• Tea Biz Podcast | Episode 47

    Hear the Headlines

    | Economic Forecasters Predict Higher Tea Prices in 2022
    | As Holiday Orders Ease, a Delivery Crisis Looms
    | Germans Tea Drinkers Set a Consumption Record

    PLUS Frugal Innovation, Part 1

    Seven-minute Tea News Recap

    Caption: Scanning tea fields at different wavelengths to assess plant conditions. Using cameras to monitor crop conditions, in order to identify threats from disease and pests at an early stage, enables a more targeted (and effective) use of pesticides, lifting productivity and profits.

    Listen on your favorite player

    Features

    Tea Biz this week travels to Assam, India to explore “Frugal Innovations” that utilize simple technology to address some of the most vexing challenges facing the tea industry. In Part 1 of the series, Aravinda Anantharaman talks with Abhijeet Hazarika @TeaSigma, an IT analyst and former head of process innovation at Tata Global Beverages, and with growers Saurav Berlia and Shekib Ahmed on cost-efficient experiments and pilots that demonstrate why tea producers should embrace simple technologies with scalable impact.

    Monitoring quality with inexpensive cameras and laptops, a centrifuge, and microwave ovens.

    Bringing Technology into the Tea Value Chain

    By Aravinda Anantharaman

    There are few entry barriers to tea. It does not demand heavy infrastructure. But a complaint shared by smallholders selling raw leaf to large-scale tea producers operating multiple factories is that for the past decade, farmgate prices are not commensurate with costs. Now the economics of the tea trade is gradually shifting from oversupply to scarcity. At the same time, some quiet work underway in India is yielding encouraging results that lower the cost of tea production, improve quality, and ease a shortage of labor. The most powerful driver for change is revenue. Prices globally, on average, increased by $0.21 cents per kilo during 2021, according to Trading Economics. Abhijeet Hazarika, IT analyst @TeaSigma and former head of process innovation at Tata Global Beverages, observed that “Tea is not a very high profit yielding commodity and will not be so in the foreseeable future until some tech breakthrough happens.” The frugal innovations described in this series, combined with higher prices may herald that breakthrough. Read more…

    Listen to the interview (Part 1)
    Abhijeet Hazarika on promising new Frugal Innovations

    Frugal Innovation

    In Part 2, Aravinda Anantharaman explores the application of Frugal Innovation in the tea garden and factories.  Shekib Ahmed of Koliabur Tea Estate explains that “Objective data changes the conversation in the factory from vague concepts to thresholds and parameters. It makes operations scientific so that we can improve.” Listen to Episode 48 of the Tea Biz Podcast

    News

    Higher Tea Prices Forecast for 2022

    By Dan Bolton

    Globally tea export prices are edging upward, driven by combined spikes in transportation and logistics, more costly fuel and petroleum-derived fertilizer, and increased labor expense.

    Regionally the trend is mixed. Exports through September are down 10% by volume but up in value in India, which produces 20% of the world’s tea. India reports falling domestic prices following a pandemic year that boosted prices through the first half of 2021. In November, auction prices for CTC in Kolkata fell to an average of $2.78 (INRs209) per kilo, down from $2.97 during the same period in 2020. 

    In contrast, last week Kenya auctioned tea at a five-year high of $2.40 (KSH271) per kilo, according to the East African Tea Traders Association (EATTA). Production there is also down 10% overall.

    Declines in production are an early sign that the economics of the tea trade is gradually shifting from oversupply to scarcity. The Economist Intelligence Unit (EIU) predicts output globally will increase slightly to 6.279 million metric tons (6.3 billion kilos) while consumption rises to 6.538 million metric tons, creating a deficit of 260,000 metric tons. That deficit will increase to 363,000 metric tons in 2022.  

    There remains a glut of low-grade tea, but demand for inferior tea is slack. 

    Globally, tea prices, led by China, have increased by $0.21 per kilo since the beginning of 2021, up 7.32% according to Trading Economics. The analytics firm, using macro models and analyst expectations, based on benchmark CFDs, predicts tea will trade at $3.30 per kilo in 2022. A contract for difference (CFD) is an agreement between a buyer and seller stipulating that the buyer will pay the seller the difference between the current value of an asset and its value at contract time (if the difference is negative, then the seller pays instead). Trading Economics forecasts tea prices could reach an average of $4.10 per kilo by year-end. 

    If that comes to pass it will be only the second time tea has crossed the $4 per kilo threshold in the past decade. More likely is that rising prices will trigger increases in production. A study by the Indonesian Board of Trade using United Nations FAO data calculated the impact of increased production on prices.

    “If there is an overreaction to recent high prices which, for example, would result in a 5% increase in production, the results can be quite different…. the clearing price would be 17% less than the baseline price at $2.54 per kg,” writes Iwan Cahyo Suryadi, Chairperson, Board of Commissioners Indonesia Board of Trade

    “If the reaction to the current high prices is even stronger, resulting in a 10% increase in production over the baseline increase, then prices could be 38% lower,” according to Suryadi.

    EIU estimates a price increase that is close to the long-term average, “we expect concerns about supply and a gradual recovery in demand in some markets (particularly in Europe and North America) to provide some support to prices in the remainder of 2021. We estimate that prices will average $2.69 per kilo in full-year 2021, representing a 0.5% decline from 2020. We are forecasting an 8.7% increase in average prices in 2022, to $2.92 per kilo.”

