• Tea Biz Podcast | Episode 49

    Hear the Headlines

    | Omicron Cancels Restaurant Reservations
    | Sri Lanka Barters $5 Million of Tea Monthly to Settle Iran Oil Debt
    | Foodservice Tea Still Recuperating, a TEAIN22 Forecast

    Seven-minute Tea News Recap

    Caption: Two years of COVID reset tea consumption at restaurants and cafés, initially reinforcing traditional expectations of comfort and warmth but evolving to permanently disrupt delivery, takeaway, menu choices, and celebratory occasions with tea.

    Listen on your favorite player

    Features

    This week Tea Biz travels to the Republic of Ireland to visit Teacraft founder and research scientist Nigel Melican who explains the necessity of mechanical tea harvesting and describes an innovation in two-man harvesters that features a rotating head that simulates a “selective” pluck without shearing leaves.

    (more…)
  • New Role for Tea Board

    The Tea Board of India last week proposed legislation that will minimize its regulatory role in favor of promotion and development. The proposed legislation, with Parliament’s approval, re-defines the board as a facilitator, a transition welcomed as “progressive” by industry leaders.

    In a formal 12-page public notice, the board “proposes to delete those archaic provisions [of The Tea Act, 1953] which have lost relevance in today’s context and introduce new objectives/ functions/ powers of the board so that the board can act as a facilitator for optimizing the development, promotion, and research in the tea industry and help in improving production, export, and quality of Indian tea.”

    The announcement invites public comments on the Tea Promotion and Development Act, 2022 through January 21.

    • Caption: The proposed Tea Promotion and Development Act of 2022 will impact the tea industry from the ground up.


    Tea smallholders plucking Assam garden
    Tea smallholders, defined in the tea act as those cultivating 10 hectares or less, plucking an Assam garden

    India Drafts Tea Act to Redirect Tea Board Mission

    By Roopak Goswami

    India Tea Board Chairman PK Bezboruah explains that “The old Act was based on facts which had become fallacies over the decades: that tea was a predominant export of India, that people needed planting permits to plant tea, that the government had accurate estimates of green leaf production in a specific block.”

    Successful enactment of the Tea Promotion and Development Act, 2022 will repeal The Tea Act of 1953.

    He cited “many steps that could be taken by the Tea Promotion and Development Board, including the revamping of auctions, removal of substandard teas from the system; setting a floor price and establishing quality standards for raw leaf, a ban on unethical manufacturing policies, ensuring compliance of Indian tea with international norms for MRLs [Maximum Residue Levels] and the identification of restrictive trade practices by some participants in the tea value chain.”

    The government has been mulling these changes for some time but the pandemic delayed implementation. Bezboruah said that as a regulator, the Tea Board has been perceived by some as an enforcer or adversary and has been accused in the media of indulging in unprofessional behavior from time to time. “The new Act will redefine and remove some of the bottlenecks that have stood in the way of the sector’s competitiveness,” he said.

    The draft spells out several objectives including “fair and remunerative prices for growers,” the promotion of tea exports, promoting the sale and consumption of tea through e-commerce platforms, promoting tea quality, promoting branding and product diversification, value addition and packaging. The board is specifically charged with supporting and encouraging small tea growers, an objective that includes implementing new technology. Oversight involves safeguarding the interests of tea plantation workers and raising awareness among the general public about the tea industry in India.

    Growers will no longer be required to obtain a permit to grow tea. Traders will no longer be required to obtain a license (only to register). The board will no longer have the power to unseat inept management and take over garden operations. The new act seeks to narrow not eliminate the board’s regulatory role at a time when aggressive regulation of existing provisions has become a priority.

    Ringtong Tea Estate owner of Sanjay Choudhury told the Telegraph that abandoning enforcement of the Tea (Distribution and Export) Control Order, 2005, could cause ‘‘irreparable loss’’ to the already struggling industry. The control order enabled the board in November to step up efforts to verify tea quality inspections in an effort to stem the influx of substandard teas. In December the board used a provision of the same control order to require that labels indicate country of origin and the presence in blends of tea not grown in India.

    Bezboruah said that “registration of new units and regular inspection of existing ones to check for quality breaches must go on, and we must quickly evolve evaluation techniques that do not depend on human assessment. The government must also place all tea manufacturing units on the negative list for a subsidy, as presently plantations are, to avoid entrepreneurs from setting up new units to avail of subsidy.”

    The central government’s vision is to see the board as a facilitator acting in the interest of industry stakeholders to restore the reputation of Indian tea as the best in the world. 

