Pranav Bhansali is Managing Partner at Bhansali and Company, one of the major export houses for CTC, Orthodox and Darjeeling tea in India. The family-owned export house, headquartered in Kolkata, has been in the tea trade for 90 years. The company buys from all the major auction centers and directly from tea gardens across India, while operating two blending facilities in Kolkata and Coimbatore. Currently, Bhansali ships to Russia, the CIS countries, Iran, and the UAE.
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Digital Convenience Steeped in Tradition
Transactions at tea auctions in Mombasa, Kenya, Colombo, Sri Lanka, and across India account for more than 75% of the world’s trade volume. The first tea auction, in London, dates to 1679. The digital convenience of tracking tea and processing payments make modern tea auctions far more efficient, and transparent, than out-cry but describing tea quality and formal rules regulating trade remain steeped in tradition.
Aravinda Anantharaman: How relevant are auctions today in Indian tea as private sales grows in significance?
Pranav Bhansali: The split is as follows (approximately): auction 45 % vs private sales 55%. Auctions continue to be very relevant and play an important role. Certain tea producers and estates consciously believe in being an ‘auction mark’ while the bulk of bought leaf producers in north India believe in producing and selling their produce as quickly as they can, which makes the private sale mechanism more suited to their requirements.
Aravinda:Is the auction price still the benchmark?
Pranav: Yes, auction levels, I would say, are accurate and reflect the dynamics of demand and supply in the market.
Aravinda:How have e-auctions been for Indian tea? Have they brought any advantages to producers and buyers?
Pranav: Yes, of course, there has been an advantage from switching to e-auctions. If we look at what’s happened in Ceylon (Sri Lanka) and Africa where the switch to e-auctions is a recent phenomena, it reiterates that changing to e-auctions was the right decision. And if it wasn’t for the e-auctions, the tea industry would have come to a halt during the pandemic.
Aravinda:It is still a buyers market, isn’t it, despite the drop in production in 2020? What is needed to make it a sellers market? Quality? Less tea but better tea? Innovation?
Pranav: You are correct. The only way the sellers can take control is by producing quality. Meanwhile producers continue to produce more tea than the market and a healthy pricing structure can bear. Who or what will break first?
Aravinda:How did 2020 change the market for Indian tea?
Pranav Bhansali: The pandemic was disastrous for Indian tea exports. Many markets were lost to African teas. India’s deteriorating relations with Pakistan has meant that Pakistani importers have increased their reliance on African teas. We all had to consider the whole concept of just-in-time inventory. Shipping and logistics was another nightmare, from which we are still reeling.
Aravinda:In black tea grades, what sells well in the export market and what sells well in the domestic? What would you recommend that producers make more of?
Pranav: In the domestic market, it’s mainly CTC grades like the BP (Broken Pekoe), BOP(SM), PF/ OF (Pekoe Fannings/ Orange Fannings). In the export market, we sell various orthodox grades like the Barooti, FBOP, GBOP, GFBOP. The markets of Syria, Turkey, Russia choose OPA/ FOP, BPS while Saudi Arabia and Iran like whole leaf grades the OP1, and it’s OPA/ FOP for Afghanistan and Russia.
Looking at African prices, it is clear that producers will do better producing orthodox grades. Last year has taught us that there are very few grades of tea that have a more robust demand than a well made OPA/FOP and BPS(O) Pekoe.
Aravinda: The tea auction in Mombasa, Kenya, which transacts 450 million kilos annually, has announced it will move to a five-day per week auction. What are you views on that? Will daily volume/prices increase? Should India increase auction days?
Pranavi: Since the offerings will be spread over five days, I feel it will be difficult to find trends and gauge the market. In north India, we have Kolkata and Guwahati auctions which are distributed over two days leaving other days time to prepare for the upcoming auction and other back end office work. Personally, I find the Indian system more convenient.
Aravinda: Can you sum up the season so far, in terms of quality, exports and prices?
Pranav: CTC first flush teas this year were slightly below par as far as quality is concerned. Indian CTC prices are non-competitive as far as export is concerned thanks to massive production in Africa. Orthodox teas are selling well thanks to demand from Iran.Unfortunately, even though Iran continues their support for Indian teas, lot of uncertainty remains as far as payment is concerned.
Bhansali and Company operates two blending facilities in Kolkata and Coimbatore.
Bhansali and Company
Bhansali and Company is a professionally managed firm that employs the finest experts and industry professionals. Partners are closely involved and conduct the majority of its tasting, buying and selling operations personally.
“Our clients treasure the personal involvement as it leads to us having a solid understanding of their needs and requirements and ensure exceptional attention to detail.”
Darjeeling is the most famous of India’s tea growing regions. Revenue from its spring flush also makes it the most lucrative, but the plants there are aging, wage inflation is high, and workers are restless. Innovation is overdue. In this podcast segment Aravinda Anantharaman speaks with Rishi Saria a third-generation planter, managing the Gopaldhara, and Rohini estates in Darjeeling.
Gopaldhara Tea Estate, Darjeeling, India
The Way Forward for Darjeeling Tea
Rishi Saria is a third-generation planter, managing the Gopaldhara and Rohini estates in Darjeeling. Among other things, he has put Darjeeling’s autumn flush teas on the map by producing a flavorful range of oolong-styled teas. Rishi spoke about Darjeeling from the point of view of a planter, describing where things stand, and what it needs. He tells the story of how Darjeeling began producing oolongs illustrating the need for innovation and he offers personal insights into rival Himalayan tea produced in Nepal.
Aravinda Anantharaman: The conversation on Darjeeling tea often turns to Nepal and how it’s affecting the Darjeeling tea market. What are your views on that?
Rishi Saria: I am an Indian whose mother is from Nepal and I’ve never thought of Nepal as another country. Our borders have been very closely tied. We have gone to Nepal whenever we wanted to. Siliguri as a community has always traded with Nepal. So for me to say that there is competition from Nepal, it’s like saying my friend has planted a tea estate. I think he’s allowed to, they are allowed to do their thing.
The only problem is that I think Nepalis are not doing enough to promote tea in their own country.
