• Need to Know | Pandemic

    Tea Industry News for the week of April 27

    • The Pandemic’s Impact on Specialty Tea
    • Starbucks Reports 60-70% Decline in US Sales
    • McKinsey & Co.: Consumers Are Readily Abandoning Brands
    • Sri Lanka: March Tea Exports Drop by Half
    • Retail Innovations: Samovar Tea Lounge Offers Free Meal Monday.
    Sri Lanka tea gardens are practicing safe harvesting techniques making up for lost weeks following government-ordered closures. Photo courtesy Lumbini Tea Estate/Gayan Samaraweera.

    It is too early to predict the impact of a looming economic downturn with accuracy. Still, a mid-April survey of U.S. tea retailers by Sinensis Research found that 81.8% of the specialty tea business has laid off staff, with 31.7% of American tea shops temporarily closed.

    Abraham Rowe, who conducted the survey, reports 2.3% of tea businesses are permanently closed two months into the crisis. “I expect this number to increase if the lockdowns last through the end of May,” he said.

    “Many of the businesses still operating report that they expect to close if sales do not pick up, or if they are unable to secure assistance in the form of loans or grants to continue operations,” according to Rowe.

    “Specialty tea business revenue is expected to decline to 65% of 2019 sales, suggesting an overall loss of about $133 million to $154 million in tea sales by specialty tea vendors, and likely much greater losses from coffee shops and cafes that sell specialty tea,” writes Rowe.

    “The coronavirus pandemic has devastated people and businesses across the world,” says Rowe, but “it’s too early to get a complete picture of the pandemic’s damage to the industry.”

    • Around 9,200 of the jobs held by tea professionals are gone. The average number of staff laid off at closed business is approximately 10, and at open businesses around 5. Layoffs and store closures represent a “devastating loss of talent and expertise” since the crisis first curtailed business activities in March, according to Rowe.
    • Most tea business owners remain optimistic. Rowe found that 93.3% of shop owners expect to reopen after the pandemic has ended and restrictions are lifted.
    • The number of businesses selling online has increased by 7%, and many companies have noted a significant increase in online sales and curbside pickup.
    • Shops that weather the initial lockdowns “can expect sales to decline between 20% and 80% this year, depending on their region and the extent to which the shop had to close or change their business model.”
    • Supply is becoming a challenge: 31% of open businesses report supply chain interruptions.

    Revenue Forecast

    Assuming that restrictions limiting normal operations last six months, “I predict 2020 revenue to decline to about 65% of the estimated $340 million to $400 million in 2019 sales,” said Rowe, adding that 96% of businesses that remain open expect revenue to decline for the year. “Very few of these businesses expect to grow in 2020,” he said.

    A massive portion of specialty tea is sold by cafes and coffee shops, many of which are currently closed. “The number of businesses doing in-store bulk tea retail has declined by almost 50%, and the number of businesses serving prepared specialty tea has declined by more than 50% — afternoon tea service has ended almost entirely in the United States,” he said.

    Rowe cautions, “these data only represent the impact on the retail market, and not the wholesale market, though a few comments on the impact on the wholesale market are included in his report.”

    “I suspect that the wholesale tea market has seen even more damage than the retail market because of this, with revenue declining perhaps as much as 75% or more,” he said. Tea shops have reported that tea wholesale to foodservice clients has declined to zero, and it seems possible that larger wholesalers are feeling this same impact.

    Rowe, who founded Sinensis Research in 2019, said his firm is providing research on the pandemic and its impact on the tea industry at no cost.

    “Please support this research by exploring our products, such as the State of the Industry Report ($29.95). If you’d like to work with us to get up and running as an online store and get sales moving again, get in touch,” he said.

    See related: Tea Shop Closings.

    Starbucks Comps Decline
    While Starbucks reported a decline of only 3% in comparable U.S. store sales for the quarter ending March 29, same-store sales plummeted 65-70% as the new quarter began, according to executives. Half of the company’s U.S. stores are now closed, leading to a 46% decline in earnings. Most workers will return to cafés in May, and the chain expects to reopen most closed locations in June, according to Good Housekeeping Magazine. Full-year revenue is expected to decline by almost 10%. In 2019 same-store fourth-quarter growth was a positive 6% for the U.S. division.

    Consumer Behavior Insights

    McKinsey & Co. is closely tracking changing consumer behavior in response to the COVID-19 crisis.