    Bidyananda Barkakoty adviser North Eastern Association says association members appreciate the intent of the government to include small tea growers.  

    “If tea board wants to be a real facilitator than a regulator then some of the proposed amendments need further amendments. We are not fully satisfied with the proposed amendments. We will submit our views in detail on January 20,” Barkakoty said. 

    Bijoy Gopal Chakraborty, president of the Confederation of IndianSmall Tea Growers Association said the industry has long supported revisions to the tea act. “One sincerely hopes that the new Tea Act will break the stagnancy of tea prices, boost domestic consumption in a larger way and enhance the export market,” he said.

    “It is good to see that in the present bill small tea growers has been well defined,” he added. A small grower is one whose estate is not more than 10 hectares. 

    Bezboruah recommends the operational head of the board be redesignated CEO to give adequate recognition to the post. A full-time CEO would be able to help the board professionally, he said. In the present structure, the Board is run by the Deputy Chairman. As currently structured, the deputy chairman responsible for operations is perceived by stakeholders as playing second fiddle to the chair, he said.

    Language in the draft emphasized the importance of achieving fair prices.

    Mrigendra Jalan adviser to Bharatiya Cha Parishad said, “The proposed Tea Act 2022 has unshackled the tea industry from the vice-like grip which did not allow new plantation areas and putting up tea manufacturing units.  Also with other amendments proposed it is expected that industry will get a supportive role from the Tea Board rather than the role of an inspector which the Tea Board has been playing in its present form.”

    “The question is whether the new Tea Act will help in ensuring that a large number of workers working in the unorganized sector get at least a minimum wage thereby narrowing the huge wage disparity that is existing today between the organized and unorganized sector,” said Jalan.

    Tea Promotion and Development Board Structure

    The chairperson of the Tea Board of India will be named by the central government. In the future, career administrators are less likely to hold the post following the success in naming Bezboruah who is the first tea planter to hold the post. The act creates a chief financial officer, a director of tea development and the position of chief executive. The board will number no more than 20. Two members of Parliament serve, one named by the Council of States and a second by the House of the People. In addition, ten members representing stakeholders, labor, research institutes and authorities hold seats along with representatives of the governments from states where tea is grown. Two members nominated by the central government represent ministries, often commerce or agriculture. Appointees, except political appointees, must have at least 15 years of experience “in matters relating to the tea industry, governance, law, development, economics, finance, management, public affairs or administration.”


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  • Tea Biz Podcast | Episode 48

    Hear the Headlines

    | TEAIN22: Bulk and Specialty Tea Prices Diverge
    | France Will Pay €1 Million to GI Certify Ceylon Tea
    | Sotheby’s Inaugural Tea & Teaware Auctions Total HDK8 Million

    PLUS Frugal Innovation, Part 2

    Seven-minute Tea News Recap

    Caption: A few of the 24 rare Puerh cakes and aged teas that were auctioned at Sotheby’s first tea auction. Photo replicated from Sotheby’s auction website.

    Listen on your favorite player

    Features

    This week Tea Biz travels to Asheville, North Carolina to meet teaware potter and ceramist Mary Cotterman who discusses the artisan spirit and state of mind of those embracing native clay and how COVID-19 lockdowns focused her attention like a monk… 

    …and then to Assam, India to hear Part 2 of the series Frugal Innovation. In this segment, Aravinda Anantharaman explores the application of Frugal Innovation in the tea garden and factories.  Shekib Ahmed of Koliabur Tea Estate explains that “Objective data changes the conversation in the factory from vague concepts to thresholds and parameters. It makes operations scientific so that we can improve.”

    Mary Cotterman turning a teapot lid at her studio in Asheville, North Carolina

    Aritisan Teaware Born from Native Mud

    By Dan Bolton

    Mary Cotterman was 12 when she learned to throw clay on a potter’s wheel. In the decades since, that wheel has never stopped spinning for this accomplished teaware artisan.  She describes the foundation of her work as functionality, “because for me, no matter how it looks, if I’m making a piece of teaware it needs to be a precise tool for pouring tea, so a lot of my design I take from traditional Chinese vessels, but I have learned small techniques and vernacular from all over.” Read more…

    Listen to the interview
    Mary Cotterman on crafting teaware in the US and the state of mind of artisans embracing native clay.
    “Technology has become much more affordable today than what it was 5-10 years ago because processing power has made it affordable. Devices are more affordable. Technology has become simpler,” says Shekib Ahmed.

