After a five-year hiatus, the Dubai Multi Commodities Centre is hosting its biennial Global Tea Forum on April 25-27 at The Address Dubai Marina Hotel, with discounted tickets now available. Saeed Al Suwaidi, Director of Agri Commodities at DMCC and a respected executive and technologist, shares his perspective on some of the issues to be addressed during the DMCC Global Tea Forum in April.
Caption: Saeed Al Suwaidi, Director of Agri Commodities at DMCC
Saeed Al Suwaidi | Unpacking the Future of TeaSaeed Al Suwaidi | Director Agri Commodities
Exploring Consumer Trends and New Market Opportunities
By Dan Bolton
The Dubai Multi Commodities Centre, founded in 2002, is the world’s largest and most successful free trade zone, now supporting 18,000 companies from a wide range of industries and sectors.
DMCC’s Tea Center, founded in 2005, is a global hub for value addition and the top tea re-exporter in the world. Tea is one of the most widely traded commodities worth nearly $50 billion, expected to grow by more than 40% this decade.
Dan Bolton: This year’s theme, Unpacking the Future of Tea: From Consumer Trends to New Market Opportunities, is compelling, given the upheaval the tea industry has experienced since the forum last convened in 2018. Will you share with listeners your perspective and describe some of the issues to be addressed during the DMCC Global Tea Forum?
Saeed Al Suwaidi: It’s amazing how everything in this industry is restarting, almost a reset. People are looking at it with fresh eyes. I mean, one of the things about this year is that it’s not an exceptional year. The past five years for us have been very different with COVID lockdowns, and everything that happened during those years changed us, and with that being said, there’s much eagerness for everything to resume almost as normal.
During the lockdown, what happened?
The main thing that’s happened is people experimented. Everybody had some tea in their cupboard and didn’t know all the nice things about it. So now, with everything open again, they’re more into experimenting with the world of tea. One of the things that we want to know is what we can bring to the table and what the world can bring to the table regarding tea and everything around it.
People call it the poor man’s drink because it’s accessible to everybody. It’s widely traded, and it’s over $50 billion worth of trade annually, and this is going up by at least 30 to 35 to 40% in the next ten years, so there are many opportunities. During COVID and right after COVID, everything that happened to the shipping industry affected everything, how things move and how tea moved. Now, it’s less economical for certain places to have tea than they would wish with the rising cost of shipping and the constraints within shipping. This is something that we want to touch on in the forum as well as to find the best ways of maneuvering trade routes. Our theme is, Unpacking the Future of Trade to see if we and everybody can add value so that everybody in the value chain benefits, and most importantly, end consumers anywhere to have something in their cupboard. So, we want to encourage the industry to see where there’s more value.
Dan: DMCC has undergone several changes in the past five years. DMCC’s tea center continued to expand its trade capacity as the world’s top tea re-exporter, opened a new coffee trading center, its first lounge, and weathered economic turmoil stirred by the pandemic while deftly managing logistics under duress. Will you update us on DMCC’s current initiatives? I heard that trading cocoa is under consideration.
Saeed: The DMCC Tea Center has been here for 16 years. We celebrated our 16th year this year, and the DMCC Coffee Center highlighted replicates that model in the coffee industry.
We went through the rough times of COVID just after its launch, but we are full steam ahead. Capturing the coffee business makes sense, especially logistics-wise. We’ve become a much better logistical center for these two commodities and are now looking at cocoa.
The cocoa industry is much more complex than coffee and tea, but we are looking at it seriously. You know, the majority of everything chocolate is mainly from West Africa. Our sister companies and logistics partners would help ease the movement of everything, chocolate, in terms of by-products, and so forth. We’re [also] looking closely into spices and tree nuts.
Let’s establish a center focusing on tree nuts and certain spices that can work together. We’re looking at things that won’t cross-contaminate and so forth.
We saw record growth last year, something that’s drawn our attention regarding forecasting for the future. We are considering expanding two or three-fold from where we are today.
Ahmed Bin SilayemAnil CookeThe Address Dubai MarinaKolukkamalai Tea Estate Tea Processing Factory
“Capturing the coffee business makes sense, especially logistics-wise. We’ve become a much better logistical center for these two commodities and are now looking at cocoa.”
– Saeed Al Sawaidi
Dan: DMCC brought you on board in part for your technological expertise, and I emphasize that because the future you are discussing is deeply interwoven with technology. Tell us a little about your background.
Saeed: All my entire career, I worked in technology, starting from Fortune 500 companies to government entities in the UAE, semi-government entities in the UAE, and American establishments wanting to get their foot inside the GCC or North Africa.
I have always had a big interest, funny enough, with both coffee and tea all my life. So, I visited tea estates in Asia and various establishments and brands of tea and coffee.
When I saw this opportunity, I wanted to be part of this amazing organization. It is and has been the number one free zone in the world for the past eight years and captured the number one spot of rough diamond trading in the world as well.
This means that they are the best, so of course, I wanted to be part of this organization. I saw the opportunities there, and what we can bring in with technology. You must be very fast in adaptation of movement and changing, and this was not the case overall with the tea industry. So yes, it’s the case somewhat of Dubai as we really adapt and change. But when it comes down to industries, like tea, especially, it’s not that kind of speed to change. One of the things that I want to change is how fast we can adapt to changes in this industry. I think when you look at this place specifically the tea business criteria, with a vision set by the Executive Chairman and Chief Executive Officer, Ahmed Bin Sulayem, is to set up a tea center out of the tea growing regions to be a hub for tea, it’s not an easy task and also no one would think to have a center like this in a place like Dubai.
