• Tea Biz Podcast | Episode 37

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    Hear the Headlines

    | Kenya Exports Saturate Black Tea Market
    | COVID Depresses Japanese Tea Business in Unique Ways
    | Unilever is Recognized as the Top Food and Agriculture Benchmark

    Seven-minute Tea News Recap

    Tea Price Report
    Sept 25 – Sale 38

    India Tea Price Watch

    India Tea Price Watch | Aravinda Anantharaman
    The Tea Board of India announced a mechanization subsidy for smallholders to address the problem of labor shortages in tea gardens. India’s Ministry of Commerce and Industry extended its tea development and promotion program through 2025-26 discontinuing subsidies for Orthodox production that includes $40 million for clearing subsidies in the tea sector. Learn more…

    Aravinda Anantharaman

    Features

    This week Tea Biz travels to Monte Metilile in Mozambique, a country along the southern coast of East Africa where Mohit Agarwal, Director of the Asian Tea Group, has revived an abandoned 15,000-acre tea estate to demonstrate the viability of organic farming at scale.

    … and then we talk with supply chain and procurement expert John Snell about what makes Mozambique such an exceptional tea-producing region.

    Monte Metilile, TE Mozambique
    Monte Metilile Tea Estate in Mozambique is the world’s largest certified organic tea plantation.

    Organic Tea Farming at Scale

    By Dan Bolton

    Mozambique is the best-kept secret in the tea world, says Mohit Agarwal, Director of the Asian Tea Group, the company that owns Cha de Magoma and the Monte Metilile brand. Mohit is walking the garden as we speak via Zoom, describing the organic dairy herd, a forest of renewable eucalyptus used for fuel, the hydroelectric turbines that power the plantation’s three factories. Pointing to the brilliant green tea bushes that stretch as far as the eye can see he explains that during 15 years of civil war from 1977 until 1992 Mozambique’s tea plantations were abandoned. Read more…

    Listen to the Interview
    Mohit Agarwal, Managing Director at the Asia Tea Group, discusses the advantages of scale.

    John Snell
    Procurement expert John Snell, founder of NM Tea B Consulting and owner of Ela’s Tea.

    John Snell: Mozambique is God’s Country for Tea

    By Dan Bolton

    A century ago, when the Portuguese first planted tea in Gurúè, Mozambique they found gentle, well-drained slopes of rich red volcanic soils at 1,500 to 3,600 feet elevation – the same altitude as India’s Darjeeling mid-tier gardens. The climate there is cool and dry from May to September and hot and humid between October and April. Annual rainfall averages more than 3,000 millimeters. By 1950 production exceeded 20,000 metric tons a year and there was more land under tea in Mozambique than any country in Africa. Listen as procurement and supply chain expert John Snell explains why Mozambique is such a great place to source tea. Read more…

    Listen to the Interview
    John Snell on why Mozambique is a great place to source tea.

    News

    Kenya increased pay for green leaf and provided smallholders 65,000 metric tons of fertilizer to increase production.

    Kenya Exports Saturate Black Tea Market

    By Dan Bolton

    Kenya reported a 19% increase in exports totaling almost 300 million kilos through June despite falling production totals. In September Kenya increased fertilizer subsidies following an August increase in payments for green leaf sold to Kenya Tea Development Agency (KTDA) factories. The combination will spur tea production and likely increase Kenya’s share of the global black tea market. Low prices led India to import 5 million kilos of Kenyan tea in the first half of 2021, compared to 1.5 million kilos during the previous year. Worldwide, tea supply continues to outstrip demand, continuing a downward trend dating to 2018. Read more…

    Japanese funeral
    Japanese funerals involved tea and generous tea gifting. Funeral directors note a steep decline since COVID-19.

    COVID Depresses Japanese Tea Market in Unique Ways

    By Dan Bolton

    Like the rest of the world, Japanese tea growers suffered as restaurants closed, social gatherings were canceled, and safety precautions limited harvest days and processing.

    The pandemic also inflicted setbacks unique to the market including a sharp decline in the gifting of tea at funerals.

    Japan’s Agriculture, Forestry and Fisheries Ministry, reports that production of unrefined “aracha” declined by 15% in 2021 compared to the previous year. Year-on-year sales of first flush teas fell by 20% in Shizuoka prefecture and by 17% in Kagoshima, according to ministry figures.

    The Japanese Association of Tea Production reports that total production of sencha declined by 15% in 2020, compared to 2019.