    Embracing Simple Technology with Scalable Impact

    By Aravinda Anantharaman

    Frugal innovations utilize simple technology to address some of the most vexing challenges facing the tea industry. It’s an umbrella term for innovations that do not require much capital, carry a low financial risk, and can be done safely with high reliability. Abhijeet Hazarika, former head of process innovation at Tata Global Beverages, describes several innovations that have moved from the drawing board to become successful pilots at partner estates. explores the application of frugal innovations in the tea garden. Shekib Ahmed of Koliabur Tea Estate in Assam talks about experimenting with frugal innovations in the field, but it’s in the factory, he says, where these simple technologies show the biggest impact. Read more…

    Listen to the interview

    Frugal Innovation

    In Part 1, Aravinda Anantharaman explores the application of Frugal Innovation in buying and selling tea with Abhijeet Hazarika, former head of process innovation at Tata Global Beverages. Listen to Part 1 in Episode 47 of the Tea Biz Podcast

    News

    TEAIN22: Bulk and Specialty Tea Prices Diverge

    By Dan Bolton

    The combined annual growth rate (CAGR) predicted for tea in 2022 suggests consumer preference for health enhancements and premium taste will widen the profitability gap separating bulk CTC (cut, tear, curl) from whole leaf and specialty grades.

    The fortunes of the tea industry are cyclical with better prices ahead.

    Demand in recent decades has been resilient, including during the Great Recession – some would say relentless. During the five years ending 2019, demand grew at around 4.5% per year. The pandemic slowed that pace but consumption in 2022 will top 6.5 billion kilos, enough to make three billion cups a day. Until recently growers managed to quench that thirst.

    What disrupted that equilibrium in 2020 is that tea output declined for the first time in 20 years. The resulting scarcity in domestic markets including India and China boosted prices. ICRA, a division of Moody’s Financial Ratings, in October 2020 predicted correctly that the bulk tea segment would report the highest operating profits in recent history. 

    In 2021 the situation reversed as more tea became available and prices declined. 

    Compounding the supply-demand equilibrium is the fact that consumer behavior rapidly changed consumption habits as office drinkers vanished, foodservice sales plummeted, and health and well-being became a daily concern. 

    Better tasting teas triumphed

    Once content with commodity offerings at the office and in restaurants, the pandemic accelerated growth in the residential segment. Sales of botanicals and blends in grocery and online spiked. In Germany for example, per capita consumption of teas and botanicals increased by an average of two liters to 70 liters per person per year.

    Market research firm Techanvio writes that “consumption of tea for residential use is significantly growing as consumers are continuously seeking changes in their lifestyles and food habits and experimenting with cuisines & beverages. Moreover, the rising at-home consumption of tea is expected to grow at a steady rate owing to increasing urbanization and the changing eating habits of consumers across the world.”

    Technavio predicts recent growth rates of 3% to 4.5% per year will accelerate to 6%+ (or greater) for the specialty tea market through 2026. The segment will add $5.5 billion in sales from 2021-2026, according to Techanvio.

    In contrast, bulk tea is predicted to have a challenging year, according to ICRA and The Associated Chambers of Commerce of India (ASSOCHAM). In a joint report titled Tea Industry at the Cross Road, ASSOCHAM predicts that declining prices and increasing energy and labor costs will be a drag on financial performance.  

    ICRA Vice President of Corporate Sector Ratings, Kaushik Das says, “Players who are focused on producing quality teas are likely to witness a much lower decline this year as average auction prices of teas manufactured from own garden leaves of the top 50 estates of Assam and Dooars have witnessed a decline of only 8.5% against 25% for the overall auction average during the first half of the fiscal year 2022.” 

    In North India prices during the first half of the fiscal year declined 23% year-over-year, a drop of 60 rupees per kilo on average compared to 2020. Declines are even more severe in the bought leaf segment, dominated by smallholders. Averages in that segment fell 77 rupees per kilo, down 33% year-over-year. In Kenya, auction prices dropped 8% to $2.18 per kilo in the 12 months ending July 1.

    Globally tea production has now returned to pre-pandemic totals, increasing 13% during the first six months of 2021 as growers in India and Sri Lanka adjusted to the pandemic. Output in 2021 is expected to top 15% in Sri Lanka and India has so far produced 100 million more kilos of tea than during the same period last year. Output declined by 10% in Kenya but exports grew 19% helping keep demand and supply in balance.

    Biz Insight – The Economist Intelligence Unit first reported tea deficits in 2019 and 2020 and now forecasts demand will exceed supply in 2022 and 2023 by 427,000 metric tons. Warehouses are filled with tea so a shortfall of a few hundred thousand metric tons will not lead to shortages in the grocery aisle, but when combined with the cumulative harm from climate change and with food inflation at record levels, disrupting the long-standing equilibrium will certainly firm up prices that had fallen well below the long-term average of US$2.85 per kilo.

