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Hear the Headlines for the Week of March 19

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Features

This week Tea Biz continues its coverage of how Japan’s tea industry successfully met the challenges of marketing tea a decade after the disastrous earthquake, tsunami and meltdown of the nuclear power plant in Fukushima.

.…. and we travel to India to discuss a pandemic pivot with Rudra Chatterjee, Managing Director of the Luxmi Group.

Pandemic Pivot

Will Direct-to-Consumer Tea Sales Catalyze the Farm-to-Cup Movement?

By Aravinda Anantharaman

2020 accelerated a shift to digital media, one that many tea producers embraced. Did this bring more customers? Did this increase sales? Is this the catalyst the farm-to-cup movement needed? Tea Biz posed these questions to Rudra Chatterjee, managing director of century-old Luxmi Group. Luxmi auctions millions of kilos of tea annually to a small cadre of buyers purchasing 20,000 kilo container lots. Last year the company quickly adapted to selling 250-gram packets of tea directly to thousands of consumers, a pivot that Chatterjee says brought significant benefits. Read more…

Meltdown Led to Tea Industry Realignment in Japan

By Dan Bolton | Part 2 of 2

Radioactive fallout from the Fukushima Daiichi meltdown descended in plumes far north and east of Japan’s tea growing region. Losses were significant in Shizuoka due to factory closings where lightly contaminated tea was concentrated. Japan’s tea growing regions were not impacted and continued to evolve, initially foregoing exports in favor of the domestic market. That changed beginning in 2016 as exports increased from 4,000 to 5,100 metric tons. Valuation peaked in 2018 at 1.5 billion yen, largely because of the out-sized success of matcha, which accounted for 43% of exports, according to the Japanese Tea Export Production Council

That changed beginning in 2016 as exports increased from 4,000 to 5,100 metric tons. Valuation peaked in 2018 at 1.5 billion yen, largely because of the out-sized success of matcha, which accounted for 43% of exports, according to the Japanese Tea Export Production Council. Production remains level at 80,000 metric tons, down 20 percent from all-time highs. Export levels plateaued and tea value is declined during the pandemic year. Testing continues as a precaution but the tea from Japan is safe when accompanied by a food-safety certificate.

Jason Eng lives in Japan and works in business development for Kametani Tea, a green tea blender, custom roaster, and matcha company that processes more than 1,000 metric tons annually for Japan’s food and beverage companies.

Read more…

Japanese Resilience and Resolve, Part 2: The story of Kitaha Tea, a company reborn after the T?hoku Quake.

Listen to Japanese Resilience and Resolve, Part 1: The story of the T?hoku Quake Tea Relief Caravan. | Click here to see photos of their adventure.

Tea News you Need to Know

US Restaurant Rescue Funds

The $1.9 trillion American Rescue Plan signed into law last week includes $28.6 billion to rescue US restaurants. The funds provide debt-free relief for small and mid-sized restaurants. Applications for tea-themed restaurants, small café chains, and tea rooms will be accepted by the Small Business Administration beginning in April. Funding eligibility includes franchisees with fewer than 20 locations that are not publicly traded.

The president of the National Restaurant Association said the grants “will inject a much-needed stimulus along the supply chain to begin to balance the economic damage done.” The rescue plan extends moratoriums until September, allocating $5 billion to help business tenants struggling to pay rent. Government funded grants are capped at $10 million per restaurant group and $5 million per location. Grants are calculated as the difference in average monthly revenue earned in 2019 minus average monthly revenue earned in 2020 multiplied by 12.

Biz Insight – Market research firm IRI in Chicago writes that consumer habits formed during the pandemic may be here to stay. One clear winner is retail loyalty “points” programs. Eighty percent of Generation Z subscribe to FREE grocery loyalty programs and 79 percent of Generation X. A majority of Millennials (68%) prefer PAID online loyalty programs. Overall 51 percent of respondents cited shopper loyalty programs as “somewhat influential” when deciding where to shop with 22 percent indicating loyalty programs are “extremely influential” when deciding where to shop.