Secondly, Nepal is a Bought Leaf Model and there is a lot of dumping of tea that goes on. Their per hectare revenue must be lower than that of Darjeeling. The factory and traders may be making money. Last year I heard that they even sold the high mountain green leaf for INR 20. Our CTC leaf last year was selling at INR 30, and at INR 32 this year.
The Nepal tea industry needs to understand that they have to stop this dumping model. They send the buyer 2,000 kgs of Darjeeling style samples. The buyer is going to pay you peanuts and they refuse to buy Darjeeling tea because Darjeeling tea producers don’t sell it for peanuts.
The gap between Nepal tea industry and Darjeeling tea industry is huge. Our cost is higher. If you look at the cost structure, Darjeeling tea will offer more to a worker than the Nepal tea industry.
They have to do more. There are exceptions like Jun Chiyabari but the bulk of the Nepal industry is not like that. They don’t have an auction centre. They don’t have a buyer-seller meet. They need to have a large spread to deal with the kind of quantity they have. They are not small anymore.
One problem there with Nepal is the organic certifications. If you are not a tea estate over there, it’s very difficult to get an organic certificate. For a Bought Leaf Model to have an organic certificate is extremely difficult because of the expense.
Most of Darjeeling is organic and competes in a different segment. That is one strategy, which some Darjeeling tea producers have taken. And the rest of us, we try to make better teas.
Aravinda: Is it in the tea that Darjeeling can differentiate from Nepal? Or is the differentiator in the working model of these two regions?
Rishi: I can tell you for sure that in the Bought Leaf Model, speciality tea has not worked for these issues: the clone is not known, the cultivar is not known. The transportation cost is causing damage. The transportation system is causing damage them in and there is very less confidence between the buyer and the seller.
We started making a lot of speciality tea at Rohini and Gopaldhara. Now we need a system to sell it. We are trying to increase the number of buyers. We try to do something different; we try not to offer what others are offering. If we offer what Nepal is offering, why will someone come to us? We charge more as our costs are higher. I cannot say that we are more efficient than them but we offer a better lifestyle proposition to the workers.
We also do a lot of direct marketing that helps. We sell directly to retailers and even to consumers. If we can sell 10 to 15%, 20% of our produce directly to consumers, it will take a lot of pressure off our balance sheet. In my mind, this is what we can do rather than harping about how Nepal is hurting us.
Look at Bhutan; you can see the kind of ties that India enjoys with Bhutan. Minus Darjeeling tea, we have the same relationship with Nepal. So how can we disturb that equation because of one product.
Rishi Saria and his son at Gopaldhara Tea Estate
Aravinda: Where does Darjeeling tea now compared to say even 10, 20 years ago?
Rishi: There’s been a lot of progress. India is a far more progressive country than what it was doing between 1980 to 2000. We have certainly outpaced the economic growth by a long margin. That has had an effect on the tea industry as a whole. Our wages have gone up faster than what we would have planned. That is one challenge. That is one of the reasons why there is a lot of hue and cry. Wage Inflation has been rampant. Pre 2006, wage inflation was roughly 3 to 4% now its close to 10 to 11%, sometimes 15%. So wage inflation is a huge issue.
But if you look at the offer of teas, Darjeeling has added green tea. Darjeeling was never known for speciality tea. If you go through catalogs from 20 years back, you will find Darjeeling first flush and second flush in a retailers catalog. In a tea shop, if you asked for Darjeeling, they’d say, we have Darjeeling first flush and second flush. That has changed. You have very tippy Moonlight style teas now, we have the traditional china hybrid, we have green teas, we have white teas, we have some special hand-rolled, handmade stuff also. From two teas we have gone to at least eight or 10 teas.
Aravinda: So there is a lot of product innovation?
Rishi: There is a lot of innovation happening and it’s happening more with farms which are realising the changes that need to come in. Let’s talk about oolongs. Who thought Darjeeling would make oolongs. We don’t have a proper tea research Institute which guides us to all these things. But if we did, that would be wonderful, you know. Whatever effort planters have made, they are all taking a lot of effort. Learning and effort go hand in hand.
Today, some retailers will describe a tea as “oolongs from Darjeeling”. Until recently, we were told, “You don’t know how to make oolongs.” We asked, why can’t we make oolongs. They said, “You don’t know how to make oolongs. You don’t even have an oolong clonal with you.” So we started defining that, we started learning how to pluck, we used to send samples and get the response, not good enough, not good enough, not good enough. Then we started hitting some right notes. We started thinking about what is mountain tea… we started thinking about the style of making mountain teas.
Most of the machinery in both of my factories are not what we had pre-2000. We have a lot of electric dryers now. We have fixing machines, we have small rollers, we are even trying to get chaangwithering into the system, we have outdoor withering… so one sits on top of the other. You learn, you ask, you learn more and you think of more things. Every day you learn. Today, I was having a tea in the office; it was a very lovely oolong style green tea, very, very lightly oxidised and very fragrant. And the thought that occurred to us was why didn’t we try this before.
Aravinda: What do you think has to change in Darjeeling to support this innovation?
Rishi: I think the Darjeeling tea fields have to get upgraded and that will take a lot of time. That, in my opinion, is one of the biggest challenges. Can we upgrade our field fast enough to still be relevant? That will be my concern. That is one of the biggest concerns there. And our biggest safety with respect to that is we are the only tea growing region in India which is trying to make tea without milk and sugar. I think that advantage can continue for sometime.
We are moving in a direction where we think hundred percent of our produce in the leaf category should be without milk and sugar. That is what essentially is there in the back of my mind. What to make is the next question.
So business advantages, there’s a lot of demand for these kinds of teas within India. Internationally, we have to compete with China, Taiwan, Vietnam, Indonesia, Kenya, Japan. There is a lot of competition and unless you have a price competitive offering — which we don’t have because our fields are outdated.
Gopaldhara used to make 120,000 kgs in 1992-93. Now, it struggles to make 70,000. So, 40% of the crop is gone because the fields are old.
So we started replanting. My family before me did too and for some reason, those fields are still not ready; it’s been 12 years. I’ve done eight hectares since 2016 or 17; mine are also not ready. We are trying to put in close to at least one lakh plants every year.