    TEAIN22 is one of a dozen New Year Tea Biz forecasts


    Tea remains unearthed from ancient tombs in Zoucheng, Jining City, Shandong Province, China. /CMG

    Sotheby’s Inaugural Tea Sale

    Legendary auction house Sotheby’s concluded its first rare tea and teaware auctions in Hong Kong this week. Sales totaled HDK$4 million for the teas. Reserve prices approached $1 million Hong Kong dollars for Puerh, some aged for more than a century. Teaware as old as 1000 years was featured in a parallel auction titled Echoes of Fragrance: Tea Culture from the Tang to the Qing Dynasties. Sales of teaware totaled HDK$4.3 million (about $552,000 in US dollars)

    The online catalog included a 1900 Chen Yun Hao puer cake and a 1950 Jia Ji Blue Label Tea that sold for HKD562,500 ($72,000). Bids for a 1937 basket of Sun Yi Shun (aged Liu An) opened at HKD $240,000 and sold for HDK300,000 ($38,000). A bid of $500,000 Hong Kong dollars is equivalent to about $65,000 US dollars and while that threshold was met for only the rarest of teas, all but two of the 24 lots were sold. Several of the more recent teas including a 1985 Snow Label sold for $112,500 Hong Kong dollars (about $14,000 US).

    The companion teaware auction featured 63 lots including a Jian black-glazed bowl dating back eight hundred years to the Song Dynasty and a rare iron-red crane cup dated to the reign of Emperor Jiajing in the 1500s. Temmoku patterns include a “hare’s fur” (that sold for HDK189,000) and a “partridge feather” (that sold for HDK403,200). Also purchased were celadon cups and stands, Yixing teapots, and a carved Tixi lacquered tea bowl that sold for HDK529,200 (about $70,000 in US dollars). During the Tang Dynasty, beginning about 1,400 years ago, tea was boiled and served as a soup with condiments. Examples from that period include conical tea bowls, unique utensils, tea caddies, trays. Winning bids ranged from HDK 25,000 to HDK50,000 (about $6,000 US)

      ? By Dan Bolton

    Yi Chang Hao (Jing Pin-Song Font) 1999 – HKD40000
    Blue Label Tea Cake (Jia Ji) 1950s
    HKD562,500
    Sun Yi Shun Aged Liu An
    (Five tickets) 1937 – HKD300,000

    France Will Pay €1 Million to GI Certify Ceylon Teas

    The French Development Agency (AFD) and CIRAD (the French Agricultural Research Center for International Development) announced a $1 million Euro grant to qualify Ceylon tea as a protected Geographical Indication (GI).

    The four-year grant finances technical assistance to enable the Sri Lanka Tea Board (SLTB) to protect its national brand from counterfeiters while assisting the Ceylon tea value chain “to become more productive, inclusive and sustainable,” reads the AFD press release.

    Eric Lavertu, Ambassador of France to Sri Lanka, said that “France has been a pioneer in the establishment of Geographical Indications to create added value to its quality products and to preserve the reputation of French gastronomy over the world. I am confident that the solid experience of CIRAD in partnership with the… [tea board] will allow a broad endorsement of the Geographic Indication by all stakeholders, based on high-level product quality, together with sound environmental and social standards.” 

    Currently, Ceylon tea does not have protection to uphold and authenticate its quality, resulting in counterfeit sales in various consumer countries.

    Biz InsightSri Lanka is Heading for a Fall | Fertilizer banned earlier in the year is now available but the cost has risen from SLRs1500 rupees a kilo to SLRs6600 rupees, about $33 US dollars per kilo and rising. A ban on the herbicide Glyphosate that was eased in November was reversed in December. Output recovered in 2021 but that recovery is highly unlikely to continue due to ongoing economic problems with widespread protests by farmers over the cost of food and unions pressing for a big wage increase. Sri Lanka, where tea is hand plucked, has the highest cost of production in the world, averaging SLRs 269 ($1.33) per kilo.

    – Dan Bolton

    • Read more… indicates the article continues. Learn more… links to reliable outside sources.