EU Reviews Pesticide Rules

Since pesticides can have harmful effects on the environment and human health, they are strictly regulated by the European Union. In recent years the EU adopted a Green Deal directive that seeks to reduce the use and risk of chemical pesticides and herbicides. The EU’s subsequent “Use of Pesticides” (SUD) rules for use apply to both ag professionals and to the public but they are not legally binding. In January, the European Commission identified “significant shortcomings in the implementation, application and enforcement” of the SUD directive by member states, launching a period of public consultation to determine whether the rules should be mandatory. The SUD directive could result in a 50 percent reduction of chemical pesticides, according to some estimates. Commissioners made it clear the SUD is not enforceable as law unless adopted by parliaments of the member states. The comment period ends April 12

Biz Insight – In East Africa growers are experiencing the worst locust outbreak in 70 years. Ambitious locals are capitalizing on the fact that locusts become lethargic after dark and easy prey. In February the Bug-Picture, a Kenyan firm that processes insects into animal feed, bought 2.4 metric tons of locusts. Teams of 25 to 30 workers sustainably and organically eliminate up to 400 kilos of the crop-killing pests between sunset and sunrise daily, earning $5 for every 10 kilos. No pesticides required.

Tea Theaflavin Inhibits Coronavirus Replication

A healthy diet and plenty of sleep are best at boosting immunity from the coronavirus, but those stricken with COVID-19 may benefit from also drinking tea.

Researchers at Tocklai TRA, a branch of India’s Tea Research Association, have demonstrated the “virus inhibiting benefits of black tea,” writes Joydeep Phukan who manages the research center in Jorhat, Assam. Citing studies published in the Journal of Biomolecular Structure and Dynamics and in the Journal Frontiers in Immunology, Director Dr. A.K. Barooah, writes that variants of the bio-active compound theaflavin act on multiple targets of the coronavirus affecting the stability and blocking the binding sites of viral proteins.

The formation of specific bonds “inhibit replication of the virus.” He said that harnessing the health properties of tea will pave the way for “extensive use of bio-actives that will immensely help to popularize black tea in India.”

PLANT-AG is a $9 Billion Startup that Promises Field to Plate Traceability

Investors, confident that traceability is a bankable attribute, have invested $8 billion in public-private bonds with an additional $800 million in cash to fund PLANT-AG – a US based open-source, blockchain documented vertical farming infrastructure project. IBM’s Food Trust software will manage gigabytes of logistics, cultivation, and processing data on greenhouse-grown leaf lettuce, strawberries and tomatoes, basil, kale, and blueberries.

Half of the fresh fruit and a third of vegetables sold in grocery stores is imported, often traveling along a month-long supply chain. PLANT-AG intends to shorten the chain to three days. Founder Karim Giscombe is building greenhouses no further than eight hours from urban centers. Harvesting at 4 a.m. means the company will eventually be able to provide a third of Americans fresh produce within 72 hours.

Biz Insight –Consumers scanning PLANT-AG product labels with their phone will be able to see where the food is grown, making tracebacks in the event of contamination practical and quick and leading to greater accountability at origin, addressing not just food safety but sustainable practices and labor conditions. Read a full account by Cliff Rainey in this month’s Fast Company magazine.

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Hear the Headlines for the Week of March 12

Features

A Story of Resilience on the 10^th Anniversary of the T?hoku Quake

By Dan Bolton | Part 1 of 2

The devastation was near total in the hours following the March 11, 2011 T?hoku [tuh how koo] quake along Japan’s northern coast. Four hundred and sixty five thousand people were displaced by a gigantic surge that spawned 40 meter waves towering 133 feet – higher than a 12 story building – in some inlets. The toll in lives exceeded 18,000 and the 40 trillion yen in damage that day makes the 9.0 quake the costliest natural disaster in human history.

The following winter was harsh as many sheltered in temporary lodging or with relatives housed beyond the 200 square miles of inundated coastal land.

Five hundred miles south of the destruction, Yasuharu Matsumoto, vice president of the Kyoto Obubu Tea Farms, called for volunteers to travel north on a mission motivated by kindness.

