Retail - Tea Biz

Panda Express Tea Bar — Need to Know

What tea professionals need to start the week of July 14, 2014 —

A wok through the new Panda Express tea bar… Amazing Race Canada contenders serve afternoon tea at the Fairmont Empress… Ito En brings first flush shincha to market in bottles and a British restaurant offers Da Hong Pao for $300 a pot.

Panda Express Tea Bar

Fast-serve Asian restaurants often scrimp on their tea selection but Panda Express is experimenting with a concept likely to turn some heads.

The 30-year-old family restaurant’s 1,657 company-owned locations in the US and in Canada are may roll out a hot tea and boba drinks menu nationwide that could prove popular with young tea drinkers. The modernization of the firm’s menu is under the direction of Andrea Cherng, daughter of founders Andrew and Peggy Cherng.

Andrea told the Los Angeles Times the restaurant chain hopes to attract millennials with a customized menu.

The company’s innovation store that opened last week in Pasadena, Calif. boasted an attractive and well-stocked tea bar. Tea is an important addition to the restaurants, according to Cherng. “Panda is in a position to bring things like boba to people that may have never heard of it,” said Cherng.

“We had a grand tea master from Taiwan come and design the teas,” said Cherng. “He spent two weeks with us perfecting them.”

The tea bar in the innovation store serves cake and pastries from a local baker but will soon start producing its own items. In the remodeled dining area customers can order orange chicken burritos and bacon and Shiitake Kale Chicken Breast which are also available at their stores nationally.

Executive Chef Andy Kao promises “menu choices that will fuel your body and feed your soul.”

In May he introduced thick cuts of applewood smoked bacon to the Orange Chicken staple. In Pasadena diners can “choose from a selection of sauces that include green onion with ginger, reminiscent of a Hainan chicken sauce, and a fiery red chile Sambal paste. You can also add pickled cucumbers, green papaya slaw, crispy wontons, crispy shallots and crushed peanuts,” reports Daily Dish reporter Jenn Harris.

In Pasadena lines formed for the scallion pancake orange chicken wraps, salads and boba. Bases include salad, scallion pancake wrap, rice and chow mein. Mains include orange chicken, Beijing beef, honey walnut shrimp, kung pao chicken breast, broccoli, string beans, grilled veggies, stir-fry chicken breast or Angus steak with vegetables, or grilled chicken or steak. All of the stir-fries are made to order in giant woks.

Items come in a large size, which includes two mains and a base for $7, or small, with one main and a base for $5.80. Panda Express is the fastest growing Chinese restaurant concept in America.

Source: Los Angeles Times, Panda Express

Amazing Race Canada Stops for Tea

Television producers know that afternoon tea is “in” and so this week’s Amazing Race Canada made a stop at the Fairmont Empress in British Columbia into a formidable challenge.

Winnipeg’s Cormac Foster was stymied at the task of reciting the Afternoon Tea menu verbatim. Selections included roasted bone-in ham with tarragon dijonnaise and a cucumber and ginger mascarpone on butter brioche. His mother and partner Nichole watched the 19-year-old stumble through 10 attempts before advancing to the next challenge.

The event pits 11 pairs on a cross-country tour with a $250,000 prize to the winners, round-trip tickets on Air Canada and a pair of Chevy Silverado pickup trucks with gas for life from Petro-Canada.

Source: The Canadian Press

First Flush Bottled Shincha

Ito En has introduced for a limited time a ready-to-drink first flush shincha green tea.

In Japanese, “shin” means new and “cha” means tea. Shincha’s singular character derives from its harvest starting in early April, when young green tea leaves contain naturally higher concentrations of nutrients and vibrant flavors, the result of wintertime dormancy. Fresh Shincha leaves are distinct from latter-harvested green teas, with a subtle sweetness attributed to a higher content of the amino acid L-theanine and a lower caffeine content. The rich and vividly green tea leaves are not only fragrant and fresh in taste, but higher in Vitamin C and catechin antioxidants than regular green tea.

