• A Year of Fire and Now, Ice | UC Davis Colloquium: Tea in a Changing World | SYSTM Foods acquires HUMM Kombucha

    Iran Tea Company CEO Implicated in $3.7 Billion Embezzlement Scandal | Shipping Shock: Missile Threat Diverts Suez-Bound Tea Cargo | Malawi Anticipates a Steep Decline in Tea Production

    Tea News for the week ending Dec. 22
    Hear the Headlines | Seven-Minute Tea News Recap
    India Tea News Update

    In 2023, the tea industry bid farewell to several notable figures. In this episode, we pay tribute to David C. Bigelow, Jr., an industry icon who died in June at 96. A member of the silent generation born in the roaring 20s, David was a World War II veteran and 1948 Yale University graduate who transformed the specialty tea segment. He steered a boutique tea blending business launched in his mother’s kitchen into a multi-million-dollar mass-market brand. Joining us today is David’s daughter Cindi, President and CEO of Connecticut-based and family-owned R.C. Bigelow, a $250 million B-Corp known for innovations that redefined tea service in restaurants and grew the company to become the US market leader in specialty tea.

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    Bigelow Tea President and CEO Cindi Bigelow reflects on her father’s innovations in specialty tea

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    Shipping Shock Tea Rerouted to Avoid Drone and Missile Attacks

    Shipping Shock: Missile Threat Diverts Suez-Bound Tea Cargo

    Houthi missile and drone attacks in the Red Sea are diverting ships laden with tea away from the industry’s primary access to Europe, costing time and money.

    Passage through the 120-mile Suez Canal connecting Europe with Asia is one of the world’s most important maritime choke points. A shipping crisis unfolds at the southern strait called Bab-el-Mandeb (the gate of tears). Yemen-based insurgents have deployed hundreds of drones and fired the first anti-ship ballistic missile to strike a commercial vessel, Palatium III.

    This week’s decision by all major shipping lines to bypass the Red Sea route will affect 53% of the global container trade. Dry bulk carriers, oil tankers, and smaller container ships will likely follow their lead. War risk insurance rates have spiked along with the price of oil. About 9.2 million barrels daily transit the canal, approximately 9% of global demand and 4% of the world’s liquid natural gas (LNG).

    The US, UK, and French navies are providing escort with the USS Carney downing a swarm of 14 drones.

    On Dec. 17, the Suez Canal Authority reported that 55 ships that were scheduled to transit the canal had been diverted. That same day, 77 ships passed through the canal, a much higher number than the 50-ship daily average.

    Tea bound for the UK, Rotterdam, and German ports from the UAE, East Africa, and Asia will now travel approximately 11,169 nautical miles around Africa, compared to 6,436 via the Red Sea and Suez Canal. Adding transit days is costly. Operating a container ship costs between $25,000 and $85,000 per day, excluding fuel, which adds up to $130,000 daily. Transit from India to the UK vial the Suez Canal is usually 17 to 21 days. Alternate routes can take five to six weeks.

    In 1869, when the eight-meter (26-foot) deep canal opened, the largest ship that could pass was 5,000 tons, but the cost of transportation and access to the Indian and Sri Lankan was far easier, making Suez a primary trade route for tea. Over 20,000 ships carrying approximately 12% of global trade each year pass through the Suez Canal, carrying 30% of all global container traffic and more than $1 trillion in goods yearly.

    Debsh Tea executives, CEO Akbar Rahimi (4th left). Photo appears on Debsh website.
    Debsh Tea executives and CEO Akbar Rahimi (4th left). The photo appears on Debsh Tea’s website.

    Iran Tea Company CEO Implicated in $3.7 Billion Embezzlement Scandal

    By Dan Bolton

    Akbar Rahimi, the CEO of Iran’s leading tea company, is under arrest, accused of a five-year embezzlement scheme that generated $3.37 billion in ill-gotten gain.