Ten months after the tsunami the flotsam and rubble remained, with buses and boats precariously balanced on roof tops of multi-story buildings.

Learn more and see photos from the adventure.

Listen to the story of the Tea Relief Caravan.

Listen next week as Tea Biz returns to Japan for a story of renewal at the Kitaha Tea Farm in Ishinomaki, Miyagi and interviews with suppliers on the challenges of marketing tea a decade after the Fukushima Daiichi meltdown.

Women’s Rights in Tea

By Aravinda Anantharaman

“In recognition of International Women’s Day, Tea Biz spoke with Sabita Banerji and Krishanti Dharmaraj from THIRST, The International Roundtable for Sustainable Tea. Sabita was born and raised in the tea gardens in Assam and Munnar. She is an economic justice advisor and the founder and CEO of THIRST. Krishanti Dharmaraj is a THIRST trustee and Executive Director of the Center for Women’s Global Leadership in New York and co-founder of WILD for Human Rights (Women’s Institute for Leadership Development). 

In conversation these women say that no one in the tea industry intentionally abuses human rights but inequality is deeply embedded – requiring systemic change.

“Tea workers are trapped in a 19th century system that creates poverty and suffering,” says Banerji. “You can’t just break it down overnight and destroy the well being and the ability for communities and individuals to live,” adds Dharmaraj. “I think this is where the collective power of the government, the industry and the workers needs to come together,” she said.

Read more

News you Need to Know

First Flush Harvest Underway

Droves of COVID-19 wary pluckers are working gardens in China, Sri Lanka, and India amid favorable weather after a dry winter. The Darjeeling first flush is underway. Consumer demand for premium tea increased during the pandemic and pricing is firm, but there is uncertainty throughout the entire supply chain as to when newly processed tea will reach market. Waiting time for obtaining container space on a ship is now 3-10 weeks at rates 50-200% higher than mid-year. Wholesalers are raising shipping minimums and pricing significant increases due to shipping. Retailers that absorbed some of the financial shock of 2020 project steep increases. Fewer aircraft are flying with many aircraft diverted to vaccine delivery. Consider the $38.25 cost of sending a three-kilo parcel from Darjeeling to Paris or London, or the $39.60 cost to reach New York. A major Canadian supplier notified customers to expect an increase in its free freight threshold from $1200 to $1350 (CAD).

Biz Insight – Price volatility is a concern which is why Tea Biz is launching the weekly Tea Price Report. The podcast news segment reports auction averages and prices for specific types of tea. The report draws on many sources including tea boards, traders, and the China Tea Marketing Association which provides a benchmark for the 10 teas most commonly exported.

Save this permalink to hear the latest prices anytime on your phone. https://tea-biz.com/tea-price-report

Need greater detail and insights?
View an in-depth report with commentary here.

Tea Relaxes the Walls of Human Blood Vessels

Compounds in both green and black tea result in significant vasodilation of blood vessels in the human body, according to medical researchers whose work was published in the journal Cellular Physiology and Biochemistry. The findings could lead to the design of new blood-pressure lowering medications. Researchers at the University of Copenhagen and the University of California, Irvine, found that tea catechins activate a protein found in the smooth muscle that lines blood vessels. The catechins cause potassium ions to exit cells, reducing cellular “excitability.” Researchers note that tea has long been known to reduce blood pressure. Understanding the precise mechanism could be helpful in reducing hypertension the number one risk factor for global cardiovascular disease and death. Heart attacks claim the lives of 17.9 million people annually, according to the World Health Organization.

Celebrating the Green

Relevant brands are pervasively innovative. Consider the collaboration announced this week between Hershey’s Chocolate Syrup and Kung Fu Tea….

Then there’s matcha. Eight hundred years ago the practice of grinding tea leaves into powder was already centuries old, but Japanese growers near Kyoto advanced the craft by improving the quality of tencha. The result was emerald matcha. Globally matcha is projected to maintain steady growth of 4.6% through 2026 more than double the rate of tea overall. This is due, in part, to the versatility of matcha which is used in many baked dishes, confectionary, ice cream, smoothies, and juice drinks. The monks who created matcha would probably not recognize the Shamrock Tea introduced by Starbucks for St. Patrick’s Day, but they would surely taste the matcha in this blend of a green tea latte made with coconut milk with a splash of lemonade and two scoops of vanilla bean powder.