Not everybody will buy it, and there was a very clear understanding of the movement for this to be established. We saw exceptional growth last year, and in the Agri Commodities, we’ve seen more than triple-digit and quadruple-digit growth in certain verticals.
Dan: I believe the future you’re describing is deeply interwoven with technology.
Saeed: I agree. There’s a lot of things that happened over the last two decades, specifically in technology if we’re talking about coffee and tea; what’s happened in coffee is we see more and more, like, you know, and retailers are getting in touch with farmers, and this is due to technology.
You have all these traders in the middle, like, shrink. There’s more money going toward the farmers, and this is one of the better things happening today, both in tea and coffee.
In terms of price discovery, farmers anywhere, whether in Sri Lanka, India, Kenya, or China, you name it, didn’t know the price their commodity gets. Due to technology, they now know. You had all these traders in the middle who would trade, and trade and trade, driving up prices and leaving the farmers out of the equation. Today both of our centers are working with governments because this is one of the only places where you can still own the tea and stilt own the coffee and your other commodities; whether it’s transferred or changed, or whatever, you can still own it throughout that value chain, and you retain the value, and this can really make a difference for estate owners.
Dan: What have you most enjoyed about this position?
Saeed: There’s so much to learn from everybody in the industry. I love learning, and this is a continuous thing. I have that mindset every day from farmers. I literally have everybody within the value chain to see. So I know the strains of the state owners and people who grow the tea, and people who buy it, and how to get to the end shipping and all of this, I see everything from start to end, and then the end product goes up goes on the shelf so to see that, and to see what can we add to have better is for more people around the world to consume this amazing beverage.
People understand that coffee 20 years ago, you would have your regular coffee. Today, there is a specialty coffee and different ways of extraction and everything.
I think this is just happening right now in tea. We see a lot of companies that are into extracting tea into new formats, and we see new machinery and tea. When you look at the coffee side, you have all these amazing machines, and you have all these different ways and different cups and mugs and so forth.
But when it comes down to tea, you just have your regular cup. This is changing right now and we’re going to see this with bubble tea and all of these kinds of new trends, such as adding tea to different ingredients and so forth, where coffee can’t be. I think we’re just seeing the beginning of that.
DMCC is a center of global trade serving 18,000 companies. Headquartered in Dubai, it is the world’s most interconnected Free Trade Zone and the leading trade and enterprise hub for commodities.
Link to share this post with your colleagues
Signup to receive Tea Biz weekly newsletter in your inbox.
Brook37 founder Mou Dasgupta says the new era of tea is not just introducing tea but also explaining how you consume it. We are saying that yes, traditionally, you drink tea from a cup, but why not break the barriers and drink tea from a champagne glass or chill the tea and drink it in a martini glass? Make other drinks using tea. Open up your imagination; don’t be bound by the past. Take our old drink, modernize it, and just do fun things with tea.
Listen to the Interview
Mou Dasgupta, founder of Brook37 The AtelierMou Dasgupta, founder of Brook37 The Atelier
Elegance Begins with the Leaf
Mou Dasgupta is pursuing her passion for tea after 25 years of trendsetting corporate leadership in the financial services industry. She developed a love for fine-quality tea while living in West Bengal, India, where she attended university in Calcutta. She trained in the sciences and holds a master’s degree in software engineering. “Brook37 is proud to bring fresh thinking and an ethical and sustainable mindset to all we do,” she says. “Our unparalleled tea selection of flavors, aromas, and colors from around the world, along with exquisite packaging, help you choose a positive and aspirational lifestyle.”
Dan Bolton: Thank you for taking the time to talk about your vision of a new era in tea and how it led to the launch of Brook37, a premium brand sourced directly from suppliers in the most famous of India’s tea-growing regions. What are some aspects of this new era?
Mou Dasgupta: In describing a new era of tea, I want to talk about tea reimagined in the USA.
The new era of tea is not just introducing tea. It’s also explaining how you consume tea. So we are saying that yes, traditionally, you drink tea from a cup, but why not break the barriers and drink tea from a champagne glass or chill the tea and drink it in a martini glass? Make other drinks using tea. Open up your imagination; don’t be bound by the past. Take our old drink, modernize it, and do fun things with tea.
That’s how I feel that the younger generation may find it more interesting. When I go to a friend’s house, they offer me Diet or a regular Coke, or maybe a club soda as a non-alcoholic beverage. I want people to offer tea. It is a non-alcoholic beverage with fantastic health values. So, keep our tea caddy next to your wine bottle and open a beautiful tea caddy when your special guests arrive. That’s how I want to position tea.
Dan: You grew up drinking good tea.
Mou: I moved to the USA from a place that is about 300 miles from Darjeeling about 25 years back, and one of my big struggles was to find the high-quality tea that I used to drink before I moved to the USA.
Over here, you can find great coffee stores everywhere, but finding a great tea shop takes a lot of work. Tea is also looked upon as a health drink. It has many health values, but I want to make people understand that tea can bring people together. Tea can reconnect people and rejuvenate; it’s a drink that can elevate the moment, and it’s a non-alcoholic drink with value like fine wine. And you know, in wine, the quality of the grapes, the soil, and the weather drive how the taste and the flavor will vary. Darjeeling tea is exactly like that. I want to make people aware. I want them to taste Darjeeling tea and see that it’s a different drink altogether.
Dan: Many brands position themselves as premium, but only a few succeed in conveying the elegance visible in your color palette, your choice of tins, and a clever pairing of an engraved traditional silver-plated infuser with a modern silver measuring spoon in your gift set Will you discuss your view on what makes a tea premium?