    India Tea Price Watch | Sale 49

    Kolkata Sale 49 saw good demand for all teas. The Middle East was active for orthodox tea. Sales of Darjeeling and Dust relied on local buyers. Hindustan Unilever was active in Dust. Prices dropped marginally when compared with Sale 48; Darjeeling saw the biggest price drop of INRs 50. However, there were fewer out-lots of Darjeeling this week, compared to Sale 48. In Guwahati, the market opened to good demand with major blenders active for both CTC leaf and dust. Read more…

    India Tea Price Watch | Aravinda Anantharaman

    Upcoming Events

    January 2022
    Tea and Beyond! | GTI 7th Annual Colloquium | January 13 | UC Davis | Day-Long Virtual | Tea and Beyond: Bridging Science and Culture, Time and Space, exploring differences between tea and herbal infusions around the world and in terms of medicine and health, ceremony, traditions, sustainability, marketing, and more. Program | Register FREE (Zoom)


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  • Tea Biz Podcast | Episode 47

    Hear the Headlines

    | Economic Forecasters Predict Higher Tea Prices in 2022
    | As Holiday Orders Ease, a Delivery Crisis Looms
    | Germans Tea Drinkers Set a Consumption Record

    PLUS Frugal Innovation, Part 1

    Seven-minute Tea News Recap

    Caption: Scanning tea fields at different wavelengths to assess plant conditions. Using cameras to monitor crop conditions, in order to identify threats from disease and pests at an early stage, enables a more targeted (and effective) use of pesticides, lifting productivity and profits.

    Listen on your favorite player

    Features

    Tea Biz this week travels to Assam, India to explore “Frugal Innovations” that utilize simple technology to address some of the most vexing challenges facing the tea industry. In Part 1 of the series, Aravinda Anantharaman talks with Abhijeet Hazarika @TeaSigma, an IT analyst and former head of process innovation at Tata Global Beverages, and with growers Saurav Berlia and Shekib Ahmed on cost-efficient experiments and pilots that demonstrate why tea producers should embrace simple technologies with scalable impact.

    Monitoring quality with inexpensive cameras and laptops, a centrifuge, and microwave ovens.

    Bringing Technology into the Tea Value Chain

    By Aravinda Anantharaman

    There are few entry barriers to tea. It does not demand heavy infrastructure. But a complaint shared by smallholders selling raw leaf to large-scale tea producers operating multiple factories is that for the past decade, farmgate prices are not commensurate with costs. Now the economics of the tea trade is gradually shifting from oversupply to scarcity. At the same time, some quiet work underway in India is yielding encouraging results that lower the cost of tea production, improve quality, and ease a shortage of labor. The most powerful driver for change is revenue. Prices globally, on average, increased by $0.21 cents per kilo during 2021, according to Trading Economics. Abhijeet Hazarika, IT analyst @TeaSigma and former head of process innovation at Tata Global Beverages, observed that “Tea is not a very high profit yielding commodity and will not be so in the foreseeable future until some tech breakthrough happens.” The frugal innovations described in this series, combined with higher prices may herald that breakthrough. Read more…

    Listen to the interview (Part 1)
    Abhijeet Hazarika on promising new Frugal Innovations

    Frugal Innovation

    In Part 2, Aravinda Anantharaman explores the application of Frugal Innovation in the tea garden and factories.  Shekib Ahmed of Koliabur Tea Estate explains that “Objective data changes the conversation in the factory from vague concepts to thresholds and parameters. It makes operations scientific so that we can improve.” Listen to Episode 48 of the Tea Biz Podcast

    News

    Higher Tea Prices Forecast for 2022

    By Dan Bolton

    Globally tea export prices are edging upward, driven by combined spikes in transportation and logistics, more costly fuel and petroleum-derived fertilizer, and increased labor expense.

    Regionally the trend is mixed. Exports through September are down 10% by volume but up in value in India, which produces 20% of the world’s tea. India reports falling domestic prices following a pandemic year that boosted prices through the first half of 2021. In November, auction prices for CTC in Kolkata fell to an average of $2.78 (INRs209) per kilo, down from $2.97 during the same period in 2020. 

    In contrast, last week Kenya auctioned tea at a five-year high of $2.40 (KSH271) per kilo, according to the East African Tea Traders Association (EATTA). Production there is also down 10% overall.

    Declines in production are an early sign that the economics of the tea trade is gradually shifting from oversupply to scarcity. The Economist Intelligence Unit (EIU) predicts output globally will increase slightly to 6.279 million metric tons (6.3 billion kilos) while consumption rises to 6.538 million metric tons, creating a deficit of 260,000 metric tons. That deficit will increase to 363,000 metric tons in 2022.  

    There remains a glut of low-grade tea, but demand for inferior tea is slack. 

    Globally, tea prices, led by China, have increased by $0.21 per kilo since the beginning of 2021, up 7.32% according to Trading Economics. The analytics firm, using macro models and analyst expectations, based on benchmark CFDs, predicts tea will trade at $3.30 per kilo in 2022. A contract for difference (CFD) is an agreement between a buyer and seller stipulating that the buyer will pay the seller the difference between the current value of an asset and its value at contract time (if the difference is negative, then the seller pays instead). Trading Economics forecasts tea prices could reach an average of $4.10 per kilo by year-end. 