It’s difficult to work in the mountains. Half of these areas don’t have roads so you have to carry all the plants. People have to have access to irrigation. We can only plant in summer. But it has to be done. There’s no alternative. So we now have close to 40% of the garden almost clonal but the balance 60% is there, that will take 30 years. But even if we get to 70:30 ratio, that’ll still be good. We’ll still be better off than many other estates that are not doing anything. All these things help in the long run.
For example, Rohini is completely clonal. You see the advantages straight away. The shoots are much better. Compared to 2019, Rohini produced 500 kg more than 2019. That kind of advantage is welcome. If you can get some irrigation going and wear out the drought, and you can get some of this e-commerce going for you, and get some retailers, buyers as partners who trust you and supply to them regularly… all these things will help you tide over.
Aravinda: Why don’t we see much Darjeeling in the auctions? Is that no longer a relevant route for Darjeeling’s teas?
Rishi: Auctions help if you are the exporter. It’s very difficult to trade in tea without an auction system, that is a fact. The system allows you a lot of availability, otherwise product sourcing can be quite difficult. It is based purely on demand and supply. I think it sets the benchmark for the lower grades. If you are a buyer, you tend to buy the cheaper grade because you know it’ll always be there. Nobody tries to do private sale of ordinary teas unless they are looking for a quantity, which they want to contract and not fight in the auction so that prices go up.
The top offerings never make it to auctions. So what happens to top offerings? Either you’ll find a wholesaler with whom you have good contacts and he feels confident buying your expensive tea and selling it. Which means he doesn’t want competition and wants some assurance that he won’t face too much competition. Otherwise you have to sell one bag, two bags, because everybody may not like paying such a premium for that tea. That is the difficulty in speciality tea. Everybody will not appreciate it. I have not found many buyers appreciating the same tea in speciality; they always want variety. So they buy one sack of this, one sack of that, different ranges so they know they’ll be able to sell something or the other.
So privately, if you want to sell specialty tea you need a large set of buyers. Otherwise you will not sustain. It’s not easy to sell a speciality tea at a price in which it is remunerative. It’s really difficult.
I know a lot of people who don’t even buy one kg of speciality, and I know so many buyers who don’t buy a single kg of ordinary tea. And I sell to both of them.
Auction cannot help you in speciality. And we don’t have those kind of tea fields to make common tea. There’s a garden in Darjeeling with yields close to 900 kgs / hectare. In Gopaldhara, I cannot produce more than 400-450 kgs/hectare. So how can I compete with them if I don’t make something special. Those that are like Gopaldhara and organic, they are even lower yielding than us. Everybody is not on the same boat. If Rohini makes a decent quality tea for the whole year, it is fine. Gopaldhara really needs a speciality tea market to survive.
It’s got a lot to do with what kind of tea fields you have, what kind of elevation… elevation of 87 gardens is from 500 feet above sea level to 7,000 ft. and they’re all Darjeeling. So everybody’s on a very, very different boat. They cannot do the same thing that’s and they cannot cater to the same market.
Every tea garden in Darjeeling has its own story to tell.
Aravinda: What about markets? Is Darjeeling still reliant on the export market or is India emerging as a market for Darjeeling tea?
Rishi: It is changing for sure. Last two years have been a washout for the Indian market because of the virus. It has been shut. So we may be forgetting some of our close friends. We have not been in constant touch with them. They are not in our memories and we are not in their memories. Frankly speaking, the virus has killed the speciality tea trade. Unless they’re buying by e-commerce, there’s no reason why they will go to a tea shop to risk themselves and have a cup of tea.
I think the high end Indian market is out. I don’t think that is coming back again this year.
Internationally, things are more open. UK looks like they will lift their lockdown soon. Germany is also lifting some of the restrictions as are some of these Western European countries? US is opening up completely…
I think it’s better than last year. I don’t know if we are going back to 2019 so quickly… Let’s assume the vaccination in Western countries is over by July, realistically speaking. So we’ll have some kind of semblance July onwards, that is what I feel.
Aravinda: And the prices?
Rishi: The production for the medium segment is still not out. We are still in the very expensive category of teas. We have not done any major deal in the medium end.
Last year, the prices nosedived. That will not happen this year. But the speciality tea sold. There could be a percentage decline but it’s not like what I saw in second flush. We were hardly able to move the tea in second flush. We were not able to sell much of the autumn flush also.
Aravinda: What is a way forward for Darjeeling tea?
Rishi: I think we really need support from the government to help us revive the tea fields. It can be in the form of a long-term loan, It can be in the form of a subsidy. It can be a combination of both. Let’s say you are removing an old area in Gopaldhara which is yielding 300 kg/hectare. I think the average price would be something in the region of INR 500. If we do 2 – 4 hectares a year, that reduced revenue can come as a subsidy, partial subsidy or a combination of loan.
Aravinda: What about the plantation model itself? Is it still workable?
Rishi: In India we have not been able to make quality tea from Bought Leaf Factories. If there is some example, it is Tea Studio. But it’s certainly not happening in a large scale. So to say that the plantation model has no future is not fair. The combination of an educated resourceful owner with assured workers has its strength. You cannot say its completely useless. That combination has something to offer.
It can all be worked out provided you have the field in order, that is the basic requirement. Whenever I think about what is missing, the field is missing. Once that is available, then you can start going back to the drawing board and start doing things.
The problem with the plantation model is that you have to pay the workers, whether you have work or not. So we will always be plucking in the rains and we will always be doing a lot of the produce even during the banjhee (dormant) period. Among mountain regions, we must be the only tea region in the world which will be plucking during the banjhee. That’s the disadvantage of having a plantation and having to provide work 365 days a year.
As an industrial body, I think planters need to start selling first, second and autumn differently from rain flush. We don’t do this. It can be very confusing for the consumer and buyer community as to what is Darjeeling. If you go to my website, we have a bai mudan that we made this year from that very fine artisan plucking, selling for INR 800 for a 20 g pack. We also have 1 kg Darjeeling broken at INR 800 or 900. This can be confusing to the consumer that the same estate is selling a kg for INR 800-900 and is asking INR 30,000 for another.
We have to develop the terroir. How do we stand out, what is Darjeeling capable of… We have Japanese bushes at Rohini and they look like a cousin of Japanese tea. We make them mildly oxidised. They are different from the tea made by the same bushes in Japan. The place, the culture, the climate impacts the tea.