    Japanese office workers are teleworking and drinking tea at home but tourism dollars are down 79% compared to 2019, despite the Olympiad and Japan’s popular rural ryokan inns are shuttered, according to the Japan Times.

    An article published in Japan News identifies money spent on gifting tea at funeral services is down 90% from a peak of 13.6 million yen in 2015.

    The publication quoted a tea association spokesperson, PAUSE “Even if the pandemic is brought under control, I doubt funeral services will ever go back to the way they were before.”

    Biz Insight – To boost sales city and regional governments in tea growing regions are providing subsidies. Shizuoka’s prefectural government is offering producers ¥5 million yen (about $30,000) to develop new tea products and ¥3 million yen (about $45,000) to develop new sales channels.

    Unilever Named Top Food and Agriculture Company by World Benchmarking Alliance

    The World Benchmarking Alliance has named Unilever its top Food and Agricultural Benchmark. The alliance, established in 2018, encourages seven transformations considered essential to put society and the worldwide economy on a more sustainable path.

    Annually the group evaluates 2000 of the world’s most influential businesses against its benchmarks.

    In a first, the alliance assessed transformation in the Food and Agriculture system globally, ranking 350 companies from farm to fork. Criteria include transforming nutrition, addressing environmental issues, and social inclusion. According to the Alliance, the findings reveal worrying gaps in the industry’s adaptation to climate change, progress on human rights, and contribute to healthy diets.

    “Only 26 of the 350 companies are working to reduce emissions from their direct activities through science-based targets set by the Paris Agreement,” writes the Alliance.

    Unilever Benchmarks

    Unilever, one of the world’s largest food companies, received a combined score of 71.7 out of 100, ranking ahead of Nestlé (which scored 68.5) and Danone (which scored 63.6). Retailer Tesco and beverage companies PepsiCo and Anheuser-Busch InBev were among the top 10. No foodservice company made it into the top 10. One hundred and nineteen companies scored between 10 and 25 points and 110 companies scored below 10 points out of 100.

  • Benchmarks for the world’s 350 most influential food and agriculture companies

Download Unilever’s World Benchmarking Scores (PDF)

Biz Insight – The Alliance writes that “while companies at the top of the ranking demonstrate that they are meeting societal expectations on a variety of topics, the overall average benchmark performance is low. Almost two-thirds of the companies in scope fail to obtain a quarter of total scores, demonstrating significant room for improvement across all measurement areas.”

— Dan Bolton

Upcoming Events

October 2021

World Tea & Coffee Expo | India
Postponed to December 2-4 | Launched in 2013 and now operated by Messe Muenchen India, this hybrid virtual and in-person event for tea and coffee professionals is now scheduled for the Helipad Exhibition Centre, Gandhinagar, Gujarat, India. Website | Register

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  • Organic Tea Production at Scale

    Mozambique is the best-kept secret in the tea world, says Mohit Agarwal, Director of the Asian Tea Group, owners of Cha de Magoma, located in Gúruè, in Zambezia province. With 6,325 acres under tea, it is the world’s largest bio-organic tea garden and its Monte Metilile brand is a success story that demonstrates the many advantages of scale in producing great-tasting, high-quality, clean teas.

    Listen to the interview

    Mohit Agarwal, Managing Director, the Asian Tea Group, discusses the advantages of organic production at scale.
    Mohit Agarwal, managing director, The Asian Tea Group owners of Cha de Goma and Monte Metilile brand
    Mohit Agarwal, Director of the Asian Tea Group, owners of Cha de Magoma and the Monte Metilile brand

    Organic Tea Production at Scale

    Mohit Agarwal, Director of the Asian Tea Group, the company that owns Cha de Magoma and the Monte Metilile brand, is walking the world’s largest certified organic garden as we speak via Zoom. Pointing to the brilliant green tea bushes that stretch as far as the eye can see he explains that during 15 years of civil war from 1977 until 1992 Mozambique’s tea plantations were abandoned, allowing the land to rejuvenate and the bushes to expel plant protection chemicals and fertilizer. As our virtual tour continues, he describes the organic dairy herd, a forest of renewable eucalyptus used for fuel, and the three hydroelectric turbines being installed to provide green power for the plantation’s factories.

    Dan Bolton: Monte Metilile is certified organic by EU-Organic, USDA-NOP, and JAS. Here you specialize in the cultivation of organic whole leaf for orthodox processing as well as commercial grades of CTC. Will you talk about your commitment as stewards of the land and your regard for the ecosystem?