Biz Insight – Starbucks, one of the biggest tea retailers in the world, announced this week it will no longer sweeten its iced tea. Customers can add as much cane sugar as they like at no additional charge, but unsweetened is the new default, making tea a zero calorie menu option.

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Hear the Headlines for the Week of March 5

Features

Differentiating Tea by Terroir

By Dan Shryock

Growers of high quality tea in the United States set out to create something that isn’t available from anybody, anywhere else, an expression of regional flavor grounded in local terroir. Angela McDonald, the president of the US League of Tea Growers, explains that while the quantity of tea grown in the US is limited, that scarcity and unique taste profile adds to its appeal.

“No one is going to buy a Mississippi Yellow Tea from Sri Lanka because it will never be the same,” says McDonald.

The Business Benefit of Custom Blends

By Jessica Natale Woollard

How creamy do you want your Earl Grey? How much citrus do people like in a green blend? Which inclusions with health benefits are best sellers? 

Blending tea is both art and science with a lot of trial and error. 

Sameer Pruthee is CEO of Tea Affair, a Canadian blending company based in Calgary, Alberta. With a background in culinary management, Pruthee got his start importing specialty teas in the late 1990s. He was intrigued by blending and flavoring: How to find the right combination of botanicals, strawberry, mango, lychee. What flavor do people gravitate to? 

How can blending help achieve business objectives? 

During the last 20 plus years, Sameer has built a business blending teas using quality raw material imported from around the world. His aim is to blend as much tea in Canada as possible.  In our conversation we focus on how companies can use custom blends to their advantage, and we’ll hear tips on Sameer’s best practices for blending. 

News you Need to Know

Brand Relevance in Chaotic Times

Marketing consultancy Prophet announced its Brand Relevance Index this week, scoring companies during a pandemic year that rewarded convenience, comfort, trust and dependability. Apple, Peloton, Kitchen Aid, LEGO, Costco, Honda, PlayStation and Amazon all made the top 10. The Mayo Clinic and Johns Hopkins received positive accolades from the 13,000 consumers surveyed.

Apple has held the top spot for the past six years and seems invincibly relevant.

However, consumer appreciation for Peloton which rose from #35 to #2, the Mayo Clinic which advanced from #24 to #4; LEGO (from #28 to #5) and Costco (from #21 to #6) all reflect behavioral changes easily traced to the pandemic. Prophet credited these brands for “adapting quickly to consumers’ changing needs and expectations, but they do so by remaining ever more true to themselves.”

No tea companies appear on the brand relevance list but in 2020 consumers rewarded tea brands with their loyalty during a time of disruption. While many consumer brands saw declines due to lockdowns tea drinkers calmly steeped at home. The lesson to apply from Prophet’s consumer research “is that all of these brands are customer obsessed, ruthlessly pragmatic, distinctively inspired and pervasively innovative,”

Tea brands should take note – especially the point about becoming pervasively innovative.

Biz Insight – Chinese luxury brand Zhuyeqing advanced to No. 2 on the World Brand Lab’s 2021 analysis of the Global Top 10 Luxury Tea Brands. Twinings (UK), TWG (Singapore), Harney & Sons (US) and Dilmah (Sri Lanka) were all top ranked. World Brand Lab analyzed 5,000 tea brands to identify 300 global (super brands). China is home to many thousands of tea brands, but few are widely known beyond the Great Wall.

Nepal Announces Tea Traceability Project

Publicly declaring the provenance of Nepali tea will increase sales globally, according to advocates of the Sustainable Export Promotion Project. The proposed tea traceability system is financed by the federal government.

“This project will do the work of branding by producing quality tea,” writes Bishnu Kumar Bhattarai, executive director of the Nepal Tea and Coffee Development Board, part of the Ministry of Industry and Commerce. He called on farmers “to be honest to make the effort a success.” The 36-month project will enable the entire supply chain to share information much of which will be available to consumers.
The government allocated 175 million rupees (USD$1.5 million) for the project.

