Tea fields at Gopaldhara Tea Estate, Darjeeling, India
Commerce Minister Meets Tea Industry Stakeholders
Union Commerce Minister Piyush Goyal met tea industry representatives from Assam and West Bengal on Jan. 6, 2024. The industry sought financial support to tide over the crisis, particularly in wages to be paid during the winter months when gardens don’t see any production. The representation also sought a subsidy for orthodox tea production and greater testing of imported teas for food safety. They have asked for trade delegations to be sent to Iran and other countries to retain old markets and gain a foothold in potential ones. Key to the conversation was the need to resuscitate Darjeeling, which has seen low production, low prices, and an increasing number of gardens being sold due to this financial inviability.
Darjeeling Tea Volumes Down by 9%
In 2023, Darjeeling produced under 6.5 million kilos of tea, down 9% from 2022 and perhaps the lowest “normal year output” in the last 50 years! The reason is multifold – some ten gardens here closed last year, and climate change has also impacted the tea harvest. Despite low volumes, prices have not gone up. Average prices at auctions were INRs 315 per kilo, which is not representative of true prices as only about 1.5mn kilos were sold via auctions, with the bulk of tea sold privately. But it’s indicative of the crux of Darjeeling’s problem.
Share Link: Tea Biz Episode 150 | Commerce Minister Meets Tea Industry Stakeholders | Darjeeling Tea Volumes Down by 9% | Harvest under 6.5 metric tons, lowest in 50 years |
World Tea Conference + Expo “Best of Awards” Named
Tea News for the week ending March 10
World Tea Conference + Expo Announces “Best of” Award Finalists
| Pakistan is Willing to Barter Rice for Kenyan Tea | Teaware Manufacturers Adopt Consumer to Manufacturer (C2M) Business Model Pioneered by Fast-Fashion | Study Suggests an EGCG-based Therapy for Treating Alzheimer’s
Forty-Four Finalists Named, Online Balloting for “Best of Awards” Winners Underway
By Dan Bolton
Finalists in eight categories in the annual World Tea Conference + Expo “Best of Awards” were named last week. Winners will be announced at the event on March 27-29 at the Las Vegas Convention Center. Event organizers and a panel of judges named the 44 individuals, tea companies, and associations vying for recognition.
The winners are determined by an online ballot, which is now underway.
Tim McLucas, vice president of QuestexBar & Restaurant Group, said, “We are proud to present the industry with a channel to honor the businesses and individuals who have made a meaningful impact over the past year.”
Categories include Most Innovative Tea App, Best Tea-Inspired Chef, Best Boba Tea Company, and Most Creative Marketing Promotion.
The ballots will also determine the favorite expo speakers, tea YouTubers, the most Sustainably Driven Company, and the most Impactful Global Tea Body.
In addition, ten finalists were named in the Tea Tycoons competition. Three entrepreneurs will individually pitch their products to a panel of experts before a live audience. Categories include tea, innovations in tea, and a sustainable business category where founders explain how they are meeting the needs of the present without compromising future generations.
BIZ INSIGHT – Registration is now open at http://www.worldteaexpo.com. The event is co-located with the Bar & Restaurant Expo. I strongly encourage tea professionals at every level of experience to attend. It’s a great opportunity to learn, see new products, validate trends, and network with professionals worldwide. This will be my 15th year reporting on the show, every one of which was memorable.
Consumer-to-Manufacturer Model Pioneered by Fast-Fashion
By Dan Bolton
A recent online search for tea utensils returned large selections offered by Temu and Shein, a pair of non-traditional Chinese retailers with unbeatable prices. Instead of Amazon, I ordered several items that arrived within ten days.
The experience suggests why teaware suppliers should consider the C2M (consumer-to-manufacturer) business model.
Taylor Smith, chief technology officer at Honeywell Productivity Solutions, described in a LinkedIn post the evolution of the C2M (consumer-to-manufacturer) business model from fashion to a much wider range of retail categories.
Feedback is nothing new, he explains. Retailers and manufacturers regularly receive requests for specific and customized products, but C2M leverages technology to quantify community-driven and real-time product demand. Critically, manufacturers learn of orders in real time, are geared to producing small batches and only produce an item when ordered.
C2M challenges the traditional role in which brands dictate demand through switching up designs, expanding product ranges, and flavor offerings. Instead, Smith explains that the community of like-minded consumers seeking to personalize their selections dictates what brands should deliver.