“Americans’ evolved palates are appreciating the flavor nuances among green teas, making this the optimal time to introduce Shincha in a modern and convenient way,” says Rona Tison, senior vice president of Corporate Relations of ITO EN (North America). “Authentically brewed and bottled to preserve the young green tea’s essence, Oi Ocha’s Shincha is an experience like no other.”

“Shincha offers the ultimate tea experience for us Japanese,” says celebrity Chef Matsuhisa of Nobu Restaurants. “I am pleased that it has made its way to America as the fresh aroma and flavor is truly unmatched. Its smooth and clean finish truly complements the purity of our cuisine.”

Oi Ocha’s Shincha is available in 16.9 fl oz. BPA-free, recyclable bottles at select retailers.

Learn more at www.itoen.com

A $300 Pot of Tea

London’s Royal China Club is offering a pot of Da Hong Pao for £180 ($300), according to the Daily Mail.

The tea was aged 80 years according to the restaurant spokesman who explained that Da Hong Pao dates to the Qing Dynasty where it was reserved for honored guests.

The tea is handmade from tender leaves, withered, tumbled, curled and baked in small batches over charcoal to create an aromatic infusion with distinctive dark cocoa notes, a toasted fruity flavor and a long smooth aftertaste that lingers for several minutes after consumed, said sommelier Peter Chan.

The Royal China Group restaurants are known for their dim sum and 18 types of artisan teas priced from $8 for service for two.

Source: Daily Mail

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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.

July 14, 2014

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Dan Bolton

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Uncategorized

Retail
Tea Beverages are Bubbling — Need to Know

What tea professionals need to start the week of July 7, 2014 —

Market researcher Technomic reports Beverages are Bubbling …Korea signs a trade agreement recognizing organic “equivalency” with USDA… Political outcry accompanies word of starvation deaths on India’s abandoned tea estates but no solutions are advanced…Suja Juice launches the first biodynamic, cold brewed, organic, non-GMO, cold-pressure teas…India’s May tea production tallies are down 12% following a 25% decline in April.

Bubbling Beverages

Chicago-based food service market research firm Technomic’s mid-year survey of menus identified six trends including this assessment of specialty teas.

Beverages Bubbling Up: Specialty teas; lemonade-and-iced-tea blends; restaurant originals such as housemade sodas; smoothies beyond fruit, featuring surprising ingredients ranging from kale or peanut butter – all are seeing increases in menu incidence. Fast casuals lead the way: Pret A Manger added Beet Beautiful Juice with apple, carrot, beet and ginger; Grand Traverse Pie Company unveiled a Pie Smoothie; and Panda Express is testing an in-store tea bar. When it comes to adult beverage trends, hops rule; IPAs and other hoppy craft beers are proliferating in many incarnations.

Also making the list:

Shrinking menus (selections trimmed at casual dining chains)
The next sriracha (hotter peppers, spicy mayo, aoili)
Asian-style small plates (dim sum style)
Brand name novelty snacks (Girl Scout Cookie cupcakes, Fritos Chicken Enchilada Melt)
Barbecue Love (authentic regional interpretations)

Learn more: Technomic Digital Resource Library

Organic Equivalency

The Organic Trade Association (OTA) last week welcomed a new organic equivalency arrangement between the United States and Korea, saying it reopens a critically important Asian market for U.S. organic processed food products, and will create jobs and opportunity for the American organic food and farming sector.

“We extend our thanks and congratulations to the officials at the U.S. Department of Agriculture and the Office of the U.S. Trade Representative for their success after a year of rigorous negotiations,” said Laura Batcha, CEO and Executive Director of OTA. “OTA and the U.S. organic industry have worked diligently to help make this happen. This new pact streamlines the trade of organic processed food products between the two countries while still upholding the highest standards of organic oversight. It’s a win for the organic sectors and for the consumers of both nations.”

Estimates are that under the new streamlined trading system made possible by this arrangement, American exports of organic processed foods and beverages to Korea, which were valued at around $35 million in 2013, will more than double over the next five years.

The U.S.-Korea equivalency arrangement was formalized on June 30.

