, India. KDHP is the largest tea plantation company in South India garden and the largest producer-tea exporter in South India with an annual production of 25 million kilos. The plantation spans 23,000 hectares.
“This has been a testament to KDHP’s efforts on quality enhancement over the years as we won an unprecedented 6 awards in each of the categories that we entered, which no one else has managed thus far,” Chacko P. Thomas.
The total brings to 29 the number of Golden Leaf trophies awarded KDHP.
Golden Leaf India Judge Yahya Beyad, owner of Britannia Teas stands over the spittoon.
Golden Leaf India Judge Moshin Saify reports his scores.
Indian tea is grown at elevations of 7,500 meters, as high as any in the Himalayan foothills and the plantations date to the late 1800s. South India teas are known for their aroma, balanced astringency and lingering aftertaste. This awards event was first organized in 2005. The judges gave high praise to this year’s competitors.
Presentation of the awards concluded the Dubai tea conference with 300 attendees offering an enthusiastic round of applause.
The victors return to Munnar, Conoor, Annamallais and Wandiperiyar with trophies for their display cases and the knowledge their teas rank among the best India has to offer.
Hard numbers are hard to find but a year after it was sold to Starbucks Teavana appears to be on a roll.
At the company’s annual meeting in March CEO Howard Schultz introduced Oprah Chai Tea in a surprise announcement that brought the celebrity on stage to discuss her love for tea.
The audience was treated to samples and Schultz said $1 from every 2 ounce package would support Oprah’s favorite charities. He announced the construction of 20 new Teavana tea bars in 2014 with major cities including Chicago and Los Angeles. The tea goes on sale Apr. 29.
Schultz reasserted that “a year after the acquisition of Teavana, we are more convinced than ever that we have the opportunities to transform the tea category in the way we have transformed coffee all around the world.”
Earlier in the year, during the company’s quarterly earnings report, Shultz said that Teavana’s two flagship stores in New York and Seattle are demonstrating that Starbucks’ single largest investment to date is beginning to pay off.
“Recent research confirms that Teavana now enjoys the highest level of awareness of any super premium tea brand and like Starbucks, Teavana had a solid Q1,” Schultz told analysts.
Starbucks reported a record $4.2 billion in revenue during the quarter including $159.2 million in the segment that includes Teavana. Overall the company grew revenues 12% with comparable store sales rising 5% in the Americas where store traffic increased 4%.
Financial record footnotes* state that an increase of 174% over Q1 FY13, “is primarily due to the addition of Teavana retail store revenues beginning in Q2 of FY13.” The $159.2 million combines revenue from Seattle’s Best, Evolution Fresh, Digital Ventures and Teavana. The first quarter includes holiday spending and is always strong but revenue in the segment is on track to post $630 in combined sales, most than half of which will be from Teavana.
In the company’s annual report, released in September, the financial segment that includes Teavana grossed $393.7 million for the year which was up 88.7% compared to the previous year largely due to the contribution from Teavana, but the exact amount Teavana contributed was not stated. Net revenue for the segment increased $185 million during the year, “driven by incremental revenues from the acquisition of Teavana in the second quarter of fiscal 2013 (approximately $156 million),” according to the financial filings.
Prior to the Starbucks acquisition Teavana reported quarterly earnings of $43 million and estimated annual sales of approximately $250 million. The company operated 284 stores at that time so a useful guesstimate is annual sales of at least $350 million. The final number will depend on how many stores are built. Teavana’s mall venues typically gross $850,000 to $1 million in sales. Going forward analysts will be able to compare year-over-year results.
Schultz said that “one year into the integration of Teavana, we are poised to begin the roll out of additional stores on the heels of the successful opening of our first two Teavana tea bars in New York City and Seattle.” The company, which currently operates 366 stores, intends to open 1000 more in the next five years. This averages 4 to 5 stores per week, a threshold easily met by a company that currently opens 1,500 coffee shops a year.
As it did with coffee, Starbucks is building gorgeous Tea Bars to showcase the brand in highly visible locations like New York City’s Central Park and Seattle. It will then roll out smaller venues in major cities around the country. These stores are cost-efficient and designed to drive profitability.
“These two beautiful new stores are already providing us the key insights that will help us achieve our goal of combining and leveraging Teavana’s strength and authority around loose-leaf tea and tea merchandising,” according to Schultz. Starbucks understands consumers and what it takes to profit from innovative, handcrafted beverages and a retail store development to create a new retail platform and a unique international premium tea house experience.
Reading consumer response online offers a glimpse of these insights:
On Yelp! Jackie F. from Miami writes: “I had heard about this store opening and made sure that I visited on my weekend trip to NYC… love the environment, service and choices that were available. I have purchased my first three loose teas and sugar and looking forward to buying more in the future. Emily was extremely attentive and helpful during my selection process… she wasn’t pushy or overbearing. Can’t wait to get home and make it on my own.”