Mou: First, elegance starts with the look of the tea leaves. A high-quality tea leaf is not dust. It’s a long, beautiful leaf, and it is rolled to perfection. It’s dried to perfection. It’s hand-picked at the perfect time. Recently, on a trip to Darjeeling, I noticed a tea leaf plucked before the rain could taste and smell different than a leaf plucked after the rain. It’s the elegance of flavor. It’s the elegance of taste.
To that, we added silver accessories. When you drink a high-quality Scotch or a single malt, you could drink it from a plastic cup, but most drink it from a beautiful crystal glass. High-quality Darjeeling tea demands that kind of setting. It is more than just flavor and not just the tea’s color. It’s also the accessories, all of them, that elevate the moment.
That’s where beautiful packaging comes in and where the look of the tea matters. So that people feel it’s a beautiful moment that they’re creating, whether it’s with their children, whether it’s with their grandchildren, whether it’s their significant other, or by themselves. Tea is an elevation of the moment — any moment.
Dan: You have a wonderful founding story. You first found success as a software engineer, angel investor, and executive director of JP Morgan Chase and Morgan Stanley before directing your talents to tea.
Mou: My primary inspiration is that for 25 years, I have been looking for this kind of tea. I had a very hard time finding Darjeeling tea like the tea that I enjoyed in India. In our Country, in the USA, the tea comes through many hands a lot of the time, and every time you open a bag, the quality of the tea goes down.
When I left my job and decided I wanted to do something on my own, something more meaningful, tea kept coming back to me.
I realized this was an opportunity because all the best quality teas get picked up by Germany by Japan right away from Darjeeling. In most cases, they don’t come to our country. We are deprived of that highest quality. Brook37 is buying exclusive small lots of seven to ten kilos of the best Darjeeling offers.
That’s what drove me. I don’t want to just bring the tea; I want to bring the whole experience with it. We call ourselves the Chanel of tea because we present tea as a high-end beverage that celebrates life. We have created a brand that will catch everyone’s attention, all the sensorial organs, the look, smell, touch, and feel all of it together. That’s what inspired me.
I didn’t want a company that was all about money or finance. It was not a motivating factor for me. I wanted to have a responsible company. There is a saying that we do not inherit nature or the environment from our ancestors; we borrow it from our children.
I didn’t want a company that was all about money or finance. It was not a motivating factor for me. I wanted to have a responsible company. There is a saying that we do not inherit nature or the environment from our ancestors; we borrow it from our children.
The environment that I’m borrowing from my children, I want to give it back in good shape in a conscious way. From day one, we have been building a conscious brand, plastic-neutral, biodegradable, and reusable packaging, certified by 1% by the planet, etc. It must be empowering, and it must be socially conscious.
“There is a saying that ‘we do not inherit this earth from our ancestors, we borrow it from our children.’ I want to give back in good shape the environment we have borrowed from our children.”
– Mou Dasgupta
Dan: Will you share your inspiration for creating a women-led team with listeners?
Mou: It’s not a conscious decision. I didn’t come in saying that I was only going to hire women. But 90 percent of the people working in our brand are women. We found the best talents who happen to be women. The best tea pluckers are women, and the best tea packaging laborers are women. Our tea sommelier happens to be a woman. Our photographer and videographer is a woman. Even our marketer and our social media leads are women. I just happened to have a team of women I found to be the best at their work.
By elevating Darjeeling tea, we also elevate the people back in Darjeeling. It’s with pride that we produce one of the best teas in the world. I want them to share that sense of pride. Darjeeling should be a name that stands above the rest, not just a tea; it is a distinguished beverage, and hopefully, Brooke37 will give that to them.
Dan: Will you discuss sourcing? That’s a challenge in Darjeeling right now, with many of the 87 registered estates in distress, several recently acquired, and all experiencing an overall decline in production from around 10 million kilos 10 years ago to six million kilos in recent years.
Mou: My primary goal is to bring the best quality tea in my country to the USA. And it is not to promote Darjeeling’s biggest tea growers or tea estates. It’s really to work with anybody who is growing high-quality tea.
We are looking for small growers. We’re looking for entrepreneurs innovating new types of teas and bringing them here at a good price. I do feel that, at times, the prices are compromised. When someone gives 70% to 80% off the price of tea, that is just dust of Darjeeling tea, and calls them Darjeeling, they are diminishing Darjeeling tea to the world. Sometimes the price paid at the back end is too low and unfair to the tea growers.
We are ready to pay $100 for a bottle containing five glasses of fine wine but not ready to pay $100 for 40-50 cups of the finest tea. If we don’t elevate Darjeeling to that point, people in the back end will always suffer.
I alone don’t have the power to eliminate poverty in Darjeeling. I make sure that I at least do my part. I promote their work, I promote their tea, and I promote their small businesses because I am also a small business owner.
Nathalie Roos, CEO of ekaterra tea, this week announced “with pride an enthusiasm our corporate name change to LIPTON Teas and Infusions.”
“This change comes together with our commitment to drive the whole tea industry upwards and grow value for all and our planet,” said Roos.