    Analysis by Iwan Cahyo Suryadi Data from Price Monitoring and Analysis Tool, FAO

    Biz Insight – The long-term average price of commodity tea at auction is $2.85 per kilo. Quality tea is more likely to be sold direct and at significantly higher prices. Sales of tea exported by all countries totaled $7.1 billion in 2020, down 4.3% by value since 2016. Year-over-year the value worldwide of tea exports declined an average of 8.6% from 2019 to 2020, according to the website World’s Top Exports. China (dominant in green tea) accounts for 29% of global sales of tea exports by value followed by Kenya with a 16% market share (dominant in black tea), Sri Lanka 10%, and India 9.7% both have about a 10% share.

    Tea remains unearthed from ancient tombs in Zoucheng, Jining City, Shandong Province, China. /CMG

    Germany Reports Record Tea Consumption

    The German Tea & Herbal Tea Association (Teeverband), based in Hamburg, reports that consumption of tea grew by two liters per capita in 2020 to a record of 70 liters per capita. East Frisians averaged an astonishing 300 liters per capita during the stay-at-home year. These totals include the consumption of black, green, herbals, and fruit teas. The report’s authors write that declines in out-of-home consumption, “triggered by the pandemic-induced closure of hotels, restaurants and canteens, were offset by increased demand in food stores, chemists and specialist shops.”

    Hamburg is a global hub for the tea trade, importing 41 million kilos and shipping 22 million kilos of teas to 108 countries. India is Germany’s most important tea trading partner, sending 6.7 million kilos so far this year, China and Sri Lanka follow. The tea association’s managing director Maximilian Wittig said that organic certified black teas now account for a 12.9% share of the market. Organic herbal teas increased their market share to 13.5% a 2.5% gain compared to 2019.

    Black tea is favored by 73% of Germans with 90% steeped in tea bags. Germans buy 57% of their tea in grocery and department stores and 12.4% at tea shops with the biggest increase in channel purchases online at 8.2%.

    Download the 20-page Teeverband report on the Tea Biz blog.

    As Holiday Orders Ease, a Delivery Crisis Looms

    Logistics experts in November who predicted everything that could possibly go wrong ? were right.

    Jason Walker at Firsd Tea, the US office of the world’s largest green tea exporter, writes that “the burden of moving holiday retail goods has shifted from the ships to the warehouses and trucks. Major players and industry experts still do not anticipate any significant, overall easing of rates and more reliable delivery speed until at least Q1 of 2022.”

    Until then buyers are advised to place their orders months in advance, be willing to pay exorbitant rates ($10,000 for a 20-foot trans-pacific container), and order tea in much larger quantities than in past years to ensure sufficient inventory. Wholesalers report waiting 62 days for shipments to arrive from China. Bloomberg writes that ports serving Southern California by November had offloaded a record 17 million 20-foot equivalent units and then loaded 3.3 million empty containers for the return trip. Los Angeles has 2 billion square feet of warehouse space that is now renting at a 30% premium. An additional 20 million square feet is under construction. 

    Deliveries that took truckers two days in 2019 now take up to 10 days before arriving in Chicago as congestion at ports and warehouses and a shortage of drivers combine to more than double delivery times. Walker cites a shortage of warehouse workers and the added expense of overtime as the ports, as requested by President Biden now operate 24/7. On-time arrival is virtually impossible unless delivered by air freight, in which case it’s unaffordable.

    When will it end? Ship jams are now visible at ports in Japan, Taiwan, and Mexico. November marks a turning point. But experts predict the transport crisis will remain through spring and once again ? they’re probably right.

    – Dan Bolton

    • Read more… indicates the article continues. Learn more… links to reliable outside sources.

    India Tea Price Watch | Sale 48

    Responding to the tea producers’ concerns over rising imports against declining exports, the Tea Board of India passed an order on November 11, by which tea importers are mandated to mention the origin of the tea on the sale invoices. Importers cannot blend imported tea with GI-protected Indian tea (Darjeeling, Kangra, Assam (orthodox), Nilgiris (orthodox)) and pass it off as Indian-origin tea.  Producers of Darjeeling tea have been asked not to procure green leaf from outside the GI area. This is expected to act as a clampdown on cheap imports into India from Nepal and Vietnam, and allow Indian exports to keep their quality, markets, and prices. Read more…

    India Tea Price Watch | Aravinda Anantharaman

    Upcoming Events

    January 2021
    Tea and Beyond! | GTI 7th Annual Colloquium | January 13 | UC Davis | Day-Long Virtual | Tea and Beyond: Bridging Science and Culture, Time and Space, exploring differences between tea and herbal infusions around the world and in terms of medicine and health, ceremony, traditions, sustainability, marketing, and more. | Program | Register FREE (Zoom)

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  • Frugal Innovation

    There are few entry barriers to tea. It does not demand heavy infrastructure. But the complaint from smallholders selling raw leaf to large-scale tea producers operating multiple factories is that for the past decade, farmgate prices are not commensurate with costs. Now the economics of the tea trade is gradually shifting from oversupply to scarcity. At the same time, some quiet work underway in India is yielding encouraging results that lower the cost of tea production, improve quality, and ease a shortage of labor. The most powerful driver for change is revenue. Prices globally, on average, increased by $0.21 cents per kilo during 2021, according to Trading Economics. Abhijeet Hazarika, IT analyst @TeaSigma and former head of process innovation at Tata Global Beverages, observed that “Tea is not a very high profit yielding commodity and will not be so in the foreseeable future until some tech breakthrough happens.” The frugal innovations described in this series, combined with higher prices may herald that breakthrough.