Nathali Z. from Brooklyn writes: “I came here led by my cousin who is a Teavana aficionado. I was excited to be in this new space and have my first Teavana Tea. The place was busy with people being helped by sales associates. When we ordered our tea the staff was very friendly, cheerful and attentive. There is an area to sit down and have our “bites”. My cousin got a chocolate brioche and I had a croissant. They were yummy but not spectacular. The tea on the other hand delicious! It was very calm and my cousin and I were excited to be one of the first people here. Definitely coming back!”
Katie R. in New York writes: I LOVE THIS PLACE! I’m so glad that Starbucks has finally opened up its first tea location… Long overdue… I’d visit this over a Starbucks coffee shop any day. I’m tea obsessed and Teavana has the best teas, hands down. The chai latte was incredible. The food selection looked great, too! I just hope they expand to other locations in Manhattan, so I don’t have to make the trek to the Upper East Side.”
This is Yelp! after all, so there were also complaints: “Plenty of cash registers, not enough tables and chairs… “NO where to sit…. and “I really wanted to like this place, but my gut is that it is a concept that won’t work… and “Because there is no coffee, it is not a place to be patronized by groups of people together, because some will inevitably prefer coffee…” comments overall were were positive or benign: “Pretty spot! I got the coco caramel sea salt latte, which ended up being too sugary and sweet for me, even after they remade it without putting any syrup in it!! The jasmine silver needle in a pot was good, though!”
Marketing is much stronger under mighty Starbucks and the public relations team that handles the account at Edelman is first-rate. In January the timely introduction of a limited edition Golden Dragon Yellow tea drew media attention and the Chinese New Year loyalty card and teaware are further evidence of integration of the brand. Customers loaded $1.4 billion onto Starbucks cards last quarter, up $260 million from the previous year. Teavana branded cards are interchangeable with the familiar mermaid which means that 40 million cardholders can conveniently charge a drink. Customers activated more than 2 million new cards a day in the week before Christmas.
Premium single cup is the fastest growing segment in at home coffee and Starbucks has grown its share to 18% of the segment over the last two years, said Schultz. The company has now sold 2 billion K-Cups. Last spring the company introduced Teavana flavors in K-Cups™ and this fall Teavana chai launched in Starbucks’ Verismo single-cup format.
Upgraded Teaware
The website has not undergone a lot of visible changes, but a close look shows an upgrade in teaware including an expanded number of exclusives. Porcelain and bone china are featured along with a packaging refresh with a QR Code and new graphics. The Teavana smartphone app has been updated to make it easier to locate stores. Teavana has 328,000 Facebook likes (Starbucks has 36 million and 5.6 million Twitter followers).
Mall-based stores as a whole were hard hit by a 15% slowdown in retail foot traffic and since the majority of Teavana stores are located in malls that had to hurt. Most of Teavana’s 366 stores in the U.S. and 62 shops in Canada are company owned. It also has 28 franchised stores in Mexico.
The tea market is a huge opportunity for the company. Globally tea is estimated at $90 billion with only a fraction of the tea sold as “value-added.” In fact, the majority is not even packaged. The success of the flagship stores means the company will expand more quickly now.
Two developments hint at the future for Teavana. During a major reorganization of the senior management last week it was announced Schultz “will expand his focus on innovation in coffee, tea and the Starbucks Experience as well as next generation retailing and payments initiatives in the areas of digital, mobile, card, loyalty and e-commerce.”
In his remarks Schultz promised “to bring breakthrough innovation to the tea category in the U.S. and Canada this spring and summer and to the international markets in the years ahead.”
A second clue is that Teavana founder Andrew Mack has retired from Starbucks. Teavana named Starbucks Vice President Annie Young-Scrivner the new President of Teavana and placed Teavana under the direction of Cliff Burrows, who is group president, U.S., Americas and Teavana. Young-Scrivner previously led the Tazo Tea division and was in charge of Starbucks Canada. Burrows, 54, joined the company in 2001 and previously worked as managing director of the U.K. division where franchising is common.
Look for Teavana to expand overseas via traditional franchising. The EMEA region now has 2,033 stores of which 1,177 are franchised. Starbucks has very strong franchise relationships in both Europe and the Middle East. Sales growth in the region was 11% last quarter with revenues of $339 million. A turn-around in the EMEA results, which were previously slack, suggests an opportunity for expansion that would include Teavana.