Shein, valued at $100 billion, is the world’s third most highly valued startup. The company operates in 150 countries and is adding 6,000 new products per day.
Shein uses a test-and-repeat model, which first produces small quantities of new designs for its online store and updates production orders based on real-time demand, writes Coresight Founder Deborah Weinswig. The company’s “on-demand manufacturing technology connects suppliers to our agile supply chain, reducing inventory waste and enabling us to deliver various affordable products to customers worldwide,” writes Shein.
Unlike Shein, which holds inventory, Temu employs 10,000 workers to manage a global network of 11 million suppliers in 150 countries. The Temu APP has been downloaded 24 million times with 11 million active users monthly. Sales reached $200 million in January. The company launched in Canada in February.
Shein initially shipped directly from China via air freight but in November 2022, the company opened a 170,000-square-foot office and distribution facility in Toronto to cut the shipping times and decrease the number of packages in the international shipping stream.
Weinswig writes that the C2M e-commerce business model deployed by Temu has “soared in popularity over the past several years.”
Gennaro Cuofano, the founder of FourWeekMBA, explains that “C2M creates a direct link between two extremes: the end customer that buys a product and the manufacturer that makes it. With C2M, they’re dealing directly with the customer.”
The porcelain cups that I ordered were available in eight “virtual” colors. Only after I selected “powder blue” did the supplier know what to make.
BIZ INSIGHT – Temu and Shein as catalysts that will influence teaware trends. Selections were extensive (138 tea strainers and 15 tea scoops). The user interfaces were intuitive (filters include items that are trending, sort by style, material, or occasion. Transactions were frictionless with flexible payment terms. The free shipping threshold was $35, and returns are free. Grand View Research estimates the global teaware market was worth $4.1 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 6.1% from 2021 to 2028. Tea retailers depend on teaware sales to make ends meet. Amazon and eBay are formidable competitors. Retailers are wise to monitor selections as they reflect consumer preferences in real time.
Tangles of the protein Tau (in blue) spread between brain cells leading to cell death. Image NIA-UK.
A New Study Suggests EGCG-based Therapy for Treating Alzheimer’s
Researchers funded by Britain’s National Institute on Aging (NIA) found that a molecule in green tea dismantles tangles of the protein tau, a hallmark of Alzheimer’s disease.
Results published in the peer-reviewed journal Nature Communications identified several molecules, including epigallocatechin gallate (EGCG), that break down the fibrous tangles that spread between brain cells, leading to cell death, according to the NIA publication Research Highlights.
Brain tissue donated by deceased Alzheimer’s patients was treated with EGCG and flash-frozen in a process known as cryogenic electron microscopy at the University of California, Los Angeles, revealing the process.
According to researchers, the EGCG binds to clefts, or openings, along each layer of the harmful fibers, destabilizing the layers and slowly prying the fibers apart. EGCG is not effective on its own because it cannot easily penetrate the human brain. The molecule also binds with many proteins, weakening its effect. But experiments indicated that a mix of EGCG-related molecules also prevented the untangled tau from spreading and forming new tangles.
Researchers caution that more work is needed, but the findings suggest that a mix of molecules that replicate the effects of EGCG can be designed to penetrate the brain and prevent cell death in Alzheimer’s patients.
FEATURES
Wendy Weir (second from left) enjoys fresh green mao feng tea at a memorable tea table with a fish pond in Hefei, Anhui Province, China. Photo courtesy of Wendy Weir.
Entrepreneurs Three-Minute Meditation with Tea
By Jessica Natale Woollard
You’ll want to pour a cup of tea for this special live meditation on the Tea Biz podcast. In my porcelain cup is a white vanilla coconut tea from the Banff Tea Company in Alberta, Canada. It’s one of my go-to blends and scents the air with a lovely fragrance to complement the moment of peace we’re about to relax into. In just a moment, we’ll get right into the meditation with our guest, Wendy Weir, but keep listening after the meditation—I’ll chat with Wendy in a few minutes to learn more about her meditative practice and its connection to tea. So, pause what is occupying your mind, rest upon the nearest comfy chair, and let Wendy lead us on a two-minute journey of our home within. Read more…
Millions of kilos of tea remain stranded at the Port in Karachi, Pakistan
Tea News for the week ending March 3
| Pakistan Willing to Barter Rice for Kenyan Tea | Asahi Launches SOU, its First New Tea Brand in Decades | Tatcha Unveils Virtual Forest Bathing and Meditation Experience
Pakistan Offers to Barter Rice to Resolve Tea Import Impasse with Mombasa Tea Suppliers
Containers of tea from Africa have been piling up at the port of Karachi since December, with more on the way, but for the first time in months, ships are unloading at a brisk pace. The government needs $1 billion immediately and $8.5 billion to pay the country’s fuel bills.