    “Consumer behavior has changed across several dimensions: consumption by category, channel selection, shopper trip frequency, brand preference, and media consumption. These shifts, combined with forecasts for virus containment and economic recovery, are critical for commercial strategies,” according to McKinsey. Beverage sales in the grocery channel were up 36% during the period March 1-21, a situation that has led to restocking issues as consumers stocked up. Consumers are making 15% fewer shopping trips and buying enough for two or more weeks.

    “Our research found that 30 to 40% of consumers have been trying new brands and products. Almost half of these consumer switches are because the desired product is unavailable, while an additional 19% decided to purchase cheaper available options. Of the consumers who switched brands, 12% expect to continue to purchase the new brands after the pandemic,” writes McKinsey.

    Sri Lankan Tea Exports Decline

    The bottom fell out of Sri Lanka’s generally robust tea export market in March following dismal yields in February. Tea export volume and value each declined by half compared to March 2019. Tea in packets dipped to 6.3mn kgs from 12.7mn kgs in 2019. Production of teabags dropped more than 1 million kilos from 2.4mn kgs in 2019 to 1.3mn kgs in March 2020. Revenue for all categories of tea was SLRs11.6 billion ($60.1 million) in March 2020 compared to SLRs22.5 billion ($116.7 million) in March 2019, as reported by the Daily News. Anil Cooke, managing director at Asia Siyaka brokers, explained that export activity virtually came to a halt before the government agreed that growing and processing tea is an essential industry.

    Retail Innovations

    Samovar Tea Lounge in San Francisco introduced Free Meal Monday in April and has since served 1,100 customers a free lunch of rice stew with vegetables, eggs, and tea. The give-away promotes sophisticated Samovar Life subscription meals starting at $19 for breakfast, $27 for lunch, and $37 for dinner. Meals are delivered Thursday through Sunday, and pickup service is available at all three of the 20-year-old tea room’s locations. Shipping is free from the company’s online tea store. The company is also delivering groceries.

    Free Meal Monday

    “We’ve never launched so many programs in such a compressed amount of time and while facing so many challenges.”

    Samovar Founder Jesse Jacobs

    From its inception, Samovar founder Jesse Jacobs viewed customers as a community celebrating the tea lifestyle. That is why he chose the URL: www.samovarlife.com.

    Jacobs generates more than $1 million a year at his tea lounges, which feature wholesome food and superior tea. He is grateful to customers, rewards loyalty, and is genuinely concerned with their well-being. He will soon launch a virtual meditation and tea tasting. “I just keep waiting for word that the covid-19 situation has a clear solution, some clean exit plan that gets things “back to normal.” But the reality is, well, more sobering,” he writes. Check out his latest blog post: Reality As It Is: What a U.S. Admiral and Burmese Meditation Master Taught Me About Surviving the COVID-19 Pandemic.

    Upcoming Events

    The U.S. will report 1QTR GDP on May 1. Globally the impact on economies is “fairly catastrophic” writes market researcher firm Statista.

    Singapore reported its economy contracted by 10.6% between January and March despite having initially kept the virus in check. The historic and unprecedented drop in Chinese GDP of 6.8% already made headlines. Japan’s economy contracted by an annualized 7.2% in 4QTR 2019 and is expected to decline another 5% in 1QTR 2020.

    Central Banks in France and Italy have projected quarterly losses between 5% and 6%. Experts expect the U.S. economy to contract by 5-10% and the UK economy by as much as 13%.

    Global 1QTR GDP

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    Dan Bolton

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  • Need to Know | Changing Consumer Behavior

    Tea industry news for the week of April 20

    • Monitoring Consumer Behavior
    • Record Prices at Colombo’s Digital Auction
    • Kenya May Ban Direct Tea Sales
    • Physical Distancing on 1,500 Acres in Assam
    • Private Investors Back Millennia Flash-Frozen Tea

    Monitoring Consumer Behavior

    Datassential surveys consumers weekly and hosts a Friday webinar Food + Coronavirus to share what they have learned about fast-changing consumer behavior. The presentations are free. Mark DiDomenico is director of consumer solutions at Datassential. He told participants during a webinar hosted by the National Coffee Association last week that American consumers at this point are more worried about their health than wealth (health concerns peaked at 67% April 1 and remained at 61% the week of April 8). Respondents (64%) consistently say they will “definitely avoid” eating out.

    When asked “since the onset of social distancing, where have you cut back on spending?” eating at restaurants topped the list at 57%.