Financial Footnotes:
The Teavana sale closed Dec. 31, 2012. The final accounting states that Starbucks paid $615.8 million in cash. At closing the company repaid $35.2 million in long term debt. Intangible assets such as the Teavana name were valued at $105.5 million. Teavana’s proprietary tea blends were valued at $13 million. An astounding $467.5 million of goodwill represents the intangible assets that do not qualify for separate recognition, such as established global store presence in high traffic malls and high-sales-volume retail venues, Teavana’s global customer base, and Teavana’s “Heaven of tea” retail experience in which store employees engage and educate customers about the ritual and enjoyment of tea.
Starbucks has underscored Teavana’s role in the company by teaming with chai-loving icon Oprah Winfrey, who arrived to cheers at Starbucks’ annual shareholders meeting in Seattle March 19 to introduce Teavana Oprah Chai, a custom blend arriving in Teavana and Starbucks stores next month.
A year and a half after Starbucks bought Teavana, Starbucks CEO Howard Schultz is still touting the company’s commitment to tea – “the $90 billion global tea market,” as he told the shareholders several times.
“We’re going to do in the long term for tea what we have done for coffee,” Schultz said, noting that he sought a like-minded partner to promote Starbucks’ refocus on tea.
The introduction of Oprah Chai is not only promoting a love of tea, but also reinforces Starbucks’ charitable efforts. (At its annual meeting Schultz emphasized its recent support for veterans’ groups and hiring veterans and veterans’ families.) Because Winfrey is also known for her charitable work, sales of Teavana Oprah Chai will benefit the Oprah Winfrey Leadership Academy Foundation, which supports education programs for youth. For every two ounces sold, $1 goes to the charity.
The blend goes on sale April 29 in Teavana and Starbucks stores in the U.S. and Canada. It is described as an infusion of cinnamon, ginger, cardamom and cloves, blended with loose-leaf black tea and rooibos. Winfrey developed the blend with Teavana teaologist Naoko Tsunoda.
Baristas at the meeting offered samples of sweetened and unsweetened varieties to good reception, even for this generally coffee-focused crowd. (Starbucks annual meetings are appreciated for their generous spread of coffees and bakery items – which this year were all from La Boulange, which Starbucks acquired a year ago).
Winfrey and Schultz settled into overstuffed chairs on stage to discuss their deal.
Schultz related that he had observed Winfrey drinking tea at a wedding they both attended. “You didn’t think much of the brand,” she reminded him wryly. He didn’t, and so he sent a sampling of Teavana Chai to her hotel room, which began a conversation that led to her designing Teavana Oprah Chai with the Teavana development team.
“Starbucks is not just a coffee company. It’s about nurturing the human spirit,” Winfrey said. “And that has been my goal in life. This felt like something I really loved and I really cared about and that would be fun to do.” She said she is a longtime chai drinker and welcomed the opportunity to develop her own blend. Teavana Oprah Chai will be served to guests on “Steep your Soul,” a new segment on the OWN Super Soul Sunday show, when guests share their recharge rituals. “I offer them my chai, and they take it whether they like it or not,” Winfrey declared.
Schultz referenced both the common ground of commitments to social causes and having gone through difficult times as businesses. Headlines flashed on the display at the shareholders meeting referenced both lucrative times for Starbucks and the rocky start of the OWN cable network. He said he sought a partner who “loves tea” and “is committed to giving back.”
The packaging is distinctive, too: the canister is an attractive light olive tone with copper lid. The clever box design has an orange base but that same olive-green lid, short enough to show the orange base.
Teavana Oprah Chai will also be featured in a new store design, Teavana Fine Tea + Tea Bars, open now in Seattle and New York and scheduled to open 20 additional locations in the coming year including Chicago, Los Angeles, and New York City.
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Single-serve lawsuits draw a line in the sand… growers of Honeybush in South Africa voice concern over rising demand… AriZona retains its position as the market leader in ready-to-drink tea in convenience stores… Numi introduces single serve tea in RealCups.
Patent Persuasion
Numi Organic Tea announced its new single-cup line last week, about the same time Harney & Sons Fine Teas launched their selection of single-cup teas.
Neither company chose to partner with Keurig Green Mountain which licenses its K-Cup technology to major tea blenders including Lipton, Snapple, Bigelow, Teavana, Twinings, Tetley, Celestial Seasonings and Tazo.
Their decision is based on economics in part. The largest brands produce K-Cups in huge quantities paying less per cup and can therefore better afford to pay Keurig Green Mountain a royalty of 6.2 cents per cup.
There is also a principal involved, a line in the sand with KGM on one side facing a growing number of private label manufacturers including California-based Rogers Family Coffee and Toronto-based Mother Parkers Tea & Coffee. Each of these firms packages their own lines in Keurig-compatible non-licensed capsules and packs tea for companies like Republic of Tea (Rogers).