    • Caption: A quality assessment station. Improving quality is critical to the success of growers.
    Hear the interview (part 1)
    Abhijeet Hazarika on promising new Frugal Innovations

    Scanning tea fields at different wavelengths to assess plant conditions. Using cameras to monitor crop conditions, in
    order to identify threats from disease and pests at an early stage, enables a more targeted (and effective) use of pesticides, lifting productivity and profits. Photo courtesy of Shekib Ahmed.

    Bringing Technology into the Tea Value Chain

    By Aravinda Anantharaman

    Abhijeet Hazarika talks about technology in terms of “frugal innovation”.

    What is frugal innovation? His checklist includes:

    • 1.    Low capital expenditure because the industry cannot bear additional high expense
    • 2.    Low complexity, taking into the view that skill levels on the tea estate, with people who are not very conversant with technology
    • 3.    Low upkeep cost, because tea estates have limited infrastructure. Innovations that required high maintenance have a short shelf life and soon land in the junk pile
    • 4.    Clean and safe because this is non-negotiable, and buyers ask for it, especially export buyers
    • 5.    Highly reliable, because the whole idea of innovation is to improve efficiencies
    • 6.    Impact, because the scale of impact must justify adoption of innovation

    The ideas he shares are not limited to large estates but have taken cognizance of the small growers. Frugal innovation also correlates with low risk which makes it an attractive proposition. And yet, there have been few takers for it.

    In Part 1, we look at how implementing frugal innovations can impact the purchase of leaf and the sale of tea.

    Innovation in the procurement of leaf

    Saurav Berlia is the third generation in his family’s tea business. The LR Group (Berlia Foods) has been involved in all aspects of tea, from gardens and factories to broking, packing and exports. His company produces more than 20 million kilos annually, supplying to buyers including the top three in India. Berlia decided to pilot some of Hazarika’s projects in frugal innovation.

    The group procures about 500 kilos of tea every day from small growers. This process involves calling every small grower each morning for an estimate of the tea they expect to pluck. The small growers sell their leaves, but they won’t know the price they will be paid for it until the next day. They will also not receive feedback on the quality of their leaves.

    Berlia is piloting an app that his growers could connect to. With this, the call every morning is made redundant. The grower’s login to the app to understand the market requirements in the morning and offer the estimated quantity of leaves right there. What’s more, because they have an insight into the market requirements, they can set their own prices. Berlia’s staff can accept the price or negotiate before they buy the leaf. Once the transaction is confirmed, the grower gets a message with the weight of the green leaf to be supplied and the price they will be paid for it.

    A three-month pilot has shown a positive response and a few of the growers are very happy. However, Berlia admits that he met with resistance at both ends — growers were resistant to the new-fangled app that demanded their inputs and attention. At his factory, Berlia’s staff were convinced it wouldn’t work. They preferred the status quo. He says patience accompanied by training addressed some of this resistance. With each unit having about 50-100 growers as partners, the app can potentially transform how transactions are conducted, to everyone’s benefit.

    “Technology has become much more affordable today than what it was 5-10 years ago because processing power has made it affordable. Devices are more affordable. Technology has become simpler.”

    – Shekib Ahmed

    Using data effectively

    Another early adopter of tech is Shekib Ahmed who runs the Koliabur Tea Estate near Silghat in Assam. The 1,600-acre estate next to the Kaziranga National Park with 900 acres under tea. Low hill ranges form part of the terrain here. The garden produces exceptional single-origin CTC tea.

    Ahmed chose to partner with Hazarika because of a shared desire to integrate technology in tea farming. Listen to as Ahmed talks about the two key points that attracted him to this.

    “Technology has become much more affordable today than what it was 5-10 years ago because processing power has made it affordable,” says Ahmed. “Devices are more affordable. Technology has become simpler. He (Abhijeet) was reminiscing how, when he was working with data, the cost of data analytics was astronomical. But now with cloud computing and everything, it’s become a lot more affordable for companies of our size to give it a shot. That was the first part.”

    “The second part was how he focused so much on frugal innovation, things that are affordable for companies of our size to try to tweak and to learn. And one of the biggest benefits of working with Abhijeet is that when we’re doing three to four projects, two or three may not give the results that we want today. They may give it later or they may not work out. However, the side benefits of all the ideas and discussions, just the access to these bright minds like Abhijeet, like the scientists really opens up a lot of little innovations, which are very groundbreaking in the sense that it’s really helped me improve quality in the last one and a half years,” said Ahmed.

    He adopted a simple system of data analytics for tea from the tea auction system. There’s a lot of data that comes from the tea board of India, but this is raw data. Ahmed talks about the resistance to change even here when he says the Indian tea industry is where the steel industry was 30-40 years ago. Innovation was very, very slow and the industry was loathed to move past its way of working.

    Ahmed’s tea is sent to the auction every week. Data analytics helped him understand how his tea was performing but also what quality the market was seeking. Just to jump the gun a bit, in using data analytics to offer tea that the market wants, Koliabur and Dubba, both of Ahmed’s estates saw a jump of 15-25% in auction prices this year. From being in the Top 20 in the ranks, they are now in the Top 10, which, given that there are 800 gardens in Assam, is no small feat. But he is quick to add that it’s not data alone that has contributed to this.