    Mohit Agarwal: The natural ecosystem that we have here is ideally suited to operate any plantation without chemicals or fertilizers. We have a lot of green cover, we have 6,000 hectares of land out of which 2,560 hectares are under tea. Do you see those Eucalyptus forests over there? A lot of this land is under forest cover. A lot of land is under citronella and Guatemala [grass] which stops soil erosion, and gives nitrogen to the soil, and is used to create bio compost.

    There’s a total ban on any chemicals or fertilizer. We do totally sustainable agriculture. Even the food for our people grown in-house is organic. We have our own dairy farm with more than 100 head of cattle which gives us cow dung and cow urine as fertilizers. Butter and milk are used by families to make Ghee.

    The entire ecosystem we built here at Monte Metilile is self-sustaining.

    Dan: This is a large-scale operation with more than 6,300 acres under tea will you explain to listeners the advantages of scaling up if you’re an organic farmer.

    Mohit: The whole idea was to make organic tea affordable and available to the global audience. MRL levels and tolerance in most countries have become stringent. Converting this entire site of 2,560 hectares of tea into organic has taken a lot of hard work. We managed to make the entire 2.2 or 2.5 million kilos of tea we produce available to consumers globally at a very reasonable, affordable price.

    “Farming organic at scale is applying the required size to solve the problem.”

    – Mohit Agarwal, Managing Director, the Asian Tea Group
    • Compost beds
    • Compost bins
    • Vermiculture bins
    Cover crops in the foreground are grown for compost and the Eucalyptus forest, right, provides renewable fuel.

    Dan: What will consumers discover when buying Mozambique tea?

    Mohit: There is flavor in the tea because of the climate. The temperatures in Mozambique are between 15 to 30 degrees. Because of the lower temperatures, there are inherent flavors. Most of our bushes are Chinery [Camellia sinensis-sinensis] out here, which the Portuguese planted.

    We can produce orthodox black tea and green teas, and, within green, we produce both steamed and roasted, CTC, and Orthodox. We also produce oolong teas and some specialty teas such as white teas. The tasting notes for these are simply magnificent. In the winter months, during what we call the first flush, the teas are light-bodied, muscatel flavored teas. Once the season comes in, we’ll get a little more body in the teas, but still, the brightness and the cups remain mellow.

    Mozambique is the best-kept secret in the tea world. This growing region has been hidden for centuries. Teas from here blend very well with the Sri Lankans or the Indian teas. Consumers have not been exposed to Mozambique as the tea was only being used in blends in conventional teas. Now we are exposing the full bouquet and it’s just delicious as a single-origin tea — fantastic for consumption without milk and sugar.

    Cha de Magoma offers the largest organic selection anybody could find in the world.

    — Dan Bolton

    • Monte Branco CTC Factory
    • Color Sorter
    • Orthodox Rolling Tables
    Cha de Magoma is the largest fully certified bio-organic tea plantation in the world with an annual production of 2.5 million kilos of tea in three factory buildings constructed by colonial Portuguese in the 1960s. The factories have since been refurbished and equipped with state-of-the-art machinery. There are two lines of CTC machines in the Monte Metilile factory. Monte Branco produces black CTC, green CTC on four lines as well as Orthodox black and green teas. Equipment includes a panner/roaster for green teas. The Orthodox factory at Monte Metilile produces black and green teas, oolong, and specialty teas on 30 rolling tables. Equipment includes two-color scanners, a steamer, and a roaster.

    Cha de Magoma

    The Asian Tea Group is a tea producing and trading conglomerate with plantations in Assam and Mozambique and trading offices in Kolkata, Coimbatore, Mombasa, Colombo, and Fuzhou (China). The group handles more than 27 million kilos of teas across all their offices worldwide.

    Cha de Magoma is the largest private-sector employer in Mozambique, a country where labor is readily available as 70% of the workforce is employed in the agriculture sector which accounts for 25% of the economy. In 2020 Mozambique exported 3,203 metric tons of black tea, down from 3,447 MT sold in pre-pandemic 2019. The value of exports rose by 79% between 2017 and 2019, bringing exporters $4.7 million in sales, according to trade statistics compiled by Selina Wamucci. Mozambique ranks 62nd globally for black tea exports.