Since its patents expired in September 2012, Green Mountain has watched its market share erode. Last year unlicensed packs grew from 7% to 14% share of the $3.1 billion single-serve market, according to data from Mintel International. Green Mountain, which once controlled 80% of the market by value, now controls 20% (with another 13% held by Keurig manufactured Caribou, Newman’s Own and Eight O’Clock coffee).
Starbucks has sold 2 billion K-Cups in a successful partnership with Keurig dating to 2011 and currently has a 12% share. Folgers (JM Smucker) has 12% share, according to IRI data (which counts grocery, drug store and mass market sales). Last week Starbucks renegotiated its deal with Keurig, striking terms that had prevented Keurig from partnering with other super-premium brands but gaining access to the lower end of the market for brands like Seattle’s Best. Almost immediately Peets Coffee & Tea announced it would partner with Keurig Green Mountain. Peets had previously offered its coffee only in RealCup™ Even though it now faces competition in the premium segment, Starbucks is quite confident it will be rewarded for expanding its offerings. Single-cups are the fastest growing coffee segment and many more homes are going to dump their Mr. Coffee for a pod machine.
Keurig believes that by developing superior equipment and partnering with companies like Starbucks to insure a large assortment of licensed brands it will win back market share.
In choosing to contract with Mother Parkers Tea & Coffee, Numi joins a growing number of grocery chains including Kroger and Safeway, large manufacturers such as Kraft and Mondelez International, and independent coffee roasters who believe that open competition leads to product innovation, improved quality and greater consumer value.
On Feb. 12, TreeHouse Foods, a multibillion-dollar private label manufacturer, filed suit against Keurig, Inc., and Green Mountain Coffee Roasters (collectively known as Keurig Green Mountain) alleging they engaged in anti-competitive acts to unlawfully maintain their monopoly over the cups used in single-serve brewers. A month later The Rogers Family Co. also filed suit alleging Keurig used its monopoly power in the single-serve coffee brewer and coffee pod markets to require its distribution partners to enter into “exclusive anti-competitive agreements designed to maintain Keurig’s monopoly power by excluding competition.”
In a release announcing the suit, TreeHouse writes that “Green Mountain has announced plans to eliminate the current lineup of K-cup brewers, which function with competitive cups, to exclude competition and force consumers to purchase higher-priced Green Mountain cups. TreeHouse’s lawsuit maintains that any supposed consumer benefits from the new technology are more than outweighed by the harm to competition and consumers by eliminating their choice and forcing them to pay higher prices for Green Mountain cups.”
“Such an anti-competitive product redesign would force consumers to pay at least 15 percent to 25 percent more for K-Cups, would block consumers from their preferred beverages and would restrain competition,” Oak Brook, Illinois-based TreeHouse said in its complaint.
Keurig Green Mountain Spokeswoman Suzanne DuLong responded that “We believe these claims are totally without merit, and we intend to defend these lawsuits vigorously.”
Coffee industry leader Mother Parkers agrees with TreeHouse Foods actions to stop a Keurig® monopoly, according to the company.
“The patents have expired; consumers have declared that they want choice,” said Bill VandenBygaart, Vice President of Business Development at Mother Parkers. “In our opinion, this action by Keurig as well as the pattern of anti-competitive activities described in the Complaint will continue to hurt the category.”
Tea and coffee drinkers “should decide which coffee they will brew, not Keurig® or Green Mountain Coffee Roasters®,” said VandenBygaart. “We support efforts to keep the single-serve business open to competition and believe that competition will deliver a better cup of coffee or tea.”
Numi Co-founder Ahmed Rahim was eager to enter the single-serve business, but it was paramount that the taste he so carefully crafted was present in each cup brewed from a single-serve capsule, according to a press release announcing the decision.
“I was impressed by the taste delivered by a RealCup™ capsule,” said Rahim. “It was clear to me that the superior taste from the carefully chosen real ingredients used in Numi® Organic Tea’s blends would be found in the teacup and not left behind in the capsule.” In choosing he placed Numi on the “one for all, all for one” side of the line.
No one wants to lose their monopoly. Keurig Green Mountain aggressively responded to the suit but the company’s decision to erect an even more formidable patent barricade is ultimately going to dampen innovation. In February KGM CEO Brian Kelley unveiled a new Keurig 2.0 brewer that will not work with non-licensed K-Cups. The patent for “intelligent extraction” which depends on a bar-code and radio-frequency ID means that owners will once again be forced to purchase Keurig coffee. It will also thwart the use of refill capsules.
The reality is that Keurig will find it hard to convince coffee drinkers they must pay for the new brewers through a premium of as much as three times the actual cost of coffee contained in the capsule. Kelley has promised the technology will produce a better cup of coffee, leading existing Keurig owners to upgrade. Keurig has sold 16 million brewers to date. Installing RFID technology in existing models is not practical. Adding this feature to new less expensive models drives up their cost.
