What tea professionals need to start the week. —

Hot tea gained market share in both the U.S. and Canada last year … an informative lecture on how marketers met the challenge of providing Mormons a hot drink… Dublin-based Research and Markets reports “green tea and herbals are the future.” Tea imports to South Korea spike… Teaity launches a new website and Village Tea Co. upgrades its e-commerce capability…Rotary International announces that a tea packaging executive will be the first Sri Lankan to sit as president… and tea lovers who like liqueurs can give Sidney Frank Imports’ new Bärenjäger Honey & Tea a sip.

Hot Tea Month

Americans are enjoying more hot tea in restaurants and at home. Following a growth spurt that featured sweet and flavored iced tea in fast-service restaurants, fresh brewed hot tea is now experiencing greater growth than iced teas and keeping pace with coffee but with much smaller market share.

• Sales of hot beverages grew 7% in the year ending July in both the U.S. and Canada while sales of cold beverages declined 1%. In Canada hot beverages hold 28.5% market share. In the U.S. hot beverages grew to 17.4% of the total beverage market.
• In the U.S. RTD tea grew by 2%, sales of loose leaf and tea bags grew 7% while roast and ground coffee sales grew 8% through July. In Canada sales of loose leaf and tea bags rose 3%, RTD declined 1% and roast and ground coffee sales grew 10%.
• A survey last month found 42% of Americans plan to increase their tea consumption in 2014. A third of Americans increased their tea consumption in 2013, according to the survey which was conducted by Teavana in connection with National Hot Tea Month. Young people lead the rapidly growing interest in tea among Americans. The young are most likely to prefer a green tea over other types of tea, according to a survey of 1,019 men and women, age 18+ during the week of Dec. 16-18.
• There are 360 tea and coffee manufacturing firms in the U.S., employing nearly 13,000 workers, and doing over $7.8 billion of business annually. Learn more from the U.S. Census Bureau, online at www.census.gov.

* Several retailers timed their release of new products to the annual National Hot Tea Month event popularized by the Tea Association of the USA.

Teavana unveils a Special Edition Golden Dragon Yellow Tea, its first yellow tea offering which is available for a limited time, beginning today.

“This unique tea offers captivating high floral notes that mingle with a smooth honeyed body and a subtle creamy, buttery finish,” said Naoko Tsunoda, director of tea development and tea authority, Teavana. “Yellow tea has long been prized in China for its limited harvest season and artisanal crafting process. The name ‘yellow’ tea refers to the unique processing and slow roasting of the tea leaves that produces a lovely, bright golden infusion color, but the rarity of yellow tea has also associated it with the imperial yellow worn exclusively by emperors for centuries.” The tea sells for $29.98 for two ounces.

Tattle Tea also used the occasion to release a new line of five limited-edition chais.

Tattle says its hand-blended teas encourage tea drinkers to expand their repertoires by trying new tea varieties as well as different steeping methods.

“At Tattle Tea we like to capture the season with our limited edition teas, and with National Hot Tea month falling in January we felt a line of warming chai teas would be the best way to celebrate,” said Anthony Borthwick, resident tea expert at Tattle Tea. “Chai is one of the best teas to help drinkers get through the tough winter months thanks to its blend of spices such as cinnamon, ginger and coriander. With our ‘Chai-Fest’ teas, we wanted to highlight the unique spices and showcase how they pair with a variety of different teas and flavors.” Teas include:

• The Queen’s Chai Black Tea – Made with Earl Grey black tea, rose petals and chai spices which are infused with real Oil of Bergamot.
• Mexican Hot Chocolate Chai Rooibos Tea– Starts with Red Rooibos tea and is flavored with Mexican chocolate then blended with chai spices, cocoa nibs and spicy African Birdseye chili.
• French Toast Chai Black Tea – A French toast flavored black tea blended with cinnamon and other chai spices.
• Honeybear Green Tea Chai – Made with Sencha green tea and flavored with honey and salted caramel then blended with chai spices.
• Forbidden Love Oolong Chai – A Devil’s Food Cake flavored Oolong, blended with rose petals and chai spices. Learn more: www.TattleTea.com

* The CDC estimates that more than 200,000 people will be affected by colds and flu this season. While a flu shot is highly recommended another natural preventative may be found in your tea cup, according to Beth Johnston, CEO at Teas Etc. in West Palm Beach, Fla.

Johnston reminds us of research reported in the Proceedings of the National Academy of Sciences that found that people who drank three cups of black tea per day produced five times the amount of germ-fighting cells than those who drank coffee, suggesting that tea drinkers have more ability to fight viral infections such as colds and flu than non-tea drinkers.

“January’s National Hot Tea Month can serve as a reminder to do something healthy for ourselves, like brew a hot cup of tea, which may provide a variety of health benefits, serve as a weight loss aid and help to ward off persistent cold and flu germs” according to the Tea Council of the USA. “What more could you ask for in a beverage?”

* In North Dakota, which has experienced a severe cold spell, Steep Me owner Terisina Hinz praises dark teas “because they’re loaded with probiotics. Probiotics resume your metabolism. It gets you ready to go in the morning. It’s not as caffeinated, but it makes you feel good; it keeps your body healthy,” says Hintz.

“As North Dakotans, we drink tea to stay warm, but once cold and flu season rolls around, it’s a good idea to drink it for the health benefits,” says Hintz.

Coffee Substitute Gives Mormons a hot drink

PROVO, Utah – The Utah Valley Chapter of the Historical Society is hosting what is likely to be a fascinating lecture at 7 p.m. Tuesday (Jan. 14) titled: “Quitting Tea and Coffee: Targeting the Mormon Market with Alternative Hot Drinks 1900 through 1930.” It is scheduled at the Provo City Library.

LDS Historian Melvin Bashore documents the challenge faced by marketers after the Word of Wisdom of the Church of Jesus Christ of Latter-day Saints excluded the consumption of alcohol, tobacco, tea and coffee for those who wished to remain in good standing.