We need to define this space. There’s a lot of false promotion that is happening. We need to get some intelligent content out there. There is a lot of misinformation that we have to clear. We need to say: This is what we make. This is how it is different. This is what kind of flavors you can expect. This is how you have to brew it.
I think all these things need to come out and is currently missing.
Aravinda: What about second flush this year with the weather?
Rishi: I think it’ll be better than last year. We should have our regular buyers back. They’ve been writing that they’ll be buying this year and that’s encouraging. For estates that are catering to the HORECA segment, I think that is quite a welcome news.
Rohini Tea Estate is located in the Kurseong valley of Darjeeling. The estate was closed for 38 years from 1962 to 2000. From the old 1300 Hectares around 38 ha remains. These teas are of the Chinese origin and in the second flush produce exquisite muscatel teas. The total are of the garden is around 146 Hectares of which 108 ha is young tea.
DARJEELING TEA
This year, Darjeeling is trying to make up for a poor 2020. Official plucking dates was February 21 and the season began on an optimistic note. But at the end of the first quarter, the mood is of concern from drought-like conditions and a severe second wave of the Covid pandemic. Rainfall was less than half received in March last year, at 27.8 mm as opposed to 66.2 mm in 2020. Number of rainy days was down to 3.8 in March 2021, from 6 in March 2020. Temperatures have seen a 1 C rise in maximum temperature and 0.6 C rise in minimum temperature, at 23.3 C (Max) and 13.3 C (Min).
March production data shows 172,294 kgs which is lower than March 2019 which was 227,790 kgs. We will be tracking Darjeeling climate, production and market news in our weekly Tea Price Report.
Darjeeling in the Indian state of West Bengal is home of a tea that comes with a 150-year legacy. Located in the far eastern part of India, almost at the Himalayan foothills, Darjeeling’s tea regions are Mirik, Kurseong, Darjeeling, Teesta Valley, Rungbung Valley and Kalimpong. The elevation ranges from 500ft to 7000 ft, impacting the flavours of the tea that is produced here. While black tea has been the mainstay of this tea region, we now see a wide range of tea types and tea styles from here. Darjeeling enjoys three main flushes – spring, summer and autumn. Darjeeling tea is protected by the Geographical Indicator (GI) tag which means that only 87 tea gardens can call their teas as certified Darjeeling tea.
Caption: Researchers and members of the London Tea History Association smelling a 172-year-old yak-butter container during a workshop in January 2020. Image used with permission, Andrew McMeekin Photography
In 2019, the Royal Botanic Gardens at Kew began analyzing the provenance of more than 300 tea specimens of mainly Chinese and Indian grown teas dating to the 1850s. Ethnobotanist Aurora Prehn began by examining labels. She then proceeded to record non-textual evidence experienced through sight, touch, and smell. In this interview she shares her findings and offers some interesting insights into the work of Horticulturalist Robert Fortune whose specimens are included in the collection. Listen as we learn about tea from 1853.
Ethnobotanist Aurora Prehn describes the 1850s tea collection a Royal Botanic Gardens, KewAurora Prehn describes tea collection at Royal Botanic Gardens near London, UK
Q|A Aurora Prehn
Aurora Prehn is an ethnobotanist working independently researching the nexus of culture and nature while consulting in areas of expertise under her LLC, People & Plants. She completed her BA in Anthropology and Environmental Studies from Marquette University in Milwaukee, Wisconsin in 2013 where her research examined local food culture, health, and the environment. Following graduation she spent five years in the specialty, organic tea and botanical industry at Rishi Tea finishing as a tea taster and educator. In 2019 she completed her MSc in Ethnobotany at the University of Kent and the Royal Botanic Gardens Kew in the United Kingdom.
Dan Bolton:Will you share with our listeners what it’s like to examine tea from 1853.
Aurora Prehn: The collection is quite old, so the leaves are different shades of brown. Of course they’re oxidized but the different shapes expose different tea types. Compression was a major theme that surfaced right away, as well as a whole slew of different Orthodox shaped leaves.
I didn’t touch them directly without gloves, and very rarely, very sparingly to preserve them, but rotated the jars to expose different labels that were hidden and even bits of metal that were stamped labels as well as a little bit of tea chests.
We all know tea absorbs scent. I was shocked to smell white tea and pick up nuances, smelling some greens that are now brown, but you can tell that there’s still that green heart there.
Yak butter has a very interesting, distinct smell, and 175 years old is still a little bit pungent.
And as far as how the collection tastes?
Well, maybe one day if Mark allows, I would love to try some.
Dan: The storied botanist and tea explorer Robert Fortune is part of the narrative. He was not working for Kew, but many specimens that he collected ended up in the museum. Will you briefly describe his adventures.
His story is fascinating.
I read a wonderful biography by Alistair Watt (Robert Fortune: A Plant Hunter in the Orient) that really covers his whole life and career. He’s a horticulturalist by training and is a plant hunter who traveled to Asia, mainly China, on five expeditions between 1843 and 1861.
Fortune was hired by the Horticultural Society of London and then the East India Company and traveled on behalf of the US government. He also collected insects and different antiquities and wrote extensively about his work in the Gardeners Chronicle as well as the Journal of the Horticultural Society of London.
He also wrote five books on his expeditions with a map of the tea lands which shows what was believed at the time. It doesn’t show the experimental test plots in Darjeeling or in South India and the area of Assam that we know that grows tea. We know that Korea has been growing tea for hundreds of years and was left off the map so it’s really quite interesting.
We have two artifacts in the collection from Fortune. One is a set of 24 paintings showing how tea is grown and processed on paper that was requested by the collection’s founder. William Jackson was writing about the plant used to make that paper, so I think the paper itself was slightly more of interest than the depictions.
Collection No. 33725. Three examples from a 24 painting set illustrating the cultivation, and processing of tea leaves into a slow roasted wulong as seen in modern Wuyishan.
The second was this fancy or twisted tea that was collected in 1852. It came from Yunnan, where Fortune wasn’t traveling, so it was likely he collected from a port.
Dan:Kew hosted multiple workshops in January 2020 for members of the tea community from the UK and Ireland – prior to closing the gardens during the pandemic. Aurora, how can listeners learn more about this marvelous collection?