Korea is the fifth-largest foreign market for U.S. agricultural products. The organic equivalency pact is in addition to the U.S.-Korea Free Trade Agreement signed in March 2012.

Source: Organic Trade Association, USDA’s NOP website.

Suja Biodynamic Teas

SAN DIEGO, Calif. – Suja Juice Co. has launch of its first line of cold-brewed, organic, non-GMO Project Verified and cold-pressured teas. The four new tea flavors, Chunmee Tropical, Honeybush Peach, Jasmine Pomegranate and Unsweetened Biodynamic Black are available exclusively at Whole Foods Markets nationwide as a part of the Suja Elements™ organic, non-GMO, cold-pressured line.

The Unsweetened Biodynamic Black flavor is Whole Foods Market’s first Demeter Certified Biodynamic® ready-to-drink tea. As with all other Suja Elements flavors, 20 cents from each bottle of Suja Elements tea sold will be donated to select charities as part of the Suja Elements Cause Collective™.

The line was co-developed with Whole Foods Markets. Retail price is $3.99 per 12 ounce bottle. In April 2014, out of its thousands of national suppliers, Whole Foods Market named Suja its “Non-Perishable Supplier of the Year” for outstanding performance, expertise in the industry, commitment ethical sourcing and partnership in product development.

Source: Suja Juice Co.

Assembly Outcry Follows Starvation Revelations

Reports of starvation deaths on abandoned tea gardens enraged members of the Assembly and led India’s press to shine a light on conditions in gardens in Darjeeling the Dooars and Terai.

The Times of India conducted an investigation detailing the plight of workers on several gardens, reporting widespread malnutrition, disease and 14 starvation deaths at Bundapani Tea Estate with 10 at Dheklapara Tea Estate. Both gardens are in Alipurduar.

Many tea workers on these estates have attained the age of retirement and have nowhere to go as their pensions are held up after companies closed the gardens, reports the Times. “The younger people receive INRs1,500 per month under the FAWLOI (Financial Assistance for Workers of Locked Out Industrial Units) scheme. When I went to register, I was told that I am not eligible as I have crossed the age of 58. What about my years of service that were left when the garden shut down? How am I supposed to take care of my family?” tea worker Ram Tanti at Dheklapara told the newspaper. The garden has been closed 14 years.

The revelations caused political outcry. In the Assembly Opposition Leader Surjya Kanta Mishr, with the Left Front, said that 120 starvation deaths on tea gardens have been reported to the state in the past three years. Twenty gardens have closed during the Trinamool Congress, he said.

Food Minister Jyotipriya Mullick said the deaths had nothing to do with starvation, according to reports in The Hindu. Workers continue to receive allotments of kerosene, rice and 125 grams of sugar per person, he said.

Dr. Mishra countered that the rice is unfit to eat. He led a walkout of Left Front MLA’s who protested, holding up posters asking “why will the workers of tea gardens die of starvation”

“The deaths in tea gardens used to occur in the past. The situation has changed now but more change is required,” said Parliamentary Affairs Minister Partha Chaterjee. He said the situation in the tea gardens had worsened during the 34 years of the Left Front government and they had no right to talk on the issue.

Mullick has assigned three food inspectors to visit the gardens in North Bengal and make weekly reports.

Under the Tea Act, the Tea Board of India can assign new owners to any estate that has failed for a period of three months. However, new owners face difficult challenges repairing gardens abandoned since the 1990s. Litigation complicates financing, factories require extensive repair, the most skilled workers have departed and untended bushes are costly to replace and will not produce acceptable tea for three or more years.

Tea Association of India Secretary General PK Bhattacharya told the Times that most gardens cannot reopen without a concerted effort from state and federal governments.

As many as 30,000 workers remain in housing on 23 gardens abandoned in the past several years.

Sources: The Hindu, The Times of India

Tea Production Down

KOLKATA, India – India’s unusually dry weather led to a 12% drop in tea production in May, according to the Tea Board.

Production in May fell to 91.4 million kilos, down from 103.7 million kilos in 2013. April production was down 25% compared to the previous year.