    Privately held Debsh Agriculture and Industrial Group engaged in “large-scale financial malpractice” dating to the presidency of Hassan Rouhani in 2018, according to NCRI. The publication cited unnamed government sources.

    “Several banks, institutions, and ministries, including the Ministry of Industry, the Ministry of Agriculture, the Customs Administration, the Central Bank, the Trade Development Organization, and the regime’s Food and Drug Organization, have been implicated in this widespread corruption scheme,” writes NCRI (National Council of Resistance of Iran).

    Here is how it unfolded

    Debsh Tea ordered grade 1 Darjeeling tea at $14 per kilogram to mislead resellers. In practice, it imported far greater quantities of tea from Kenya and seconds from Iran that sold for $2 per kilogram “with the Food and Drug Organization confirming the quality of the imported teas,” according to NCRI. Origins were falsified, and corrupt customs officials apparently looked away.

    The company also bought domestically grown tea and “re-imported” it, masquerading as expensive foreign grades.

    The tea was traded at the Central Bank’s official exchange rate, known as the “Nimaee-dollar,” which values US dollars at 37,000 tomans, “a rate accessible exclusively to traders affiliated with the regime,” according to NCRI. This compares to the market exchange rate, which hovers around 50,000 tomans per dollar [USD$1 equaled 42,340 IRR on 12/20/23]. “Consequently, each dollar contributes approximately 13,000 tomans to the coffers of the regime’s embezzlers. When multiplied by the billions of dollars received in foreign exchange, this translates to astronomical figures,” writes NCRI.

    Iran’s General Inspection Organization noted a spike in the annual budget, which usually allocates around $300 million for tea imports. The government’s allocation for tea and tea processing equipment tripled in 2021, with $1.472 billion earmarked for machinery.

    Imports totaled 110,000 metric tons, about double the usual amount – quantities sufficient to depress sales of domestically produced tea.

    “Tea cultivators have suffered huge losses,” writes Maryam Shokrani with the state-run Sargh daily newspaper. Mohammad Sadegh Hassani, executive director of the Union of Northern Tea Factories, told NCRI the embezzlement scheme “upset the market balance, confronted the industry with a crisis, and led to the accumulation of a large volume of tea in warehouses.”

    Akbar Rahimi is one of a group known colloquially in Iran as the “smuggling brothers,” who were implicated in another significant case related to irregularities in the import of paper at the Ministry of Culture and Islamic Guidance. The term “smuggling brothers” refers to organized groups exploiting state connections, particularly with the Revolutionary Guards, to conduct extensive trafficking to bypass international sanctions,” according to NCRI.

    Judiciary spokesman Masoud Stayeshi, on Dec. 5, confirmed, “Various collaborations have been made with this company [Debsh], and a significant amount of foreign exchange and national resources have been allocated to this issue.” Other Islamic Republic officials implicated in the embezzlement include Javad Sadatinejad, the Minister of Agriculture, who resigned in April; governors of the Central Bank; chiefs of the Iranian Customs Administration, and others.

    Iran International reported that Chief Justice Gholam-Hossein Mohseni-Eje said the government had dismissed 60 individuals in the case and later clarified the dismissals included those involved in non-related incidents during the past two years. Government spokesman Ali Bahadori Jahromi said earlier this week that several low and mid-ranking officials have been arrested over the case. According to Iran International, the company’s CEO, Akbar Rahimi, is reportedly under arrest. The court refused to name the suspected collaborators, several of whom are likely highly placed in the government of Supreme Leader Ali Khamenei.

    Reformist newspaper Etemad writes that “the main problem is that, aside from a general headline, no details have been released.

    Iran’s Inspection Organization revealed irregularities on Nov. 30. Besides the abovementioned embezzlement, Rahimi may have traded $1.4 billion in Iranian government-held foreign currency on the open market. The case against government bodies that had provided foreign currency for the firm is to be sent to the Public and Revolution Court of Tehran for certain violations, according to IFP News.