    “Consumers are avoiding risk but also seeking ways to adjust,” said DiDomenico, who cited examples such as cooking from scratch (42% say they do this more often), eating comfort foods (+33%), stress eating (+24%), and drinking alcohol more often at home (+14%). Moving forward? “Consumers are likely to avoid buffets and salad bars. Half say they will order for delivery (and disinfect delivery packaging), he said. Shopping for food online (+22%) is a new behavior that is very likely to stick, he said.

    Global Impact

    David Parnham, Research Director at Café Culture in Australia, recently completed a report on the immediate impact of lockdowns. The impact is sobering. While Australians were not strictly confined to their homes (New Zealand is in lockdown), a survey of cafe owners found that 19% experienced a 70-90% decline in sales, with an additional 19% reporting declines of 50-70% and 29% reporting declines of 20-50% in sales. Café Culture Managing Director Sean Edwards posted several helpful suggestions from café owners for “Staying Afloat in Tough Times.”

    Business News

    Sri Lanka is embracing a digital future for the Colombo Tea Auction according to Sri Lanka Tea Board Chairman Jayampathy Molligoda. The country’s first three electronic auctions in April resulted in sales of 16.5 million kilos of tea. Efforts to switch from outcry to electronic bidding span 20 years, according to Jayantha Karunaratne, chairman of the Colombo Tea Traders’ Association. “Changing the mindset of some players is not an easy task, said Karunaratne, adding, “Our vision is to go online because it provides advantages such as lower cost, greater efficiency, and more transparency.”

    As soon as the auction opened demand from Russia, Turkey, and the Middle East drove record prices. An Uvakellie from Vellapatna Estate, owned by Madulsima Plantations, sold for SLRs810 ($4.21) per kilo and a Uva High from Finlays Oodoowerre Estate sold for SLRs980 ($5.10) a kilo, a record for FBOPF1 grade tea at auction. Akbar Brothers purchased the lot. Dickwella Estate then broke the SLRs980 mark at SLRs1000 ($5.20) per kilo for an FBOPF1 bought by Ceylon Tea Marketing.

    “The response from industry stakeholders has been fantastic. The Sri Lankan tea industry has once again proven its resilience to upheavals,” said Dhammike Wedande, senior vice president of Asia Siyaka Commodities, a leading tea broker.

    Direct Trade Ban
    Kenya’s Ministry of Agriculture intends to ban direct tea sales. New regulations state that “henceforth, sale by private treaty (direct sales overseas) is outlawed,” forcing growers to sell exclusively through the auction process.

    The new regulations raised concerns voiced by the East African Tea Trade Association (EATTA), which manages auction and direct tea sales in Mombasa.

    “Exporters who have long-term contracts with international buyers might have to review those contracts, and we don’t know how this is going to affect the market,” EATTA Managing Director Edward Mudibo told Business Daily.

    The Tea Auction in Mombasa, the world’s largest by volume, is experiencing difficulties associated with the spread of the coronavirus and was relocated to a hotel.

    The entire auction system is “dysfunctional,” according to small growers who appealed to Kenya’s President Uhuru Kenyatta to intervene to curb predatory behavior amid falling prices. Reformers agree and hope to automate bidding.

    Kenyatta’s reforms, announced last week by Agriculture Cabinet Secretary Peter Munya, require the Kenya Tea Development Agency to pay 50% of the price of monthly deliveries. The remainder is to be paid as an annual bonus. In the past, KTDA factories paid farmers KS14-16 per kilo. Buyers will now pay 10% down with the balance due before export. Factories must pay farmers within 30 days after receiving auction proceeds. Also, brokers representing factories will be limited in the number they represent (no more than 15 factories in the current proposal).

    Physical Distancing on 1,500 Acres

    India reported more than 1,500 new COVID-19 cases in the 24 hours ending Monday, April 20, bringing the national total to 17,656 confirmed cases with 559 deaths. There is no indication of a “flattening curve” with the contagion likely to peak in four to six weeks. West Bengal, which includes the fabled Darjeeling growing region, has 339 reported cases with 12 deaths. Assam reports 35 cases with one death.

    Samar Jyoti Chaliha, who manages the Dikom Tea Estate near Dibrugarh in Assam, harvested only 17,000 kilos of tea in March due to government-ordered lockdowns. Usually, the garden produces 40,000 kilos of first flush tea. The early harvest typically yields 70,000 kilos, “but this year, I may be able to make a max of 45,000 to 50,000 kilos,” said Chaliha. The workforce is a concern. “I am limited to 50% of peak season’s employment (3,800 workers),” he said. Chaliha is currently paying 1,800 workers, but few are plucking tea. “Overgrown bushes take a lot of time. Right now, it is more slashing/skiffing and hand breaking overgrown leaves and branches which are tossed to the ground. We cannot make tea out of this stuff,” he said.