    If that comes to pass it will be only the second time tea has crossed the $4 per kilo threshold in the past decade. More likely is that rising prices will trigger increases in production. A study by the Indonesian Board of Trade using United Nations FAO data calculated the impact of increased production on prices.

    “If there is an overreaction to recent high prices which, for example, would result in a 5% increase in production, the results can be quite different…. the clearing price would be 17% less than the baseline price at $2.54 per kg,” writes Iwan Cahyo Suryadi, Chairperson, Board of Commissioners Indonesia Board of Trade

    “If the reaction to the current high prices is even stronger, resulting in a 10% increase in production over the baseline increase, then prices could be 38% lower,” according to Suryadi.

    EIU estimates a price increase that is close to the long-term average, “we expect concerns about supply and a gradual recovery in demand in some markets (particularly in Europe and North America) to provide some support to prices in the remainder of 2021. We estimate that prices will average $2.69 per kilo in full-year 2021, representing a 0.5% decline from 2020. We are forecasting an 8.7% increase in average prices in 2022, to $2.92 per kilo.”

    Analysis by Iwan Cahyo Suryadi Data from Price Monitoring and Analysis Tool, FAO

    Biz Insight – The long-term average price of commodity tea at auction is $2.85 per kilo. Quality tea is more likely to be sold direct and at significantly higher prices. Sales of tea exported by all countries totaled $7.1 billion in 2020, down 4.3% by value since 2016. Year-over-year the value worldwide of tea exports declined an average of 8.6% from 2019 to 2020, according to the website World’s Top Exports. China (dominant in green tea) accounts for 29% of global sales of tea exports by value followed by Kenya with a 16% market share (dominant in black tea), Sri Lanka 10%, and India 9.7% both have about a 10% share.

    Tea remains unearthed from ancient tombs in Zoucheng, Jining City, Shandong Province, China. /CMG

    Germany Reports Record Tea Consumption

    The German Tea & Herbal Tea Association (Teeverband), based in Hamburg, reports that consumption of tea grew by two liters per capita in 2020 to a record of 70 liters per capita. East Frisians averaged an astonishing 300 liters per capita during the stay-at-home year. These totals include the consumption of black, green, herbals, and fruit teas. The report’s authors write that declines in out-of-home consumption, “triggered by the pandemic-induced closure of hotels, restaurants and canteens, were offset by increased demand in food stores, chemists and specialist shops.”

    Hamburg is a global hub for the tea trade, importing 41 million kilos and shipping 22 million kilos of teas to 108 countries. India is Germany’s most important tea trading partner, sending 6.7 million kilos so far this year, China and Sri Lanka follow. The tea association’s managing director Maximilian Wittig said that organic certified black teas now account for a 12.9% share of the market. Organic herbal teas increased their market share to 13.5% a 2.5% gain compared to 2019.

    Black tea is favored by 73% of Germans with 90% steeped in tea bags. Germans buy 57% of their tea in grocery and department stores and 12.4% at tea shops with the biggest increase in channel purchases online at 8.2%.

    Download the 20-page Teeverband report on the Tea Biz blog.

    As Holiday Orders Ease, a Delivery Crisis Looms

    Logistics experts in November who predicted everything that could possibly go wrong ? were right.

    Jason Walker at Firsd Tea, the US office of the world’s largest green tea exporter, writes that “the burden of moving holiday retail goods has shifted from the ships to the warehouses and trucks. Major players and industry experts still do not anticipate any significant, overall easing of rates and more reliable delivery speed until at least Q1 of 2022.”

    Until then buyers are advised to place their orders months in advance, be willing to pay exorbitant rates ($10,000 for a 20-foot trans-pacific container), and order tea in much larger quantities than in past years to ensure sufficient inventory. Wholesalers report waiting 62 days for shipments to arrive from China. Bloomberg writes that ports serving Southern California by November had offloaded a record 17 million 20-foot equivalent units and then loaded 3.3 million empty containers for the return trip. Los Angeles has 2 billion square feet of warehouse space that is now renting at a 30% premium. An additional 20 million square feet is under construction. 

    Deliveries that took truckers two days in 2019 now take up to 10 days before arriving in Chicago as congestion at ports and warehouses and a shortage of drivers combine to more than double delivery times. Walker cites a shortage of warehouse workers and the added expense of overtime as the ports, as requested by President Biden now operate 24/7. On-time arrival is virtually impossible unless delivered by air freight, in which case it’s unaffordable.