Pakistan customs officials estimate that 95% of the 8,500 containers in port await letters of credit, including almost 5 million kilos of tea in 300 containers shipped from Africa.
The logjam is preventing billion of dollars worth of raw materials from reaching manufacturers. During the weekend of March 12, port authorities processed 1,024 inbound containers and 2,553 containers filled with long-delayed exports essential to offset a $48.4 billion trade deficit.
Honda, Suzuki, and Indus Motor assembly lines are closed or curtailed due to severe disruption to their supply chains. Shipping agents this week advised Pakistan that foreign shipping lines will halt services if the backlog is not resolved. DHL announced it would scale back operations, suspend imports, and limit outbound shipments.
Tea retail prices surged by Rs1000 to Rs1,600 per kilo leading to the celebration of Ramazan on March 22. Prices could go as high as Rs2,500 per kilo (about $9.50 per kilo), according to Zeeshan Maqsood, an executive member of the Pakistan Tea Association(PTA). Maqsood told the Dawn Newspaper that delays in processing bank documents lead to shortages and higher prices as retailers ration supplies.
Last year Pakistan purchased 234 million kilos of tea from Kenya. To resolve the impasse, Islamabad offered Kenya 150,000 metric tons of rice for tea of equivalent value. Mombasa traders welcomed the swap, according to East African Tea Trade Association (ETTA) Managing Director Edward Mudibo. He told Business Daily Africa, “We welcome this arrangement because it will work in our favor given the economic situation in Pakistan.”
Africa supplies 90% of Pakistan’s black tea imports, and Pakistan, in turn, supplies Afghanistan with 87% of its tea. In 2023 Pakistan’s tea market is expected to generate $1.12 billion, a 4.3% decline, according to Statista market research. Pakistan and Egypt buy 55% of Kenya’s tea exports annually, but sales have steeply declined since November, according to EATTA.
Pakistan is currently in talks with the International Monetary Fund (IMF) to unlock the next tranche of $1.1 billion of a $6.5 billion bailout agreed upon in 2019.
New Asahi SOU bottled green tea
Asahi Launches First New Tea Brand in Decades
Beverage giant Asahi expects to sell 60 million bottles of SOU this year. The innovative Icho-style unsweetened partially fermented green tea launches on April 4. Asahi surveyed 12,000 people over two years to discover that the taste preferences of Japanese consumers have changed from slightly bitter green tea to teas with “high aroma and crisp flavor.”
This is Japan writes that the country’s top tea master Yasuyuki Suda was commissioned to develop a “high aroma tea that meets the needs of the times,” writes the company. The tea will be available in 620ml and 2-liter PET bottles developed exclusively for Asahi.
According to the International Tea Committee, Japan is the eighth-largest tea-consuming country in the world. Green tea accounts for 15% of sales volume. It is also a popular export. Leading brands include Kirin, Suntory, and Ito En. In 2021 the export value of Japanese tea reached more than 20 billion yen, doubling since 2015. The top destination was the U.S., accounting for half the total.
Asahi is known for its international beer brand but also owns Mitsuya, a traditional steamed tea brand that dates to 1884, and Wonda, an RTD tea launched in 1991. Wonda’s product range includes black, green, and oolong teas, bottled coffee, and fruit blends.
Asahi Holdings earned $25.1 billion in the fiscal year ending January.
BIZ INSIGHT – Japanese consumers drink more bottled tea than all carbonated beverages combined. Kirin developed the world’s first canned tea in the 1960s. Kirin Namacha, a heat-treated green tea, was sold in small, 150ml cans that became a staple in Japan’s vending machines by the 1970s. Bottled teas were first introduced in the US in the 1980s by Lipton and Nestea and are now the top-selling format in Japan.