    Restoring the bushes should be complete by April 23 or 24. It will then take another 15 days to come up with succulent leaves, which brings us to the beginning of the second flush, he explained. A typical second flush yields approximately 260,000 kilos (2.6 lakhs) during May and June.

    “I don’t know how the bushes will behave after skiffing at this time of year (pruning is normally done in winter when the plants are dormant). Dikom produced an average of almost 3,000 kilos per hectare last year, a highly productive yield. “If all goes well, the second flush should be fine,” he said.

    The garden currently has 1,500 acres (635 hectares) under tea. Given the vast area, instead of limiting the number of workers to one per acre, when they are most needed, consideration should have been given to simply assigning smaller numbers of workers within each block (say 100 vs. 200). Growers could assign 100 masked pluckers to each of two widely separated sections and maintain safe distancing of 10 feet between pluckers. Even with 3,800 workers in the field at the same time, in most of Assam’s licensed tea gardens, there would only be two workers per acre. “Apparently, no one took this up with the government,” he said.

    Production News

    India will take additional steps to spot-check tea to ensure it complies with the Food Safety and Standards Authority of India (FSSAI ) norms. Random checks should result in higher prices a necessity given the lower volumes at auction. “Tea failing to adhere to the FSSAI parameters may not be allowed to be offered in the auctions depending on the extent of the violations by the producers,” according to the circular issued to planters. Tea Board Deputy Chairman Arun Kumar Ray told the Deccan Herald, “right now, the priority is to comply with the health safety norms and hygienic practices in tea gardens to combat the COVID-19 crisis.”

    In Sri Lanka, February Yield Marks Decade Low

    Sri Lanka harvested only 17.9 million kilos of tea in February, down 3.8 million kilos from February 2019. High grown and medium grown tea showed marginal gains, but tea from the lowest elevations declined 28.3% due to drought. Forbes and Walker Tea Brokers report the first two months of 2020 yielded only 39.8 million kilos, down 5.1 million kilos compared to the first two months of 2019.

    Health News
    Sri Lanka is promoting black tea as an immunity booster with the slogan: “Double Your Protection” The campaign online and in print states that “Black tea is not only delicious but packed with immune-boosting theaflavin antioxidants. Enjoy 3 to 4 cups daily, and be protected both inside and out.”

    The Times of India reports that the Indian Council of Medical Research (ICMR) will study the antiviral properties of theaflavin-3, a compound found in black tea. The United Planters’ Association of South India (UPASI) circulated a press release citing work by researchers in Taiwan and China, suggesting replication of SARS CoV-2 is inhibited by polyphenols commonly found in tea. These include Theaflavin-1, Theaflavin-2, and Theaflavin-3, all of which are abundant in black tea.

    The European Journal of Preventative Cardiology reports fewer heart attacks and a lower risk of dying of heart disease among tea drinkers participating in a Chinese study of 100,000 adults over seven years. Those who consumed three or more cups of tea per week had a 20% lower risk of heart attack or related cardiac incidents and a 22% lower risk of dying of heart disease.

    Retail News

    Millennia Tea, a Canada-based supplier of flash-frozen tea leaves, closed its first private funding round at $500,000+. The pioneering brand, based in Saint John, processes tea much like leafy produce at origin where it is washed and frozen to preserve antioxidants destroyed during the drying process.

    Tea cubes
    Millennia also markets cubes of fresh tea leaves

    Shelly King, CEO of Natural Products Canada, a key investor and strategic advisor, told Huddle that “today’s health-conscious consumer has embraced ‘food as medicine’ and is looking for ways to optimize the nutritional value of their everyday pleasures like a simple cup of tea.”

    “Millennia TEA has a category-changing product that ticks all the boxes for today’s consumer,” said King.

    Upcoming Events
    The United Nations has designated May 21 as International Tea Day to raise awareness of the need for sustainable production and to honor those working to supply the world with tea. The British have a reputation for never enough when it comes to tea, so they also celebrate National Tea Day (Tuesday, April 21). The Sun once again published a chart of tea in 16 shades from red amber to milky white. The article always leads to squabbles over exactly how much is too much dairy. Historian Seren Charrington-Hollins explains why milk is added last:

    “One of the fiercest topics is whether to put the milk in the cup before or after the tea. In the early days of British tea-drinking, when the china we had was of such poor quality that it would crack under the heat of boiling water, milk was always put in first to cool the tea.