    When will it end? Ship jams are now visible at ports in Japan, Taiwan, and Mexico. November marks a turning point. But experts predict the transport crisis will remain through spring and once again ? they’re probably right.

    – Dan Bolton

    • Read more… indicates the article continues. Learn more… links to reliable outside sources.

    India Tea Price Watch | Sale 48

    Responding to the tea producers’ concerns over rising imports against declining exports, the Tea Board of India passed an order on November 11, by which tea importers are mandated to mention the origin of the tea on the sale invoices. Importers cannot blend imported tea with GI-protected Indian tea (Darjeeling, Kangra, Assam (orthodox), Nilgiris (orthodox)) and pass it off as Indian-origin tea.  Producers of Darjeeling tea have been asked not to procure green leaf from outside the GI area. This is expected to act as a clampdown on cheap imports into India from Nepal and Vietnam, and allow Indian exports to keep their quality, markets, and prices. Read more…

    India Tea Price Watch | Aravinda Anantharaman

    Upcoming Events

    January 2021
    Tea and Beyond! | GTI 7th Annual Colloquium | January 13 | UC Davis | Day-Long Virtual | Tea and Beyond: Bridging Science and Culture, Time and Space, exploring differences between tea and herbal infusions around the world and in terms of medicine and health, ceremony, traditions, sustainability, marketing, and more. Program | Register FREE (Zoom)


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  • Tea Biz Podcast | Episode 46

    Tea Biz Podcast Logo

    Listen on your favorite player

    Hear the Headlines

    | Ekaterra Tea CEO John Davison Gets Underway
    | India Steps up Efforts to Halt Illegal Tea Imports
    | Chinese Archaeologists Discover Oldest Tea Yet

    Seven-minute Tea News Recap

    Features

    This week Tea Biz travels to Singapore for a conversation with John Davison, CEO of ekaterra tea, soon to be the largest tea company in the world. Ekaterra is currently a division of Unilever that houses 34 tea brands including Lipton, PG Tips, TAZO, Brooke Bond, Lyons, and Red Rose. In November CVC Capital Partners, a multi-billion private equity firm headquartered in Luxembourg, paid $5.1 billion for Ekaterra tea, outbidding several competitors and establishing a valuation based on 14x earnings before taxes and depreciation.

    Ekaterra Tea CEO John Davison discusses his plans for re-energizing the Unilever tea portfolio.

    Ekaterra tea CEO Re-energizes World’s Largest Tea Company

    By Dan Bolton

    John Davison joined Unilever in March 2021 to carve out the company’s underperforming tea portfolio. Davison was formerly CEO at Zuellig Pharma, a $13 billion pharmaceutical distribution company employing 13,000 workers in 12 Asian countries. Davison, who is British, is a graduate of Cambridge University and Harvard Business School. He began his career with UK retailer Marks & Spencer before joining McKenzie & Co. in 1991. He was global head of strategy at Diageo in 1995 during the Guinness merger and a regional president at Danone for 11 years beginning in 2003. Davison, who lives in Singapore, will relocate to Europe after Christmas. Davison discusses the urgency of improving tea quality and adopting sustainable initiatives along the entire supply chain. Listen to his plans for re-energizing the world’s largest tea company.  Read more…

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    John Davison on re-energizing the world’s largest tea company

    News

    Sparsh Agarwal, Selim Hill Tea Estate

    India Steps up Efforts to Halt Illegal Tea Imports

    By Dan Bolton

    India’s food safety and customs officials have stepped up inspections of tea imports targeting Nepal and citing complaints that large quantities of Himalayan grown tea are being illegally passed off as origin protected Darjeeling tea.

    It is not clear how great a quantity is involved but CBIC is asking for proof of export license and sanitary and phytosanitary certificates after customs authorities discovered that only 23.4 million kilos of the 60.4 million kilos imported into India during the past three years for re-export had been re-exported. The Darjeeling Tea Association asserts most of this tea arrived from Nepal and was sold as if India produced it.

     Growers describe a porous border that makes it possible for raw tea leaves to cross from Nepal. Unscrupulous factory owners can confidently process the leaf and pass it off as Darjeeling in the domestic market, reaping a significant difference in price. Tea vendors are in on the game, offering as little as 600 rupees [about US$8] per kilo to producers and then doubling the price for unsuspecting customers.

     Larger quantities of bulk processed tea can also cross the border as a bilateral trade agreement waives tariffs and prevents arbitrary inspections that could be viewed as harassment.