Keurig may abandon its first-generation brewers but private label capsules are here to stay, as evidenced by the rapid growth of the Hamilton Beach FlexBrew. This non-licensed $49.95 Keurig-compatible brewer in five months is already found in 11,000 outlets. It is outselling Keurig’s comparable K-10 because it not only accepts K-Cups, it accepts refillable cups, has a wire mesh basket for your own freshly ground coffee and will brew European-style filter pad coffee as well as tea pods.
Keurig 2.0 will certainly offer more features; and with its partners likely make a better cup of coffee. It may well triumph in its niche — but not by unfairly stifling competitive innovation.
CASE: TreeHouse Foods Inc. v. Green Mountain Coffee Roasters Inc., 14-cv-00905, U.S. District Court, Southern District of New York (Manhattan).
Source: TreeHouse Foods
Fast Growth RTD Tea
While carbonated drinks remain the most widely consumed beverage in America the U.S. Beverage industry reported another year-to-year drop in volume, this time down 1.42% in convenience outlets compared to 2012. In contrast RTD tea is the fastest growing segment of the beverage category.
AriZona Tea was the top-selling brand in convenience last year with almost $270 million in sales. Lipton Brisk ($153 million) and Lipton PureLeaf ($125 million) trailed according to data from IRI.
The biggest growth was Coca-Cola’s FUZE juice fortified with vitamins. Sales increased 250% to $33 million. The bottled tea category generated $1.23 billion sales in convenience outlets in 2013.
Bottled water showed big gains as soda consumption continues to decline but ready-to-drink tea may be the ultimate victor now that the world’s major bottlers are give it a boost.
Coca-Cola reported last month that its tea volume grew by 11% last quarter. Sales of Honest Tea are up 25% compared to 2012 and it is now a $100 million brand. FUZE tea and juice blends and Gold Peak shows solid growth as well.
Market research firm Canadean released its Global Iced/RTD Tea Drinks Report last week noting North America had net volume growth of 74 million gallons (280 million liters). The $5.1 billion U.S. market for RTD tea is expected to increase to $5.3 billion in 2014 with projected growth rate of 6% through 2018.
“The refreshing taste and perceived natural, healthy image of iced/RTD tea drinks will continue to generate growth and place the category in a good position to take advantage of the slowing carbonates market,” according to Canadean.
RTD tea is not just gaining customers in the United States.
Of the impressive 18.7 billion liters forecast to join the market between 2013 and 2018, over 15 billion liters is projected to come from Asia, with a massive contribution from China (as it overcomes its temporary setback) and Indonesia, according to Canadean. “Soft drink categories have continued with healthy double-digit growth, primarily owing to the key categories such as iced/RTD tea drinks and packaged water. The company reports that in Europe most carbonated consumption continued to occur in West Europe (primarily Benelux) in 2012. The region consumes 55% of global volumes but has lost considerable ground to Asia.
Excessive Demand Depletes Honeybush
Demand is depleting stocks of Honeybush, a largely wild-harvested South African bush used to make a popular herbal drink.
It has become a popular because of its sweet flavor and it is often praised for its potential health benefits. There are 23 species of Honeybush; several are used to make an herbal beverage. In 1997 the harvest was 27 metric tons but when companies like Tazo, Twinings and Stash offering Honeybush blends in their lineup demand rose to 200 metric tons.
The challenge is supply.
Honeybush (Cyclopia sp.) is a legume that grows only in the mountains north of South Africa’s Cape of Good Hope. Honeybush is part of the fynbos biome a habitat that is under pressure similar to that experienced by Rooibos which experienced a three-fold increase in demand. The result was widespread cultivation on land farmed at the expense of other native plant species.
Richard Cowling, of the Department of Botany at the Nelson Mandela Metropolitan University, cautioned that steps should be taken to prevent mistakes by the Rooibos tea industry.
“What is required is the mainstreaming of biodiversity and sustainability into the policies and practices of the Honeybush industry at this early stage of its development,” Cowling told the Flower Valley Conservation Trust. This could be done through certification championed by the local industry. Certification could ensure that sustainable veld harvesting guidelines are followed, that cultivation only takes place on old lands and that fair labor practices are met, he said.
There is very limited commercial cultivation of Honeybush so supply has relied heavily on wild bushes. The small plantations that currently exist are only able to supply 25% of the need. Honeybush traders travel into the mountains and harvest what is to be sold. Concerns have been raised that improper harvesting has damaged the existing supply. Wildfires, droughts, and over-harvesting have now raised serious questions about the plants’ long-term survival. Beginning in the mid-2000s, supply began to drop significantly, just at a time when global demand was increasing. The supply problems pose significant challenges to blending for consistent flavor and appearance and prices have now doubled.