Aurora: One way that people can engage this collection is through the online catalog available on Kew’s website. Search economic botany collection by just typing camellia.
One of the really remarkable things about this collection is how intact it is. Teas that were identified in the 1850s, they’re still here and still intact.
This is what’s pushing me to keep going remotely during this pandemic, because I know that listeners and tea nerds around the world are really just going to love it. There’s going to be even more coming out of this project.
Rediscovering 174 Years of Tea, Chai, and ?
By Aurora Prehn and Mark Nesbitt
There are many histories of tea’s material culture, each depending on the perspective of the historian and, crucially, the raw material and methodology of analysis. This collection is distinct from those of most other museums and archives in being composed primarily of tea leaves, rather than teaware or documents. The majority came from across Asia, between 1847 and 1914, and include all parts of the tea plant, from root to seed, as well as clay, other woods, bamboo, and metals. Alongside processed tea leaves from all six tea categories, the collection also contains: seed husk and flower bud cakes, rare tea types, bricks from remote trading outposts, wooden statues, teapots, adulterated tea, fermented lappet, extracts, and a single yak butter container with an aromatic note left from its contents approximately 172 years ago. As one can imagine, these artifacts contain many biocultural stories, histories, and perspectives.
Caption: Philippe Juglar, right, presenting AVPA award to Managing Director Chaminda Jayawardana, Lumbini Tea Factory, Sri Lanka
The Paris-based AVPA (Agence pour la Valorisation des Produits Agricoles) is allied with tea producers globally. Recognition, professional education programs, and competitions build self-esteem and economic success that directs a larger share of the value chain to the country of origin. “This is why we cling to local transformation of agricultural products so that producers benefit from the pursuit of excellence,” says AVPA President Philippe Juglar. Juglar explains how competitions that exclude international judges in favor of local experts reveal that what the gastronomic world and what the professional tea world consider quality tea leads to some “very interesting differences.”
Philippe Juglar is a partner and consultant at Agro Business Consulting & Development, a Paris-based consultancy focused on agrobusiness development and trade. ABCD helps clients increase revenue by adding tangible and intangible value. He has worked in Europe, Latin America, Africa and the Middle East.Juglar was named AVPA president in 2005.
Dan Bolton:Tea-consuming nations have many compelling reasons to support tea suppliers at origin. Name the most compelling of these reasons from the vantage of AVPA and describe your process of evaluating tea with French-only juries.
Philippe Juglar : We are trying to create contacts between European distributors and possible suppliers in new countries. For instance new tea producers in Eastern Africa are absolutely unknown up to now. They have a new image. We want the French and European tea distributors to have contact with new countries of production and new producers.
The tea market is mainly global international companies or very large trading companies. They import the quality and the quantities they want.
First, we try to precisely define the parameters we want to judge, and we check that all our judges in the jury agree on the measurement of all those parameters.
Second, we group the products in homogeneous categories. We don’t want to compare what is not comparable, but just to have a comparable notation for products that are seamlessly similar.
Third, very paradoxically, we wish not to have an international jury. Tasting is very hard to predict related to our culture. We want to have and to find out, the very interesting proof and for that a common language is very, very important. To try to say in your mother language what you feel is difficult but in a foreign language is nearly impossible.
Last, we try to compare what the gastronomic world thinks and what the professional tea world thinks, and I can assure you that we find very interesting differences.
Dan: Quality is visible to all. Color, pluck, and the precision of leaf preparation and style as is the absence of defects such as oxidation of the leaves. Taste is subjective, yet skilled tea tasters agree that certain teas possess exceptional characteristics. Please explain AVPA gastronomic approach in evaluating tea.
Philippe: Do you know how we judge wine in France? The best one of a certain region?
The wine that mirrors the pattern of the wine of that region. So you have an organoleptic profile for, for instance, Burgundy, and the best wine of this specific region of Burgundy is the one with a profile which is the nearest to the theoretical one, which is completely intellectual.
We never compare two wines from two different regions, that is nonsense.
In AVPA we prefer a local transformation of the rural product.
First reason, to give a larger share of the value chain to the country of origin.
The second reason is to obtain exceptional qualities. When the processing of the agricultural product is made by the grower himself or the nearest possible from the grower, then you get exceptional products: You change your grower into apassionate, dictator of his own product, and his reaction is completely different. There is no discussion. You just want to have the best with the best practice.
The third reason is that in producing countries you now have emerging markets. Why import from America or from Europe?
Tea is, by definition, processed in growing countries, which may be the reason for those exceptional teas you have in China or in Japan because they have processed their own teas for thousands of years.
Dan: Consumer preferences power markets, AVPA educates and helps inform tea selection by consumers. Will you share your thoughts on the importance of traceability and delivering a fair price to those at origin.
Philippe: Traceability for me is very, very important because what the consumer is looking for is to know the family, the region where the product is coming from. Nowadays you have a code, a picture of the very farm where the product has been grown. That leads to a notion, you know perfectly which is a geographical indication.
A lot of these small producers have no financial means to get a brand or a trademark, but they can get a geographical indication and collectively capitalize upon it (that’s the way we do it in Italy or in France or maybe in Japan).
Very good products are known by their geographical indication and a geographical indication is a way to get that intangible value, which will transform the lives of the group.
As far as fair trade prices for me, it’s a very, very difficult notion. I don’t believe that you built a regular commercial relationship based on the fact that one in the deal is a poor guy.
I saw it very well in coffee: If I am poor, I can sell my coffee. If by selling my coffee I become rich, I cannot sell it anymore.
And the second problem: What is a fair price? The cost of living is not at all the same in Sri Lanka, in China, in Colombia or in Canada.
So the notion of a fair price is a concept developed in developed and consumer countries.
Frankly speaking, deep studies for coffees show that over $1.00 gained by the fair trade logo, 90% of that stays in Europe.
I prefer to help the farmer to get a natural good value by the quality, and by the fact that his brand or the geographical indication is reviewed by the consumer. This is better than by an act of charity.
