• Tea Biz Podcast | Episode 36

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    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:

    • 47% of shoppers are planning on making a major purchase (a third indicated they would spend $500-$2000);
    • 40% of Australians are looking forward to spending on dining out and entertainment and 19% will book holiday travel
    • 35% say that now is a good time to buy major household items.

    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

    • Read more… links indicate the article continues. Learn more… links to additional information from sources.

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    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

    Click to view more upcoming events.


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  • Tea Biz Podcast | Episode 35

    Tea Biz Podcast Logo

    Listen on your favorite player

    Hear the Headlines

    | Bids Top $4 Billion for Unilever Tea Portfolio
    | India Considers Halting Imports of Nepal Tea
    | Sales of Herbal Supplements in US Top $10 Billion

    Seven-minute Tea News Recap
    Tea Price Report
    Sept 11 – Sale 36

    India Tea Price Watch

    Growers no longer must seek permission to plant tea in India, a move that could encourage new tea regions to add tea cultivation, increase the number of small growers cultivating tea, and possibly increase the volume of production.  Circulars from the Tea Board follow the Commerce Ministry’s announcement of new rules regarding permits. In Darjeeling, planters are calling for a ban on Nepal tea imports. Learn more….

    By Aravinda Anantharaman

    Features

    This week Tea Biz travels to Switzerland to learn from Caroline Giacomin at ETH Zurich the physics behind that colorful sheen that rises to the surface of black tea. Is tea scum just that or a revealing indication of goodness in the cup?

    … and then we travel to New Delhi, India where the Rainforest Alliance’s Madhuri Nanda reveals how practitioners of RA’s sustainable farming practices are evolving toward broader, more holistic ecosystems in Part 2 of our series on Regenerative Agriculture.

    Interfacial surface film that forms on black tea.
    Interfacial surface film that forms on black tea.

    The Physics of the Film that Forms on Black Tea

    By Dan Bolton

    Have you ever noticed a colorful sheen on the surface of your tea? It appears to break like ice floes in the arctic as the tea cools. Researchers once thought tea film was due to waxy substances contained in tea leaves released during steeping. That is not the case. The delicate film is an interfacial interaction of oxygen, tea polyphenols and calcium carbonate ions in water. It does not form on white, yellow, green, or lightly processed oolong teas, only black tea. In many parts of the world, soft water prevents the film from forming. Is tea film a fleeting glimmer of color to enjoy or an ugly scum to quickly dissipate with a squeeze of lemon? Caroline Giacomin, a physicist at ETH in Zürich, Switzerland joins us to explain the physics of tea film from a study she and colleague Peter Fischer recently published in the Physics of Fluids. Learn more…

    Listen to the Interview
    Physicist Caroline Giacomin explains the physics of black tea film
    Madhuri Nanda
    Madhuri Nanda, Rainforest Director, South Asia

    Regenerative Agriculture: A Holistic Approach

    By Dan Bolton

    Madhuri Nanda, the Rainforest Alliance’s director, South Asia, explains that while sustainable farming ensures that agricultural practices do not negatively impact and degrade the environmental, social, and economic aspects of the surrounding ecosystem ? the focus shifts in regenerative agriculture toward adopting a broader holistic approach that enhances biodiversity and improves soil health through increased microbial activities that build resilient systems capable of withstanding adverse climatic scenarios. Read more…

    Listen to the interview
    Madhuri Nanda Rainforest Director, South Asia, on the evolution of sustainable farming.

    News

    Bidding for Unilever’s tea portfolio underway. Photo Photo © Vladimir Akin`shin | Dreamstime.com

    Advent International Will Bid $4 Billion for Unilever’s Tea Portfolio

    By Dan Bolton

    Advent International and the Singapore Government Investment Corporation (GIC) will bid $4 billion in a joint offer for Unilever’s tea portfolio, according to a report by Sky News.

    The Advent-GIC consortium is competing with at least six other large private equity firms that hope to acquire fabled brands Lipton Yellow Label, PG Tips, Lipton Iced Tea, Australia-based T2, TAZO, Pukka Herbs and several other regional brands.

    Unilever will retain its most profitable tea holdings in India and Indonesia as well as the Lipton-PepsiCo partnership in the US.

    Bloomberg estimates Unilever’s entire tea business to be worth $5.7 billion. Other bidders expected to meet next week’s deadline are the Dhabi Investment Authority, KKR and Clayton, Dubilier & Rice.

    Biz Insight In a July earnings call, Unilever CEO Alan Jope said “The balance of Unilever’s tea brands and geographies and all of our tea estates have a very exciting future, but this potential can be best achieved we believe as a separate entity.”

    The divestiture is expected to conclude by the end of the year.