Currently 15% of the Honeybush produced stays in South Africa. The rest is exported, with 85% of those exports going to the United States and Germany. Honeybush producers worry that the plant simply will not survive and work is now being done to establish nurseries and plantations to grow more Honeybush for commercial use.
These supply concerns are coinciding with efforts by the European Union and South Africa to assist one another with protecting geographic trademarks for products including Honeybush.
Neill Coetzee at Cape Town South Africa’s Coetzee & Coetzee (Pty) Ltd. is one such exporter. He identified five species that are commercially utilized. Two are slow growing and mainly wild harvested, he writes.
One species, Cyclopia longifolia, is “a new kid on the block and showing big commercialization prospects,” according to Coetzee. “This tea is very similar to Cyclopia intermedia (the original honeybush) but grows well in cultivation,” writes Coetzee whose firm trades in natural and organic ingredients, medicinal plants, herbal teas, Rooibos and Honeybush.
Small quantities of Honeybush are grown on lands from Mosselbay to Oudsthoorn (the eastern sides of the Western Cape province) and on the western side of the Eastern Cape province (Joubertina to Kareedouw). There are two Rooibos plantations situated near Honeybush producers but most Rooibos is grown 200 miles away in the Cederberg Mountains near Clanwilliam, considered the heart of Rooibos cultivation.
Learn more: South African Broadcasting Corporation
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Tea Biz serves a core audience of beverage professionals in the belief that insightful journalism informs business decision making. Tea Biz reports what matters along the entire supply chain, emphasizing trustworthy sources and sound market research while discarding fluff and ignoring puffery.
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CBC reports pesticide residues greater than legal threshold… China tightens food safety rules leading tea gardens to reduce reliance on pesticides… “Be More Tea” generates plenty of social buzz… Harney & Sons introduce tea in K-Cup compatible capsules… Coffee Bean & Tea Leaf introduces tea granitas.
Popular Tea Brands Exceed Threshold for Pesticide Residue
The Canadian Broadcasting Corp. (CBC) aired an exclusive report backed by laboratory findings showing several popular tea brands contain pesticide residue exceeding the government mandated threshold.
Test results from the CBC’s Marketplace Consumer Watchdog Blog can be viewed here.
Responses from tea companies tested in the report can be viewed here.
Authorities stressed that minute traces of residue found in samples of Lipton, Tetley, Twinings and other popular brands were not a health risk.
“Health Canada reviewed the information provided by Marketplace and for the pesticides bifenthrin, imidacloprid, acetamiprid, chlorfenapyr, pyridaben, acephate, dicofol and monocrotophos determined that consumption of tea containing the residues listed does not pose a health risk based on the level of residues reported, expected frequency of exposure and contribution to overall diet. Moreover, a person would have to consume approximately 75 cups of tea per day over their entire lifetime to elicit an adverse health effect,” a spokesperson wrote to the CBC in a statement.
Canada’s Food Inspection Authority (CFIA) previously disclosed concerns about pesticide residue in 2009 and again in 2011 following tests of tea. Marketplace commissioned testing through an accredited lab to see if the teas exceeding Canada’s allowable limits were still in violation. In several instances that was the case.
Eight of the 10 brands sampled from grocery shelves in Toronto contained multiple chemicals and one brand contained residues from 22 different pesticides. Traces point to the use of endosulfan and monocrotophos, both banned by the United States and Canada as well as China and the European Union.
Brands purchased at grocers including Loblaws included Uncle Lee’s Legends of China, King Cole and Signal tea. Only Red Rose came back free of pesticide residues.
Environmental lawyer David Boyd told Marketplace “the presence of so many pesticides on a single product and so many products that exceed the maximum residue limits for pesticides, suggests that we’re seeing very poor agricultural practices in countries, which poses risk to the environment where these products are being grown; which pose risk to the farm workers who are growing these crops, and ultimately pose risk to the Canadians who are consuming these products.”
“The whole point of pesticides is that they’re chemically and biologically active in parts per million or parts per billion,” Boyd told the CBC. “Pesticides can have adverse effects at what are seemingly very small concentrations,” he said.
According to Boyd, these results “should raise a red flag for the regulators whose job is to protect the health and safety of Canadians in our environment.”
Here is a statement from the Tea Association of Canada:
“In Canada, the Tea Association continues to work with the Pest Management Regulatory Agency (PMRA), The Canadian Food Inspection Agency (CFIA) as well as the Food and Agriculture Organization of the United Nations’ Intergovernmental Group (IGG) on Tea, which is spearheading an agreement to harmonize pesticide standards, making tea production safer for consumers and protecting the livelihoods of millions of smallholder producers worldwide.