Juglar presents 2018 tea award to Chaminda Jayawardana, director at Lumbini Tea Estates, Sri Lanka
Competition Tea
By Dan Bolton
Tea competitions that “speak” for their respective markets are great for the industry. In the tea lands, skilled growers and tea makers can infinitely adjust their pluck, style, and grade for export but first, they must understand market preferences. Respected annual contests such as the Emei Dah Pan Competition in Taiwan and the Lu Gu Farmers competition, which dates to 1976, are a model for peer review but in France AVPA judges companies from around the world for excellence “based on gastronomic rather than standardized refereeing.”
A money-losing federation of small grower co-operatives in Tamil Nadu, the largest of its kind in India with a history dating to 1965, languished for decades before Supriya Sahu emerged as a leader with a singular message: produce tea that builds the lives of farmers and a better future. “That’s our ambition, to transform an organization that was a sleeping giant into one that can show the world that a small growers’ organization can be the best among the best,” she says.
Supriya Sahu, managing director of INDCOSERVE in Tamil NaduTea tasting at INDCOSERVE
Awakening a Sleeping Giant
Supriya Sahu arrived in the Nilgiris in 2019 to head INDCOSERVE, a cooperative of tea farmers started by the government of Tamil Nadu. In less than two years, she has turned this 55-year-old loss-making cooperative into a profitable one. INDCOSERVE’s 30,000 small farmers and 16 tea factories produce 14 million kilos per year, with a newly launched retail range. We talk to Sahu about how she has pulled this ambitious and audacious plan that can well serve as a blueprint for small growers across the country.
Aravinda Anantharaman: This is your second deputation in the Nilgiris. When was the first one? And how did the second one come about? What did you do between these two deputations to the Nilgiris?
Spuriya Sahu: The first one was 20 years back, between 1999-2002, when I was posted as the Collector of the district. I worked for the government of India for almost 10 years. I worked mostly in the ministry of information and broadcasting where I looked after the policy aspects of broadcasting, basically the licensing of the television channels and community radio and content regulation on television channels, et cetera. Those were my earlier assignments. After that, I was posted as Director General, Doordarshan. After competing 10 years, it was time to do something at the grassroots. Tamil Nadu government was kind enough to post me here because there was an opportunity to work with the farmers. So having worked at the policy level for a very long time, I think it was very important, interesting to touch base with the ground reality to see what’s happening in the field.
Aravinda: When you took over managing INDCOSERVE, where was it at? What did you inherit?
Supriya: Basically it’s like a sleeping giant. That’s what I’m telling my team all the time. That it is like a sleeping giant and we are awakening it slowly. It has a huge potential and it could be a game changer in the tea industry. I am saying this because of many reasons.
One, I think our greatest strength is that we are a cooperative. It is a democratically elected institution. INDCOSERVE is not headed by officers, but by farmers themselves. How many organisations can boast of that? The chairman of INDCOSERVE is a small farmer himself. We have 16 factories. Each factory has a board and the board is headed by a small farmer. How does it help? It helps because then they have a direct role to play in whatever they do. Almost all these small growers have been with us for more than 20 years, 30 years; we are doing enrolment of new members, which is a continuous process.
If profitable, as a very large player in the sector, we can be a game changer for the tea industry. Because we can set standards and benchmark us, which we were not doing earlier. With all due respect to my colleagues before me, I think most of them were holding the position as an additional charge. They were managing it remotely, sitting at Chennai or elsewhere. You did not have such a senior officer managing it from the headquarters. And that makes a lot of difference because you are there 24 by 7 to handle the affairs of the institution.
Aravinda: How is INDCOSERVE set up?
Supriya: It’s a cooperative federation. There are 16 factories affiliated to us. INDCOSERVE was set up by the government in 1965. Then the first factory was inaugurated at Kundah. Over a period of time, several factories have come up. We have about 30,000 members, 30,000 small tea growers who are members. That makes us one of the largest tea co-operative federations in Asia. And of course the largest cooperative federation in India. Because you have the bought leaf factories, you have STGs.
If you look at the North Indian tea sector, it’s mostly estates. There are some small growers also, but they are not affiliated in a cooperative structure. Whereas in South India, it is mostly the bought leaf structure, but like a federation people coming together, working for themselves, this may be the only one in the country.
Aravinda: The cooperative model is challenging. What were INDCOSERVE’s challenges?
Supriya: We had several brainstorming sessions with our small growers. I also started something called open house where every Monday, any small grower can drop in here.I wrote about 30,000 letters to small growers, saying that I’m here to serve you. Here is the number to my office, my office address, my email. Please tell me what shall we do. That letter was also very emotional because I also wrote to them as the previous district collector who served them 20 years back. I have that connection with the people of this district.
We had several rounds of discussions in the field, and then we identified several challenges, which we have documented. The most important challenge was that INDCOSERVE could never emphasise on quality of our teas. We were not even known. Nobody knew about INDCOSERVE as a brand, as an entity.
Now maintaining quality of tea leaves is a biggest challenge because we are not like a big estate where people can just ask their labourers to pick two leaves and one bud. Here, farmers just pick the leaves and bring it to us. We did not have leaf supervision standards in the factories. That was the biggest challenge we identified. But then, how do you make sure that 30,000 farmers understand how important is the quality of leaves? How do we make them understand that the quality of the leaf has a repercussion on the quality of the tea that we make.
We did several demonstrations telling our farmers that when you bring this kind of a leaf, this is the tea you produce. We launched something called as a mission quality, which was at three levels: what we will do at the INDCOSERVE level, the factory level and the grower level.
We started from the grower level. We have about 200 leaf supervisors. They are the people from the community, about 20-30 of them with each factory. Their job is to collect the leaf from the growers bring it to a collection centre, or the grower brings it to the collection centre. The transportation vehicle brings it to the factory. We trained all our leaf supervisors. That was the most critical because whenever a farmer brought the leaves, they were able to demonstrate, that you give this leaf, this is what we will produce. I would say about 55% to 60% of the leaf quality has improved dramatically, thanks to this kind of an interaction which we did at the grower level.
Then we also had several hours of meetings where we trained small grower representatives. One interesting thing in the Nilgiris, here the Badaga community, who cultivate land, who are the main supplier of tea, is a very cohesive, a very tight knit community. In fact, the entire village is like a family. If they see a value, they will tell everybody in their community to follow it. It’s a discipline, it’s coming together, it’s a team work. So that really helped us.