    “But in the 18th century better china started to arrive and those who could afford it switched to putting milk in after the water, as a social signifier. Continuing to put milk in first was associated with the lower classes.

    “Tea tastes better if you put the milk in after the hot water because you avoid scalding the milk. You also maintain the perfect temperature for brewing, which is 95C,” advises Charrington-Hollins.

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    Dan Bolton

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  • Need to Know | Grocery Sales Spike

    Tea industry news for the week of April 13
    – Grocery Sales Spike
    – Tea Production Declines
    – Health Misinformation
    – Skipping Port
    – Edible Tea

    Consumers emptied shelves stocking up on tea, but there is plenty more in warehouses.

    Tea sales in grocery spiked as consumers rushed to stock up ahead of lockdowns in the US, Canada, and the UK. Sales in the UK the week of March 21 rose 55% compared to the previous year, according to Nielsen market research.

    Grocery shoppers in the UK, on average, spent an additional $80 (£62.92) stocking up during March.

    In the US, market information provider IRI in Chicago reports an 11% increase in year-to-date in sales of packaged tea in multi outlets (including grocery and convenience stores). Dollar sales of instant tea mixes rose 12%. Sales of refrigerated teas increased by 9.4%, and sales of refrigerated ready-to-drink coffee grew 23% year to date, compared to the same period in 2019. Coffee sales were up 8.2% to $2.6 billion through March 22.

    Major brands, including Lipton, Tetley, Twinings, and PG Tips assured consumers confronting empty shelves that supplies were sufficient as grocery sales rose 20% to their highest level in a decade, according to Kantar Research. Herbals associated with improving immunity spiked as well with top sellers listing ingredients such as echinacea, ginger, ginseng, and lemon and honey.

    Production Declines 

    Plucking resumed Monday April 13 in Darjeeling on government orders limiting the workforce to 25% of normal. A large factory like Thurbo, one of the Goodricke Group, employs 400 but can operate with 100 staff by reducing the number of processing lines. Processing capacity makes it possible to resume plucking the valuable first flush leaves.

    Financial analysts at ICRA estimate India’s tea industry will experience a decline of 90 million kilos in 2020. The estimate assumes 45-50 million fewer kilos of tea from plantations and 45 million fewer kilos from smallholders. Annual tea production will decline 6-7% in Assam and West Bengal and another 5-6% in South India. Bought-leaf factories remain closed.

    ICRA estimates that the earliest tea estates could start production would be around the third week of April, given the present situation, according to The Economic Times. The government permitted plantations to resume harvesting this week, but mandates staffing at no more than half previous levels. Social distancing and health precautions are to be enforced. Since the lockdown, now in its third week, weeds are encroaching, pest counts are high, and a light pruning is needed before plucking resumes. These actions will add INRs15 per kilo to the cost of production, according to ICRA, noting: “Any decline in production in the second flush teas would result in a substantially higher cost per kilo.” In India, labor expense accounts for 65-70% of the cost of production.

    Kenya saw exports decline by 4 million kilos in February to 40.5 million kilos compared to February 2019 totals, according to the Agriculture and Food Authority. Disruptions in the auction at Mombasa are to blame as the weather is excellent with moderate temperatures and favorable rainfall in the western and rift valleys. The harvest increased to 49.2 million kilos compared to 31.4 million kilos during the same period last year. Smallholders contributed 19 million kilos to the total. Prices at Mombasa were down, averaging $2.13 per kilo compared to an average price of $2.16 per kilo in February 2019.

    Curfews in Sri Lanka temporarily stopped tea production in March. Plantations Minister Ramesh Pathirana said the nation’s tea plantations would be allowed to continue operations so long as they adhere to guidelines set by the Health Ministry. To facilitate transactions, the Ceylon Tea Traders Association has switched to online auctions after 137 years of outcry bidding. Banks and the government departments regulating food safety and trade that are essential to export are now open three days a week but operated by half their usual staff.

    In Vietnam, first-quarter tea exports declined 2.4% in volume and lost 19% in value compared to the previous year. Shipments to China, Taiwan, and Russia, were virtually halted. The US is one of the top five destinations that together account for 75% of Vietnamese tea. Prices declined 13.5% to $37 million in February, averaging $1.48 per kilo, according to the Vietnam Tea Association. Trading partners are asking for lower prices, delayed delivery, and even canceling contracts, according to the association.