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    Episode 148 | Iran Tea Company CEO Implicated in $3.7 Billion Embezzlement Scandal | Shipping Shock: Missile Threat Diverts Suez-Bound Tea Cargo | Malawi Anticipates a Steep Decline in Tea Production | PLUS  Cindi Bigelow, President and CEO of R.C. Bigelow Tea pays tribute to her father David C. Bigelow, who passed in June at 96.

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  • COP28 Declaration is Good News for Tea Smallholders | Sun Garden Tea Merges with QTrade Teas | Goodricke Group Achieves Carbon Neutral

    COP28 Declaration is Good News for Tea Smallholders | Sun Garden Tea Merges with QTrade Teas | It’s Easier Now to Attend Chinese Tea Tradeshows | Goodricke Group Achieves Carbon Neutral Tea Production

    Tea News for the week ending Dec. 8
    Hear the Headlines | Seven-Minute Tea News Recap
    India Tea News | Aravinda Anantharaman

    In the 1990s and early 2000s, curating a catalog of 200 direct-sourced teas, establishing a small chain of neighborhood tea shops, launching a formal tea school, and selling tea online to people worldwide was pretty ambitious. Twenty-five years later, Montreal-based Camellia Sinensis, having survived pandemic peril, has emerged with vigor in a configuration admired for its innovative approach to experiential retail. Camellia Sinensis even helped finance a factory in South India to produce tea on demand. Partner Kevin Gascoyne joins us during the company’s 25th Anniversary year to share valuable insights and a few missteps while traveling a long path to success.

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    Kevin Gascoyne on the 25th Anniversary of Camellia Sinensis tea in Montreal, Canada

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    Nepal-based civil society group Digo Bikas Institute holds an action on loss and damage during the UN Climate Change Conference (COP28) at Expo City in Dubai, United Arab Emirates. Photo by Christopher Edralin UN/COP 28

    UN: Bring the Vulnerable to ‘Front of the Line’ for Climate Funding

    By Dan Bolton

    A Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action adopted by 134 delegates to COP 28 UAE will provide $2.5 billion to address agriculture-related climate issues.

    The declaration was accompanied by the announcement of several related initiatives, including a $200 million agriculture-related research partnership between the UAE and the Bill & Melinda Gates Foundation.

    UAE Minister of Climate Change and Environment Mariam Mohammed Almheiri said, “Countries must put food systems and agriculture at the heart of their climate ambitions, addressing both global emissions and protecting the lives and livelihoods of farmers living on the front line of climate change.”

    According to the UN Intergovernmental Panel on Climate Change, some 3.5 billion people, nearly half of humanity, live in areas highly vulnerable to climate change. OCHA climate team head Greg Puley told the conference’s participants on Monday that it was a “grave injustice” that people on the frontlines of the climate crisis who were least responsible for it, too often found themselves “at the back of the line” for climate funding.

    Commentators and agriculture experts say COP 28 recognized the important link between food and climate in the declaration. Delegates affirming the statement represent 5.7 billion people, including 500 million farmers. The UN Conference of Parties resulted in the Paris Accords in 2015, signed by 200 countries that agreed to limit long-term global temperatures from increasing above 1.5C. Temperatures currently stand at 1.2C compared to pre-industrial times. Estimates suggest temperatures will increase by 2.4C to 2.7C by 2100. The window for keeping within the 1.5C limit is “rapidly narrowing,” according to the UN.

    Unilever called for urgent climate action. The company, still a major player in tea, has a visible leadership role in investing in renewable energy, switching to low-carbon feedstocks as alternatives to fossil-fuel-based chemicals, and pledging to protect and regenerate 1.5 million hectares of land, forests, and oceans by 2030. The company said it is already sourcing 93% of its electricity from renewable sources.