    The plantation is certified by Fair Trade International as well as Fair Trade USA. Since certification in April 2020, workers have collected substantial fair trade premiums from customers, funds that have been invested in welfare projects. The FT premium committee, for example, purchased an ambulance which is critical to ensure that people get health care when required and improved plumbing to provide clean drinking water. The next big project is the construction of new buildings for a school to ensure access to education for the children, according to Avinash Gupta, Director of Global Sales at the Asian Tea Group.

    Rainforest Alliance, Naturland, Non-GMO, and FSSC22000 certifications are a work in progress and are expected to be in place very soon, according to Gupta.

    Monte Metilile teas are exported to Europe, the UK, the US, China, and Japan, writes Gupta. Our primary trading partner in the US is QTrade Teas & Herbs and in Europe Wollenhaupt Tee GmbH and Ludwig H.O. Schroeder & Rudolph Hamann oHG. Retailers that stock Monte Metilile includes TeaGschwendner (Germany), Nothing But Tea (UK), and Upton Tea (US).

    In addition to tea, Cha de Magoma bottles natural spring water at a water packaging plant on the estate. The mineral water is marketed under the Monte Gúruè brand.

    The estate covers 6,000 hectares with 2,560 hectares under tea. Crops include citronella, banana, pineapple, vegetables, Guatemala grass, neem and sugarcane. Some are grown to make bio compost and some to feed a herd of dairy cattle. farms. Three Hydel green power units drive turbines generate a large portion of our power requirements. There is immense potential to expand the tea plantation and increase our production.
    The estate covers 6,000 hectares with 2,560 hectares under tea. Crops include citronella, banana, pineapple, vegetables, Guatemala grass, neem, and sugarcane. Some are grown to make bio compost and some to feed a herd of dairy cattle. farms. Three Hydel green power units drive turbines that generate a large portion of our power requirements. There is immense potential to expand the tea plantation and increase our production.

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  • Q|A John Snell

    A century ago, when the Portuguese first planted tea in Gurúè, Mozambique they found gentle, well-drained slopes of rich red volcanic soils at 1,500 to 3,600 feet elevation – identical to the altitude of India’s Darjeeling mid-tier gardens. The climate is cool and dry from May to September and hot and humid between October and April. Annual rainfall averages more than 3,000 millimeters. By 1950 production exceeded 20,000 metric tons a year and there was more land under tea in Mozambique than any country in Africa.

    Listen to the interview

    Procurement expert John Snell, founder of NM Tea B Consulting and owner of Ela’s Tea.
    Monte Metilile Tea Estate in Gurúè, Mozambique. Photo courtesy Asian Tea Group.

    Mozambique is God’s Country for Tea

    John Snell is principal at NM Tea B Consultancy, with expertise in sourcing that spans 35 years of procurement, supply chain management, and importing tea for major brands and private label suppliers. He also owns Ela’s Tea a specialty tea supplier and blender. John resides in Toronto, Canada.

    Dan Bolton: John why is Mozambique is such a great place to source tea?

    John Snell: Firstly, Mozambique’s latitude is a bonus; given the warming of the equatorial region, Gurúè is a more stable environment for tea and unlike much of Africa’s tea region, has true seasonality. With a true off-season, Gurúè offers an opportunity to produce true first, second, and autumnal flush specialty teas, something quite rare on the continent.

    Furthermore, Zambezia province sits on the Great Rift Valley whose high sides create a rain shed and whose depths collect groundwaters. This together with loamy soils and the seasonality makes Mozambique God’s country for tea.

    John Snell
    John Snell
    The Republic of Mozambique spans an area of 300,000 square miles with a population of 30 million. The estimated GDP is $41 billion with a per capita annual income of $1,331 (PPP)

    Dan: Will you describe the Portuguese era of tea production in Mozambique that began with plantings in the 1920s?

    John: Mozambique was a Portuguese colony for 700 years and chose this place above others, in her vast empire, as the most prodigious place to grow tea, despite being ever-present in South India and Sri Lanka. By 1950, Mozambique was the largest producer in Africa, only usurped by Kenya in the 1960s due to civil war.

    Dan: Mozambique tea production is resurging, its tea industry reborn, with organic cultivation and modern, more efficient processing techniques. What is the business opportunity in Mozambique?