The total shortfall for the country is -8.5% for the period January through May, which includes the entire first flush harvest and much of the second flush.

The India Tea Association reports Assam gardens received 55% less rainfall than normal; Darjeeling received 60% less rain than normal and rainfall totals in the Dooars and Terai were down 40-60%. These conditions make it unlikely that India will match last year’s record output. Because domestic demand for tea continues to grow, the shortfall may hamper suppliers’ ability to maintain quality and meet export commitments.

Source: Tea Board of India

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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.

July 7, 2014

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Dan Bolton

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Uncategorized

Need To Know, Retail, Trends
Green Tea May Protect Prostate — Need to Know

What tea professionals need to start the week of June 30, 2014 —

Tea garden workers in India abandoned by estate management are starving… Green tea appears to protect the prostate… crafty artists are making ornate flowers out of intricately folded tea packets.

Empowering Smallholders

DARJEELING, West Bengal – Word this week of the starvation deaths of several tea workers at an abandoned tea garden was refuted by government officials who visited Raipur Tea Estate in Jalpaiguri district.

Conflicting accounts and no formal autopsies leave the exact cause of death in question, but the incident has focused attention on the plight of up to 30,000 workers on 23 gardens abandoned in the past several years.

Press reports, including the Times of India, last week described six deaths, including infants, but West Bengal Food and Supplies Minister Jyoti Priya Mallick, on Sunday toured the Raipur Tea Estate with North Bengal Development Minister Gautam Deb and said the deaths were due to disease and illness.

Deb told the The Hindu “there have not been any starvation deaths in the tea garden. I have talked to the family members of six workers who recently died and they told me that they were suffering from illnesses such as tuberculosis and high blood sugar,” said Mallick.

A physician on Saturday confirmed evidence of malnutrition at the garden where workers continue to pluck leaves without a wage.

Like the 460 workers at Raipur there are thousands struggling toj survive on abandoned estates in West Bengal, Kerala and Assam. Tea plantations are mandated to provide shelter, medical care, food subsidies and a minimum wage but once abandoned the resources disappear.

When a garden closes workers with skills operating a tea factory and those young enough to prune and pluck leaves simply move on leaving the weak and less skilled workers to fend for themselves. At Raipur workers continue to pluck leaves without drawing a wage to sell to bought leaf factories.

On Sunday Mallick announced steps to improve the supply of subsidized rations to workers and awarded INRs 5000 ($83) to the families of the dead. A vigilance inspection was ordered at 20 other gardens, according to The Hindu.

The distressed gardens failed during difficult financial times beginning in 2004, reopen periodically and fail.

The government will also try to convince owners of the tea gardens to reopen them, according to Mallick but banks are unwilling to write off the millions in debts and new owners can bear to make good on bad loans and non-performing assets.

The state of Kerala took a different approach, reopening many gardens that had failed mainly by permitting workers ownership. West Bengal had no such success.

Kerala’s experience is powerful testimony to the important work of training smallholders to strike out on their own.

Last week the Ethical Tea Partnership and IDH – the Sustainable Trade Initiative announced a very successful pilot program of outdoor classrooms that has trained 48,000 Kenyan smallholders to improve their agricultural skills and to process tea.

ETP announced a coalition of major tea companies would expand the program to 200,000 smallholders in Africa and Asia’s tea growing countries within the next three years.

ETP’s hands-on training in irrigation, composting, plant nutrition and protection from insects has increased yields by as much as a third. The Kenya Tea Development Agency (KTDA) supports the program through 1,600 Farmer Field Schools.

“Tea provides a livelihood for millions of people around the globe. These projects show that the industry is committed to helping smallholder farmers and workers earn a decent wage and farm better, and that it understands that this is fundamental to building secure supply chains and future success,” said ETP Executive Director Sarah Roberts.

Targeted nations include Malawi, Uganda, Rwanda, Tanzania, India and Vietnam. The effort is funded by multi-nationals that include Unilever and Tata Global Beverage and Taylors of Harrogate producers of Yorkshire Tea.