    “The world isn’t reducing emissions quickly enough to meet global targets and avoid climate breakdown,” writes Unilever, adding that it “calls on governments attending COP 28 to increase ambition and accelerate actions urgently, we can go further, faster in the race to net zero.”

    COP 28 Advisor Edward Leo Davey told VOA that genuine implementation of the declaration “will represent a significant positive step forward in the lives of smallholder farmers.”

    Farmers were encouraged to adopt sustainable practices, including organic farming and agroecology, to reduce harmful agrochemicals, conserve water resources, and protect soil health.

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    Episode 146 | COP28 Declaration is Good News for Tea Smallholders | Sun Garden Tea Merges with QTrade Teas | It’s Easier Now to Attend Chinese Tea Tradeshows | Goodricke Group Achieves Carbon Neutral Tea Production | PLUS Kevin Gascoyne. a partner at Montreal-based Camellia Sinensis shares valuable insights, innovations and a few missteps blazing a 25-year path to success. | Episode 146 |

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  • Retailers Rekindle Tea Culture Face-to-Face

    Andrew McNeill, Business Development Director at Seven Cups Fine Chinese Tea, says that stay-at-home tea drinkers exploring specialty teas are eager to share the experience of tea discovery face-to-face. In December, the 20-year-old tea merchant and tea house relocated to a 2200 sq. ft. combination tea shop, tearoom, warehouse, and online fulfillment center.

    Caption: Kai Steerman, left, enjoys a tasting led by Zhuping Hodge

    Listen to the Interview

    Seven Cups Fine Chinese Tea Business Development Director Andrew McNeill
    A tea oasis in the Arizona desert
    A tea oasis in the Arizona desert

    Seven Cups Tea House Carefully Crafts a Cultural Experience

    Seven Cups Fine Chinese Tea is typical of well-established shops that survived the pandemic. The direct-trade retailer is 20 years old, located in a second-tier city, and generates revenue online and in-store from packaged sales, tea service, and wholesale supply to coffee shops, cafes, hotels, and restaurants.

    Packaged tea has fared well since 2019. A spike in sales has jammed tea cupboards with direct-from-origin and exotic teas purchased online. The growing consumer preference for better-tasting tea favors retailers with quality selections, including herbal infusions. Retailers are remodeling to promote in-shop sampling as it encourages social interaction and repeat business among enthusiasts eager to explore new origins and styles as they learn from experts.

    Seven Cups founder Austin Hodge says, “The business model of our tea house has always been to provide an authentic and high quality product and customer experience. We see the opportunity to expand our tea house is a validation of this model. We firmly believe that high quality tea isn’t just compelling to a niche market of connoisseurs, it’s readily enjoyed by everyday, working class people.”

    “When you enter a traditional teahouse, in China or Tucson, you step into a cultural experience that separates you from your daily problems. It’s a teahouse tradition for tea drinkers to be treated with respect and dignity, whatever their outside problems might be,” says Hodge.

    Dan Bolton: Every successful retailer has plans to expand to a new 2200 sq. ft. location. What led Seven Cups to relocate?

    Andrew McNeill: So, for us, it was realizing that we were hitting a point where we were at capacity. We realized about five years ago that we had to start making a plan. We were sharing a strip mall with several other popular businesses, and it’s great to have the exposure to being next to other popular businesses. But if people can’t park there, it’s a problem. And being there for 20 years, we realized that if people hadn’t found us yet, in this location, they probably weren’t gonna find us.

    We were fortunate in that we had enough of a unique draw in our local area, where people sought us out from far away. We weren’t dependent on foot traffic to drive business and awareness. But that said, after moving to a location with better visibility, we’ve already seen an enormous response.

    You can do everything right with your social media, tending to your tribe, and getting the word out in your community; these are all great and worthy things to do. But finding the right location that’s going to be visible and accessible to your customers can’t be substituted.

    So, location still does matter.

    Dan: Did you decide to buy or lease?