    For innovation to fully work, it must be leveraged across the value chain.

    Listen next week to Part 2 when we take a look at frugal innovation in the fields and in the factory.

    Determining raw leaf density
    Drying in a vacuum oven
    Floor fermentation
    Using a microwave to determine withering parameters

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  • Tea Biz Podcast | Episode 46

    Tea Biz Podcast Logo

    Listen on your favorite player

    Hear the Headlines

    | Ekaterra Tea CEO John Davison Gets Underway
    | India Steps up Efforts to Halt Illegal Tea Imports
    | Chinese Archaeologists Discover Oldest Tea Yet

    Seven-minute Tea News Recap

    Features

    This week Tea Biz travels to Singapore for a conversation with John Davison, CEO of ekaterra tea, soon to be the largest tea company in the world. Ekaterra is currently a division of Unilever that houses 34 tea brands including Lipton, PG Tips, TAZO, Brooke Bond, Lyons, and Red Rose. In November CVC Capital Partners, a multi-billion private equity firm headquartered in Luxembourg, paid $5.1 billion for Ekaterra tea, outbidding several competitors and establishing a valuation based on 14x earnings before taxes and depreciation.

    Ekaterra Tea CEO John Davison discusses his plans for re-energizing the Unilever tea portfolio.

    Ekaterra tea CEO Re-energizes World’s Largest Tea Company

    By Dan Bolton

    John Davison joined Unilever in March 2021 to carve out the company’s underperforming tea portfolio. Davison was formerly CEO at Zuellig Pharma, a $13 billion pharmaceutical distribution company employing 13,000 workers in 12 Asian countries. Davison, who is British, is a graduate of Cambridge University and Harvard Business School. He began his career with UK retailer Marks & Spencer before joining McKenzie & Co. in 1991. He was global head of strategy at Diageo in 1995 during the Guinness merger and a regional president at Danone for 11 years beginning in 2003. Davison, who lives in Singapore, will relocate to Europe after Christmas. Davison discusses the urgency of improving tea quality and adopting sustainable initiatives along the entire supply chain. Listen to his plans for re-energizing the world’s largest tea company.  Read more…

    Listen to the interview
    John Davison on re-energizing the world’s largest tea company

    News

    Sparsh Agarwal, Selim Hill Tea Estate

    India Steps up Efforts to Halt Illegal Tea Imports

    By Dan Bolton

    India’s food safety and customs officials have stepped up inspections of tea imports targeting Nepal and citing complaints that large quantities of Himalayan grown tea are being illegally passed off as origin protected Darjeeling tea.

    It is not clear how great a quantity is involved but CBIC is asking for proof of export license and sanitary and phytosanitary certificates after customs authorities discovered that only 23.4 million kilos of the 60.4 million kilos imported into India during the past three years for re-export had been re-exported. The Darjeeling Tea Association asserts most of this tea arrived from Nepal and was sold as if India produced it.

     Growers describe a porous border that makes it possible for raw tea leaves to cross from Nepal. Unscrupulous factory owners can confidently process the leaf and pass it off as Darjeeling in the domestic market, reaping a significant difference in price. Tea vendors are in on the game, offering as little as 600 rupees [about US$8] per kilo to producers and then doubling the price for unsuspecting customers.

     Larger quantities of bulk processed tea can also cross the border as a bilateral trade agreement waives tariffs and prevents arbitrary inspections that could be viewed as harassment.

     India is the largest market for Darjeeling with 5 to 6 million consumers. As India’s premier growing region, Darjeeling has focused mainly on controlling overseas exports to protect its name and reputation for purity and taste. Joining us today is Sparsh Agarwal a fourth-generation Darjeeling grower at Selim Hill Tea Estate who articulates a domestic threat, which is the import of teas blended to dilute the Darjeeling brand.

    Listen to the interview
    Sparsh Agarwal explains how a porous border with Nepal dilutes the Darjeeling brand

    Agarwal reports “The crux of the problem is that if you have spent any time in Darjeeling, you know that the border between Nepal and Darjeeling is super porous, right? So there’s a large problem of green leaves being smuggled in and then being produced in Darjeeling tea factories. The second-degree problem is that tea shops are buying Nepal teas at a fraction of the price of Darjeeling teas. This is not the problem of the growers, to be honest, it’s not the grower’s fault that this is happening. Ultimately we will all have to go towards better, more established sourcing of teas using technology. We are looking into how technology like blockchain can be used to be able to improve these things. We are right now in advanced conversations with one particular company to be able to do better sourcing for our customers so that they know that this tea is not only coming from Salem Hill, it’s coming from these sections within Selim Hill.” 

    Biz Insight – India is also aggressively challenging importers to monitor Kenyan tea, threatening to cancel their operating license for violating new rules that require labeling by origin. Kenya had hoped that India would establish a minimum import price, a solution endorsed by the Indian Tea Association. Instead, India stepped up inspections taking a closer look at quality and quantities to slow a recent surge of low-value teas.  Kenya shipped to India 2.8 million kilos of tea from January through June, up from 1.5 million kilos in the same period last year.