The Confederation of Indian Small Tea Growers Association (CISTA) is seeking assistance similar to Kenya and Sri Lanka to ensure better execution and monitoring of various tea production and promotional schemes. It will also help initiate a pilot program to develop an alternative market for small tea growers, according to The Hindu Business Line.

This, in turn, will help small tea growers produce better quality green tea leaves and ultimately upgrade themselves from mere green leaf producers to made-tea producers, according to the CISTA release.

In London delegates to the annual TEAm Up conference acknowledged it will take more than government programs to resolve key social and environmental issues affecting the sector. ETP and IDH, joint hosts of the event, updated producers, packers and retailers on the progress of their pioneering projects and explored how action to tackle them can secure supply chains and build brands’ reputation.

“It is amazing to see how the tea industry is making serious efforts and investments to address difficult issues such as wages and smallholder inclusion,” said IDH Chief Executive Joost Oorthuizen. “These and other deeply rooted problems, that only a few years ago were ‘owned’ by civil society groups, are now high on the agenda of the international tea industry. We can use this positive energy by working together, and collaborating with retailers, government agencies and NGOs, who all have a part to play.”

Learn more at: Ethical Tea Partnership

Green Tea Protects Prostate

The American Cancer Society projects that 233,000 men will be diagnosed with prostate cancer in 2014. It is the most prevalent type of cancer in men after skin cancer, affecting one in seven men in the course of their lives. Given tea’s reputation as a healthful beverage with powerful antioxidants, it is not surprising that researchers would be considering the potential impact of green tea on prostate cancer.

A new report published by “Metabolomics”in May 2014 found that epigallocatechin-3-gallate (EGCG), a catechin in green tea, may affect the work of one of the enzymes that powers cancer metabolism.

In many cancer types, the enzyme Lactate dehydrogenase A (LDHA) is present in elevated amounts. LDHA affects the way that the chemical compound pyruvate is processed. Pyruvate is produced in glycolysis and would typically continue to metabolize, giving the body’s cells energy. When cells lack the oxygen they need, pyruvate is instead converted to lactate because of the presence of the enzyme LDHA. Elevated LDHA keeps a process going that feeds the growth and survival of the tumor and also promotes the migration of the cancer cells throughout the body. It is suspected that if LDHA can be targeted, the growth of the cancer cells may be slowed. Researchers believe that treatments that impact LDHA may be important in future therapies.

In this study, led by Qing-Yi Lu of the Department of Medicine at UCLA, EGCG reduced the production of lactate in human pancreatic adenocarcinoma cells (MIA PaCa-2), as well as other metabolic processes such as anaerobic glycolysis, consumption of glucose and the glycolytic rate. It was assessed that the treatment “significantly modifies the cancer metabolic phenotype.”

The National Institute of Health reports being involved with five current trials related to prostate cancer and green tea extracts including studies on early stage prostate cancer, men having radical prostatectomies, and patients with low-risk cancers.

Source: Metabolic consequences of LDHA inhibition by epigallocatechin gallate and oxamate in MIA PaCa-2 pancreatic cancer cells, Metabolomics, Lu, Qing-Yu; Lifeng Zhang, Jennifer K. Yee, Vay-Liang W. Go, and Wai-Nang Lee. Accepted for publication May 2014.

Folded Flowers from Tea Bags

Here is a clever challenge for crafty tea drinkers who like origami. This video shows how to fold square tea wrappers into pinwheel like flowers.

Paper Printables shows you how to make a cute little paper star from just 8 tea bag sized bits of paper. Super easy and novel greeting card or gift wrap embellishment. Just download a beautiful tea bag design from http://paperprintables.com/ and get folding!

Source: Scrap Books, Crafty Attic

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.

June 30, 2014

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Dan Bolton

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Uncategorized

Consumer Behaviour, Retail, Tea
Samovar Launches New Tea Bar Concept – Need to Know

A row of tea infusion crucibles at the new Samovar Tea Bar in San Francisco.

What tea professionals need to start the week of June 16, 2014 —

Samovar Tea Bar launches a new tea retail concept worth watching…Honest Tea sells its billionth bottle… George Jage, founder of World Tea Expo, exits… Barak Obama sneaks out for a cup of tea.