“To the rescue came businesses with a whole host of alternatives,” said Bashore who illustrates the period with product slides and advertisements. “It was tea and coffee, not tobacco and alcohol, that seemed to be the substances that were the greatest stumbling block for otherwise faithful Mormons,” Bashore told the Daily Herald.

Local suppliers concocted many alternates. Postum was the most popular alternate, becoming available nationally. It is a powdered roasted-grain beverage created as a coffee substitute by C.W. Post in 1895. Postum reached the height of popularity during World War II when coffee was rationed and remained in production until 2007. In May 2012 Kraft sold the brand to Eliza’s Quest Food which offers Postum online. Learn more: Postum.com

The Future is Green and Herbal

A report from Research and Markets predicts the future of tea “is green and herbal.”

The report, released Dec. 11, notes that “while the Black/Other Teas segment is growing modestly (3.4% annually), production of Green tea is growing rapidly (11% compound annual growth rate CAGR) and Herbal Teas are growing exponentially (>15% CAGR).”

Despite the exploding demand for tea, little has been published on this market, especially the green and herbal segments, according to the Ireland-based research firm. Yerba Mate, Chamomile, Echinacea, Ginseng and Rooibos share many of tea’s health benefits which are a primary driver of sales growth.

Retailers benefit from continued publicity from green tea’s ability to cure and prevent various diseases. Recent research suggests tea is especially helpful for those concerned with heart disease, cancer, diabetes, neurological diseases, renal disease, dementia, oral health, intestinal problems, and strokes.

“Aging populations in Japan, Europe and the U.S. also are increasing demand for tea because of its anti-ageing properties,” according to the report which describes the global market as “very large and estimated at $15.4 billion in 2013, in terms of (wholesale) production value.”

Among Americans who are likely to prefer green tea over other types of tea, it is young people leading the way.

Learn more: “Tea: The Future Is Green And Herbal. Global Markets, Competitors And Opportunities – 2013-2018 Analysis And Forecasts“

Teaity Redesigns Website

CINCINNATI, Ohio – Teaity, a website designed for tea enthusiasts, has a new look and enhanced functionality. Added were six new features and nine improvements giving tea drinkers a more robust, user-friendly experience.

“During our first year we received overwhelmingly positive response to Teaity’s vision,” said founder Chris Giddings, adding “our members and supporters asked for some really thoughtful changes and improvements.”

Teaity listened, adding features that include:

• A Brand Directory to make searching easier;
• Settings for temperature and weight;
• New layout for the Tea Category Pages;
• More visible reviews and scoring system for the teas;
• A blog for users to stay up-to-date with Teaity, industry news, and tea tips;
• A new and improved Tea Timer easily accessible throughout the site.

“We’ve poured a lot of heart and soul into the new design and we believe our members and fans are going to really love it,” said Giddings. Learn more: www.teaity.com

Bärenjäger Honey & Tea

NEW ROCHELLE, N.Y. — Bärenjäger, the original honey liqueur, has released Bärenjäger Honey & Tea, a blend of premium honey and tea liqueur; and Bärenjäger Honey & Pear, a combination of premium honey liqueur and Williams pear brandy.

Bärenjäger Honey & Tea combines premium honey and tea liqueur made from all natural ingredients and no artificial flavors. The new spirit offers an herbaceous nose, a sweet black tea and honey taste and a long finish of lingering black tea notes.

Bärenjäger Honey & Pear is made with generous amounts of pure, real honey and high quality pear brandy sourced from Germany. These two line extensions join the growing portfolio which also includes Bärenjäger Honey Liqueur and Bärenjäger Honey & Bourbon which was launched in 2012.

The liqueur dates to the 15^th Century when the Eastern Prussian bear trap company, Teucke & Konig, first introduced Bärenjäger which translates to “Bear Hunter.” In an effort to end the struggle between man and bear, this sweet concoction was the first professionally produced Meschkinnes – mead-like moonshine made from honey by beekeepers and farmers – and was formulated to aid hunters attract bears and lure them from their dwellings.

Imported by Sidney Frank Importing Co., Bärenjäger Honey & Tea and Bärenjäger Honey & Pear is available nationwide in liter, 750ml, 375ml, and 50ml sizes. SRP is $28.99 (750ml). Learn more: www.sidneyfrank.com

Village Tea Company Announces New E-commerce Platform

NEW YORK,  N.Y. – Village Tea Company Distribution Inc., in partnership with Village Tea Direct has launched the company’s updated e-commerce platform, www.villageteaco.com.

The new site was developed and is hosted by Blue Sky Group, a digital creative marketing company based in Warwick, Rhode Island.  The site features a more product-focused interface with consumers which will enable existing and new customers to purchase their favorite Village Tea flavors in a more efficient manner.

“We are extremely excited about our partnership with Village Tea Direct. Our relationship and the new look site will allow us to generate additional revenue streams while we focus our efforts on continuing to grow the brand as well as our wholesale platform,” said Janon Costley CEO, Village Tea Company Distribution, Inc.

“As we enter into a new year, we will continue promoting our great tasting tea as an integral part of living a healthy and fit lifestyle” said Don Jones, CEO of Village Tea Direct. Learn more: www.villageteaco.com

Rotary Announces First Sri Lankan President

EVANSTON, Illinois — K.R. “Ravi” Ravindran, a business leader from Colombo, Sri Lanka, will be the 105^th president of Rotary International – a global network of 1.2 million volunteers dedicated to tackling the world’s most pressing humanitarian challenges.

Ravindran is founder and CEO of Printcare PLC, a publicly listed company and global leader in the tea packaging industry. A member of the Rotary Club of Colombo he will begin his one-year term on in July 2015 as the first Sri Lankan to hold Rotary’s highest office. Ravindran says a top priority will be to strengthen clubs by attracting men and women committed to improving communities worldwide through volunteer service.

After the devastation of the 2004 Indian Ocean tsunami, Ravindran led Rotary’s recovery efforts by helping to raise $12 million to rebuild 22 schools, enabling nearly 15,000 children to resume their studies. “The tsunami could take away schools, homes, possessions, and even loved-ones, but it would never be allowed to take away the spirit of children,” said Ravindran.