    John: To be honest, during the civil war and thereafter, the tea produced in Mozambique was plain, weedy, poorly manufactured stuff, a price reducer for most normal tea chaps and if this had continued, I have no doubt that the business would be extinct by now. However, the civil war did the industry a favor, if you like, as it precluded Mozambique from an era when the rest of Africa geared up to support the teabag market of the UK, predominantly. When Assamica clones were created for productivity and strength rather than finesse. So, come their re-emergence, the bushes planted by the Portuguese, both Sinensis, and Assamica varieties are still there and have naturally cross-pollinated creating their own unique hybrids. There is now this astounding variety of mother bushes, which need testing and selecting, from which VP [vegetative propagation] can proliferate the types to fields.

    — Dan Bolton

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  • Tea Biz Podcast | Episode 36

    Tea Biz Podcast Logo

    Listen on your favorite player

    Hear the Headlines

    | Retail Sales Forecast Happy Holidays
    | Restaurant Reticence is Declining
    | A Restructured DAVIDsTEA Expands into Pharmacies

    Seven-minute Tea News Recap
    Tea Price Report
    Sept 18 – Sale 37

    India Tea Price Watch

    India Tea Price Watch | Aravinda Anantharaman
    The Indian Tea Association has asked the government to introduce a minimum import price for teas imported into India, to ensure they meet the requirements of the Food Safety and Standards Authority of India and to see that these teas are not sold in India as domestic tea. Learn more….

    Aravinda Anantharaman

    Features

    This week Tea Biz travels to Guwahati in Assam, India where the co-founders of Folklore Tea discuss how they engage customers at an unusual level of intimacy.

    Processing raw leaves at Folklore Tea in Assam. Photos courtesy Folklore Tea.
    Processing raw leaves at Folklore Tea in Assam

    Exceptionally Local Teas that Connect with Consumers

    By Aravinda Anantharaman

    A recent development in tea in India has been the rise of new brands, many that have their roots in tea regions. Almost all of them seek to bridge producers and consumers. Most rely on the narrative that accompanies a product from its place of origin. For consumers, it’s in part vicarious living and a window to another world. Folklore Tea is as good as it gets for those who want to know who made their tea and where it comes from. Read more…

    Listen to the Interview
    Folklore Tea introduces the growers, village and even includes an original poem describing its teas.

    News

    Shoppers weary of COVID lockdowns say they are eager to splurge.

    Retail Forecasters Predict Happy Holidays

    By Dan Bolton

    Marketers anticipate strong holiday sales despite fewer footfalls at physical outlets due to surging sales online.

    Projections range from $1.28 to $1.3 trillion during the November to January gifting season. Mastercard’s SpendingPulse projects a 7.4% holiday sales increase, and the widely cited Deloitte annual holiday forecast estimates US holiday spending will grow between 7% and 9% in 2021. Ecommerce sales are anticipated to be between $210 and $218 billion, a gain of 11% to 15%, according to Deloitte.

    Last year’s holiday sales came in higher than expected, increasing by 5.8%, according to Deloitte. The consensus is that consumers have spent down debt and are eager to counter a gloomy summer that curtailed entertainment, dining out, and travel as COVID restrictions forced many to vacation close to home. In the US consumers have an estimated $1.5 trillion in extra savings to splurge, according to Bloomberg.

    As restrictions lift, retail marketing group Shopper, in Australia, predicts consumers will embark on what has been coined as “revenge spending” sprees.

    The publication AdNews writes that Australian households squirreled away more than $100 billion (AUD$140 billion) during the COVID pandemic, with 26% of Australians saying their families are better off financially than this time last year. Shopper’s Urge to Splurge Post-Pandemic Revenge Spending Study, conducted in August, revealed that during the holidays:

    A consumer survey by AlexPartners found 88% of US consumers plan to spend the same or more this holiday season, up 12%, as reported by Chain Store Age. “There’s unprecedented pent-up demand out there, consumers have lots of money in their pockets, in part due to recent government programs,” according to the firm.

    Countering that optimism is the fact that in September new COVID cases are averaging 145,000 a day in the US with more than 2000 deaths. Consumer confidence declined mid-summer during the latest wave of infections. Market research firm Numerator reported that in July and August consumers expressed big concerns over the Delta variant with 46% reporting they were “highly concerned” a number that grew 10% between July and August as hospitals filled. The majority (51%) cited the Delta variant with 66% of vaccinated adults expressing worries about family and friends becoming infected.

    Vaccination mandates and more widespread use of masks are working to bring down case loads. California, a state with 39.5 million people that reported 65,000 cases a day last December, is now reporting fewer than 8,000 daily with an infection rate of 22 cases per 100,000. In contrast, Texas reported 44 cases per 100,000 the first week of September and Florida is experiencing 42 cases per 100,000.