Lipton writes that the rebranding will strengthen the company’s position as the world’s number one tea business and affirm its approach as a consumer-centric organization. Ekaterra currently generates €2 billion in annual turnover from sales in 150 countries. The name change is more inclusive of non-traditional brands in the ekaterra portfolio, such as Pukka and TAZO. The company owns 34 brands including PG Tips, the T2 retail chain, and regional brands such as Brooke Bond Red Label and Bushell’s in Australia.
| The First of Seven Agriculture-Focused Satellites is Safely in Orbit
The SpaceX Transporter safely delivered the first Agri-Focused Earth Observation Satellite (EOS) into orbit Jan. 3. The constellation of seven satellites will each monitor one million square kilometers daily, covering 100% of the largest areas of farm and forestlands, about 98% of the globe’s land surface. The satellites, designed by Dragonfly Aerospace, scan 13 bands to generate panchromatic and multispectral imagery to monitor daily crop growth, water stress, weed spread, the presence of pests, and temperature variations at ground level. Tea growers can use the data to precisely control CO2 emissions, cut energy consumption, decrease water usage and reduce losses to pests.
| The Specialty Tea Institute Ceases Operations According to Peter Goggi, president of the Tea Association of the U.S.A, the decision was driven by economics and a decline in interest. STI will not accept membership applications in 2023 and will not conduct classes anytime in the near future, he said. Goggi writes that STI could not offer many courses over the last three years due to COVID and had experienced a dramatic drop in both membership and interested students. STI is the association’s educational arm, offering basic through advanced training. The institute’s Certified Tea Specialist and Certified STI Instructor credentials and STI Tea Mentors program were well respected with participation by tea professionals around the world.
| PLUS Mou Dasgupta, founder of Brook37 The Atelier in Princeton, New Jersey, is pursuing her passion for tea after 25 years of trendsetting corporate leadership in the financial services industry. She developed a love for fine-quality tea while living in West Bengal, India, where she attended university in Calcutta. She says Brook37 “is proud to bring fresh thinking and an ethical and sustainable mindset to all we do,” she says. “Our unparalleled tea selection of flavors, aromas, and colors from around the world, along with exquisite packaging, help you choose a positive and aspirational lifestyle.”
Grace Farms Foods CEO Adam Thatcher says that even though slavery was abolished globally nearly a century ago, more than 28 million people are trapped in forced labor worldwide. Poverty and lack of access to education create opportunities for those who stand to benefit from the exploitation of vulnerable men, women, and children. In modern times, forced labor takes the form of work with little to no pay, fear and coercion, and restricted freedom of movement. This often occurs at the beginning of the supply chain when our tea is grown, food is harvested, our clothes are made, and the materials used in our buildings are extracted.
Listen to the Interview
Grace Farms Foods CEO Adam ThatcherGrace Farms Foods CEO Adam Thatcher
Ethically and Sustainably Sourced Tea
What makes our line of organic teas unique is that the herbal blends are naturally sweet ? much sweeter than you’d normally expect. They’ve got about 10% organic stevia leaf in them, just as if you were to pick it out of the garden. Since the success with those blends, we’ve been developing a line of black teas, and we’re getting ready to come out with green tea and wellness blends, says Grace Farm Foods CEO Adam Thatcher.
Grace Farms Foundation aspires to advance good in the world, providing a peaceful respite and porous platform to experience nature, encounter the arts, pursue justice, foster community, and explore faith.
Dan Bolton: Adam, welcome to the podcast. Tell us about your mission and vision and introduce our listeners to how the tea you sell plays a key role in improving suppliers’ lives.
Adam Thatcher: Thank you for having me on the program. I’m a big fan and very excited to share our story.
The story begins at this amazing place called Grace Farms. It’s a cultural and humanitarian Center in New Canaan, Connecticut, where we’re free and open to the public, we pursue justice, and where people can come and encounter the arts.
We also foster community at this place. We want to be open and welcoming and inviting to everyone.
Tea has played a critical role, tea being this common beverage that everyone enjoys around the world that conveys a sense of hospitality of welcoming from a host to a guest, but also the comforting nature that when you come to a new place, whether it’s at a friend’s house, or going to a place like Grace Farms, a nice warm beverage helps you lower your shoulders a little bit, find that commonality and then begin the dialogue.
So, our story with tea begins there. We expanded our tea game to another level when we established Grace Farms Foods, a public benefits subsidiary of Grace Farms Foundation created to share our signature coffees and teas with the world. And that’s really where we got started.
Grace Farms’ elegantly flowing roof. Photo by Sahar Coston Hardy
Dan: Your range of premium teas seeks to end forced labor and mirrors Grace Farms’ aesthetic: Making the world more just, sustainable, and peaceful. Will you tell listeners about your blends and sourcing strategy?
Adam: Our tea blends are unique because Grace Farms resident tea master Frank Kwei developed them.
Frank has welcomed hundreds of thousands of visitors to Grace Farms with a warm cup of tea and fantastic conversation explaining what Grace Farms is. Our first line of teas were organic herbal blends that are his own family recipes.
Frank Kwei
What makes them unique is that the herbal blends are naturally sweet, much sweeter than you’d normally expect. They’ve got about 10% organic Stevia leaf in them, just as if you were to pick it out of the garden. I find it hard to go back and drink a regular herbal tea like chamomile that doesn’t have this natural sweetness. And for us, it’s exciting because we’ve packaged a perfect blend all in one sachet, with no need to add sugar that probably isn’t organic and has been heavily processed.
Since the success with those blends, we’ve been developing a line of black teas, and we’re getting ready to come out with green teas and wellness blends, all using Frank’s expertise to come up with these inspiring blends.
Chamomile Citrus | $14BREATHE | Turmeric-Ginger | $14Herbal Collection | $65Grace Farms sources coffee and tea from organic, sustainable suppliers vetted for ethical labor practices.
Dan: Where are you sourcing your teas from?
Adam: We source teas and herbals from around the world. So right now, our teas are coming from India and Sri Lanka. We’re now going to begin bringing in teas, green teas from China, and Matcha from Japan. The herbals come from a wide variety of places. For example, rooibos comes from South Africa, lavender from Croatia, and chamomile from Egypt. We are trying to find the best origins from a quality standpoint and then digging into the supply chain to ensure that they are ethically and sustainably produced, sourced, and traded.