Japanese Hinoki “Virtual” Cypress Forest
Tatcha Unveils Virtual Forest Bathing and Meditation Experience
The Japanese company, with offices in San Francisco, Hong Kong, and the UK, currently hosts an online meditation set in a virtual cypress forest.
Touring the virtual store provides insights into “shinrin-yoku,” the ritual of connecting to nature through the senses. The destination is an onsen wellness resort with a ceremonial tearoom, hot tub, and meditation led by Toryo Ito, a Japanese Zen Buddhist monk and brand ambassador.
Last week the metaverse forest came to life as a three-day Los Angeles pop-up that introduced visitors to forest bathing in a setting that resembled a Japanese Hinoki Forest. The occasion was launching of Tatcha’s Forest Awakening skincare collection at Sephora.
Online visitors are introduced to the body wash and skincare products in a natural setting enhanced by the simulated forest with sounds of running hot springs and varying shade as they “walk” about the forest and spa.
Olga Dogadkina, co-founder and CEO at Emperia, the software company that created the metaverse experience, told Chain Store Age, “Virtual stores are becoming an extension of the brand, one that allows retailers to tell a story as no other media could.” Tatcha offered a line of green tea-based cosmetics and developed a “Renewal Tea” blend of Japanese Pine and Mulberry created by Japanese blender Hagugendo tea to accompany the campaign. The tea sells for $14 for 20g in 8 tea bags.
Mulberry & Pine | $14 20gMeditation HutOnsen wellness resort in Hinoki forestCosmetics firm Tatcha offers an immersive lesson in experiential retail.
International Taste Institute Awards Two Starts to Mount Everest Fruit Tea Blend
Brussels Judges Present “Berry Gang” a Superior Taste Award – the equivalent of two Michelin Stars
Kirchner, Fischer & Co. Managing Director Stefan Gieschke said the winning tea was blind-tasted by 200 well-known chefs and sommelier judges who evaluated hundreds of teas for color, brilliance, fragrance, complexity, character, mouthfeel and finish, among other criteria.
“We always knew that our teas are top class! That’s how self-confident we are with 230 years of company history,” said Gieschke. “Now we have it written in black on white or better, yet — gold on white!
The Institute’s expertise is recognized worldwide, and it has been tasting, judging, and evaluating food and beverages from more than 130 countries for over 20 years.
Since 1793 excellence was a matter of fact as we face the most critical jury in the world: our customers — but now also the jury of the International Taste Institute agrees,” he said.
“We are beyond proud of this amazing result and dedicate a lot of applause and a double page of attention in our catalog,” said Gieschke.
FEATURES
Adaptable Extruded Tea
Narendranath Dharmaraj, a 40-year tea industry veteran in Kerala, India, has developed an economical technique that rids tea of its stringy fiber skeleton resulting in a substrate superior to fannings and dust. Extruded tea is a malleable hybrid format that retains the fragrance of well-made, orthodox tea. The adaptable substrate can be blended to improve conventional CTC or pressed and die-cut to resemble broken-leaf grades. Imagine 3D-printed tea in myriad shapes and sold at a premium.
Tea Manufacture: Futuristic Development Opportunities
By Narendranath Dharmaraj
Not much has changed in tea manufacturing in this traditional and tradition-bound industry. Orthodox, as it means, is the original production method of tea with a typically twisted leaf appearance and liquor characteristics delivering flavor and aroma. Such teas are best brewed by steeping in boiled water for a few minutes and typically yield fewer cups per unit weight of tea, described as ‘cuppage.’ Normally the withering is hard, meaning more moisture is removed from the leaf. The withered leaf is subjected to gentle and limited maceration in gently rotating rollers to express just enough juice to impart the aroma and flavor over longer periods of ‘fermentation.’ The target is to maximize the whole leaf and rolled nutty leaf grades which typically result from a combination of finer green leaf quality and careful adherence to manufacturing parameters (many of the ‘specialty teas’ are in these grades). Read more…
| Logistics Companies Invest to Right the Ship | Kenya’s Newly Elected KTDA Board Ousts Executives | Hain Celestial Streamlines its Tea Selections
Hear the Headlines
Seven-minute Tea News Recap
A special auction conducted by the Tea Board of India across auction centers featured a carefully curated catalog of teas plucked on International Tea Day on 21st May. This special sale saw record prices that brought welcome energy and excitement to the industry. Read more…
Features
Tea Biz this week travels to Darjeeling, India, where Dorje Tea, an innovative new tea venture, is taking root at the Agarwal family’s ancestral farm at Selim Hill Tea Garden … and then to the Jersey Isles off the coast of France, where Alicia Gentili, project manager and tea maker at Jersey Fine Tea, discusses the challenges and rewards of establishing a new tea garden in the English Channel.