Ravindran was also involved in many other tsunami-related projects in Sri Lanka, Indonesia, India, and Thailand that were supported by Rotary’s Solidarity in South Asia Fund for long term recovery. Rotary clubs around the world contributed nearly $6 million to the fund. The projects include housing developments, orphanages, water and sanitation systems, solar oven technology, community-based credit unions, health centers, and the replacement of destroyed fishing trawlers.

As president, Ravindran will oversee Rotary’s top humanitarian goal of eradicating the paralyzing infectious disease polio. In 1988, Rotary helped launch the Global Polio Eradication Initiative with the WHO, UNICEF, and the U.S. Centers for Disease Control and Prevention. Since then, Rotary club members worldwide have contributed more than $1.2 billion and countless volunteer hours to the polio eradication effort. Learn more: www.rotary.org

South Korean Tea Imports Spike

SEOUL, South Korea — Korea Customs Service reports that the country imported 8,234 metric tons of tea in 2013, up 97% over the 4,171 tons imported in 2009.

The growth is attributed to tea’s health properties. “As demand is on the rise for healthy foods, imports of tea products also continue to rise,” a customs official told Yonhap News Agency.

The imports were valued at $48.38 million, a jump of 187% since 2009. Green tea imports more than doubled from 15 to 34 tons and yerba mate surged to a surprising 446 tons in 2013, up from 47 tons in 2009.

Tea exports remain small. The country’s outbound shipment of all agricultural products reached $5.72 billion in 2013, up 1.4% according to the Ministry of Agriculture, Food and Rural Affairs. Japan is the largest importer of Korean goods, China is second.

Korean tea exporters shipped approximately $600 million in coffee, tea, mate and spices in 2013, according to Business Search Service. Approximately $35 million of this total was shipped to the U.S. The service does not break out figures for tea.

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Tea Biz serves a core audience of beverage professionals in the belief that insightful journalism informs business decision making. Tea Biz reports what matters along the entire supply chain, emphasizing trustworthy sources and sound market research while discarding fluff and ignoring puffery.

Tea Biz posts are available to use in your company newsletter or website. Purchase reprint and distribution rights for single articles or commission original content.  Click here for details.

What tea professionals need to start the week..—

Assure your customers who are resolved to lose weight that tea really does burn calories¹… Tetley just launched a blend of green and black tea to bring tea drinkers the best of both… author Jeff Fuchs describes in a video interview an arduous 5,000 kilometer trek for his 2008 book The Ancient Tea Horse Road… India will subsidize construction of micro factories to help small growers improve tea quality… Matt Bucklin’s PowerPitch that Quit Tea helps you break free of cigarettes got two thumbs up last week and for those high-energy types who never need a New Years diet Dosha Tea Pops will satisfy your lollipop cravings.

Health

Can Tea Really Help You Lose Weight?

As calendars flip open to a new year, resolutions are made, many having to do with weight loss. Soon thereafter tea sellers will start to hear the popular question: “What is the best tea for losing weight?”

Some in the industry are strong believers in the idea of tea as a panacea, that it can help with all aspects of health, including weight loss. Others are firmly committed to encouraging a love of tea without focusing on health benefits, worried that its impact might be overstated. A third contingent find themselves somewhere in between, unsure of what is proven and what is lore. Fortunately there are now updated reports that help to present the latest information in clear documents.

In December 2013 the American Journal of Clinical Nutrition (AJCN) contained twelve reports from the Fifth International Scientific Symposium on Tea and Human Health (Sept. 2012). One of the summary papers was titled “Catechin- and caffeine-rich teas for control of body weight in humans.”

In the AJCN report, it was indicated that studies showed a combination of tea’s polyphenols and its caffeine resulted in an increase in calorie burn in tea drinkers. A further review found that study participants who consumed green tea and caffeine over a 12 week period without changing other components of their diets, lost an average of 2.9 pounds. The population-based studies continued the good news for tea drinkers. People who consume tea regularly have lower Body Mass Indexes (BMI) than those who do not drink tea. They also had less overall body fat.

In summary, it appears that tea has the potential to have a positive impact on weight control. As for the perfect tea for weight loss? As a wise teacher once told me, “It’s the one that they’ll drink regularly.”

¹Catechin- and Caffeine-rich Teas for Control of Body Weight in Humans
Researchers: Rick Hursel and Margriet S Westerterp-Plantenga
Am J Clin Nutr 2013 98: 6 1607S-1610S. October 2013.

Retail

Reily Foods Acquires New England Tea & Coffee

NEW ORLEANS, La. – Reily Foods has acquired New England Tea & Coffee Company, a Massachusetts-based firm in operation since 1916.

New England Tea & Coffee is one of the largest independent coffee roasters in the country with a line of bagged and flavored coffees, teas and single-serve capsules. The company’s packaged coffee is available in supermarkets across the U.S., online and brewed at more than 5,000 foodservice locations.

Terms were not disclosed and day-to-day operations will be as usual, according to Reily, a New Orleans, Louisiana-based food manufacturer and distributor.

Reily brands include Luzianne Tea, Luzianne Coffee, French Market Coffee, CDM Coffee, JFG Coffee and several condiments, dressings and sauces. Learn more at: www.reilyfoods.com.

Origin

KOLKATA, India — India’s tea estates are near capacity giving small growers a critical role in meeting domestic demand, according to outgoing Tea Board Chairman M.G.V.K. Bhanu.

A steady and judicious investment in tea estates is critical for survival of the tea industry, said Bhanu, citing the fact that small growers already account for 35% of the billion kilos India produced last year. Bhanu cautioned tea companies “to set aside a sizable portion of their surpluses for ploughing back in replantation and irrigation” and he urged a larger allocation of government funds to small growers.

Production in a majority of big gardens has virtually reached the saturation point, he told the Hindu Business Line. In the absence of regular investments on maintenance of tea estates, production of green leaves would continue to decline.