Dan: Let’s talk about your concerns about forced labor and the problems associated with child labor. Describe for our listeners what can be done and how.
Grace Farms Foundation is a not-for-profit organization, and its stake in the ground is to end forced labor worldwide. It has a particular focus on supply chain analysis and a priority on the building materials supply chain because it sits at the interesting intersection of architecture and human rights.
Tea has given us this new opportunity to not only demonstrate through building materials, which is a very unconsumed friendly industry, right? You build a building once, and it lasts for 50 years, whereas tea is something that’s consumed daily. So, when we decided to start Grace Farms Foods, we ultimately decided to start it with three goals. The first is to share our signature teas with everyone. The second is to demonstrate and educate about ethical and sustainable supply chains. And the third is giving back 100% of the profits to support Design for Freedom. This initiative began at Grace Farms to stop forced labor in the architecture and construction industry.
We began building a program to demonstrate and educate about ethical and sustainable supply chains during the pandemic. The opportunity to travel to origin wasn’t an option, to begin with, so we started by saying, okay, how do we have some reassurance that we’re not participating in forms of child labor but also make sure that human rights are being respected and, and that fair pay is being given to those farmers or those tea workers for the work that they’re doing?
So, we looked at Fairtrade certification and changed our Fairtrade certifier to partner with Fairtrade International and the US branch of Fairtrade International, which is Fairtrade America; it’s the most globally recognized Fairtrade certification around the world. It began in Europe and works with FLOCERT. We saw this as an opportunity to lead the conversation in the tea industry here in the United States by partnering with Fairtrade International to become Fairtrade America’s first US brand to use Fairtrade-certified ingredients in our teas.
Fairtrade International has more rigorous standards, and it is producer-led. It focuses on smallholder farms and includes those stakeholders in every conversation, from setting standards to paying premiums and minimums to the ecology and environmental practices exhibited by these certified farms that we sourced from, so that was the beginning for us. But then that’s just using a third party to say, Okay, there’s been an audit, they’ve met our standards, but then there’s this need for what I think is the most important is that first party audit you going to the origin, meeting with the tea pickers, talking with the team managers, and making sure what they’re saying aligns with what the factory worker is saying, as you’re asking these questions, and getting to really immerse yourself in the culture. Tea in some of these areas around the world, like Darjeeling, is more than just a job or an industry. It is life. It is culture. And so, for us to experience that was incredibly validating. It creates an opportunity for long-term relationships when you find a partner with values alignment like your own.
Dan: Two-thirds of the transaction price is concentrated toward the retail end of the tea supply chain. How do you bridge the gap between a consumer paying a higher price and a producer not fully benefitting from that well-intentioned purchase?
Adam: As I mentioned, partnerships are the cornerstone to creating a fantastic and sustainable product, not only from the conventional view of sustainability, environmental and from humans, right said but also from a business side, right, because as you develop a stronger relationship and partnership, then you find more efficiencies, and you’re able to supply even a larger market. Our partnership began, ultimately, with a fantastic individual by the name of Kunall Patel, who is the owner and CEO of Davidson’s Organics.
In my opinion, all tea needs to be organic. It is crazy that the wide, very large share of the tea market is grown with pesticides sprayed on it and synthetic fertilizers put into it. This is a very, very lightly processed product that is put in a cup with boiling hot water poured on it. Then you drink it. So growing tea organically addresses two issues, the consumer’s health and the lasting effect on our environment.
Organic farming practices have been proven to protect soil health, improve water retention, create more resilient plants, and create a more reliable crop year after year. So that should be the non-negotiable, lowest common denominator the entire tea industry should be moving towards.
Now, beyond that, right? Let’s be honest, deforestation is also occurring because there is not a proper living wage for small farmers which is the reason they need to continue expanding their growing areas. The last consideration is whether the suppliers are using biodynamic practices. Biodynamic farming is essential. Intercropping with native species of trees and other shrubs that attract different types of microorganisms and insects that all benefit the soil health, not only helping to trap carbon tea, is actually a very effective plant at absorbing CO2 and trapping it in the soil. Biodynamic farming practices accelerate that process.
So, that’s where there needs to be buy-in, and that does have to come from consumers. Right? Consumers need to stop buying tea that’s not organic and does not meet those standards.
Our commitment is that the tea source will meet these minimum requirements. One of the reasons we chose to partner with Fairtrade International is because they have a whole Climate Resilience Program that helps educate the producers at origin on how to create more resilient farms and how to use more organic practices that will combat climate change.
As we grow and we’re able to generate a profit, nothing would make us happier than to continue to strengthen those relationships with the producers where we’re sourcing our teas.
Wednesday afternoon tea serviceOnce the snow falls visitors can experience the wonders of nature by snowshoeing across a mesmerizing winter landscape .
Grace Farms: The Season of Light
During the winter season, Grace Farms offers opportunities to reflect and engage in programs for people of all ages, from afternoon tea on Wednesdays, served by expert Frank Kwei, to helping those in need to listening to improvisational arrangements of seasonal music, to participating in one of our many programs related to our initiatives of nature, arts, justice, community, faith, and Design for Freedom.
As in all seasons, visitors are invited to explore our nearly 80 acres of natural landscapes and walking trails. For those interested in a deeper understanding of nature and our universe, there are a variety of facilitated programs such as bird watching and astronomy. Grace Farms is open and free to public six days a week.