    Tea remains unearthed from ancient tombs in Zoucheng, Jining City, Shandong Province, China. /CMG

    Chinese Archaeologists Discover the Oldest Tea Yet

    Archaeologists extended the age of prepared teas to the early stages of the Warring States, circa 453 to 410 BC, a period 2,400 years ago, according to a report by the Xinhua News Agency.

    The samples were discovered in tombs excavated in Shandong Province in the remains of a city built 2,800 years ago. [during the Spring and Autumn period (770-476 BC)]. Stem and leaf carbonized residues were found in an inverted porcelain bowl. Researchers led by Professor Wang Qing at Shandong University said the residue is likely dregs left by ancient people after boiling tea. Tests for theanine confirmed the substance as tea. The findings advance the age of prepared teas by more than 300 years in a study published in the Chinese-language Journal of Archaeology and Cultural Relics.  – Dan Bolton

    • Read more… links indicate the article continues. Learn more… links to additional information from reliable outside sources.
    Tea Price Report
    Nov 27 – Sale 47

    India Tea Price Watch | Sale 47

    Tea Biz caught up with tea exporter Pranav Bhansali of Bhansali and Company to review the Indian tea industry’s past year. He said, “Quality teas have been selling at fantastic premiums for CTC and Orthodox teas, even at this late stage of the season. This is surprising, especially for CTC teas, since it is unusual to see the major packeteers and blenders being this aggressive and active on quality produce at this time of the year.” Bhansali says, “Indian tea exports have taken a hit due to high CTC prices and weather disruptions.” The Tea Board estimates a decline of 8-10% in calendar 2021 compared to the same period last year. “Supply chain disruptions and container shortages are expected to continue into 2022. On the bright side, Iran continues to be the largest consumer of Indian Orthodox teas,” says Bhansali. Read more…

    Aravinda Anantharaman
    • Aravinda Anantharaman introduces the two-part series Frugal Innovations with Abhijeet Hazarika and Indian tea growers Saurav Berlia and Shekib Ahmad who describe cost-efficient experiments and pilots that demonstrate why tea producers should embrace simple technologies with scalable impact. Listen to Episode 47 of the Tea Biz Podcast | Friday, Dec. 10

    Upcoming Events

    December 2021

    Sips & Bites: Exploring the World of Artisanal Tea | December 15 | Virtual |
    Director Dr. Katharine Burnett will share an overview of the Global Tea Initiative. Manik Jayakumar, Founder of QTrade Teas & Herbs, and Rona Tison, Executive Vice President of Corporate Relations at ITO EN, North America, will discuss their work in the tea industry and walk attendees through a tasting of their exquisite teas. The Global Tea Initiative (GTI) for the Study of Tea Culture and Science was established in 2015 to promote evidence-based knowledge about tea. | Register FREE (Zoom) | 6-7 pm PST | Sponsored by the Robert Mondavi Institute for Wine and Food Science, University of California, Davis.

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    Ekaterra CEO John Davison

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  • Tea Biz Podcast | Episode 45

    Tea Biz Podcast Logo

    Listen on your favorite player

    Hear the Headlines

    | In the Black: Holiday Sales Surge
    | CVC Capital Pays $5.1 Billion for Unilever’s Tea Portfolio
    | Weather Stations: A Climate Change Adaptation Essential for Tea

    Seven-minute Tea News Recap

    Features

    This week Tea Biz travels to Brisbane, Australia where East Forged Tea co-founder Kym Cooper reminds us that innovation need not be at the expense of the timeless taste of tea. East Forged preserves that taste ? with no sugar, coloring, or artificial flavoring ? in a convenient, slightly fizzy, nitro-infused, cold-brewed iced tea that pours a craft-brew-like head of foam. 

    … and then to Boston, Mass. to learn how Evy Chen, facing an 82% decline in foodservice sales of her signature cold-brewed tea, reformulated, rebranded, and relaunched online as a successful direct-to-consumer brand. 

    Manufactured in a brewery and then canned, the teas get a burst of CO2 for fizz and nitrogen to add texture and a creamy head. Photo courtesy East Forged

    A Fizzy, Foamy Innovation in Tea

    By Dan Bolton

    East Forged teas, launched in Australia in 2020, are nonalcoholic sparkling adult beverages cold-brewed for 12 hours from organic whole leaf green, black, and white teas and blended with low-sugar Calamansi, Pitaya, or Yuzu juice. Manufactured in a brewery and then canned, the teas get a burst of CO2 for fizz and nitrogen to add texture and a creamy head. The black tea tastes of citrus and is dry, not sweet, the Fujian-grown white tea is flavored with calamansi, a mild, wild citrus-hybrid from the Philippines ideal for social occasions. Read more…

    Listen to the interview
    Kym Cooper describes the importance of making teas that taste like tea

    Resilient & Resourceful

    The tea industry globally demonstrated its ability to recover quickly during two years of disruption. Less is said about individuals who overcame pandemic-related obstacles and the resourcefulness of people that grow, process, and trade tea. To remedy that, Tea Biz is sharing stories of resilience, reinvention, pivots, and clever workarounds that exceeded expectations.