Annual exports have remained around 200 million kilos for the past half century, while domestic demand is booming, he said. Small growers, newly defined as those with holdings up to 25 acres (10 hectares) are ideally positioned to meet an estimated annual increase of 30 million kilos per year purchased by domestic tea drinkers. In five to seven years small growers are expected to produce 50% of the country’s tea.

Bhanu has championed subsidies for growers willing to operate mini- and micro-factories. This will improved freshness by cutting transport time, raise plucking standards and reduce handling of green leaf from small gardens, said Bhanu. Micro factories are those producing less than 200 kilos a day. Mini factories produce more than micro factories but less than 500 kilos daily. Neither will be required to register under the Tea Marketing Control Order, 2003. This will relieve small operators of expensive paperwork and regulations necessary for large factories. A subsidy of up to 40% is available for the cost of machinery, construction and improvements (excluding the purchase of land) of their factories.

Bidyananda Barkakoty, Chairman of North Eastern Tea Association (NETA) to the Hindu that “If the small tea growers are able to set up their own factories within their plantation area the quality of tea will definitely improve because of improvement in plucking standards, less transportation time and less handling of green leaf. It will also generate huge employment at local level.”

The emphasis should be exporting quality and value-added tea and the focus should be on countries such as the U.S., Russia, Iran, Egypt and Kazakhstan. “The opportunities held out by Pakistan should also be carefully explored,” he said.

Training, motivating and retaining tea workers is a challenge. “Garden owners in North India must take care of their workers; otherwise there will be shortage of manpower as it has happened in south Indian gardens,” Bhanu to The Hindu Business Line.

Sources: The Hindu and The Hindu Business Line

Retail

Sweepstakes Helps “Get Your Bits Fit”

NEW YORK, New York – TEAS’ TEA® will award Fitbit Flex Activity™ Trackers daily through January to help consumers keep their New Year’s Resolutions.

The wireless wearable devices sync to smartphones or computers to track physical activity stats, helping motivate daily fitness goals. Consumers can enter every day on the TEAS’ TEA® Facebook page, for a chance to win one of these fitness wristband devices.

To enter visit Facebook.com/itoen.teastea or #GetYourBitsFit.

Learn more at www.teastea.com

Innovation

Tetley USA blended black and green teas to achieve the full flavor of black tea and the health benefits of green tea, without the bitter taste often associated with green tea.

“We have heard from consumers that they would like to drink more green tea for its renowned benefits, but aren’t always happy with the taste,” said Tetley USA’s Marc Birnbaum. “With our new Black & Green blend, tea drinkers don’t have to compromise.”

Tetley Black & Green blend is available in a new flip-top 72-ct. box.  Tetley and Good Earth Tea are owned by Tata Global Beverages. All Tetley branded tea will be Rainforest Alliance certified by 2016, according to the company.

Dosha Tea Pops Promote Ayurvedic Lifestyle

Everyone needs to occasionally satisfy a craving for sweets and Dosha Pops tea-based lollipops meet the need. Finding balance through Ayurvedic principles of holistic healing inspired founder Peggy Andrews to create the natural treat in flavors that include Chai Me Up (chai spice Tulsi and coconut), Head Over Hibiscus, Velvet Rope (Chicory) and Inner Glow (lemon, turmeric and ginger)

According to Ayurvedic beliefs, each person also has a unique pattern of energies like a fingerprint called “doshas,” said Andrews. “Through the use of herb mixtures, plants, teas, common oils, and spices, Ayurveda’s key mission is simple: to bring the dosha back into balance.

“We strive to offer healthful candies so that people don’t feel they need to totally abstain from sweets and can still feel good about eating them when they do satisfy their cravings,” stated Andrews. Learn more at: Dosha Pops

Health

Two years ago Matt Bucklin launched Quit Tea because replacing a bad habit with a good habit is easier than simply curbing a bad habit. His advice to Stop Smoking — Start Sipping caught the eye of Yahoo! PowerPitch producers and last week two of the three investors on the show gave him a thumbs-up. Bucklin had 60 seconds to make his case. He said that he came up with the idea after he quit smoking himself with the help of herbs. “It helps temporarily support willpower, improve lung health, detoxify the body, and reduce hunger,” said Bucklin. He calls it the Substitution Strategy for Quitting Smoking. The New York-based self-funded startup is two years old. Quit Tea is distributed nationally in retail locations like Whole Foods Market and Walgreens, and sold internationally in Canada, China, and Western Europe. Bucklin said 250,000 have tried the herbal supplement. Learn more at: www.quittea.com

Tea Horse Road
Elyse Petersen of Tealet sat down for tea and talk with Jeff Fuchs, author of The Ancient Tea Horse Road and Founder of Jalam Teas. For thirteen centuries, one of the planet’s most daunting journeys and most remarkable trade routes remained a mystery to all but a few journeyers and residents along its 5000 kilometer length. Elyse and Jeff discuss how Jeff found his way to the mountains of Yunnan trekking over the almost forgotten ancient trade route. Jeff also discusses the production and market for Pu-erh works and how to get your hands on the most prized teas of Yunnan, China. See the video on Vimeo.

Asides

 Drazil Kids Tea, a finalist in the Dream Big America competition didn’t win last week but co-founder Christine Wheeler was upbeat over the firm’s success. The caffeine-free organic blend of herbal teas infused with fruit juices is selling well in natural grocery stores and a hit with Christine’s four kids. Learn more at: Drazil Kids Tea.

Colder than Mars

Winnipeg drew the world’s attention briefly this week when scientists noted that the New Years Eve low of -37.9C was considerably below temperature readings from the surface of Mars. Airports recorded -53C degrees in parts of Manitoba Province last week while the Curiosity Rover in the Gale Crater on Mars enjoyed a balmy -29C. United Airlines canceled flights to and from the city for two days due to safety concerns. The Winnipeg Sun noted that December was the coldest month in 80 years and the second coldest in 120 years… temperatures (without wind chill) averaged -20.9C in the city of 635,000 last month about -10C degrees colder than the North Pole.

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Tea Biz serves a core audience of beverage professionals in the belief that insightful journalism informs business decision making. Tea Biz reports what matters along the entire supply chain, emphasizing trustworthy sources and sound market research while discarding fluff and ignoring puffery.