At the factory level, they did not have any standard operating procedures at all, no SOPs were in place. We consulted private bought leaf factories. We consulted some private estates like Chamraj. We learned, we went to them, we took our teams to see how a private sector company operates. And it was a huge learning. We took our MDs, we took our Chairman … it was an eye opener. Because they saw that the factories were so clean, so hygienic, so well maintained; packaging was so good, marketing was fantastic. They felt we can do it. So we introduced SOPs, we introduced monitoring of the liquor, we appointed quality officers. We appointed a Chief Quality Officer at the INDCOSERVE level. And at the factory level, we appointed five quality officers monitoring the quality of teas across the factories. They’re all experienced people who have worked in the private sector for a very long time.
At INDCOSERVE level, we have introduced a weekly and a weekly internal certificate mechanism. We give an internal certificate with quality grades. There is a healthy competition to get the A quality, because we have told them that those who will get the maximum number of these certificates will be eligible for an annual award. We are introducing an award system to incentivise the factories, as well as the MDs.
These were the major things that we introduced as far as the quality, but then I can go on talking about it because there are many things that we did, in marketing, in building a brand and things like that.
Aravinda: Just to go back a bit, when you wrote those 30,000 letters, did you get responses from the people?
Supriya: Many people did. About 35 or 37 called me to say, you have to do this, our factory is not operating at the optimum capacity. Their feedback was so good, so precise. They knew what was happening in the machinery. Many people also said that the tea maker was not good, or that the staff were not paying attention.
They also had an issue with non settlement of their dues. In fact, that was another major reform, We were not announcing the base price of the green leaf, which means if I am a farmer, I won’t know much money I will be paid upfront. We started announcing the price on first of every month. The farmer knew if I supply my leaf, I will get this. He or she was able to compare it with the private factory.
We were paying much less than the price determined by the tea board of India. That was not instilling the confidence. I think most of the grievances were attached to this, that they were not getting the base price determined by the Board.
Many of my factories were making a loss. We took a calculated risk in ensuring that we give the price determined by the board, to be on the right side of the law, and because it’s their right. I’m still happy to say in the last one year, except maybe for two months, we have been able to pay either the tea board rate or above.
We got more leaf. We’ve been able to operate our factories at an optimum level. It built the confidence of growers in the organization.
Kattabettu Tea Factory
Aravinda: Was there infrastructure upgrade to the factories?
Supriya: Most of our factories are 30 to 40 years old, some as old as 50. No upgrade had happened and only some machineries had been upgraded. There has not been an integrated upgrade of the machinery. We have got an upgradation plan as well as funding support from the government of Tamil Nadu and NABARD, under a scheme called as the Rural Infrastructure Development Fund. We have got about INRs 18.5 crore. We are renovating five factories which in the next six months will be state-of-the-art factories.
Aravinda: What makes up INDCOSERVE’s product portfolio?
Supriya: So we introduced the Bedford (named for the famous neighbourhood in Coonoor), BlueMont, Honey Hill, Marlimund, which is the local lake here. We introduced about 11 new varieties of tea. Earlier, we had 3, which we are supplying in the Public Distribution System (PDS) system, all three were dust. We just used to sell it through auction centres. For the first time we introduced leaf tea. That market we were not tapping. Plus we came out with a niche product, which is under packaging right now, the Nilgiri kahwa. We experimented, we have patented it. It has green tea, it has almonds, it has got saffron, it has elaichi (cardamom), laung (clove), and it has got rose petals. So now we are in the process of packaging it and bringing it out. So likewise, we are in the process of making a Nilgiri-Madurai jasmine, a mint tea, a masala … these are some of the varieties which are coming soon.
Aravinda: Why the need to create a brand for INDCOSERVE and not just continue on the auction route?
Supriya: We realized during our field assessments that we were a hundred percent dependent on the supply in the PDS. We are the largest supplier of teas in the PDS system of the government of Tamil Nadu. That makes us the largest supplier of tea in PDS anywhere in India because we are the only state where our teas are available in ration shops. We supply about 2,000 tons of tea annually through 30,000 shops of the government of Tamil Nadu. That’s our main business, that’s our bread and butter. It’s about 200 tonnes a month. It is very challenging, but then that gives us a very nice market to our famers because the tea that we supply in the PDS is not free. People have to buy it. It’s only an outlet that the government of Tamil Nadu has very kindly provided.
But our factories were making losses. They did not explore other avenues, newer markets. They were quite content within the space that was made available to them. They were also bringing the tea to only one platform, Tea Serve, The tea market is volatile; we were vulnerable. Therefore there was a need for us to kind of explore other avenues. Why not explore selling packaged teas, that can be displayed on the shelf. If you want to sell, you have to create a brand.
We opened the Indco Tea House. We have two now, one at Kattabettu and another at Bedford. We are opening four in Chennai, in the metro stations. We have launched the tea trucks, we are calling them as tea vandis, a tea and a snack shop. This is again a very unique concept coming from a cooperative federation. They are very beautiful vehicles. Five vehicles are already operating and 20 more vehicles are joining our fleet in next three months. They are in Botanical Gardens and Doddabetta, those locations. The new vehicles will go outside the Nilgiris too. They are very popular with tourists because apart from what people want, they also serve wholesome food like thennai mururku, payasam made of samai rice. The local whole foods is also being used, which is healthy and nutritious. And we have partnered with the local Toda tribal group to operate these vehicles.
Our dream is that we should be like Cafe Coffee Day chain or Starbucks. Why can’t we, a home grown outlet, be like that?
INDCO’s Tea House
Aravinda: The shift to making leaf tea, how did that go down with the factories?
Supriya: I must say that it is much more easy to convince local farmers, and it was easier to convince our growers then to convince the officers. Because I think they have a vision which is much more far reaching. It was not very difficult to convince them because leaf was not selling at all because South India is mostly dust market. So you will find that the dust used to get picked up, but the leaf would not sell or sell at a very low rate.
Thanks to these efforts, with leaf tea, we almost doubled our turnover in one year. We have almost doubled our farmers’ income. Out of 16 factories, except three, everybody was making loss in 2018-19. Last year, except three, everybody has made profits.