Sandip Thapa, the founder of CuppaTrade, an eMarketplace that enables bulk growers to sell online, says the newly launched B2B eMarketplace exploits new-age tech, including AI and VR, to offer the expanding segment of small tea growers access to a diverse and global base of tea buyers. not interested in maintaining the status quo, “the old way of doing business needs an overhaul,” he says, adding, “We want to blow up the market basically, and to bring in efficiency, make trade much faster, make it extremely dynamic and bring the sellers and buyers closer.”
Listen to the Interview
Cuppa Trade Founder Sandip Thapa on fixing the old way of doing business in tea.
A Fresh Perspective
Sandip Thapa started his career as a tea taster and auctioneer. He later spearheaded India’s first tea eMarketplace – the Jorhat Tea Centre, working with the Tea Board of India.
Sandip Thapa, Founder CuppaTrade
CuppaTrade is a newly launched B2B platform offering the expanding segment of small tea growers access to a diverse and global base of tea buyers.The platform exploits the new-age tech including AI (artificial intelligence) and AR (augmented reality) to connect tea producers across the world directly to buyers worldwide. It facilitates the sale of authentic GI tea to buyers, reducing cycle-time, ensuring quality, providing better renumeration to sellers and making procurement cost-effective for buyers.
In this conversation with South Asia Correspondent Aravinda Anantharaman, Thapa describes a sales cycle that takes far too long, lacks transparency and favors large buyers. Stakeholders shows little interest in innovation. “The need of the hour is a fresh perspective,” he says.
Aravinda Anantharaman: Congratulations on launching CuppaTrade. Will you tell us a little about it?
Sandip Thapa: Thank you. CuppaTrade is an online marketplace catering to the tea ecosystem. We are focusing on the small tea growers’ cooperatives, the bought leaf factories, and the small producers. And we are increasing their buyer base. We are working on their market expansion, and we are going to the secondary and the tertiary buyers. We are connecting the small producers with a very large number of small buyers across the country. This is the plan in phase one, and in phase two we intend to open up for cross-border transactions as well, wherein we focus on the exports.
We want to blow up the market basically, and to bring in efficiency, make trade much faster, make it extremely dynamic and bring the sellers and buyers closer.
Aravinda: Looking at the Indian auction system, where did you feel there are gaps that needed to be plugged?
Sandip: The entire process should have evolved. It is almost 180 years old and by this time everyone knows how tea is to be treated. So, the quality assessment is set, the pre-sale and the post-sale processes are set. What are the responsibilities of the seller? What are the responsibilities of the buyers? These are set and on the basis of these conventions, you see a lot of comfort in private sales. Wherein, the seller is sending samples directly from the garden; the seller is taking the onus of taking care of the quality and the buyer is taking the responsibility of timely payment or whatever the understanding is, with regards to paying prompts or credit terms.
What we should have done is, in the auction system, we should have gone many years ago directly to ex-garden sales.
Technology has yet to play a pivotal role in the ecosystem. So if it’s a broking house or an auction organizer, they could have come up with an app or platform wherein directly from the garden, the tea invoices for sale, could be uploaded and by the time it’s come to the warehouse, your kuchcha or the provisional catalog would be ready. They could have reduced the cycle time. And this is very easy. These are very common sense interventions. Nobody’s doing it, so we might as well do it through CuppaTrade.
Now, we have knowledge in the palm of our hands. Why can’t trade be that quick? You have the learnings of the marketplaces like, Amazon and Flipkart. Unfortunately the tea industry has been bereft of these innovations. You have pockets of innovation, but they’re very tiny. You have progressive sellers and buyers, that’s why you’ve seen the plethora of D2C brands coming in directly trying to sell from the gardens.
So for us, the number one concern is the pace of transaction.
Second is opening up of the market or the platform to add a very large number of buyers and sellers and to showcase small tea growers and producers because the kind of teas they are producing, although the volume is very small, has limited representation.
Next you have to consider credit facility, with regards to receiving the material and making the payment, already set.
It is a Tea Board run auction. The banks and fin-tech companies, could have easily opened up credit facility to the buyers or even to the sellers through the platform. That takes care of the working capital concern.
CuppaTrade offers buyers four ways to complete a transaction.
Finally, I feel it’s very restrictive in the sense that it’s not enough to have a tea board license if you are a buyer. Even if you have a license, you probably will not be able to operate out of any auction center if the committee doesn’t allow it.
So the Buyers Committee is almost like a club. New buyers do get added in the auction system, but if you dig deeper, who are these new buyers? It’s the same old firms registering their new firm. So that is how the new buyers are coming in the platform. But it’s the same handful of 20, 30, 35 buyers. So these things should have evolved. Who should have anchored these? It could be the auction organizer, CTTA (Calcutta Tea Traders Association) or the GTAC, or STAC. It could be the Tea Board, it could be the brokers. But unfortunately, because the industry is so old, you have various interest groups and they run in their own direction. They have their own agenda, they have their own interests to fulfill, and that is how you see where the industry is at the moment.
“The only segment that has made headway are the traders, packeteers, and merchant exporters. They buy low and sell high. That premium never returns to the small tea grower (STG) or producer (STP).”
– Sandip Thapa
Aravinda: In terms of price discovery and in setting prices, the auction offers the benchmark. How would CuppaTrade do that?
Sandip: It’s very unfortunate because when you have a very limited set of buyers, price discovery will suffer. We respect the buyers version, because they also have their own interest to protect because they are looking for value. And with the commodity prices going up, it’s not just the tea price, you have other various costs which is going up, one has to control cost somewhere. Unfortunately, the producers are at a receiving end, where they don’t have much of a say.
And you have to understand the buyers are mostly either traders or agents or packeteers in the auction system. So the procurement cost has to be low so that they make a larger margin. The platform has not been opened to the secondary or tertiary buyers, no one would want to go there and bring them onboard. Else, then what happens to the primary agents and buyers?