Tea Biz posts are available to use in your company newsletter or website. Purchase reprint and distribution rights for single articles or commission original content.  Click here for details.

Last week trading was halted on three crypto currency exchanges after it was revealed hackers stole 4,474 Bitcoins from the Silk Road 2.0 website.  Silk Road is a drug-selling black market whose technical staff blamed the loss on a “transaction malleability” bug in the Bitcoin software. The loss was valued at $2.6 million, according to an article in  Forbes.

Bitcoin developer Greg Maxell responded to concerns about Bitcoin security in a Q&A with Coin Desk News. He said coding done by the exchange is to blame. He admitted there is a known bug in early versions of the Bitcoin software, first identified in 2011. The bug has been fixed and old versions previously installed on servers are gradually being replaced but “this wouldn’t make the top ten list of dangers in the Bitcoin technology.”

Experts advise against keeping digital coins in an exchange or other online wallet services. Keep your coins in your own encrypted wallet to keep them safe from hackers. An escrow account with millions of coins is a tempting target for hackers.

Bitcoin has a current market valuation of nearly $1 billion but this is highly volatile. The valuation spiked in December then plummeted on regulatory concerns voiced by several governments. In January Bitcoins were listed at more than $900.

The incident involving Silk Road 2.0 has since led to questions about Bitcoin’s ability to prevent fraud. Last week the value of the currency fell 10% percent in a single day. TechCrunch writer Alex Wilhelm noted the “price of Bitcoin on Mt.Gox has cratered, again. It now rests just above $110. That’s down from around $260 the day before. Users are betting more heavily now that their Bitcoin on the exchange is never coming back.” The weighted value of Bitcoins based on multiple exchanges was $621.1 Feb. 23. Mt.Gox was excluded from the calculation as of Feb. 10.

Mt.Gox is a Tokyo, Japan-based firm that claims to be the largest of several exchanges trading Bitcoins. Mt.Gox suspended trading in mid-February due to technical difficulties leading to security concerns.

In a Feb. 17 open letter to its customers Mt.Gox announced it has a workaround that will use a unique identifier created by Blockchain to show whether transactions have been modified or not. This will prevent any fraudulent use of the malleability bug and “protect the assets of our customers.”

Mt.Gox added a new login system that emails customers accessing the account and advised customers to use two-step authorization.

Withdrawals will be permitted at “a moderate pace” and with new daily and monthly limits in place “to prevent any problems with the new system and to take into account current market conditions,” according to Mt.Gox.

Mishaps like the above will either strengthen merchant and consumer confidence in the ability of Bitcoin and similar currencies to address security issues or lingering uncertainty will sink them.

Learn more: Reddit, Tea Biz and Crypto Coin Talk

In January India’s central bank warned against the use of Bitcoins shutting down several exchanges and China has directed its banks and other financial institutions not to deal in virtual currencies. Germany’s Bundesbank voiced a similar warning while in Canada the first of five Bitcoin ATMs opened in a Vancouver coffee shop.

Germany’s central bank later joined several other European banks in warning of the “enormous” risks due to speculation but regulators have not banned the trade of digital currency.

The Reserve Bank of India expressed concern that trading Bitcoins could violate the country’s Foreign Exchange and Payment Systems laws and regulations since the currency has yet to be authorized by the central bank. Last week several Bitcoin exchanges halted trade in response.

Following these news reports India’s Commerce Ministry and Tea Board announced a review of transactions by tea growers accepting Bitcoins as payment for small consignments of tea. The country permits shipments of up to 4 kilos of tea without mandatory surveillance if sent by International courier.  Tea growers selling direct benefit using Bitcoin by avoiding currency and bank fees and service charges for credit cards.

Globally there are about 100,000 Bitcoin transactions a month according to the Bitcoins Association of India (BAI) but fewer than 1000 are made in India. Billions of transactions are concluded daily making it unlikely trade in Bitcoins and other cryptocurrencies threaten the stability of world currencies, provided that money creation remains at a low level. The BAI’s legal advisers said that trading in Bitcoins is not illegal, citing legal precedent in the U.S. and U.K.

Last month Ben Bernake, chairman of the U.S. Federal Reserve, echoed concerns that digital currencies present speculative risks but said “there are also areas where they may hold long-term promise.”

The Canadian ATM is operated by Vancouver-based Bitcoiniacs using a kiosk designed by Nevada-based Robocoin. It converts Bitcoins into Canadian currency and accepts Canadian bills, according to a report by CBC News. The ATM scans the user’s palm before transferring money from an online wallet via a QR code read by your smartphone. It then issues a paper voucher for the transaction. The machine is installed at the Waves Coffee House. Bitcoins are accepted by at least two dozen Vancouver retailers.

The machines “make it easier for people to buy and sell Bitcoins and hopefully will drive the adoption of Bitcoin, and make it more accessible,” Bitcoiniacs owner Mitchell Demeter told CBC News. The company plans to install four additional ATMs in major cities including Toronto and Montreal. Rules of the Financial Transactions and Reports Analysis Centre of Canada — also known as FINTRAC — aren’t as strict as regulators in the U.S. The coins are traded on Canada’s VirtEx exchange.

While not against the law, trading in Bitcoins is speculative. In December Bitcoins demonstrated their volatility after rising to a high of $1242 (the price of gold) before falling to $600 in 48 hours between Dec. 5 and Dec. 7 on word the Chinese government would not allow its banks to trade directly in Bitcoins. China blocked the country’s Bitcoin exchanges from accepting new cash in what has been Bitcoin’s largest market.

In February Bitcoins are trading at $621 making the cumulative value of the 12 million outstanding Bitcoins about $13 billion in U.S. dollars.

See: Bitcoin Primer

To insure scarcity the supply is capped at 21 million coins, a number that is expected to take 126 years to digitally mine. All currencies are volatile and subject to inflation over time but few could fall to zero since they are backed by governments large and small.