Consumers should continue to consume and enjoy the many varieties of tea for its health promoting and protective effects as well as its delicious taste. “There is now an overwhelming body of research from around the world indicating that drinking tea benefits human health,” says Dr. Carol Greenwood, Professor of Nutritional Sciences at the University of Toronto and a Senior Scientist at the Rotman Research Institute at Baycrest.”
Last November the Chinese Food and Drug Administration proposed a major revision to its food safety laws that will likely be approved by China’s congress late this year.
Pesticide residue has steadily declined in China’s tea leaves
This is a high-priority initiative motivated by recent food safety scandals, according to the U.S.-China Health Products Association. It will clarify government oversight, increase regulatory obligations for food manufacturers and distributors; enhance controls over food products and increase penalties for non-compliance. Individuals sentenced for imprisonment will not be allowed to engage in food manufacturing or distribution in his/her lifetime. During the past three years more than 2,000 people have been prosecuted for food safety-related crimes in China.
The amendments continue a sweeping reform of the country’s food safety standards following a national scandal in 2008 involving melamine-tainted infant formula. That breech led to the execution of violators to make the point China was serious. Enactment will further efforts to curb pesticide use in tea gardens
By 2005 93.1% of tea products already had attained or exceed the Green Food standard, according to a presentation by Mao Limin, then chairman of the Zhejiang Tea Industry Chamber of Commerce. Limin told delegates at the 2011 North American Tea Conference that random inspection of tea had reached 100% at government owned gardens. In addition 267,000 acres (108,000 ha) of organic tea plantations had been certified organic and pesticide free.
The Green Food standard permits chemical pesticides and fertilizers but mandates residue levels meet export standards. The European Union and Japan set the highest thresholds but all trading partners have Maximum Residue Levels (MRLs). Organic certification in China is under the IFOAM rules with annual re-certification. Organic teas for export must comply with rules established by certifying bodies such as Swiss-based IMO, the British Soil Association, the USDA’s National Organic Program and JAS Japan.
Every pesticide approved for use has a required safe harvest interval, which is the time lapse between application of pesticides and harvest. In China preference is given to pesticides that are not easily dissolved in water. This reduces the portion that actually gets into the liquor. Most chemicals biodegrade leaving residue trapped in the spent leaf.
Use of dangerous pesticides has fallen over phase out.
“It shouldn’t come as a surprise to anyone that there are pesticides used in commercial tea production, and that third-world countries are using some illegal ones, which are probably cheaper,” writes Austin Hodge, founder of Seven Cups Fine Chinese Tea in Tucson, Ariz.
“The boney finger always gets pointed at China, the great polluter, with pollution in Beijing as bad as when I was a kid in Los Angeles. It can all be explained in three words: cheap prices, commodity, and quantity. For the most part, bugs come in the summer. In the tropics, however, bugs are omnipresent. It’s always summer. It provides for a long growing season and an abundant yield. It is a broader truth that if you want cheap tea and cheap food, pesticides come along with the price,” he wrote in in a T Ching post last May.
In April 2012 Greenpeace issued a report: Pesticides: Hidden Ingredients in Chinese Tea following an investigation that showed chemical residue from pesticide. The organization sent samples purchased from well-known tea companies to an accredited third-party laboratory that found residues of various types on all 18 of the samples submitted. A total of 29 different pesticides were detected, several known to cause harm. Six samples contained more than 10 different pesticides. Twelve samples showed traces of banned pesticides including methomyul, endosulfan and fenvalerate which are known to impair fertility, harm unborn children and cause heritable genetic damage.
Inspections show greater compliance over time.
What the report did not state is that most of the residue was within established standards.
“If you take the considerable trouble of comparing the Greenpeace data with EU pesticide limits for the 28 chemicals mentioned then 5 of the 18 teas accused actually fall below the MRL limits for all 28 and two teas exceed by a trace level of 1 mg/kg on two chemicals,” writes Nigel Melican, founder of TeaCraft, a widely acclaimed British tea consultancy. He goes on to say: “This leaves 11 teas non-compliant for one or more pesticides, were they to be sold in the EU.”
The sampled teas were from local Chinese vendors and not subject to more stringent export rules.
“Nowhere in the report does Greenpeace China suggest that the non-compliant teas are representative of China teas presented for export – but commentators in the USA and UK have erroneously and immediately jumped to this conclusion,” he writes.
More troubling is the CBC investigation of tea for sale in Canada.
Lipton’s $40 million global campaign promoting a relaxed lifestyle message is riding high on social buzz following the debut of Kermit the Frog as the brand’s new icon of calm.