    Tea factory and garden in Nepal
    Tea factory and garden in Nepal. Photo by © Ar-tem | Dreamstime.com

    India Considers Halting Imports of Nepal Tea

    By Dan Bolton

    The Terai Indian Planters’ Association (TIPA) and the Darjeeling Tea Association (DTA) are seeking a “blanket ban” on the import of Nepal tea.

    DTA Chairman BK Saria complained to the West Bengal Chief Minister Mamata Banerjee that a decline in production from 9.5 million kilos to 6 million kilos in 2020, and rising costs of production have affected both the domestic market and exports. He writes that “The crisis has been further compounded by the sale of deceptive Nepal tea being sold in the Indian market as ‘Darjeeling Tea’.” Immediate action is essential to save the industry’s 87 registered gardens, he said.

    Nepal is a landlocked tea producer that relies on India’s much more developed tea industry for re-export, shipping about 69.4 million kilos there in the past four years, according to the Tea Board of India. Tea board data shows that only 26.6 million kilos have been re-exported during this time, making it likely that 42.8 million kilos were sold domestically, exempt from import duties, and in direct competition with Darjeeling producers. Teas exported from India pay a 40% tariff to enter Nepal but Nepal pays no tariffs to ship tea to India due to terms of the South Asian Free Trade Agreement.

    Imports of tea to India are up a surprising 176% year-on-year, according to the Tea Board of India. Growers in Nepal and Kenya shipped 12 million kilos to India during the first six months of 2021, more than three-fourths of the full-year average for 2019. Traders pay as little as $1.70 per kilo for Kenyan tea, compared to the $2.50 per kilo all-India average. India’s thirst for tea has increased as COVID restrictions and drought significantly lowered yields of tea grown in India. Since there is no country of origin labeling requirements, it is likely the imported tea is being blended and marketed domestically as Indian tea.

    “Nepal tea is sold at a much cheaper rate than the Darjeeling cuppa as its cost of production is very low owing to rampant use of child labor and gross violation of labor laws,” according to DTA.

    DTA Advisor Sandeep Mukherjee told the Times of India, that “unless import of Nepal Tea into India is banned, the livelihood of those dependent on it would be at risk and may reach a point of no return, where more tea gardens in the Hill would shut down.”

    Biz Insight – Indian efforts to limit Nepal tea imports have ebbed and flowed over the past decade. In May 2020 India halted tea shipments from Nepal for several weeks by imposing non-tariff barriers tied to sanitation and quality control. India growers complain that bulk tea shipments do not require a label of origin, FSSAI (food safety compliance), or rigorous customs checks. Low prices induce tea brands such as Tata Consumer Products (TCP) and bulk exporters to rely on Nepal to supply India’s domestic blenders, but do not purchase direct.

    US Herbal Supplement Sales Set Record $10 Billion in 2020

    Sales of herbal supplements in the US grew a record 17.3% in 2020 exceeding $10 billion for the first time. The total excludes brewed teas but includes green tea powders marketed as supplements.

    The 2020 Herbal Market Report, released annually by the American Botanical Council, using transaction data from SPINS, reveals sales in the mass market channel grew by 25.1% to $2.1 billion in 2020. Direct sales, including online, grew 23.7% about twice the rate reported in 2019. Sales in traditional natural and health food stores grew 1.6% to $2.95 billion. Total supplement sales were $11.26 billion.

    Elderberry, known for its immune boosting properties was the top seller along with apple cider vinegar and ashwagandha. Sales of Elderberry grew by 150% to $275 million in mass market and $54 million in the natural food channel.

    CBD sales plummeted 36.9% to $57 million in the natural channel and declined 30% in mainstream outlets during the first year of the pandemic, the first decline in sales since 2017.

    Sales of dry and bottled green tea soared in mainstream outlets last year, but sales of green tea supplements declined 7.9% in 2020, falling to $31 million to rank 13th among the top-selling herbal supplements, according to SPINS.

    Biz Insight – “US consumers spent more than ever on herbal dietary supplements for immune health and stress relief in 2020,” according to the report. “During a year in which much was out of control, many consumers seemed to take control of their own health and prioritized selfcare with herbal and fungi-based dietary supplements. As the pandemic stretches into its 20th month it remains to be seen whether these trends and record-breaking sales will continue in 2021.”

    Click to download 2020 Herbal Market Report PDF

    — Dan Bolton

    • Read more… links indicate the article continues. Learn more… links to additional information from sources.

    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

    Click to view more upcoming events.


    Share this episode with your friends in tea.



    https://teabiz.sounder.fm/episode/news-01212021

    Subtext

    Avoid the chaos of social media and start a conversation that matters. Subtext’s message-based platform lets you privately ask meaningful questions of the tea experts, academics and Tea Biz journalists reporting from the tea lands. You see their responses via SMS texts which are sent direct to your phone. Visit our website and subscribe to Subtext to instantly connect with the most connected people in tea.

    Subscribe to Subtext

    Subscribe and receive Tea Biz weekly in your inbox.

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