Meanwhile an increasing number of retailers are accepting Bitcoins. To minimize risk the coins are quickly exchanged by online ventures such as www.bitplay.com which processes payments for more than 12,000 retailers in 30 countries. Participating retailers are typically online ventures that range from small companies like Mad Over Coins and the Bitcoin Mega Store to Hawaii-based Tealet and giants like Overstock.com with more than $1 billion in annual revenue.

Timothy Lee in Forbes argues that Bitcoin is less useful as a retail currency and more likely to find its place serving niche segments like transferring funds without the expense of hiring Western Union or as a meta currency facilitating the exchange of world currencies since Bitcoin allows wealth to be transferred across international borders without the expense or government scrutiny that comes with traditional wire transfers.

Are you considering accepting Bitcoins? Click this link to see TIME Magazine’s informative video introduction and share your thoughts with Tea Biz readers below.

Sources: Bloomberg BusinessWeek, TIME, CBC News, The Hindu Business Line, Forbes

Learn more at:
Bitcoin.org and Bitpay.com and BitcoinFoundation.org and BitcoingCharts.com and BitcoinMagazine.com

Last updated: Feb. 24, 2014

What tea professionals need to start the week.

Support tea innovator Christine Wheeler, founder of Drazil Kids Tea, as she competes Tuesday (Dec. 31) for the Dream Big America prize… Sri Lanka will pass the $1.5 billion mark for tea exports, setting a record… British Airways has perfected a tea that tastes great at 35,000 feet… India’s tea plantations will lose subsidies on food grains for workers…. Assam will star in a documentary on its historical importance in the commercialization of tea… Farmer Brothers launches a premium hot tea line… and BevNovations unveils Silence Tea to help you relax…

Retail

Farmer Bros. Co. has launched a new line of Premium and Select hot teas. The Premium and Select lines feature a full range of high quality black, green, and herbal teas in both classic and exotic flavors. This latest release from Farmer Brothers offers operators a comprehensive line of hot teas catering to the preferences of nearly 85 percent of U.S. tea drinkers.

Tea offerings in full-service restaurants have grown 53 percent as consumers increasingly look for a hot tea option, particularly at breakfast, according to research cited by the company.

“Even factoring in the cost of typical disposable cups (8oz. hot cups) and common sweeteners like sugar and zero-calorie alternatives, both hot and iced tea can provide up to an 80 percent profit margin on these beverages, making these tea lines a high-value addition to most menus,” according to Data Essentials, Proprietary Study.

Packaging has been completely redesigned to enhance consumer quality perceptions.

Source: Farmer Bros. Co.

Relaxation tea

Marketing experts BevNovations this month launched Silence Tea a 16-oz. bottled blend that “combines the finest tea leaves in the world with other natural ingredients known to soothe the mind, body and spirit.” The all-natural beverage activates the seven Chakras and is the first line of relaxation and calming beverages with essential vitamins and antioxidants, according to the company. The decaffeinated teas contain Chamomile and Theanine. The tea is available in four low-sugar flavors: Pomegranate Black Tea, Peach White Tea, Lemon Black Tea, and Honey Green Tea. It will be stocked in gourmet, natural and specialty food stores, grocery and convenience outlets, according to BevNovations. Learn more: Silence Tea

Origin

Subsidized grain deliveries cut

Tea plantation owners in Assam were notified that beginning next month they must purchase food grains at market prices for 800,000 workers until they are covered under National Food Security Act (NFSA). Implementation of NFSA will be delayed until February.

Eligibility cards are to be given workers by Feb. 15 with distribution of food grains unlikely to begin before March 2014, according to The Business Standard. Garden owners are provided subsidized grains in bulk at prices about one third of market rate from the Food Corporation of India (FCI).

“I don’t understand stopping the food grain allocation now,” Dipanjol Deka, secretary of Tea Association of India (TAI) told the newspaper. “Furthermore, I am doubtful if they will be able to roll out NFSA by March. Do you think our state government has become so efficient,” he asked.

Deka said that he fears that if supplies are stopped even for a brief period, it will fuel unrest and violence in tea gardens. Switching to a new system of procurement all of a sudden for such huge quantities would not be practically feasible, he said.

Assam’s government is currently distributing 7000 metric tons of rice and 5000 metric tons of wheat per month to growers a practice that began in 1950.

Source: The Business Standard

Assam in the limelight

Tea was commercially planted first in Assam which remains the world’s greatest concentration of tea bushes. This month the Tea Board of India agreed to finance an historical documentary film, dating to the discovery of tea there by Scottish adventurer Robert Bruce.

SEE: Namsang Tea Estate for the story of Robert Bruce and Maniram Dewan.

The film was proposed by Bidyananda Barkakoty, a representative of the Joint Forum of Assam Tea Planters’ Association (ATPA), North Eastern Tea Association (NETA) and Bharatiya Cha Parishad (BCP).  The board allocated $6,500 for the project.

Sources: Times of India

Sri Lanka tea exports reach $1.5 billion

Strong demand for Sri Lanka’s Ceylon tea will generate $1.5 billion in exports this year.

Siyaka Research estimated the country had exported 290.6 million kilos through November and would exceed 320 million kilos by year end.

Top export destinations include Russia and Iran and Syria and Libya despite civil unrest. Prices held firm despite a glut of black tea in Kenya where prices in Mombasa fell to a four-year low.

Sri Lanka exported $1.49 billion of tea in 2011 and $1.40 billion in 2012.

Source: Lanka Business Today and The Daily News

Innovation

Several studies demonstrate that food and beverages are a third less tasty at 35,000 feet.

This is due to low cabin pressure that decreases the ability of taste buds to detect saltiness and sweet and to dry air that reduces our sense of smell.

British Airways has introduced a blend of Assam, Kenyan and high-grown Ceylon that enhances the flavors and aroma of tea bringing it in line with the experience of earthbound tasters. The tea is served on flights originating in Mumbai. Learn more: DNA India

Accolades

Drazil Kids Tea competes in startup competition

Christine Wheeler, co-founder of Drazil Kids Tea, a naturally caffeine-free organic blend of herbal teas infused with fruit juices, is a finalist in the Dream Big America competition, a live nationally syndicated radio show pitting startup business ventures against each other.