    Andrew: We moved from being a renter to a buyer. And, of course, the advantages of being a renter versus an owner will depend on where a business operates. In our case in Tucson, we saw pretty strong advantages to being an owner, especially with rents increasing; given the economic climate in the last three years, it was clear at the time. Things are shifting now, as they always are, but it was time to move in terms of favorable lending conditions and property valuations.

    That said, we spent a long time finding this place. It was a unicorn location. We knew we were looking for something unusual. In our case, a big part of what we wanted was to consolidate the wholesale and online fulfillment with the tea house. There are obvious advantages and efficiencies in getting your operation under one roof. The challenge there, of course, is that there are very few tea house-restaurant-retail spaces and slash warehouse-office spaces in one building. You must build to suit, to create something like that.

    Ultimately, the property that Austin found was an off-market building, a market space that had been abandoned since the 80s. It was not listed. Our realtor did us a real favor by proposing an offer to the owners.

    Starting negotiations that way, we were fortunate to find a space that could be reshaped into exactly what we needed.

    Dan: COVID created new consumer behaviors leading shops to adapt. Your business does an amazing job educating customers and introducing them to suppliers and producing regions. Will you talk briefly about how this new shop accommodates online buyers and how you approach teaching with sampling?

    Andrew: I think we’re still in the midst of that change. During COVID, we’ve accumulated a lot of stuff. And our consumer experiences have been focused on the home and consumption in the home, the individual, and the family.

    And so we’ve gone from buying stuff to buying experiences. When you’re building out a retail space, it’s very important to focus on the experience and the experience of the product. This is something that, for us, historically, has been the case in our tea room, in the decades past, is been only a small part of our business, but it’s been an integral part of our business. Because what it is and what it provides is that experience, it’s a guided experience in an environment conducive to it.

    When people experience the possibility of what tea can taste like and what satisfaction it can provide when brewed with intentional and beautiful surroundings, this ultimately drives a whole customer lifecycle that we wouldn’t have otherwise.

    Regarding parts of our business, the tearoom is just about 10 or 15% of revenue. So, it’s not a significant part. But the marketing power of providing this experience for folks, that face-to-face interaction with your customer, and the feedback given back to us as a business is invaluable.

    We certainly missed that during COVID. And we’ve seen that people coming out of the pandemic haze are interested in having that interaction from the consumer side. So, we’re happy to be in the fortunate position of opening a new Tea House experience when people are just becoming more comfortable coming out and seeking such experiences. Of course, it’s got to be great; it’s got to satisfy those expectations both in terms of the educational experience and the sensory experience.

    Dan: Tell us about the tasting experience.

    Andrew: Tasting is a central part of the experience; there’s a tearoom, but there are also individual tasting tables. So, these tables are not a place where people would sit down with their own tea, but where they would sit down with the shop owners or some of the staff to have a conversation and chat about tea. And, of course, that conversation is an organic educational experience where people can come up with their own questions. That drives the discussions and the whole experience of tasting this tea and understanding what’s behind it. Of course, it helps us that education flows the other way because we understand how consumers enjoy this tea. We’ve built out places in the new store for people to have those conversations in different parts of the building.

    Dan: How many tasting tables are there in the store?

    Andrew: So we have three different tea tables. The tea room itself is about 700 square feet, which is about the same as we had in our old space. The added space gives us a little more flexibility on where we placed the retail section of the business. In the old store retail sort of ran through the tea room, so you could be having your tea experience in the tea room and people would be walking in back of you along the walls looking at teapots. Here it’s a little more of a private experience. There’s a clear separation between the retail area, which takes up about 500 sq. ft. and the tea room. And so people feel a little more comfortable with getting up close and personal with teapots and jars of tea, while having conversations with our staff over the retail items.

    Simultaneously it makes the tea experience when you’re sitting down all that more special and private and focused.