    Health Misinformation

    Physicians strongly disclaim a post stating that drinking tea is an effective cure for COVID-19, the disease caused by the newly discovered coronavirus. The World Health Organization (WHO) in March declared there is no known cure for COVID-19. “To date, there is no vaccine and no specific antiviral medicine to prevent or treat COVID-2019,” according to WHO. The post, incorrectly attributed to CNN, appeared on WhatsApp and Facebook and was widely shared. The report did not appear on CNN. “While tea may strengthen immunity, there is no “research” indicating benefits for COVID-19 patients,” according to Dr. Jayaruwan Bandara, director of the Sri Lanka Medical Research Institute, as reported by AFP in a Fact Check published March 26.

    “News reports in China in February also picked up on the claim that tea could be used to stop the virus but said it was not true,” according to the BBC News Reality Check.

    Related…

    Sri Lanka is promoting black tea as an immunity booster, and India may soon follow.

    Citing a study by the Tea Research Association (TRA) that Ceylon tea contains high levels of theaflavin, Sri Lanka initiated an advertising campaign claiming that ‘Ceylon Black Tea’ enhances COVID-19 immunity. TRA maintains that theaflavin, the main polyphenol in black tea, boosts immunity based on studies published in medical journals

    A 2003 experiment involving 21 volunteers by Dr. Jack Bukowski at Harvard Medical School showed that immune system blood cells from tea drinkers responded five times faster to germs than did the blood cells of a control group. Bukowski explained that L-theanine is broken down in the liver to ethylamine, a molecule that primes the response of an immune system element called the gamma-delta T cell.

    “We know from other studies that these gamma-delta T cells in the blood are the first line of defense against many types of bacteria, viral, fungal, and parasitic infections,” he said. In 2007 Bukowski demonstrated that drinking five cups of tea daily increased the body’s ability to ward off colds and flu. His work appeared in The Journal of the American College Of Nutrition

    The United Planters Association of South India (UPASI) Tea Research Foundation is compiling a brief to convince the Tea Board of India to follow Sri Lanka’s lead in promoting tea as a wellness drink.

    Tea Board Chairman PK Bezbaruah told the Hindu Businessline, “Indian teas, particularly Assam and the South Indian teas, have a very high proportion of the Theaflavin compound and hence should ideally be more effective.”

    “I think this can help push exports, particularly at a time when the output is expected to be at least 15% lower this year,” Bezbaruah said.

    Skipping Port

    Shipping companies are bypassing Indian ports essential to the tea trade. Container ships generally stop at one or two local ports to load cargo before traveling between continents. When containers are delayed in reaching port, ship captains have no reason to stop.

    Canceling India’s tea auctions for two weeks to prevent the spread of the coronavirus set in motion a sequence leading to this unusual logistical snafu. Tea is exempt from transport restrictions, but shipments delayed at auction experienced further problems in transit as law enforcement agencies stopped trucks en route to ports. Exporters next experienced numerous cancellations of consignments following the collapse of retail demand in foodservice. New buyers are scarce, leading to acute cash flow problems that subsequently hampered exporter’s ability to meet contracted delivery dates.

    NEW PRODUCTS

    Edible Beetroot & Parsnip tea


    Edible Tea

    Nim’s, a UK-based fruit crisp brand, recently introduced the first edible teas. These can be brewed or eaten as a snack. Nim’s located in Sittingbourne, produces air-dried snacks using beetroot and pineapple, kiwi and pineapple, and beetroot and parsnip. The tea sells for $6.25 (£5) for 12 sachets. Once the tea is steeped, you can enjoy the rehydrated fruit and vegetables “Drink, Eat and be Healthier.”

    Arizona Iced Tea introduces Hard Tea with vodka

    Vodka Tea

    Arizona Iced Tea launched a 5% ABV ginseng and honey-flavored green tea blended with vodka. The new line is named Arizona Hard. The initial rollout in Canada features 473ml single tall cans or 12-ounce (355ml) six-packs. The suggested retail price is CAD$3.49 for the individual can. In Canada, spiked tea can be delivered to your home by food delivery services such as SkipTheDishes.