Samovar’s Clever Retail Concept

SAN FRANCISCO, Calif. – Jesse Jacobs, founder of Samovar Lounge last week unveiled a new tea retail concept that bears watching.

The Samovar Tea Bar, located at 411 Valencia St., advances the idea that takeaway tea can be fast, inexpensive and every bit as trendy as a “third-wave” coffee shop.

The brightly lit, open layout (designed by Arcanum Architecture) resembles an Apple Store. The 600 sq. ft. storefront requires a small staff. The only food on the menu are scones available in savory or sweet with jam or honey.

The most significant innovation, however, is a line of what Jacobs calls “crucible” brewers built into the service counter.

This puts customers directly in front of sommeliers wearing aprons who measure the tea, place it in the glass chamber and then press a touchscreen to fill the crucible with hot water, agitate and infuse the tea. Elapsed time is a couple of minutes with the tea decanted into a pitcher and poured into a cup.

Samovar Tea Bar Owner Jesse Jacobs

In a flash Jacobs demonstrates all the captivating interaction of a single-pour barista with a healthful beverage delivered faster than coffee. The machines make quite an impression.

Manufactured by Salt Lake City-based Alpha Dominche they sell for $15,000. Khristian Bombeck, founder and inventor at Alpha Dominche, designed the Steampunk 4.0 with a computer to control a wide range of specific parameters, such as water temperature, agitation and water pressure as well as three grades of metal filters to reproduce a range of brewing methods.

An added benefit of the system is that it’s programmable, allowing staff to recreate these parameters at the touch of the screen. This also means that the Steampunk requires only minimal operator training.

The shop is frenzied urban friendly with six teas priced between $3 and $5. These include a black, green and herbal and a matcha shot or shake. Seasonal options include an iced tea. A copper cauldron of chai makes it possible to get a cup of tea as quickly at Samovar as from the famous chaiwalla street vendors in Calcutta.

The tea bar is open from 7 a.m. to 7 p.m. in a part of the city known for exceptional coffee shops like Four Barrel Coffee just up the street. Expect it to draw a crowd.

George Jage Departs World Tea Expo

LONG BEACH, Calif. – Tears and toasts marked the departure of George Jage as the organizer and host of World Tea Expo, the most vibrant of North America’s tea gatherings.

Jage, who co-founded the annual tradeshow in 2002, will lead CannaBusiness Media, a Colorado-based publishing and event company serving the medical marijuana trade. CannaBusiness is a division of Anne Holland Ventures, Inc., headquartered in Pawtucket, R.I. Publications include the Marijuana Industry Directory, Marijuana Business Daily and the annual CannaBusiness Money Show.

His last day at F+W Media was June 11.

George Jage is moving on.

On the Saturday ending the show a crowd of friends and family filled the office during the final hour of the World Tea Expo. A portable bar appeared as the show floor closed and Jage announced his departure to the crowd of exhibitors with wife Kim and their two children nearby.

The outpouring of emotion that followed was spontaneous. There were testimonials and tearful goodbyes, a blend of sorrow and light-hearted ribbing about his new position.

Devan Shah, who invested more in the Expo than any other sponsor, told the crowd that Jage’s role in organizing World Tea Expo was indispensable in the development of America’s specialty tea industry.

James Norwood Pratt extolled Jage for his commitment and charm. Jane Pettigrew offered her congratulations and Suzette Hammond, Director of Education & Brand Communication Strategist at Rishi Tea, was so tearful she could only give him a hug.

Kim Jage watched proudly. She departed the company in October 2013.

Jage, President & Publisher at CannaBusiness Media,quipped that he intends to take his next assignment “to new highs.” The job is a perfect fit, it is as though I have been preparing for this position for years, he said.

He and his family will remain in Las Vegas.

A Billion Bottles

Sales of Honest Tea passed the billion bottle mark last week, an accomplishment that took 16 years. Astounding when you consider the company launched 85 different beverages under the label and bought 22 million pounds of organic and Fair Trade Certified ingredients to accomplish this feat.