Wheeler was the top vote-getter Dec. 16, securing a spot in the Dec. 31 Finals Show. Drazil Kids Tea contains 50% fewer calories and 35% less sugar than most kids beverages. There is no added sugar as all sugar comes naturally from the fruit juices. It also provides a good source of antioxidants and 100% daily value of vitamin C.

Get In The Ring: The American Startup Clash was founded by the Erasmus Centre for Entrepreneurship. It provides exceptional entrepreneurs an opportunity to compete against founders from across the country and around the world.

“Get In The Ring perfectly aligns with our mission at Dream Big America,” explained host Doug Stephan. “Each Tuesday we showcase the amazing entrepreneurs in the country, and give them a chance to share their story with America.”

Dream Big America airs from 9:10 to 9:40 a.m. ET on Tuesdays on the Doug Stephan’s Good Day Program which is syndicated in more than 500 markets across the U.S. It has a weekly listening audience of 3.5 million. The show can also be heard via live podcast on the www.DreamBigAmerica.us website.

Voting begins immediately after the show at 10 a.m. ET and continues for 28 hours until 2 p.m. Wednesday. Voting is by text (Text DBA to 612-22-DREAM (612-223-7326)). Learn more at: Dream Big America

Founders questions answered by Christine Wheeler on the Dream Big website:

1. How do you define success?

For me, success is not just about the outcome, it’s also about the journey. It’s reaching for the goals you set out for yourself both personally and professionally. Of course no one reaches every goal but it’s that desire to make and pursue goals that’s important. My favorite quote is, “I never said it was going to be easy. I said it was going to be worth it.” This applies to all aspects of life – starting a business, raising kids, eating healthy, etc. Life is not always easy but dreaming big and striving for those dreams is what a successful life is all about.

2. What has been your proudest moment as a founder?

My proudest moment came in one of the company’s darkest hours. We had a major setback right at launch. The delay would be at least 6 months and make us lose all the momentum we had going. Most teams would have fallen apart at this moment, especially given the long road it took us to get to this point. Not the Drazil team. We pulled together, figured out what we had to do, and then invested a lot of additional time to get it done. I had such a sense of pride, knowing that I had a great team and that we created a product that we all believed in.

3. What has been the toughest decision you’ve made during your time as a founder?

The toughest decision I made was not to roll out with our initial product. Drazil had been in a small test market and just got accepted into a large distributor that would have dramatically increased our number of stores. While the product was selling pretty well and consumers loved the idea of a kids’ tea, I felt there were still changes we needed to make to better meet the needs of consumers. The beverage category is so competitive that we needed to launch with the best product possible. Thus, we took everything we learned from the test market and developed the current Drazil Kids Tea line. Looking back, I am very happy I made the tough decision not to launch and instead, spend the time and money to reformulate our initial product.

4. What have you learned about yourself during this startup process?

I learned that I could not have done it without the support of family and friends. While starting a business is thrilling and fun, there is a level of stress that never goes away. Not to mention, there will always be set backs. Having the support of my family and friends has helped me get through the tough times. I believe staying positive and keeping strong mentally will enable you to win most of the battles faced as an entrepreneur.

5. What advice would you give to another budding startup company?

Do your homework first. Understand the market you are entering, the consumer need and the current competition. Don’t be dismayed if you find a similar product but make sure you understand how your product or service can compete and win against the competition.

6. What are your next milestones as a company? What kind of support and resources do you need to achieve these milestones? 

With our initial angel investment, we worked hard to get the concept and product right and prove it out in market. Our launch in Northern California helped us better understand the marketing expenditures needed to generate trial and awareness. Now we want to obtain additional funding in order to expand Drazil Kids Tea to other western states and generate sales in larger retailers.

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Tea Biz serves a core audience of beverage professionals in the belief that insightful journalism informs business decision making. Tea Biz reports what matters along the entire supply chain, emphasizing trustworthy sources and sound market research while discarding fluff and ignoring puffery.

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What tea professionals need to start the week.

Holiday sales are strong with online surging. Starbucks breaks loyalty card record but fewer shopping days since Thanksgiving limited brick-and-mortar traffic. ShopperTrak reported that store traffic during the week of Dec. 15 dropped 19.9%… Tealet Discusses Benefits of Bitcoin Transactions…export earnings in Sri Lanka rose 10.7% through November… Farmer Brothers introduces a new line of premium tea… severe frost in the Nilgiri Mountains of India will depress yield…. the Pew Research Center released a fascinating chart comparing beverages worldwide. 

Retail

Holiday sales of tea look strong. Tea Biz talks regularly with retailers who report welcome demand for their gift lines and seasonal specialty teas with better than expected online sales. The U.S. Census Bureau estimates the greatest sales gains are in big-ticket items with an estimated 8% growth in appliances and electronics, and furniture and home furnishing stores with sales up 9.4% compared to last year. The National Retail Federation (NRF) estimates 3.9% gains overall. Online sales are breaking records accounting for almost 40% of all spending. Online retailers have benefited from a compressed holiday season, with six fewer days between Thanksgiving and Christmas this year, according to The NPD Group. The weekend after Thanksgiving saw a 34% increase in electronic-commerce transactions over 2012. Starbucks is selling 1,500 loyalty/gift cards a minute with a record 2.4 million cards loaded in single day last week (Dec. 19). Today is likely to exceed that total. During the 2013 holiday season $1.4 billion was loaded. The company reports that $4 billion has been added to its cards in the past year.

Bitcoin Option for Tealet Transactions

Consider for a minute the challenges faced by tea retailers attempting to deal direct with specialty tea growers in 50 countries.

In addition to shipping and postage* there are cross-border fees and currency exchange fees, bank charges to transfer funds, credit card transaction and merchant fees and significant fluctuations in currency over time. The Indian rupee for example is trading at INRs 62 against the U.S. dollar and INRs 101 against the British pound. A few months ago INRs 50 bought a dollar’s worth of goods. In late August the exchange rate hit an all-time low of INRs 69.