    Deloitte vice chairman Rod Sides, the company’s US retail and distribution sector leader, writes that “While consumer concerns about health and safety have eased since the last holiday season, pandemic-influenced shopping behaviors continue to gain traction.”

    Biz Insight – The big question now is which channel will outperform? The majority of shoppers say they want to get out of the house and visit stores but that depends on local outbreaks. A big concern for online buyers is on-time delivery. Savvy tea retailers finalized preparations before September, borrowing in the spring to stock teaware and gift selections for the holidays. Manufacturing was in full swing across Asia all summer but shipping delays and the extraordinary spike in container charges make it imperative that holiday promotions begin early this year. MasterCard suggests Oct. 11 as a start date for a 75-day sales season. The president of international operations at UPS advises consumers to “Order your Christmas presents now because otherwise on Christmas day, there may just be a picture of something that’s not coming until February or March.”

    Proof of vaccination at restaurants is encouraging frequent diners to venture out

    Restaurant Reticence is Declining

    By Dan Bolton

    Frequent diners are determined to return to their normal routine of dining out.

    OpenTable’s most recent quarterly survey of 20,000 restaurant fans finds that 62% are now dining out at least once a week. During the first quarter, only 39% of frequent diners were eating out at least weekly. Takeout remains the most popular alternative to dining in with 34% of respondents ordering takeout at least once a week. In 2020 35% of all restaurant orders were from drive-throughs, according to NPD Group.

    OpenTable reported a pronounced decline in July and August over concerns about the spread of the Delta variant. Seated dining at US restaurants is down about 11% below 2019 levels. In August the National Restaurant Association found that 60% of restaurant-goers had changed their use during the pandemic with most opting to eat outdoors and 19% saying they completely stopped going out to restaurants.

    OpenTable found that 27% of Canadians intend on eating out more frequently than before the pandemic, citing a need to take a break from home cooking (40%) and support for local restaurants. Diners were more likely to have dined solo (33%) in 2020 and now eat earlier, making reservations for 5:30 and 6 pm.

    Proof of vaccination should be a requirement for staff, according to 46% of OpenTable diners, up from 25% during the first quarter. A 71% majority are willing to show their vaccine cards and 23% say that restaurants must require proof of vaccination before they will dine indoors. In the San Francisco Bay Area 37% say proof of vaccination is a must.

    Overall, 48% of frequent diners are willing to show proof of vaccination, but mandatory proof of vaccination isn’t necessary for them to dine in. Nationally 15% of respondents say they will refuse to show proof of vaccination if required for dining-in. In Florida, Nevada, and Arizona 23% say they are unwilling to show proof of vaccination*.

    Biz Insight – When asked what they miss, 93% of frequent diners cite dining at their favorite restaurant, another (42%) are longing for their favorite menu items with (39%) hoping to attend happy hours with friends and (26%) looking forward to wine and beer tastings.

    *Footnote: San Francisco Bay Area: 37% say vaccination proof is a must, the highest of any region. In Canada: 34% say vaccination proof is a must. In Vegas, Orlando, and Phoenix: 23% say they’re not willing to show vaccination cards, the highest of any region

    Restructured DAVIDsTEA
    Expands into Pharmacies

    North America’s largest tea retail chain has emerged from bankruptcy, named a new chairman to replace co-founder Hershel Segal and is now “moving forward with a number of initiatives,” according to CEO and Chief Brand Officer Sarah Segal.

    DAVIDsTEA display in Rexall Drug stores

    Jane Silverstone Segal, Herschel Segal’s spouse, was named director and chair of the board on Sept. 14. Hershel remains a strategic advisor and retains 46% of the company’s stock.

    During an earnings webcast Sarah Segal said that DAVIDsTEA is “successfully transitioning to a digital-first company.” The company is laying the groundwork for a successful omni-channel presence that retains key retail stores, a strong and growing online business and new emphasis on placing our products on the shelves of well-place retail partners, she said.

    In a release following the quarterly disclosure, Sarah Segal announced the expansion of a store-within-a-store concept to 156 Rexall pharmacies. The four-foot in-store displays showcase 25 SKUs. The Montreal-based chain offers a mix of tea and herbal infusions at 18 stand-alone locations with 3,300 retail partners including Canada’s major grocery outlets.