“Sixteen years ago, it almost felt like I sold every bottle myself. It’s nice to see our brand and mission reach an audience well beyond my personal sales route! This is a testament to the persistence and faith of our team as well as the increasing acceptance of organic ingredients,” said co-founder & TeaEO Goldman.

“One of our core missions is to democratize organics,” said Goldman. “Now when I visit with our suppliers, they know it’s not just some guy who started a company out of his house, it’s a representative of The Coca-Cola Company.”

It took 10 years to sell 112 million bottles. Following the company’s acquisition in 2011 Honest Tea became available in 100,000 outlets. In the past six years sales grew by 888 million bottles. The company now buys 8 million pounds of organic ingredients a year, most of it tea.

Source: Honest Tea

Presidential Preference

President Barak Obama dashed from his Washington DC residence last week to visit a Starbucks on Pennsylvania Avenue, bypassing the media pool. He was accompanied by White House Chief of Staff Denis McDonough and armed guards. He spent about eight minutes in the shop.

On their way back to the residence, a group of reporters arrived. Noticing the cup Bill Plante a CBS News reporter, loudly asked Obama, “how’s the coffee?”

“It’s tea,” the president responded.

The media subsequently ran 1,535 articles on the encounter.

Source: CBS News

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.

June 16, 2014

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Dan Bolton

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Uncategorized

Retail
Global Consolidation of Tea & Coffee Goliaths – Need to Know

What tea professionals need to start the week of May 12, 2014 —

Global consolidation in the coffee and tea segment has led to more than 100 deals valued at $23 billion the past five years. Last week’s proposed combination of Mondelez International’s coffee brands (Maxwell House) with D.E. Master Blenders 1753 BV (Douwe Egberts) will create a $7 billion behemoth that owns dozens of leading brands in the major coffee drinking countries… Oprah surprises Teavana customers in NYC… Kenya intends to increase local tea consumption by building new factories that add value to its largely bulk production of black CTC (cut, tear, curl).

Once investors identify a golden opportunity it soon catches the attention of bigger investors.

It is a little like the shiny minnow that darts harmlessly in the sea grass near the bottom of the pond. None of the really big fish pay much attention until a curious few one-pounders gather.

It is they who get gobbled.

In the past five years 100 deals valued at $23 billion have consolidated coffee and tea globally. Merger and acquisitions with the significant investment that follows, made a big impact on specialty tea brands. Coffee chains and juice ventures have been expanding so successfully they have now caught the attention of global firms.

Teavana’s acquisition of Teaopia followed by Starbucks’ acquisition of Teavana comes quickly to mind but Pickwick tea in Europe, Tea Forte, Talbott Teas (acquired by Jamba Juice) and the Unilever purchase of T2 are other recent examples.

In the $81 billion coffee market and $90 billion market for tea – size matters. Once a business has demonstrated that it is scalable it becomes edible.

The proposed combination of Mondelez International’s coffee brands with those of D.E. Master Blenders 1753 BV follows the acquisition of relatively small fry including Peet’s Coffee & Tea, Caribou Coffee and Tea Forte by Joh. A. Benckiser (JAB Holding Co.)

JAB paid $10.4 billion for D.E. Master Blenders and now owns Douwe Egberts, Senseo (single-serve coffee machines), Pilao, Merriild, Friele, Harris, Moccona, L’OR and Pickwick Tea. The company sells coffee in 45 countries and has leading positions in Norway, Denmark, Belgium and the Netherlands. The $3.4 billion DMB employs 7,500. It is the world’s No. 3 coffee marketer.

Mondelez, which owns Maxwell House, Tassimo and Jacobs Coffee, Carte Noire, Grande Mere, Kaffee HAG, Kenco and Gevalia, has the top selling brands in 10 countries including France, Sweden, Poland and Austria. The firm holds a second place in Germany, Greece, China, Ireland, Russia and Denmark. The company split from Kraft in 2012 and maintains its largest holdings in snack foods. It is valued at $64 billion. Mondelez is the world’s No. 2 coffee marketer earning $3.9 billion last year.