Tealet is an online marketplace where retailers can source handmade artisan tea. Founder and CEO Elyse Petersen employs a novel approach to facilitating these transactions while lowering cost. Her firm accepts a digital cryptocurrency known as Bitcoin and she is teaching growers the advantages of doing the same.

SEE: Bitcoin Primer 

“Since getting involved with the movement I have learned much about the power of Bitcoin to make international business more efficient,” says Petersen, whose business is based in Hawaii but trades with small growers in all the tea lands.

Growers ship their tea to Tealet’s warehouse in California for distribution to subscribers and to be sold in bulk to retailers.

“I like to compare Tealet’s use of Bitcoin to pay our growers to the role tea played in establishing the world’s first trade routes,” said Petersen. Vendors along the long and treacherous Tea Horse Road accepted bricks of tea from the Chinese as payment for food and supplies, she explained.

“Tea served as one of man’s first forms of currency so it is very appropriate that the next innovation of currency is being applied to the tea industry,” said Petersen.

“This year we started to accept Bitcoin as payment for our growers’ tea and it has been quite successful. We receive the payment in full without having to pay 3% Paypal or credit card fees (right now we pay 0% with Coinbase),” she said. PayPal charges 3.9% plus 30-cents per transaction for receiving payments under $3,000 from buyers outside the U.S.

“We thought that if we could take advantage of Bitcoin’s efficiencies in accepting payment: Why can’t we take advantage of it for paying the growers?” she said.

Tealet has not executed the project but is building the groundwork for connecting the growers’ bank accounts to an exchange that will convert Bitcoin into their local currency. “The fees associated with this service are only 1% of the transfer amount, versus 10% that farmers are currently paying if they use Paypal,” said Petersen.

Her goal is to bypass the banking and online payment systems just as Tealet bypasses tea importers, distributors and middle-men in the supply chain.

“My plan is to have a protocol ready for all growers by the Spring of 2014. Team Tealet will do an aggressive sourcing trip to meet all our grower partners and help them learn about Bitcoin so we can start using the digital currency to pay for their teas,” she said.

“We are really excited about the project and feel we have taken on responsibility for inspiring other businesses that they too can benefit from using Bitcoin,” said Petersen.

*Three Kilos

Anyone sending Christmas packages this month has a much lighter wallet.  My own cost for mailing several small parcels to family and friends topped $145.

Sending three kilos of tea from Chicago to India requires a drive to the local Post Office and costs $75.25 adding approximately $25 to the wholesale price per kilo. Sending the same 12x12x24-inch package via UPS will cost $87 adding $30 per kilo. By comparison, shipping a container of tea brings the shipping expense down to $1 per kilo.

Now consider the reverse.  The same 7 pound (3 kilo) parcel sent from India SAL (Surface-Air-Lifted) or by Air Post costs around INRs 2,040 (US$32.92). Many opt to pay INRs 2,882 for Speed Post ($46.51) for delivery to the U.S. which sounds like a bargain until you consider the time and money involved in getting parcels to the Post Office. In India parcels must be presented at the post office in person and meet restrictive packaging guidelines. Gardens are quite remote so the first leg of the parcel’s journey could require a three hour ride over rough roads to a post office that can accept international or SAL parcels. Reimbursement for loss is limited to $56 and since loss and damage are common, insurance is necessary (and required). In the event of loss, compensation cannot exceed the value of the contents (to a maximum $1,615). If you use a reliable air freight service like UPS (Worldwide Expedited) the cost would be INRs 4,651 (US$75).

Source: India Post Rate Calculator 

Bitcoin Primer

World Tea News recently published an article I wrote on the emergence of many popular tea brands in Bitcoin’s new online MegaStore. Larger retailers with a thorough understanding of the risks should definitely consider accepting Bitcoins as this digital currency promises to significantly lower the cost of online transactions. 

The novelty of buying things with Bitcoins has a certain appeal to consumers but most of those who own Bitcoins are holding them tight anticipating an increase in value greater than current savings rates.

Prices for tea in the MegaStore (which lists 100,000 items and went live in August) are displayed as a percent of the current value of a Bitcoin. A single coin was trading for $US858 last week when the article was published. At that rate ?0.0842 was the equivalent of US$72. Today Bitcoins are trading for $US634 making a dollar worth ?0.00157.

This volatility illustrates one of the obstacles to widespread use of any peer-to-peer payment system. To insure that Bitcoins remain “rare” there are only 22 million in circulation. This means that even small numbers of speculators trading Bitcoins will alter its value in the market.

The fact that the currency lacks liquidity and is accepted by only a small (albeit fast-growing) number of vendors suggests Bitcoin will emerge as the strongest of the cryptocurrencies but anyone can create a competing product, make it equally scarce and useful provided enough vendors accept it as payment.

Critics point out that Bitcoins are not legal tender and therefore are not regulated by legal tender laws. Bitcoins have no intrinsic value which means if they fall in value, unlike gold and silver, they could fall to zero. There is no government backing, no Federal Deposit Insurance Corp. rescue plan. Bitcoins are not going to replace the U.S. dollar.

All that said, there is value in a frictionless exchange of a universal currency that is not subject to geopolitical influence. The payment system is transparent and math-based, not subject to government manipulation. It protects against identity theft. It is private but not anonymous to guard against money laundering and fraud. Bitcoins will grow in popularity so long as online purchases require credit card authentication with its requirements of a billing address and the burden of fees and onerous service charges.

Compared to existing payment systems Bitcoin is almost as handy and frictionless as cash.

Learn more at: Bitcoin.org and BitcoinFoundation.org and BitcoingCharts.com and BitcoinMagazine.com

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Tea Biz serves a core audience of beverage professionals in the belief that insightful journalism informs business decision making. Tea Biz reports what matters along the entire supply chain, emphasizing trustworthy sources and sound market research while discarding fluff and ignoring puffery.

Tea Biz posts are available to use in your company newsletter or website. Purchase reprint and distribution rights for single articles or commission original content.  Click here for details.