    Evy founder Evy Chen

    A Story of Reinvention

    By Dan Bolton

    In 2020 US restaurant and foodservice sales declined by $240 billion (22% for the year) placing unprecedented stress on food and beverage suppliers. In Boston, Evy’s Tea founder Evy Chen watched as standing orders for her organic, sustainable, artisan cold-brewed bottled teas cease overnight. Revenue fell 82%. She persevered, observing that COVID lockdowns led to a surge in online transactions and altered long-established consumer buying habits. Within a year she had reformulated, rebranded, and relaunched online as a successful direct-to-consumer brand known as Evy. Read more…

    Evy Chen on bouncing back after a dramatic drop in sales of her namesake cold-brewed tea.

    News

    Unilever spent the past year consolidating its 34 tea brands into a single division launched as ekaterra Tea.

    CVC Capital Pays $5.1 Billion for Unilever Tea Portfolio

    By Dan Bolton

    CVC Capital Partners last week paid $5.1 billion to acquire legendary tea brands Lipton, PG Tips, Brooke Bond, Lyons, Bushells, and Red Rose as well as relative newcomers TAZO, T2, and Pukka Herbs culminating Unilever’s corporate carve-out. 

    The portfolio of 34 brands was christened Ekaterra Tea following a year-long restructuring with the intent to either sell or separate the division from Unilever’s core offerings. Ekaterra is now the world’s largest tea company with approximately 10% global share and the leading tea brand in 58 markets. Unilever retained its tea business in India and Indonesia along with the PepsiCo-Lipton partnership headquartered in the US.  

    Ekaterra CEO John Davison welcomed the acquisition: “ekaterra is a strong business with positive momentum and has an exciting future ahead under the new ownership of CVC Fund VIII. We look forward to the next stage of our journey as the world’s leading Tea business.” Read more…

    Biz Insight – Bold big-scale investments in tea companies are rare. Five years ago Unilever spent a combined $500 million acquiring retail chain T2 in 2013, completing the roll-up in 2017 when it bought the TAZO brand from Starbucks and Pukka Herbs. 

    But these acquisitions were tactical and defensive, designed to stimulate revenue in light of a moribund black tea category by diversifying an aging stable of legacy brands from Lipton to Lyons. The $5.1 billion deal announced by Luxembourg-based CVC Capital this week is 10x greater, signaling an intent to revitalize and elevate the portfolio. Unilever spent the past year shaping a new corporate model for the large-scale production of sustainable tea but was unwilling to finance it. Ekaterra’s vision could only be realized if the corporate carve-out attracted aggressive bidding. Fortunately, it did. Finalists CVC Capital, Carlyle, and Advent International each spent time and money evaluating the potential rewards for investors. The low bid of $4 billion demonstrates that independently they agree that Ekaterra is headed in the right direction. CVC’s winning bid was 14 times (EBITDA), a measure of the portfolio’s basic contribution to Unilever’s earnings. All three bids embraced the complexity of re-imagining tea at scale. Insiders say CVC won the day with determination and grit. 

    • Ekaterra Tea CEO John Davison and Dan Bolton met virtually for an hour-long interview last week in which Davison discusses the urgency of adopting sustainable initiatives along the entire supply chain. Listen to his plans for the company in Episode 46 of the Tea Biz Podcast | Friday, Dec. 3

    Restaurant reservations are up 4% in the US and are now 7% higher globally compared to 2019, according to OpenTable. Recovery is uneven. During the past two years, 90,000 US restaurants closed permanently and the omicron variant has heightened concerns about future lockdowns.

    In the Black: Holiday Sales Surge

    By Dan Bolton

    Shoppers are exceeding expectations for the holidays.

    Americans spent an estimated $5.1 billion on Thanksgiving Day and nearly twice that on Black Friday sales that extended through Sunday. Adobe’s Digital Economy Index estimated total sales will reach $9.2 billion. Small business Saturday will net $4.5 billion. Toy sales are up 256%. Barclaycard Payments reported a 16.7% increase in volume compared to the same period on Cyber Monday 2020 and a 4.5% increase in payments compared to pre-pandemic levels.

    US consumer spending online rose 20% in the first three weeks of November, according to the Adobe Index which predicts a record $207 billion in e-commerce sales this holiday season, up 10% compared to 2020. The US Census Bureau tallied $214.6 billion in third-quarter e-commerce sales, which now account for 13% of total US retail sales. The National Retail Federation projects holiday sales will increase 8.5% to 10.5% totaling $859 billion over the forecast period, compared to 2020. 

    Consumers appear to be heeding the advice to shop early. The Guardian reported a Deloitte survey that showed people spent 80% to 85% of their holiday gift budgets before Black Friday. Read more…

    Africa has only one-eighth the minimum density of weather stations recommended by the World Meteorological Organization (WMO) leading to inaccurate forecasts and unreliable early-warning systems. Kenya’s government currently maintains only 22 rainfall stations in a country spanning 225,000 square miles. 

    Weather Stations: A Climate Change Adaptation Essential to Tea

    The Glasgow Climate Pact calls for doubling the developed world’s investment in climate adaptations for poor nations. 

    Farm-level mitigation is underway as tea gardens dig ponds to capture rainwater and plant trees for shade but generalized weather forecasts focus on changes in average conditions and are of little help alerting growers to heatwaves and frost. 

    Africa has only one-eighth the minimum density of weather stations recommended by the World Meteorological Organization (WMO) leading to inaccurate forecasts and unreliable early-warning systems, according to the Washington Post. Kenya’s government currently maintains only 22 rainfall stations in a country spanning 225,000 square miles. 