Master Blenders offered $5 billion for the Mondelez coffee unit. If approved the new company, to be known as Jacobs Douwe Egberts (JDE), will be the largest pure-play coffee venture in the world. Annual revenues would top $7 billion with a global coffee market share of 16.3%.

That makes JDE a big fish but dwarfed nonetheless by Nestle, the world’s largest coffee supplier. Nestle sells $20 billion a year worth of coffee, about one fifth of its $100 billion annual food and beverage sales.

Nestle accounts for 22.7% of the $81 billion global coffee market, according to Euromonitor International, a market research company headquartered in London.

The company earns 40% of its annual coffee sales from roast and ground, and owns several billion dollar brands. Its Nescafe soluble coffee business is immense. Nespresso remains the top selling single-serve brand and Nestle is building boutiques and marketing its espresso home brewers in Canada and the U.S. Nestle maintains excellent margins and it is broad based – but it is not nimble.

Rapid expansion of the middle class in Brazil, India and China is opening opportunities to sell coffee to millions of new consumers.

Merging the coffee units allows the combined company “significant growth opportunities in a highly attractive market,” said Pierre Laubies, CEO of Master Blenders and prospective head of the new entity which expects to save $1.5 billion annually once the merger concludes early next year.

Jacobs Douwe Egberts will benefit from its focus on coffee in identifying future acquisitions. There are many mid-sized retail and roast coffee ventures thriving in the emerging coffee drinking countries.

In North America DAVIDsTEA in Montreal has demonstrated that it can scale and so has Argo Tea in Chicago. Second Cup in Toronto is another potential target.

Next year when life in the pond begins to settle look for JDE to grab another bite.

Learn more: www.demasterblenders1753.com and www.mondelezinternational.com

Oprah Surprises Teavana Patrons

Oprah Winfrey is having a great time marketing her new Oprah Chai with pal Howard Schultz CEO of Starbucks.

The other day she surprised patrons at the new Teavana store in New York City, chatting and laughing and enjoying her new role as the nation’s spokesperson for tea. And on Sunday she donned the Green Starbucks apron and served customers a Mother’s Day buy one and get one free Teavana Oprah Chai Tea Latte.

The visits were a perfect photo opportunity with staff eager to make her tea strong to order. On her way out the door she handed out gift cards.

Curious about the combined power of television ads, promotions, TV interviews, personal appearances and hundreds of media reports on Oprah Chai I emailed the Teavana publicists at Starbucks a note requesting information on total sales (or charity contribution). I think first week sales will top $500,000.

What’s your best guess?
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Tapping Kenya’s Internal Tea Market

Kenya, which relies on small holders to grow black tea for export, has experienced a difficult period due to declining prices, high production cost, climate change, narrow market outlets and limited diversification and value addition.

This week Kericho county Governor Paul Chepkwony announced his jurisdiction plans to build a new tea factory on its 450-acre Kabianga tea farm for an estimated $3.4 million (Sh300 million).

The county is undertaking feasibility studies to determine whether the processing factory will turn a profit producing higher grade “value-added” teas suitable for export to international markets.

Tea grown in this region is currently processed as CTC (cut, tear, curl) at the nearby Momul Factory owned by the Kenya Tea Development Agency.

The project is worthy of note because value-added processing is the key to generating profits. It is also central to increasing domestic consumption. About 5% of Kenya’s tea is sold in the domestic market earning $250 million, a small number compared to India where almost 90% of the locally grown tea is sold within the country. Chinese companies have created many profitable brands for various segments of the market consuming 82% of China’s 1.85 billion kilo annual production.

Kenya’s Ministry of Agriculture is currently formulating a ‘national tea policy’ to encourage tea drinking. Principal secretary Sicily Kariuki told the Kenya Star on Saturday the policy will seek solutions to sustain production of high quality tea and reduce the cost of production, processing and marketing. The policy will also look into tea trade and value addition.

Kenya earned $1.3 billion from tea exports in 2013.

Learn more: Kenya Star

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May 12, 2014

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Dan Bolton

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Market

Retail