    “People want to have an intentional, amazing, profound experience every time. If you create that brush with the sublime with your products, service, and relationship with your customer, you’re really in tune with what folks want.”

    — Andrew McNeill

    Dan: Let’s talk about innovations in the back end of the store.

    Andrew: Wholesale is not the profit leader of our business. It comes along with online retail, the tea house, part of a broad revenue mix. So, for us, that makes consolidation more important because we’re all serving multiple roles. You can have conversations not only with different people but with different people as they’re serving different roles. It is also very valuable in terms of efficiencies for building out the wholesale part. A free-standing building enabled us to build the ventilation and cooling system to suit tea storage. It’s of utmost importance to take care and preserve the quality of the tea from season to season. We’re a vendor that focuses on one lot per year. We do not blend 2021 tea with teas from 2022. Selling is seasonal, dated by year, so you must ensure the tea is holding up. As tea ages, people are going to know that it’s aging. We make sure that we’re doing our best to preserve its quality. A freestanding building also means there are no intrusions of smells that will contaminate, there’s no flavor creep from, say, other products that are around. It also gives us the advantage in terms of compliance to have one FDA-inspected facility instead of two, same for health department inspections locally. Being able to focus on getting things just right was one of our build-to-suit goals

    Dan: Online you offer an interesting version of sampling option.

    Andrew: As fresh tea arrives; we offer graded samplers. This is an experiential product. This year we did five different grades of Longjing (Dragon Well) from the same factory. These teas are grown in the same garden, harvested during the same season, and processed by the same tea maker. You can taste the differences from the earliest pluck of their premiere, early spring Ji Pin (ultra grade) Da Fo Longjing (2022), and compare as the season progresses, tasting how the leaf changes and how differences in plucking and processing change as the harvest progresses. You can brew each tea separately for casual drinking or compare different teas side by side to calibrate your taste buds.

    Tasting tables in foreground, retail display at right, tea room in rear.

    Dan: Younger people coming to tea are seeking distinctive taste. I tell people it’s as simple as this; your grandmother drinks tea — her grandsons and daughters taste tea. She seeks consistency in a brand that spans 50 years of her life. Her grandchildren are looking for something novel, identifying flavor notes and asking, where was it grown? How was this tea made? Why does it taste this way?

    Andrew: Yeah, they are looking for an experience every time. I think that’s an excellent way of putting it and describing the generational shift. Many younger consumers are not drinking a whole lot of tea. We have a subscription service, and people said, “this is great, my only complaint is I’m getting too much tea.’

    People want to have an intentional, amazing, profound experience every time. If you create that brush with the sublime with your products, service, and relationship with your customer, then you’re really in tune with what folks want.

    There’s a sophistication with the consumer now since people can learn so much so fast about the supply chain. They will ask those questions to satisfy their own moral, philosophical demands for an ethically managed supply chain, but also to satisfy the sort of epicurean desires of being able to taste the terroir, the provenance of this product.

    With people coming in who have a high degree of knowledge, what they’re looking for is not only answers to those questions but a conversation around those questions. So it’s not just being able to provide that information but being able to have a conversation around that information.

    Because people are used to having this conversation, say on social media and over long distances over the internet, and getting this information directly from growers when they come into their local tea shop, they want to be able to continue sharing their own preferences and learn more about your own sourcing approach and just delighting in a conversation about something that both of you love.

    Taste of China (experiential tasting)

    Discover the wonders of Chinese tea as you taste a selection of high-quality teas featuring different origins and processing methods. Learn about different types of tea and their traditional health benefits. Great for parties and special events (baby showers, client/employee events, birthday parties, graduation parties, cultural experience days, etc.). Light snacks will be served with tea (1 snack per person included in the price).

    Cost: $18 per seat (minimum 6 seats, maximum 30 seats per event, no child pricing), 18% minimum gratuity not included
    Length: up to 90 minutes.

    Download tea and snack menu

    — Seven Cups Fine Chinese Tea

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