Another thing we decided to do, which is the game changer for our organization, is we have gone ahead with the international certifications like fair trade. Our fair trade audit got concluded just now. We will know in a week’s time about the audit outcome. Outcome is not important. What is important is the process. We have three of our 16 factories who got trustea certification for the first time. When they went through the process, our farmers and our officers looked at our factories. They looked like they were bombed, they were so dirty with microbial infections, with people not conscious about the cleanliness, the hygiene, the workers safety, the workers, rights.
Now all our factories have workers restrooms, excellent toilets, all newly constructed or renovated, clean drinking water, safety gears, boots, shoes, and fire safety.
When they went through the process, I would say it is an internal journey.
Why should a government body always be referred to as not producing good quality tea, inferior, not clean? We want to break all these stereotypes. So we have established one model at Kattabettu where the entire factory is better than a private factory, and with our own money.
When we have also eco-restored the factory, that is another futuristic area we are going to, where we have planted sholas, grasslands. We have created an eco-center within the factory saying that we are located in a biosphere and are responsible for the ecology.
We have demonstrated to our officers and to our farmers, that, look at it, you have done it. Your organization has done it. So why not others? And others are coming and doing it.
We have set up teams. There were hardly any people here. We have a separate marketing team. We have a quality team. We have a technical team who looks at all these aspects. We have appointed an Environment officer, somebody who will look at the environmental aspect of our factories. We burn wood which is not good. We need to find alternatives. We are looking at LPG to have the gas-fired factories. We’re looking at the options, like solar. One of our factories at Kaikatti, at converting into a completely solar integrated roof system, making it a carbon neutral manufacturing unit.
Aravinda: Are you still using the Tea Serve auction platform?
Supriya: Tea Serve was set up in 2000. An internal study conducted pointed to some bias in selling our teas. There was no electronic platform at that time. Tea Serve was the first electronic auction platform in India. Another reform we brought was on Tea Serve. Tea Serve was operating on outdated software and we were not aligned to the all-India software of the tea board. As a result, our market was limited only to some 15-20 buyers. We migrated to the software platform of the tea board.Now we are at par with any software platform. Earlier we were not taking our teas to any other auction. Today, instead of one, today, we are selling at five auction centres. We are at Kochi, at Coimbatore, at Coonoor auction centres; we are also part of their new experiment with the Japanese auction system. Within a year, we quickly moved over from a very archaic and old system at which we were operating to a dynamic platform and we are aligned with everybody else. Whenever we find that we need to balance the market, we can use this platform. So strategically, I think it’s good to have Tea Serve, but it is not good to confine ourselves only to it.
We have an all India platform available to us. Definitely our teas are fetching much better than ever before. The average price of tea was never more than INRS 62 to 65. Now, it is never below INRs 100. As a result, we have been able to pay a historical price to other farmers when we paid them in the month of September – 28 rupees per kilo of green tea leaf, which is the highest ever in the history of INDCOSERVE, thanks to all these initiatives being taken.
Aravinda: Are you making more leaf or more dust tea?
Supriya: We make about 14 million kilograms of tea every year, all grades of tea, leaf and dust. We adjust according to the market. Whenever the leaf prices are more, we can tweak our manufacturing process to make 60% leaf and 40% dust. All these things have been brought into the system now. So there is a market consciousness, market intelligence.
Aravinda: Are you making green teas?
Supriya: Not yet, but our factory is getting ready to make orthodox and orthodox green teas. We were not even making orthodox until now.
Aravinda: Is India the market or is export also part of the plan?
Supriya: Export is definitely a very big thing on our agenda this year. If we are looking at improving our farmers’ income, if we really want to play an important role in their livelihood, improving further their livelihood opportunities, then I think we need to find markets abroad.
Thanks to COVID, we have not been able to really travel and do that kind of market exploration. But, recently we have appointed an export consultant, on a part-time basis to help us look at the export market. Very good inquiries have come in and we are pursuing them.
Aravinda: What’s the brand INDCOSERVE story?
Supriya: If I put myself in my farmers’ shoes, then our story would be that we want to produce a tea which is sustainable, which is ethical and, which goes … these words are very commonly used, like empowerment … but we really mean that we want to produce a tea, which builds the lives of farmers towards a better future. From an organization that was a sleeping giant to one that can show the world that a small growers’ organization can be the best among the best, that’s what our ambition is.
Aravinda: Is tea farming of interest to the Badaga youth now? Will this stop the migration to the cities?
Supriya: With the organic cultivation that we are promoting now, we are registering our farmers to move towards the organic cultivation in the next 3-4 years. That is the plan. I think the young people are getting interested in this new and niche areas. If the factories are old, the machinery is dilapidated, if there is no technology, we cannot attract young people, they will not find any value in it. So we are renovating our factory, we are modernising our machines, We are moving towards eco-friendly technologies like LPG, solar. We are also moving towards a massive digitisation. We have launched a growers’ app. I mentioned to you some time back about the annual awards. We are introducing the young tea grower award. We want them them come into the boards during the election. That’s when change will happen. We want young farmers to come. They will come only when they look at the factory and say, it’s next gen.
Aravinda: What has turning profitable meant?
Supriya: We are not looking at profitability only in terms of money. We are looking at it in terms of what role we played for the people for whom we were established. For us, profitability will be in those areas, look at the UN sustainability goals – poverty, hunger. Did you provide livelihood opportunities? Did you reduce their vulnerability to situations like Covid?
Yes, we did. During Covid, we were the only cooperative, only factories operating with all precautions, because there was a huge demand for tea from various other states, especially from Kerala. Where we supplied 2000 tonnes in a year, we supplied it in 21 days to Kerala. None of our farmers had to borrow. None of our farmers had to face the brunt of Covid. That is where our profitability, our existence matters. Did you reduce the vulnerability of your farmer to unprecedented crisis like Covid. That’s where we played a very important role.
We are very proud about the fact that when this order was asked, whether we will be able to do it, within three days, all the farmers, they sprung into action. We opened up factories, supported by the government of Tamil Nadu. Farmers bore the gloves, the masks, the sanitation, and the medical checkup. We were the only people working. We worked through the entire COVID period and we fulfilled our commitment and earned INR 21crores, which we distribute it to our farmers. I think, this is where the real profitability or the success of an organization lies, when you are able to support your farmers in situations like this.