Biz Insight – Throughout Nepal’s recent history nearly all its tea exports were used in blends, obscuring its identity. Eighty percent of the country’s tea is processed as CTC (cut, tea curl). Eighty percent of exports are to India. The remaining 20 percent, approximately 5 million kilos, is hand made. These higher-value “orthodox” teas are purchased by Germany, the US, Canada, and Japan, accounting for 10% of export volume. Nepal has expanded planting to 13 districts beyond the existing five which produced a combined 25 million kilos in 2019. These districts, mainly in the west, are better suited to orthodox production.

The Danish Tea Association Merges with The European Speciality Tea Association

The five-year-old Danish Tea Association will merge with The European Specialty Tea Association, transferring more than 50 members to become ESTA’s Danish Chapter. Danish association president Alexis Kaae currently serves as vice president of the London-based ESTA. Initially cautious of the newly formed ESTA, Kaae said “we are totally confident that our good work of the past will continue in Denmark but within the wider community which is being grown by ESTA.”

Biz Insight – European Speciality Tea Association executive director David Veal said that chapters operate with a degree of independence electing their own board every two years. Chapter members in Denmark can still promote specialty tea locally… “but they will also be able to network with the wider global speciality tea community,” he said. ESTA members reside in 28 countries.

YELP! Names Tea House one of the 100 Top Places to Eat in America

Congratulations to the Copper Kettle Tea Bar in Foley, Alabama for making Yelp’s 2021 list of 100 Top Places to Eat in America. The many steak, sushi, tiki, hot dog, chicken, and fine dining winners on the Yelpers’ Choice list all serve tea but the Copper Kettle, which ranked 66^th, is the only tea-themed eatery to meet Yelp’s extensive criteria. The Gulf Coast shop offers sampling, tea classes, and high tea with a huge selection of 115 traditional and sophisticated offerings from Wuyi oolongs and pu’er to gunpowder green teas. There are also wellness, fruit, and honeybush teas as well as rooibos, mate and chai. The shop hosts musicians and tea by the fireside. “We are a little tea house with a big heart,” writes co-owners and sisters Robin Peters and Susan Adams. The shop, housed in a 1930s era cottage, opened in its current location in 2015.

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Hear the Headlines

Features

India’s tea industry has for long been about two types of tea, CTC and Orthodox. But in recent years, the industry saw the emergence of the specialty tea segment, which includes new tea types, and handmade and artisanal teas, and also wild and indigenous teas. Tea Biz India correspondent Aravinda Anantharaman talked this week with Parag Hatibarua, who works closely with these teas and their makers.

Hatibarua says that higher value teas are not easy to make. “It takes a lot of love, a lot of dedication, a lot of experimentation,” he says. His advice to growers: “You’ve got to first learn the art of making these teas with love and then move slightly more mass market,”

Collaborative Training Program Taps Industry Expertise

By Dan Bolton

The tea industry lacks a good, consistent, authoritative, recognized educational program that offers a universally acknowledged certification, says David Veal, executive director of the European Speciality Tea Association.

Tea Biz asked Veal to explain what makes the association’s new training program unique?

“The aspiration of our program is that not only knowledge and skills, but professionalism and passion will be stimulated by those participating in the program, and that the overall results will be an ability and desire to buy, brew, serve and promote better quality tea, and in so doing, educate consumers and encourage them to experiment with new and different teas,” says Veal.

Tea Biz: You explained that the program is collaborative, drawing on broad industry support.

Veal: Collaboration is one of the fundamental values of the association, so this collaboration is being delivered in two ways, firstly, by working with a wide number of industry professionals using their skills, knowledge, and experience to create the curriculum for the various modules, and secondly, by delivering these modules and the resultant certification in partnership with existing high-quality individual tea educators and trainers and existing successful schools and academies.

“Of course, this will only work if the quality of the content and the delivery of the modules is consistently high and relevant, and we’re absolutely certain that this model, based on working with industry leaders will be successful,” he says.