     India is the largest market for Darjeeling with 5 to 6 million consumers. As India’s premier growing region, Darjeeling has focused mainly on controlling overseas exports to protect its name and reputation for purity and taste. Joining us today is Sparsh Agarwal a fourth-generation Darjeeling grower at Selim Hill Tea Estate who articulates a domestic threat, which is the import of teas blended to dilute the Darjeeling brand.

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    Sparsh Agarwal explains how a porous border with Nepal dilutes the Darjeeling brand

    Agarwal reports “The crux of the problem is that if you have spent any time in Darjeeling, you know that the border between Nepal and Darjeeling is super porous, right? So there’s a large problem of green leaves being smuggled in and then being produced in Darjeeling tea factories. The second-degree problem is that tea shops are buying Nepal teas at a fraction of the price of Darjeeling teas. This is not the problem of the growers, to be honest, it’s not the grower’s fault that this is happening. Ultimately we will all have to go towards better, more established sourcing of teas using technology. We are looking into how technology like blockchain can be used to be able to improve these things. We are right now in advanced conversations with one particular company to be able to do better sourcing for our customers so that they know that this tea is not only coming from Salem Hill, it’s coming from these sections within Selim Hill.” 

    Biz Insight – India is also aggressively challenging importers to monitor Kenyan tea, threatening to cancel their operating license for violating new rules that require labeling by origin. Kenya had hoped that India would establish a minimum import price, a solution endorsed by the Indian Tea Association. Instead, India stepped up inspections taking a closer look at quality and quantities to slow a recent surge of low-value teas.  Kenya shipped to India 2.8 million kilos of tea from January through June, up from 1.5 million kilos in the same period last year.

    Tea remains unearthed from ancient tombs in Zoucheng, Jining City, Shandong Province, China. /CMG

    Chinese Archaeologists Discover the Oldest Tea Yet

    Archaeologists extended the age of prepared teas to the early stages of the Warring States, circa 453 to 410 BC, a period 2,400 years ago, according to a report by the Xinhua News Agency.

    The samples were discovered in tombs excavated in Shandong Province in the remains of a city built 2,800 years ago. [during the Spring and Autumn period (770-476 BC)]. Stem and leaf carbonized residues were found in an inverted porcelain bowl. Researchers led by Professor Wang Qing at Shandong University said the residue is likely dregs left by ancient people after boiling tea. Tests for theanine confirmed the substance as tea. The findings advance the age of prepared teas by more than 300 years in a study published in the Chinese-language Journal of Archaeology and Cultural Relics.   Dan Bolton

    • Read more… links indicate the article continues. Learn more… links to additional information from reliable outside sources.
    Tea Price Report
    Nov 27 – Sale 47

    India Tea Price Watch | Sale 47

    Tea Biz caught up with tea exporter Pranav Bhansali of Bhansali and Company to review the Indian tea industry’s past year. He said, “Quality teas have been selling at fantastic premiums for CTC and Orthodox teas, even at this late stage of the season. This is surprising, especially for CTC teas, since it is unusual to see the major packeteers and blenders being this aggressive and active on quality produce at this time of the year.” Bhansali says, “Indian tea exports have taken a hit due to high CTC prices and weather disruptions.” The Tea Board estimates a decline of 8-10% in calendar 2021 compared to the same period last year. “Supply chain disruptions and container shortages are expected to continue into 2022. On the bright side, Iran continues to be the largest consumer of Indian Orthodox teas,” says Bhansali. Read more…

    Aravinda Anantharaman
    • Aravinda Anantharaman introduces the two-part series Frugal Innovations with Abhijeet Hazarika and Indian tea growers Saurav Berlia and Shekib Ahmad who describe cost-efficient experiments and pilots that demonstrate why tea producers should embrace simple technologies with scalable impact. Listen to Episode 47 of the Tea Biz Podcast | Friday, Dec. 10


    Upcoming Events

    December 2021

    Sips & Bites: Exploring the World of Artisanal Tea | December 15 | Virtual |
    Director Dr. Katharine Burnett will share an overview of the Global Tea Initiative. Manik Jayakumar, Founder of QTrade Teas & Herbs, and Rona Tison, Executive Vice President of Corporate Relations at ITO EN, North America, will discuss their work in the tea industry and walk attendees through a tasting of their exquisite teas. The Global Tea Initiative (GTI) for the Study of Tea Culture and Science was established in 2015 to promote evidence-based knowledge about tea. | Register FREE (Zoom) | 6-7 pm PST | Sponsored by the Robert Mondavi Institute for Wine and Food Science, University of California, Davis.


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