    As it turns out, the gardens themselves are repositories of great volumes of “hidden” weather data used by the University of Leeds to develop high-tech computer simulations capable of providing climate information that is both useful and usable for tea growers in Kenya and Malawi.

    The Conversation explains that understanding what future conditions will be like is particularly important for tea growers because the tea plant has a long lifespan, of more than 80 years. “That means it is critical to take decisions now that will continue to be sound in the future, like replanting with better and resilient cultivars, planting shade trees and crop diversification,” according to researchers.

    The site-specific modeling establishes a temperature threshold specific to tea varieties. In Kenya’s Rift Valley growers are alerted when projections show several consecutive days of temperatures exceeding 27 degrees Celsius. In Malawi, the threshold temperature is 35 degrees Celsius.

    “Projections from a suite of 29 global climate models offer projections for the 2050s and 2080s,” according to the Leeds University researchers.

    Biz Insight – In January the Kenya Agricultural and Livestock Research Organization (KALRO) signed a two-year contract with aWhere of Denver, Colo. to monitor 6,787 virtual weather stations in Kenya that provide advanced weather data and analytics that support climate-smart agricultural decisions. aWhere maintains 1.7 million virtual weather stations worldwide according to CEO John Corbett, who writes that “Having accurate weather data and analytical tools to generate actionable insights for the food sector positions Kenya as a leader in climate adaptation.”

    – Dan Bolton

    • Read more… links indicate the article continues. Learn more… links to additional information from reliable outside sources.
    Tea Price Report
    Nov 20 – Sale 46

    India Tea Price Watch | Sale 46

    This week saw good quantities of tea on offer, with an all-India sale percentage at 80%. Prices were marginally higher than Sale 45. Kolkata saw good demand for all CTC, Orthodox, and Dust. Hindustan Unilever was active for CTC while the Middle East was active for Orthodox. The quantity of Darjeelings on offer this week was higher and prices were up marginally. In Assam prices remained largely the same as the previous week, however, they are better than corresponding 2019 prices. Analyst Abhijeet Hazarika @TeaSigma notes that high sales volume in the last two weeks with increased offerings has eased pressure on supply. Read more…

    Aravinda Anantharaman

    Upcoming Events

    December 2021

    World Tea & Coffee Expo | Gandhinagar, India | December 2-4
    Launched in 2013 and now operated by Messe Muenchen India, this hybrid virtual and in-person event for tea and coffee professionals is now scheduled for the Helipad Exhibition Centre, Gandhinagar, Gujarat, India. Website | Register
    Click to view more upcoming events.

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  • Tea Biz Podcast | Episode 44

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    Hear the Headlines

    | India Tea Industry Reforms
    | Glasgow Climate Pact Boosts Morale, but Will Momentum Build?
    | Drinking Tea Linked to Lower Risk and Severity of Stroke
    | Golden Leaf Awards Return

    Seven-minute Tea News Recap

    Features

    In Part 2 of this extended Newsmaker Interview, Aravinda Anantharaman speaks with Tea Board of India Chairman Prabhat Bezboruah who describes a new board mission to increase consumption, promote tea exports and expand markets at home and overseas. He also addresses discussions underway to transfer regulatory oversight of India’s tea industry from the Ministry of Commerce to the Ministry of Agriculture and Farmers Welfare. Read more…

    India Initiates Tea Industry Reforms

    By Aravinda Anantharaman

    India’s highest levels of government are reforming the basic structure of agriculture. The intent is to loosen regulations on pricing and storage and to permit direct sales of produce. The rules have protected India’s farmers from the free market for decades. Prime Minister Narendra Modi has called the reforms a “watershed moment” for Indian agriculture. Opposition by farmers has been so intense that Modi announced in November that the government will abandon the September 2020 reforms. Will tea reforms go forward? In this Newsmaker Interview Prabhat Bezboruah, Chairman of the Tea Board of India describes a new board mission to increase consumption, promote tea exports and expand markets at home and overseas. He also addresses discussions underway to transfer regulatory oversight of India’s tea industry from the Ministry of Commerce to the Ministry of Agriculture and Farmers Welfare.

    Listen to the interview (Part 2)
    India Tea Board Chairman Prabhat Bezboruah discusses reforms in the regulatory oversight of India’s Tea Industry.
    Listen to the interview (Part 1)
    The year has been “quite bad” compared to 2020, explains India Tea Board Chairman Prabhat Bezboruah

    News

    Ekaterra CEO John Davison, left, is joined by: Sebastian Pole, Founder, Pukka Herbs (with mic), Ruchira Joshi, UK Country Director, Sustainable Trade Initiative, IDH, Jenny Costelloe, Executive Director, Ethical Tea Partnership and Abdul-Razak Saeed, Climate Policy Lead, Rainforest Alliance.

    Glasgow Climate Pact Boosts Morale, but Will Momentum Build?

    By Dan Bolton

    The Glasgow Climate Pact constructively addresses issues critical to the tea industry both for brands and producers. The document also advances efforts to end deforestation and to phase down (not phase-out) coal.

    COP26 brought into line the four largest polluters when India announced plans to reach net-zero emissions by 2070. India is the world’s fourth-biggest emitter of carbon dioxide. China announced it will be carbon neutral by 2060 and both the US and EU reaffirmed their commitment to reach net-zero by 2050. 