Dorje Tea co-founders Sparsh Agarwal and Ishaan Kanoria, at right.
Reviving Darjeeling
By Aravinda Anantharaman
Sparsh Agarwal is the fourth generation in his family to cultivate tea in the Himalayas, but, as you will hear, he is not bound by tradition. Agarwal and Dorje Tea co-founder Ishaan Kanoria are targeting India’s domestic market, offering a subscription model that delivers Darjeeling tea from all four plucking seasons, improving profitability and giving Selim Hill Tea Garden a second chance. Read more…
Sparsh Agarwal on marketing Darjeeling’s seasonality domesticallyAlicia Gentili, project manager and tea maker at Jersey Fine Teas
Camellia sinensis is a versatile plant grown in many parts of the world, observes Tea Biz correspondent Dananjaya Silva. At 49 degrees latitude, Jersey, the largest Channel Islands between England and France, is much further north than traditional tea lands. Yet, the island is proving fertile ground to produce fine loose-leaf tea. Silva talks about the challenges of growing tea outside its comfort zone with project manager and maker Alicia Gentili from Jersey Fine Tea. Read more…
Alicia Gentili on growing tea on the English Channel Island of JerseyMSC operates the world’s second-largest container fleet by TEU
Logistics Companies Invest to Right the Ship
By Dan Bolton
Shortages of raw ingredients for beverages and higher shipping costs continue the supply chain woes into summer. Last week, Starbucks’ customers found green tea in short supply, chai tea bags, and oat milk. No single item has disappeared from the menu, but Reuters found temporary shortages at nine major fast-service chains are widespread.
Less obvious are the costs passed along due to more expensive air and sea transport and a shortage of truckers. According to the Drewry Freight Rate Index, reserving a 40-foot container to ship tea from Shanghai to Los Angeles cost $6,368 in June. Delivery to Chicago from Shanghai normally takes 35 days (including 33 at sea) but shippers now estimate 73 days for delivery as port-to-destination times have doubled. When premiums are added to secure equipment and vessel space is included, the effective West Coast rate for landing tea from China is about $8,000 to $11,000 per FEU (forty-foot equivalent unit), according to the Journal of Commerce.
At the consumer level, online orders for tea must now meet $50 and $75 thresholds to qualify for free shipping, and four-week delays are common. Observers predict that the kinks in the supply chain will persist through 2022.
Biz Insight – Global container fleets are consolidating as shipping companies spend new-found money acquiring vessels and ordering containers. Swiss-owned MSC (Mediterranean Shipping Company) has acquired 70 ships since August and has an order book of 800,000 TEU for new ships. The buildup in demand shows no sign of abating as consumers spend pandemic savings and economies emerge from lockdowns.
Kenya is home to 658,000 tea smallholders
Newly Elected KTDA Board Ousts Executives
Newly elected Kenya Tea Development Agency (KTDA) directors and chairman David Muni Ichoho on June 22 were escorted by police to their offices in the KTDA headquarters in Nairobi.
KTDA’s Peter Kanyago, who had been at the helm of the tea agency for 26 years, was forced to relinquish his position after he was unseated in a local election April 25. KTDA CEO Lerionka Tiampati and other senior staff were given compulsory leave. Ichoho announced an internal investigation to determine culpability for potential malpractice and possible abuse of office.
Kenya’s tea farmers collectively own 66 of the nation’s tea factories. They contract with the Kenya Tea Development Agency (KTDA) to pay for what they produce and to market their tea.
During the past two years local concerns about a ‘tea cartel’ and a new administration in Nairobi led to legislative reforms that permit factories to replace directors by conducting special elections. The previous system awarded votes by share. Board members found they only had to please the largest farmers. Now it’s one man, one vote. Ousted board members challenged the Tea Act, 2021 in court and consider any special elections conducted between March and May invalid.