The TV audience of 43 million watching the Academy Awards and a well prepared social team capitalizing on the Oscar presentations generated 3.85 million views of the ad on YouTube in the past week. The commercial depicts a horde of “Animal” puppets driving cabs, shouting and racing about New York City set the scene for the thoughtful frog who is captured placidly walking amid the mayhem doing good turns and going with the flow as he is bumped and jostled about.
“Be More Tea” is Unilever’s first global campaign to elevate its Yellow Label brand and Kermit is the epitome of mindfulness as he sips his way through the antics of Miss Piggy and pals. The promotion is tied to a Disney movie starring the Muppets.
Kermit will be the face of Lipton in North America and Europe where the puppets are well known but “Be More Tea” is a slogan that will be translated into many languages in advertisements designed to create single global positioning for the world’s leading brand of tea.
“We live in a busy world. It’s easy to slip into a routine with our heads down, moving from one place or obligation to the next. Lipton wants to inspire consumers to ‘look up’, take in all that life has to offer and enjoy what you may have otherwise missed,” said Alfie Vivian, vice president of refreshments for Unilever. “This is what ‘Be More Tea’ means to Lipton and the philosophy we will bring to life in our new national ad campaign starring the Muppets.”
Alessandra Bellini, VP-brand development for Unilever Refreshments, told Ad Age that Unilever is doubling Lipton marketing spending to more than $40 million this year compared to last. The campaign will run four weeks.
“The campaign backs both Lipton hot tea and iced tea. While Lipton has had global campaigns in the past for ready-to-drink tea, this is the first global effort behind the entire brand lineup,” Ms. Bellini told Ad Age. “Lipton — in both cold and hot forms — trails only Coke in sales among global beverage brands,” she added.
“Making movies and dating Miss Piggy can be stressful – especially the dating part. But I always try to stay cool and look on the bright side,” said Kermit the Frog. “That’s what this Lipton campaign is all about. In a world filled with high-stress wild-in-the-street types like Animal, you have to take time to enjoy life and ‘Be More Tea.’”
Click here to see a 90-second behind the scenes video with Kermit back stage preparing for his role in the new Disney Movie “Muppets Most Wanted” scheduled for release March 21.
Harney & Sons Tea Capsules
Harney & Sons Fine Teas introduced a line of Keurig-compatible single-serve teas this week.
Tea drinkers can now enjoy Harney & Son’s teas with the convenience of the individual tea capsules that are 98% recyclable. Four blends from the company’s classics collection are available in 24-count boxes: Paris, Egyptian, Chamomile, Hot Cinnamon Spice and Tropical Green, as well as four blends from their HT Collection in 16-count boxes: Green Tea with Coconut, Earl Grey, Peppermint Herbal and Hot Cinnamon Sunset.
The Keurig® compatible capsules deliver the same great flavor and aroma customers have come to expect, according to the company which is now celebrating its 30th Anniversary. The Cool, Peel and Recycle technology allows tea drinkers to easily peel off the capsule after cooling, and recycle the capsule filter and spent tea. Harney & Sons continues to provide new and innovative ways to enjoy their classic tea, said founder John Harney.
Three generations of the Harney family oversee a venture that still sources, blends and packages their own products from start to finish. Harney’s small home-run business in Salisbury, Conn., has grown into a global operation with more than 170 employees at its headquarters in Millerton, New York. The company fills 90,000 square feet of warehouse space and has a new bottling plant under construction.
Cold tea beverages, fruit and tea fusion drinks and chilled herbals are doing well in the marketplace.
Last week The Coffee Bean & Tea Leaf® introduced Tea Granitas to the lineup, a new concept in the beverage category.
“Borrowing inspiration from the Italian granita dessert – made of fruit and ice – the Tea Granitas are a light, refreshing balance of premium iced teas and trending fruit flavors, and are blended with ice,” according to the company.
The Passion Fruit Tea Granita blends Assam Black Tea and the bright, bold flavors of passion fruit, yielding a slightly tart finish. The Pear Berry Tea Granita combines the company’s popular Swedish Berries fruit infusion with notes of pear, creating a delicious caffeine-free beverage.
“The Tea Granita is a truly unique beverage that’s perfect to launch in the spring,” says CBTL President and CEO, John Dawson. “It brings a delicious twist to iced tea refreshment and is the latest in a long line of tea beverage innovations from The Coffee Bean & Tea Leaf®. Our customers know us for our signature tea beverages, such as the Chai Tea Latte and Matcha Green Tea Ice Blended® drink, and we believe the Tea Granita is another delicious beverage our customers will love sip after sip.”
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“This has been a testament to KDHP’s efforts on quality enhancement over the years as we won an unprecedented 6 awards in each of the categories that we entered, which no one else has managed thus far,” Chacko P. Thomas.