We feel everyone can coexist. A small buyer can become a medium-large buyer. A large buyer can become a very large buyer because, when you look at the FMCG industry, everyone is going rural, everyone is going to tier-two, tier-three cities. Everyone is trying to get into just-in-time to fill the shelves, use technology so that inventory is just right and operational costs are down. Similar things could have happened, but when you have a very limited base, how would you expect a fair price discovery?
Yes, you need discipline and you need to put systems in place. But why can’t teas be bought by international buyers at the same time? You have to have mechanisms in place. And it may not be suitable for all kinds of tea. That’s all right. But even on an experiment basis the platform should have been opened up. If it’s a very high quality tea, anyway it’s going to Europe, why can’t the importers be asked to be part of the platform. With a click, you would have expanded the market. And it would be all digital. You log in, explore the catalogue and you bid. How difficult can it be? And now we have working examples, it’s not that we are reinventing the wheel. It’s been many years that Amazon and Flipkart have been in our lives.
If we don’t focus on an alternate, wherein we are speeding up the cycle time, we are reducing the inventory turn-around or providing easy credit in a transparent and open manner from the platform, then when?
Even for that matter sampling. If you go to a buyer’s place, a fairly large or medium sized buyer, the amount of samples they get, it’s humanly not possible to taste all those teas. In many cases, they know what a garden or a particular mark is making. They know the flushes and they know the quality that would be coming out at any particular point in time. So it’s just the type samples they would see seriously at the start of the season or flush, and occasionally the usual sale samples, that’s about it. They do not have the bandwidth to see all samples, because they’re buying from auctions, they’re buying from private sale, they have 2, 3, 4 local brokers sitting outside the office with the samples pushing for sale.
For certain category, you have to see the sample and then only purchase, definitely. Why not? But not for all categories. If you look at the BLF category or the variety that is mostly bought within a particular price range, that anyway is bought on the basis of touch and feel. No one would make the cups and taste. That category is increasing. So if you do something about it, digitize it or have a data set, that one can refer to, instead of just receiving sample, it would make things easier for both buyer and seller.
Here also, CuppaTrade will be using a lot of tech like digital catalogue to make catalogues a bit more interesting and offer more than an Excel sheet; Augmented Reality so that buyers don’t have to go through physical samples. This will save them a lot of space and time. And with our quality assessment, it’s going to be very interesting. They will be able to buy teas on the go, even if they’re travelling or wherever they may be stationed. Once fully ready, we’ll showcase it and we’ll take feedback from the stakeholders. So far it’s been very, very encouraging.
Aravinda: I would also think it addresses one of the concerns that producers have about how many samples they send. Small producers can’t afford to send so many samples in the hope that they get somebody to taste the tea and set a price for it.
Sandip: Correct. So while we are building the AR module, we have already taken steps to get into focused sampling. The process begins right from registration. It’s very thorough. It’s a two step process, where initially, the buyer just uploads the basic details. Then the team sits with the buyer over a call and captures which grades do they buy, at what levels, what are their preferences and so on. And then we also push or showcase the teas that they’re not purchasing. And that is how we nudge them to try new varieties and steadily expand the market.
You would be surprised and happy to know that while it’s been only about three months that we are active and live, we’ve handled teas from Arunachal, Nagaland, Himachal, Upper Assam and South India. And of all shapes and sizes. It could be a five kilo pack, it could be a two kilo pack, all are welcome; green tea, oolong, orthodox, tippy, non tippy, CTC, many varieties.
When we discuss with buyers who mostly deal in CTC, Bolder Grades, Dust and so on and so forth, we ask them, if they would buy green tea as well, or would they be interested in Arunachal Orthodox or some other varieties? They usually say, “No, we do not deal in these teas.” Then we counter, “You haven’t dealt because you haven’t had a platform where you could be assured of a constant supply. Here is your chance, we are showcasing these variety and sending you a few samples.” We encourage them to test it out with their clients, and tell them that now they have a seasoned partner in CuppaTrade who can offer a smooth supply. So this is how we are expanding or helping the small producers expand the market.
Aravinda: The traditional auction system, especially with the mix of commodity and CTC and Orthodox (ODX) has a very complicated grading system that is very intimidating for any new buyer. Unless they already have a sense of all these finer differences between grades.
Sandip: It’s a very interesting point. We have a plethora of grades and most are not required. We had discussed this with Tea Board earlier. Everyone agrees that we need to reduce the numbers and have only the standard ones like you find in Sri Lanka. But here comes the problem, when you say, a particular grade, let’s say a BOP or a BP, it varies between garden to garden because of the sizing of the grains. And that happens because of quality of mesh in sifters, as it varies between manufacturers. You’d be happy to note that during our quality assessment, we are pointing out the mesh size for each invoice.
This is a foundational work that we have started wherein we are providing as many data points as possible for the comfort of buyers. We are laying this foundation so that slowly, we may do away with the samples altogether. This may sound impossible now, but with technology, this is possible.
We realized early, that after a point, when we have lakhs of buyers in the platform, it’ll not be possible for us to send out samples even if we do focused sampling.
It’s a process. Sellers realize it. Buyers also realize that there are too many grades in the market. We need to reduce it. We are talking to Associations too, because it reduces cost for the seller as it helps in streamlining packaging, and is less confusing for buyers.