Ichoho’s first official act was to notify the organization to accord full recognition and cooperation to the new board as it takes over factory management, “We wish to assure all stakeholders that the operations of the group are running smoothly without any interruptions.”
He told the Kenya News Agency that “Procurement contracts will also be reviewed to ascertain value for money and determine if the services and goods were obtained within the market benchmarks.”
“The reform journey began in earnest on 14th January 2020, with the directives by His Excellency the President of the Republic of Kenya, following outcry by over 658,000 farmers over dwindling fortunes as it became clear that the tea value chain governance structures had been captured by some individuals and groups of persons for their own selfish interests at the expense of the principal stakeholders – the tea farmers,” said Ichoho.
He said KTDA abdicated their core responsibility of serving the best interests of the farmers.
“It is against this background that shareholders made a decision to exercise their rights to make leadership changes with a view to charting a new direction towards a sustainable and profitable farming in tea sub-sector for smallholders. The farmers, towards this objective undertook to elect new leaders from the shareholders as Factory Directors and Board members for the KTDA Holdings,” Ichoho said.
A spokesperson at a non-violent late-night protest predicted that a case before Kenya’s Constitutional Court would find the government’s actions unconstitutional and reinstate the old board.
Ichoho said that all cases brought by or that have been filed by KTDA challenging the Crops Industry Regulations, 2020, and the Tea Act, 2021 will be discontinued with immediate effect.
“The Company will support full implementation of the Tea Act 2020 and will no longer pursue avenues that are against the interest of over 600,000 small holder farmers,” according to the Kenya News Agency report.
On June 18, 2021 KTDA elected the following: David Muni Ichoho as chairperson with board members, Michael Kamau Ngatia, Paul Mwangi Kagema, Enos Njiru Njeru, John Mithamo Wasusana, Geoffrey Chege Kirundi, Abungana Khasiani, Erick Kipeyegon Chepkwony, Thaddeus Mose Mangenya, James Ombasa Omweno, Wesley Cheruiyot Koech and Baptista Muriki Kanyaru.
Patrick Ngunjiri was appointed Acting Company Secretary.
Celestial Seasonings offers 105 varieties of tea.
Hain Celestial Simplifies Tea Selections
US grocery stores enjoyed a strong 2020 and in 2021 pandemic stickiness is apparent for e-commerce convenience and at-home meals, according to Coresite Research which reports that as of June US retail store closures are down year-over-year for the first time since the initial lockdowns.
Half of Americans now say they would feel “very comfortable” shopping in a physical store during the next three months, compared to 29% in the year-ago period according to SafetyCulture. When they return, consumers will discover that higher ingredient costs, packaging, shipping expense and eroding brand loyalty convinced food manufacturers to simplify their offerings.
General Mills anticipates raising its prices 7% globally over the next year. “We are ending one period of significant consumer disruption only to start another,” Chief Executive Jeff Harmening told the Wall Street Journal. “The next few months will be especially critical for our brands as the world transitions to a new normal.”
Tea manufacturer Hain Celestial has a big footprint in grocery with thousands of SKU (stock-keeping units) – far too many according to Mark L. Schiller, president and chief executive officer. Schiller told investors that shedding 20 brands, discontinuing 1,000 SKUs proactively before the pandemic and really simplifying the way we operate …” were the cornerstones of a simplification strategy that has increased margins.
He told Food Business News that he is transitioning the $2 billion Hain Celestial Group from a holding company to an operating company. The new focus is on innovation vs. additional flavor varieties, he said.
“So, instead of ‘here’s the 37th flavor of Sleepytime tea,’ ” he said, “we’re bringing tea with energy, tea with melatonin, tea with probiotics and gut health and immunity and things that are much more incremental in the category, cold brew tea, K-cups, things that really are going to help the retailer grow their category and therefore, earn their space.”
| Afghan Tea Market Concerns as Taliban Conquers Kabul | Foodservice Recovery Rates Vary Widely by Sector | Researchers Confirm Heart Healthy Aspects of Tea
Seven-minute Tea News Recap
April 21 – Sale 33
India Tea Price Watch
Afghanistan is an importer of green and orthodox black tea from India and in 2020-21, about 760,000 kilos of tea was exported from there. At the moment, the movement of cargo between the two countries stands interrupted. – Aravinda Anantharaman
Features
This week Tea Biz visits Darjeeling, India on word of the sale of the iconic Jungpana and Goomtee tea estates to Anshuman Kanoria, principal at Balaji Agro International and chairman of the Indian Exporters Association
… and then to London where Kyle Whittington reviews The Tea Girl of Hummingbird Lane, a novel by Lisa See.