    Sales declined 18.6% or $4.3 million to $18.7 million during the quarter ending July 31. Pandemic-driven sales were $23 million during the same period in 2020.

    Biz Insight – During the earnings webcast, Sarah Segal said that “After a period of dramatic changes and transformation to our business over the past nearly 18 months, we are eager to connect with our customers in new ways.” “We are laying the foundation to scale and expand to become a truly global tea company,” she said.

    — Dan Bolton

    Upcoming Events

    September 2021

    Level Up, Virtual
    September 29 | The Tea & Herbal Association of Canada will host a mid-year Meet-Up from 10 am to noon. Admission $55 (CAD) Members $50. Agenda | Register

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  • Folklore Tea

    A recent development in tea in India has been the rise of new brands, many that have their roots in tea regions. Almost all of them seek to bridge producers and consumers. Most rely on the narrative that accompanies a product from its place of origin. For consumers, it’s in part vicarious living and a window to another world. This is as good as it gets for those who want to know who made their tea and where it comes from.

    Listen to the interview

    A conversation with Subhasish Borah, co-founder Folklore Tea, Assam
    Birinci Borah at Folklore Tea

    Exceptionally Local Teas that Connect with Consumers

    By Aravinda Anantharaman

    Emphasizing the local characteristics of Assam (instead of crafting tea to the expectations of export markets) shows respect for the land, customs, and artisanal craft, according to Folklore Tea co-founders Subhasish Borah, an urban planner, and Bidisha Das, a business management grad.

    Folklore Tea founders Bidisha Das, left, and Subhasish Borah

    Folklore Tea, based in Guwahati, actively works with farmers to become something more than a marketing platform for their teas, explains Borah, 30, and Das, 29. The couple run the Kohuwa Collective, a space that comes with a slow food café and tea room, with rooms for collaborative clothing and pottery workshops – concepts that seem to drive their work. They launched Folklore early in 2020 and, as a brand, are keen to carry the farmers’ stories.

    Folklore is anchored in the idea of storytelling and connecting to consumers intimately. Each tea acknowledges the farmer who grew it. Each tea is given a name, and a poem accompanies it.

    Each eco-friendly packet is numbered with a handwritten note addressing the recipient. And while this helps connect with the drinker, it’s not Folklore’s unique sales proposition. That lies in the experiments and work they do with their farmers.

    Folklore works with three small growers, Beeman Agarwalla, Birinsi Borah, and Tarun Gogoi, who collectively cultivate about three hectares (seven acres) of tea. They also run Prithivi, a farmer producer company that now includes 56 members with farms ranging from 0.2 to 3 hectares in size. All the growers are geographically located close to each other, making this a community enterprise. Beeman, Birinci, and Tarun have chosen organic farming and work with the other members to convert inorganic farms to organic. The process takes a long time, up to five years, during which farmers have to face a loss in yield and income. The association supports them by way of small scholarships for children and providing compost from a small vermicomposting unit.

    Beeman Agarwalla and Tarun Gogoi. Behind it all, there are real people – small tea growers whose innovation improves the craft and whose land stewardship protects the environment and the quality of your tea.

    “Behind it all, there are real people – small tea growers whose innovation improves the craft and whose land stewardship protects the environment and the quality of your tea. It is their passion that makes the tea taste better.” – Folklore Tea

    In Assam, small tea growers sell their green leaves to bought leaf factories that manufacture and sell tea. Most of these factories make CTC tea, which is bought and blended for the domestic market. Farmers adopting organic cultivation find no advantages in price as CTC factories are not always organic. Here, the tea is mixed, and the source and style of cultivation are lost. With no advantages to producing organic tea, the farmer has no incentive to stay the course. And this is something that Folklore is trying to address.

    Subhasish describes a proposed project for a mini-community factory that will be used to manufacture organic CTC with leaves sourced from their own farmer community. Currently, they have six small units where their tea is made. These units are not heavily equipped with machinery, and even the CTC is made using traditional wooden tools.

    Related: A Local Movement is Brewing in Assam

    “Right now, there are 56 growers who have joined us. So, collectively, whenever we will be able to set up the factory then we have a huge leaf bank. If we get this funding, which I’m not sure we will get, then of course we go for CTC as it will help not only these three people but all 56 families. That means almost 180 people will be benefited with this factory, it will be huge change in the village,” he said.

    “Whatever we can do in terms of packaging, design, or marketing will help them,” he said.