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    Dan Bolton

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  • Need to Know | E-Auctions | Pandemic Harvest

    Tea industry news for the week of April 6

    China’s tea harvest in full swing including Enshi, in pandemic stricken Hubei Province

    Closely Monitor Tea Auctions

    Tea auction houses are a choke point for black tea transactions globally. The routine flow of commercial grades of tea is in jeopardy as major tea auctions react to the pandemic. Twin threats loom, the first involves gatherings that ensure the safety of participants. The second is the logistics. India’s national lockdown was tragically timed to the onset of the first flush, which observers predict is lost.

    The Colombo Tea Traders Association (CCTA) successfully conducted an all-digital auction – a first in 126 years of “outcry” bidding. The pandemic shut down the auction temporarily, halted shipping, and closed factories engaged in processing, blending, and packaging tea. “The tea industry has since regained its composure and momentum, and all its operations are now gradually resuming full capacity islandwide,” according to CCTA. The e-auction runs April 4-6, with samples available for viewing online and for purchase remotely under the guidance of the Colombo Tea Brokers’ Association.

    India’s Darjeeling growers earn 40% of their business during March and early April as first-flush teas are rushed to clients in Europe, Russia, Japan, and the US. Plucking had just commenced when India’s prime minister ordered a 21-day national lockdown on March 25. Tea bushes welcome spring with their best quality shoots, which amount to 25% of the crop by volume but bring an estimated $20 million (INRs150 crore), or roughly 40% of revenue. Lost sales are compounded by the fact that by April 15, when the lockdown is scheduled to end, trees will be overgrown, forcing a time-consuming and costly pruning. Darjeeling annually produces about 8 million kilos of tea. That will not be the case in 2020.

    The financial losses Darjeeling faces led the Union Home Ministry on April 3 to amend its workforce order to permit gardens to operate with up to half their workers if they enforce social distancing. However, few seem willing to operate processing factories, bought-leaf factories are closed to smallholders, and workers’ unions in West Bengal and Assam strenuously oppose returning to work due to the contagion and limited healthcare. North Bengal accounts for a quarter of India’s 1.3 billion kilo harvest.

    Tea Retail

    India’s street corner chaiwallahs and tea stand vendors operate without inventory or cash reserves. In the past three weeks, the steady business of supplying office workers has disappeared along with crowded trains and bus stations. At 20 rupees per cup, these workers earn less than $1.50 per day after expenses.

    The approximately 1600 US tea shops in all but eight states where residents are now under orders to stay at home, are experiencing dramatic declines in foot traffic. It is hard to profit from small transactions, so Emma’s Tea Spot in Baltimore promoted its curbside pickup and delivery by offering staples as incentives. These include eggs, bread, and toilet paper. Orders are mainly by phone with payment prior to pickup or delivery. No employees come into contact with customers since orders are placed in a sanitized pickup area outside the building.

    China Harvest Underway

    Saturday (April 4) marked the opening day of the tea harvest in China. Qingming celebrations, which involve traveling to the ancestral homes of urban Chinese, are subdued in many parts of the country this year as more than 3,000 perished amid 83,000 confirmed cases of COVID-19.

    Tea harvests in Zhejiang and Anhui Province are in full swing. Harvesting is underway but delayed in Hubei, which is the third-largest producing province and the center of the pandemic.

    Yunnan continues to experience a severe drought. Chinese authorities say 1.14 million of the province’s 47 million residents are experiencing difficulties accessing drinking water, along with a quarter of a million head of livestock. Crops covering 180,000 hectares are drought damaged according to the provincial water conservancy department. “At present, 78 rivers in Yunnan have been cut off, 115 reservoirs have dried up, and 99 irrigation wells have an insufficient water supply,” according to a report published by Xinhua News Service.

    UPCOMING EVENTS

    The European Tea Society is hosting a free webinar on How Pandemics and Climate Change are Affecting the Tea Trade.

    On Wednesday, April 8 Elyse Petersen, founder of www.tealet.com, is presetting on Covid19 and how this is impacting working directly with growers. The European Tea Society opened this webinar to anyone.  The webinar begins at 2 p.m. EST.  Here is the link:  https://www.europeanteasociety.org/events/2020/4/8/members-webinar-elyse-petersen-working-directly-with-growers-how-pandemics-and-climate-change-are-affecting-tea-trade.  

    The World Health Organization was founded on April 7, 1948. This agency of the United Nations is commemorating the work of nurses and midwives on World Health Day, Tuesday.

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    Dan Bolton

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  • Q|A with World Tea Expo’s New Owners – Need to Know

    It’s only been a week but Penton Group President Fred Linder was gracious in answering five questions on the future of the World Tea Expo and its ancillary business ventures. Linder will oversee World Tea Expo as part of Penton Exhibition Services which supports more than 100 events across five sectors. Linder also runs the company’s New Hope Network.