Anshuman Kanoria discusses his company’s acquisition of two of Darjeeling’s best-known tea gardens.
Restoring Darjeeling’s Reputation from the Roots Up
By Aravinda Anantharaman
The sale of two iconic Darjeeling tea gardens focused attention on the ongoing challenges facing growers in this fabled tea-growing region. Jungpana and Goomtee were acquired by the Santhosh Kanoria Group, which owns the tea export company Balaji Agro International. The group also owns Tindharia estate in Darjeeling. We spoke to Anshuman Kanoria, Chairman of Balaji Agro and Chairman of the Indian Exporters Association about this acquisition. Read more...
Listen to the Interview
Anshuman Kanoria on India’s unrealized potential in teaLisa See has written a “brilliantly layered book” writes Whittington
New York Times best-selling author Lisa See has written several novels revealing her fondness for tea. The Tea Girl of Hummingbird Lane, however, uniquely explores the mysterious world of Pu’er. Reviewer Kyle Whittington writes that See’s novel “consists of so many brilliant layers… for the tea reader this is a wonderful story, packed with great tea content that will either develop or ignite an interest in, and a desire to explore the world of Pu’er.” Read the review…
Afghan Tea Market Concerns as Taliban Conquers Kabul
By Dan Bolton
Afghanistan is a major tea-consuming nation and a smuggler’s paradise for tea. The country became a profitable middleman by clever manipulation of border regulations that were only recently reined in after decades of openly flaunting Pakistani Customs enforcement.
Since tea trades in US dollars, money in Taliban controlled bank accounts is frozen. Bank withdrawals are limited and in-bound remittances from Western Union and MoneyGram have stopped. The East African Tea Trade Association (EATTA) reports bidding at the Mombasa auction on tea bound for Afghanistan slowed as the Taliban occupied Kabul but EATTA explained that Afghanistan gets its Kenyan tea via Pakistan where there have been no disruptions at all, according to The East African. Shipments between India, another major source of tea, and Afghanistan were halted this week.
Afghanistan’s banks are closed, halting direct deposits for salaried workers. Interbank transfers are subject to sanctions imposed by western powers decades ago to curtail terrorist activity. The Financial Action Task Force, warned member countries they must ensure that “no funds or other assets are made available, directly or indirectly” to the Taliban or face fines and censure by the United Nations and the US along with many of its allies. During the 20 years since the Taliban was last in power, many businesses transitioned from cash and writing checks to digital banking. Prices for basic commodities like bread, oil, and tea have doubled since the government collapsed and the economy is in freefall.
In 2020 foreign aid from the US and Europe accounted for 43% of the economy. Remittances from Afghans living outside the country were nearly $800 million last year, according to the Wall Street Journal. Given near universal sanctions due to a global blacklisting of the nation’s central bank, the Taliban will find it difficult to borrow or trade essential commodities, making taxes on citizens and local businesses the Taliban’s sole source of funds in a $22 billion economy.
It is too soon to know how the collapse of the Afghan government and the return of the Taliban will alter the tea market, but smuggling was rampant during the 1996-2001 Taliban regime. In Helmand province, traders said that “if we smuggle 40kg (heroin), we give the Taliban 4kg.”
Pakistan Customs lists black tea and green tea as two of the five most smuggled commodities. Tea exports to Pakistan surged in 2020, increasing 18.7% in value compared to 2019, making it the world’s highest-valued tea import market at $590 million. Kenya accounted for $497 million of last year’s import spend, growing 27% following a decision by the Indian government to no longer export tea to Pakistan.
Afghans prefer green tea to black, yet hundreds of thousands of kilos of black tea are landed annually at the Port of Karachi, Pakistan. Until recently Pakistan charged a combined 38% tax and duties on tea making the import cost of tea 32% higher than tea imported into Afghanistan. Afghanistan is a landlocked nation so huge quantities of African tea, mainly from Kenya, are delivered to the Pakistani port tax-free, taxed at a low rate at the Afghan border, and then transported to large warehouses where it is broken into retail packets and smuggled into Pakistan. Smugglers pay a 12%-15% bribe and transportation cost, pocketing the difference.