    Folklore’s association with Prithivi is a close and mutually beneficial one. Prithvi and its farmers brought knowledge of cultivars and tea making, along with market intelligence. Says Subhasish, “Most of the small tea growers with whom we are working started back in the early 1990s. They planted whatever tea bushes they could get from nearby tea gardens. The knowledge of cultivars was not very prominent at that time.”

    The Folklore team decided to study tea and brought knowledge and the willingness to experiment in tea making. Their experiments are with clones, leaf-to-bud ratio, and processing methods such as pan-roasting and naturally scenting tea. Only a small volume of made tea, not more than 300-350 kilos, is sold under the Folklore brand, primarily black and oolong whole leaf tea and some CTC.

    On average a small tea grower can pluck 6-7 kilos of unprocessed tea daily to make 3-4 kilos of finished tea.

    They are experimenting with rolling techniques to improve appearance, experimenting with blending to get the right flavor. And they have also taken on the immense challenge that oolong brings to tea making.

    Artisanal tea making is still has a niche market within India. Folklore seems conscious of this, taking a B2C approach for India and a B2B platform that caters to a global market, with customers in the US, Canada, UK, and Australia. Since the scale is still small, the brand can sustain its relationship and customer base.

    As Subhasish says, there are two main challenges and opportunities of Assam’s tea industry: people who live in the tea areas of the state don’t know enough about loose leaf teas. The irony of producing one of the finest teas and yet sending them to faraway markets is the story across India’s tea-growing regions.

    “It’s very sad,” says Subhasish, “because people in their own region, especially in the villages and towns that are surrounded by tea gardens, the people don’t know much about loose leaf teas. It’s absurd that mainstream media is promoting the concept of green tea in Assam. Green teas have been grown here for years. It is supposed to be the other way around,” he says.

    “Paying 500 rupees for a kilo of tea is not a thing here,” he says. The economic status is not very high. Assam’s annual per capita income is INRs 119,155 ($1,700 compared to the all-India average of $2,100 per capita).

    “People collectively have less money so marketing loose leaf teas at a higher price is difficult. It takes a lot of effort to make loose leaf tea and if you’re selling it for let’s say INRs 300 to 400 rupees per kilo then it’s not giving me anything.

    “Consider that you can get a kilo of CTC for INRs 90 to 100 rupees ($1.20). In this scenario everyone is going to buy CTC but it’s weird. In Assam the culture of water-based tea is also very high but that water-based tea is made using CTC, not loose leaf teas.

    “Most of the growers face difficulties here, they don’t have the human resources or the financial resources to do marketing or packaging. Many people who start making teas go back to selling fresh leaves so that they don’t have to think about marketing again. And many people go back to inorganic because if they ultimately have to sell the leaves to bought leaf factories then then there is no point in maintaining organic because the factories are not certified to process organic tea,” he said.

    Due to financial limitations, few of our growers can afford the expense of the organic certification process, but the growers are far beyond it. They preserve ancient processing traditions and care deeply about their environment. They put their heart and soul into the teas they make naturally, says Subhasish.

    As much as the conversation is on branding and experimentation, ultimately, what will make a brand like Folklore work is its impact on the community. Already there are plans to set up a bamboo cottage on one of the tea farms open for experiential travel. Assam has a lot on offer, from textiles to food, and of course tea. “We want to bring people,” says Subhasish. We want to show the things that are going on here. That it’s not only tea, but a lot of associated cultural elements too.” He talks about the vision to make the area an open museum, where “the entire place can act as a museum, all the houses can act as a museum and the traditional tools which are used in the processing are living heritage.”

    Subhasish describes Folklore as a “passion project.” Perhaps that’s what Assam needs more of, passionate marketers who can join hands with farmers to create quality teas and find a market for them for the greater good of the community. And if it includes nudging local preferences towards better tea for their consumption, that’s a bonus. 

    Trouville Black Tea

    People have spun stories on my genesis.
    Was it a monk who discovered me? or
    Was it a king who dropped me in boiling water?
    Yet my origin is unknown
    Since then, I have grown
    And grew and grew some more
    Moving across spaces and borders
    A living chronicle of several cultures.
    I’m Trouville. I was found through pure chance.

    — Subhasish Borah

    • Assam oolong
    • Cupping
    • Finished tea
    Folklore’s artisanal teas are hand-plucked and hand processed. The company publishes a poem for every tea. The name Meraki means to incorporate one’s soul within their work.

    Birinci with his wife. Small holder farms ranges from a half an acre to seven acres.

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