Register here if you are interested in becoming an ESTA Authorized Tea Certifier or if you would like to register for the introduction to tea module.

Classes begin in March. Learn more…

News you Need to Know

Retail Sales Thawed in January

Strong January sales signal a retail thaw in the US despite high unemployment and COVID lockdowns. Retail sales grew by 5% in January, the strongest performance since June, according to the US Census Bureau which found 88% of those receiving federal stimulus checks immediately spent the money. Construction and manufacturing workers are returning to job sites as the vaccine rollout gains momentum. Rates of infection and hospitalizations are down 72% from the January peak.

Biz Insight – Congress is debating an additional $1,400 payout that will boost sales through the spring and summer. Economists at Bank of America predict “stellar” growth but the Federal Reserve cautions that the recovery is “uneven and incomplete” with hospitality and entertainment experiencing the slowest return to normal.

Restaurant Reticence Persists

In the US the National Restaurant Association reports that 83% of American adults say they are not eating in a restaurant as often as they’d like. Market research firm Datassential has routinely surveyed consumers on behalf of restaurant owners since March 2020. Last week 43 percent of consumers said they still “definitely avoid” eating out. …Fear of visiting restaurants peaked in April at 68 percent.

Asked whether their greatest concern is public-health or the economic crisis — 54 percent said they are more concerned about public-health, but that’s down from 61 percent in January.

Starbucks, a proxy for the retail beverage segment, reported same-store sales were down 5 percent in the latest quarter, an improvement over the 9 percent decline in same store sales last fall. Starbucks locations in China turned positive for the first time since the pandemic began. NRA predicts a 10% jump in sales at eating and drinking places in 2021 largely due to pent-up demand. In the meantime, there are still dark days ahead for tea-themed restaurants.

Seattle’s Queen Mary Tea Room Faces Permanent Closure

Seattle’s Queen Mary Tea Room faces permanent closure, says Greengo. Last March she was forced to close the dining room, the staff of 30 has been trimmed and now, she says, she’s “out of options.”

“The Tea Emporium across the street from the restaurant has remained open. We’ve built a small deck and started serving cups of tea to go and crumpets,” she said. “We started a GoFundMe campaign to ward off a permanent closure of the Queen Mary Tea Room,” she says.

Donors far and near have contributed $30,000 to cover expenses. Greengo hopes to raise $20,000 more. “The clock is ticking,” she says.

Kenya’s Tea Earnings Surged in 2020

Kenya was handsomely rewarded for a bountiful 2020 crop that filled the global gap in black tea exports. The Kenya Tea Directorate reports more than $1 billion in sales, an increase of nearly three billion shillings compared to 2019. Lockdowns curtailed India’s harvest and logistics hampered black tea suppliers globally enabling Kenya to export 518 million kilos last year, up from 497 million kilos in 2019. Black tea production globally declined 2.5% in 2020 according to the Global Tea Digest which writes that the bulk of that decline was in India which was down 135 million kilos for the year.

Biz Insight – Pakistan previously favored Indian black tea but political tensions over Kashmir virtually halted trade. Pakistan purchased the largest quantity of Kenya’s tea followed by Egypt, and Russia. Indian tea sold to Dubai for re-export still finds its way to Pakistan in blends.

Daily Wage Increased 30% for Tea Workers in Assam

Last week garden workers in Assam received a 30% an increase from $2.30 to $3 per day. Union leaders representing garden workers say the INRs50 (70-cent) increase rupees is insufficient. Wages are an issue in the state elections this year. Congressional leader Rahul Gandi promised an increase to 365 rupees $5 per day if the ruling BJP party is re-elected. Separately the federal government announced a 10 billion rupee budget proposal to improve the welfare of workers.

Biz Insight – Tribal workers comprise 17% of Assam’s population – a deciding factor in 40 of the state Assembly’s 126 seats. The long overdue increase dates to 2017 when a wage advisory board recommended an increase to INRs 351 RUPEES per day. Tea is labor intensive with wages accounting for 65% of the cost of production. The domestic price of tea rose in 2020 giving growers additional leeway but many argue that the colonial-era plantation model is failing.

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