    LOGO-PentonPenton is a large business-to-business publishing company based in New York. It’s flagship tradeshows include Natural Products Expo (West and East) and the Multi-Unit Food Service Operators Conference. The company also publishes Nation’s Restaurant News, Natural Foods Merchandiser and Supermarket News.

    In announcing the acquisition Linder retained the core team that includes Event Manager Samantha Hammer Mitchell, Education Program Manager Monique Hatchett, Customer Service Manager Edie Gillette and Tea Academy Director of Online Education Donna Fellman. Hammer Mitchell is a former Penton event manager. Click here for details of the sale.

    Tea Biz: Mr. Linder please share your vision for World Tea Expo and its ancillary educational program, competitions, industry awards and newsletter.

    Fred_Linder_RGB
    Fred Linder

    Linder: It’s a bit too soon for me to articulate a strategy for the individual part of the business.

    We bought World Tea Media because we like the Tea category and we feel that we can help the industry grow as we have proven in other Food sectors, most notably in the Natural Products industry.

    I also think that World Tea Expo is a better fit inside of Penton. We will work with the leadership within the Tea group to evaluate what is working and what may need improvement.

    Tea Biz: The tea community wryly observes “there are beverages, and there is tea. They are not the same thing.” During recent years the Expo floor was opened to many classes of beverages from artichoke, coconut and vitamin water to liquid herbal supplements. Will that continue?

    Linder: Again, that will be determined in conjunction with the Tea leadership team. From a very general point of view, I am not a fan of diluting, but I also don’t think it’s an all or nothing approach. We have an excellent track record in other industries of making sure that attendees and exhibitors have an authentic experience that is aligned with their and the industry’s expectations, while still allowing for growth and innovation. Authenticity is key.

    LOGO-WorldTeaExpoTea Biz: The Expo is noted for an exceptional educational program seen by industry veterans as catering mainly to those who want to get into the business. What will Penton do to entice the best and brightest veteran retailers, wholesalers and exporters to attend and share their insights and expertise both from the podium and casually on the exhibition floor? Vendors realized more sales and bigger sales in the past. Attracting premium buyers to the event is the tide that lifts all boats. How will Penton draw quality buyers to the event?

    Linder: We have an excellent database across Penton and deep experience with education, most notably, for innovators and entrepreneurs. In addition, our marketing capabilities are second to none. By combining these disciplines with the expertise within the Tea team we will create a winning formula for growth in both quality and quantity. Ultimately, the success of any show is about the right attendees having the right conversations with the right exhibitors through a mix of networking and a vibrant education program.

    Tea Biz: Will Penton through its North American Tea Competition take a leadership role in defining and advancing standards for specialty tea?

    Linder: At this point I don’t know enough to answer this question. We did have standards programs in other businesses so we are experienced in the mechanics of what that could look like, but what Penton’s role in that might be is an unknown to me at this time.

    I will say that although we have owned the business for only a week, I am really impressed by the staff and their enthusiasm and passion for the business and the industry. I will rely on their expertise and guidance a lot on where and how Penton will best fit into aid and abet in the growth of the category.

    There’s much to learn, but through our broad experience with education, content trade shows, combined with an understanding of the food and food retailing sectors it will be a very exciting time for all of us. I am very bullish on the future.

    BIO

    Fredrik M. Linder is an expert in natural products and the health and wellness arena and has a passion for the industry and its mission. Fred’s industry relationships are deep, which allows him to understand where all of the companies and products fit together, how they are trending and gives him direct access to the top leaders in the industry who look to him as a sounding board. He was instrumental in the development of Penton’s data and insight products for the natural products industry. Fred also runs Penton Event Services supporting all Penton best in class events. In addition, Fred is responsible for Club Industry, LDI and the newly acquired World Tea Media assets. Fred serves on several boards including SISO and the Company Council of IADSA (International Alliance for Dietary Supplement Associations). In the past he served on the boards of the Tuberous Sclerosis Alliance, The Coalition to Preserve DSHEA, Bastyr University, and The Dietary Supplement Education Alliance. In addition to New Hope and the Penton Exhibitions Services team, Fred oversees Club Industry and Live Design. Prior, he was employed with Meredith Corporation, Capital Cities/ABC and Universal Media.

    Fredrik M. Linder
    Group President, Lifestyle & Penton Exhibition Services
    [email protected]

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