Biz Insight – Pakistan’s Competition Commission considers smuggling to be “the biggest threat faced by the domestic tea industry, causing loss of millions of rupees to the government and forcing legal importers out of business,” according to a 2019 report. A crackdown on violators in late 2020 led to a 55% increase in customs duties collected (a proxy for illegal trade) and evidence of a concerted effort by Pakistan to decrease the cost of legal imports, making smuggling unprofitable.
It will take years to rebuild some US foodservice sectors to 2019 consumer spending levels.
US Foodservice Recovery Rates Vary Widely by Sector
By Dan Bolton
Sales at Quick Service Restaurants (CSR) and the Supermarket Prepared Foods segment are well ahead of pre-pandemic totals but “everyone in foodservice is starting from a really different point,” reports Ann Golladay, senior project director at Datassential Research’s Baltimore office.
Datassential calculates that — overall — consumer spending in foodservice declined from $806.7 billion in 2019 to $701.4 billion in 2021 and will not return to pre-pandemic spending levels until 2023.
Golladay explained to webinar participants Aug. 19 that Fast Casual, once the darling of the industry with the largest real growth will not reach pre-pandemic spending levels before 2023 “and that will be nominal growth that does not include inflation,” she said. Golladay estimates inflation at 5% per year “so you will probably have to back down these projections 10% by then,” she said. Consumer spending at fast casual restaurants declined 19% in 2020. The segment is projected to generate $67.4 billion next year compared to almost $68.7 billion spent in 2019.
A survey of the nation’s grocers found that 74% reported increased sales in 2020. The consumer spend for prepared foods at supermarkets in 2022 will be $38.8 billion, rising by 119% compared to 2019 dollars.
Recreation, lodging, and convenience store foodservice segments will take even longer to recover. Lodging, for example, will have only achieved 71% of its 2019 consumer spend by 2022.
Until workers return to downtown offices, the business and industry foodservice sector, projected to reach pre-pandemic sales of $6.9 billion, will never recover.
Tea Biz Insight – Jack Li, principal at Datassential identified five “x-factors” that could disrupt the official projections. These include new variants, vaccine mandates, additional and extended lockdown, sustained inflation, and a combination of labor and supply chain bottlenecks.
Tea flavonoids reduce risk and severity of adverse cardiovascular events.
Researchers Confirm Heart Healthy Aspects of Tea
By Dan Bolton
Accumulating evidence of tea’s heart health benefits led researchers to conduct an umbrella review describing and critically evaluating the totality of medical evidence to date.
Their findings: “It is reasonable to judge that two cups of unsweetened tea per day has the potential to decrease CVD (cardiovascular disease) risk and progression due to its flavonoid content.”
The peer-reviewed paper authored by Abby Keller and Taylor Wallace and published in the Annals of Medicine, examines 10 years of studies, from 2010 to 2020, that identify several biological mechanisms showing a decreased risk and severity of cardiovascular disease in tea drinkers.
The authors write that “Results of population studies commonly suggest that tea consumption is inversely associated with several health outcomes. Shorter-term clinical intervention studies provide additional evidence that tea consumption has the potential to affect intermediate outcomes and biomarkers of disease in healthy, at-risk, and diseased populations.”
Based on this umbrella review, the researchers observed that the consumption of tea as a beverage “did not seem to be harmful to health; therefore, the benefits of moderate consumption likely outweigh risk.”
Miriam “Mim” Enck, president of The East Indies Coffee & Tea Company, in Lebanon, Penn., passed away Saturday, Aug. 14 after a short illness. Since 2018 Enck has operated the company founded by her late husband, Walter Progner who started the specialty tea retail business in 1976. She was 75.
Upcoming Events
August 2021
POSTPONED: Beijing International Tea Expo, Beijing China August 27-30, 2021 | Beijing Exposition Center (the recent coronavirus outbreak forced Beijing authorities to halt all events that attract large crowds. Watch this space for new date when it becomes available.)
September 2021
Caffé Culture Show, Business Design Center, London September 2-3 | The European Speciality Tea Association will host a Speciality Tea Hub on the exhibition floor with a tea brew bar, a members’ lounge, educational seminars and small exhibitor pods. Admission is free | Program | Register
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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