Aravinda: With the small tea farmer and the bought leaf factory how do you ensure, because the volumes are so small how do you ensure there’s a sufficient supply of a particular tea, a particular grade, which has already found a buyer and who’d like a, the assurance of a steady, consistent supply
Sandip: For stabilizing the supply chain for a buyer with a particular set of variety, we have a mechanism for requirement matching. We use AI to educate the platform that for a particular buyer, a certain category of tea is suitable. Thus, after a point, when we have enough data, the platform will give us and the buyer suitable recommendation basis her buying history. Then, we shall position the new marks accordingly. This way we are trying to bring some semblance and ensure that the buyers have the required supply.
Aravinda: And I think there’s also the opportunity to take back market insights to producers, or to the factories, to the small tea growers, and say, okay, I have an estimate of how much tea of a certain grade, of a certain kind at a certain price band in demand and sort of establish those sort of conversations also
Sandip: Yes, this is what the market is demanding and perhaps they could tweak manufacturing to stay relevant and take advantage of the prevailing market. We want to rely on data and market feedback for this. We are earnest in developing a robust database and analytics to improve all-round offerings.
The other thing with small growers is that, they are defined by one segment, but within that segment itself, there’s such a huge range, isn’t it? There are those who are producing these uber specialty and extremely fine quality tea, and there are those who are still starting out and figuring out a way around making tea. So how do you then navigate this spectrum of small tea growers?
We have already faced this kind of a dilemma because you have certain bought-leaf factories who are working very closely with smart growers and they’re putting in 70% to 80% fine leaf in manufacturing. But the moment the buyer hears it’s a bought leaf factory, the perception gets colored. It’s a constant education process with them. And we insist that they shouldn’t judge either by the mark or where it’s coming from. They should assess and pay only basis the quality.
It’s a process because the perception of BLF is very strong. It’s a volume game for BLF producers with less regard to quality. But when you come across exceptions, you’ve got to fight for them.
Here, we have an advantage because the buyer set is very large and it’s increasing every day. So I think from the traditional platform point of view, when they are selling through CuppaTrade, the biggest advantage is the market base. There is somebody who’s working hard towards positioning them, and we do get into a bit of confrontation with buyers, and urge them to stick to apple to apple comparison on quality because we know what we have, we know the producers, the team and advisors have gone to the factory, we click pictures, we make videos, and we know some of them are very disciplined producers and the result is in the cup. When you taste you know immediately that these have been manufactured with very finely plucked leaves and they’re different. Some of the invoices are even better than many agency gardens, I must say.
It’s a constant positioning that we have to do. And that is how you set the mark, because it’s not just the seller who’s saying that her tea is good, but the platform too, which is supposed to be unbiased. And because we have a large buyer base, it becomes somewhat easier for us to represent those kind of teas.
Aravinda: CuppaTrade is not just a trading platform, it’s also supports a community where conversations can happen, insights can flow from one to the other. And you facilitate, that direct dialogue.
Sandip: We are not traditional brokers. We are not traders. We don’t want to keep a margin. We are very clear on that. Whatever benefit or the higher price that the seller gets, which the buyer is providing, it has to go directly to the seller. We have a service fee. We charge the sellers, we charge the buyers, but that’s about it. We are pure facilitators providing a platform where everyone is welcome to interact, negotiate in a secure, safe environment, while we take care of quality and payments.
Aravinda: So what is the volume you need of buyers and sellers to make CuppaTrade viable and breakeven?
Sandip: We’re going for all. We’re going for everybody. And it’s because India itself is a very, very large market. If you look at the figures, I think the timing of CuppaTrade is apt.
If you look at the auction versus private sale data, auctions are usually around 45% annually. And there is a constant shift towards private sale. We anticipate that this shift will keep increasing. Within a couple of years it will be a stark 40-60 in favor of private sale. CuppaTrade operates in the private space and we don’t conduct auctions. It’s a marketplace, where buyers and sellers negotiate directly and finalize the price and quantity.
As far as buyers are concerned, internally we have taken a target to have about over a lakh (100,000) of buyers across the country. At the moment, we are somewhere near 500 buyers, and we have not even stepped up because, it’s end season in North India. We are focusing on South Indian producers right now. By late February or early March, we shall go all-out and hasten the onboarding process. It’ll be pedal to the metal, so to say.
We want to go to the hinterlands. We want to go to the destinations, hold buyer-seller meets, do the legwork, also to make the onboarding process as smooth and easy, help them understand our processes, our quality assessment, show the AR version of the sample, gauge their comfort level and tweak accordingly. Again, it’s a process and it’ll take some time and as you know the industry is averse to innovation and tech, we anticipate it’s going to be a long haul. But yes, for us, the figure is over a lakh of buyers on the platform.
Aravinda: How difficult is it to conduct transactions on CuppaTrade? What are buyers and sellers required to do to join the platform?
Sandip: It’s very easy. You go to the website CuppaTrade.com and click Marketplace. You identify whether you are a seller, buyer, or both. And the registration form opens up. Many requirements are not mandatory. It’s left to the seller and buyer. That is the first step of registration. Then the team calls and we get into the detailing bit. So it’s that easy and it’s completely free. We don’t pay to be members of Amazon or buy from Flipkart. So that’s the model.
Aravinda: And it comes directly the product itself, eventually comes directly from the producer’s side, the seller’s side?
Sandip: Yes, fresh and in the shortest possible time. We’re removing many layers of traders or intermediaries. In most cases, it’ll be between seller to destination buyer. For certain categories it could be the intermediaries who would be feeding the destination. We are not averse to, agents or traders being in the platform because we are focusing on the ecosystem. Where we bring advantage for both seller and buyer is better remuneration, a large variety in the shortest possible time on a one-stop shop platform with tech driven value-adds. There’ll be many segments of buyers who will be very interested in the platform.
Listen to the interview