    The pact makes concrete tools to curb warming and establishes new rules to hold countries accountable for curbing emissions but falls short of financing efforts in less developed countries. The pact also leaves unresolved how much and how quickly each nation will cut emissions. Delegates returned to their homelands demonstrating greater cohesion and consensus that every nation must do more before the 2022 summit.

    Tea brands welcome rules to encourage trade emission-reduction credits and prevent double-counting and wording that allows carbon-market credits from decades past (Kyoto Protocols).

    The agreement advances the Paris Accords but pledges made by 197 countries are unlikely to contain atmospheric temperatures at less than 1.5 degrees Celsius above their pre-industrial levels. Scientists estimate that close adherence to pledges may limit global warming to around 2.4 degrees Celsius.  Others say temperatures will increase by 2.7 degrees Celsius.

    Warming to either level will wreak havoc in the tea lands. Degrading tea quality and reduction in yield are already apparent in three regional hotspots.

    South India is one of the hotspots where tea production is threatened along with the Rift Valley in Africa and portions of China.

    Biz Insight – Many of the 74 nations where tea is produced find it difficult to finance climate mitigation efforts at the farm level. Unresolved at this year’s summit are concrete steps by developed countries to make good on a $100 billion a year promise made in 2009 to assist poor nations. Contributions in 2019 were $30 billion short and $50 billion of what was pledged is directed at mitigation with much less earmarked to finance adaptations. In Glasgow, delegates asked that countries “at least double” to $40 billion the money committed to financing adaptations making possible construction of clean energy alternatives to coal and wood.

    Golden Leaf judges evaluating teas in 2019 competition

    In-person Judging Returns for the 2021 Golden Leaf Awards

    By Jessica Natale Woollard

    Australia’s Golden Leaf Awards return in 2021 with live, in-person judging to crown this year’s best teas in the Australian market. Tea submissions are open until Nov. 30. View the award guidebook for more information.

    The Golden Leaf Awards are presented by the Australia Tea Masters and feature a number of categories: green, black, white, yellow teas; matcha; Pu-erh; herbals; chai; and iced tea. There’s even a category for tea packaging and best tea house.

    The judging is blind and done by industry professionals. Learn more…

    Australia Tea Masters founder and CEO Sharyn Johnston speaks with Tea Biz’s Jessica Natale Woollard about this year’s event.

    Listen to the interview
    Australia Tea Masters founder Sharyn Johnston
    Tea and Coffee Drinkers are Less Likely to Suffer Strokes
    Moderate consumption of coffee and tea separately or in combination lower the risk of stroke and dementia

    Tea and Coffee Drinkers are Less Likely to Suffer Strokes

    A decade-long study of 365,000 people suggests that tea and coffee drinkers are 32% less likely to suffer a stroke when compared to nondrinkers.

    Results of the UK Biobank study, initiated in 2006 and continued through 2020, were reported this week in the online journal PLOS Medicine. The authors write that “while previous studies have looked at associations between tea and coffee consumption and better brain health, there has been inconsistency in findings.” 

    “Our findings suggested that moderate consumption of coffee and tea separately or in combination were associated with lower risk of stroke and dementia,” writes lead author and Professor Yuan Zhang at Tianjin Medical University, Tianjin, China.

    Associating tea and coffee drinking with better health outcomes does not guarantee that the same outcome will happen for everyone, according to a review of the research published by Medicine Net.

    Professor Zhang said it is also possible that coffee and tea consumption might be protective against dementia and post-stroke dementia. Strokes cause 10% of deaths globally, and those who survive often experience post-stroke dementia. People who have had a stroke have a far greater risk of developing dementia than people who have not had a stroke. About 1 in 4 who have had a stroke will go on to develop signs of vascular dementia, according to WebMD. In the US vascular dementia is the second most common form of dementia after Alzheimer’s disease.

    Drinking coffee or tea – even in very small amounts – lowered the risk for both strokes and dementia.

    Researchers cite weakness in that study participants were in better health than the population as a whole, and that the participants are mainly white and British (96%) “therefore we cannot infer an association that is relevant to everyone in the UK.” Learn more…

    Biz Insight – Drinking two to three cups of coffee or three to five cups of tea daily (or in combination) led to a 28% lower risk of dementia compared with those who do not drink tea or coffee. Researchers say that around 40 years of age, the immune system starts to decline. As people age, they experience a form of chronic low-grade inflammation. Experts have linked this kind of age-related inflammation to dementia and cognitive decline. The worldwide population of those aged 60 years and over will grow to 2.1 billion by 2050 according to the United Nations. Rates of dementia are expected to increase alongside this aging population, according to Medical News Today. 

    – Dan Bolton

    • Read more… links indicate the article continues. Learn more… links to additional information from reliable outside sources.
    Tea Price Report
    Nov 13 – Sale 45

    India Tea Price Watch | Sale 45

    Large quantities of Kenyan tea imported and blended with Assam, Darjeeling, Nilgiri, and Kangra tea are impacting the quality of Indian teas sold domestically. Indian media report Kenya tea imports increased 146% year-on-year between January and August prompting the Tea Board to take a stern stance. Importers must now report within 24 hours any tea stored for distribution and declare origin, quantity, and describe the quality of leaf stored. Random checks are underway. Read more…

    Aravinda Anantharaman

    Upcoming Events

    November 2021

    Iraq Tea Festival | Nov. 28-29 | Baghdad Chamber of Commerce
    Baghdad, Iraq |

    Click to view more upcoming events.

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