• Q|A Mary Cotterman

    Mary Cotterman was 12 when she learned to throw clay on a potter’s wheel. In the decades since, that wheel has never stopped spinning for this accomplished teaware artisan.  She describes the foundation of her work as functionality, “because for me, no matter how it looks, if I’m making a piece of teaware it needs to be a precise tool for pouring tea, so a lot of my design I take from traditional Chinese vessels, but I have learned small techniques and vernacular from all over.”

    • Caption: Mary Cotterman turning a teapot lid at her studio in Asheville, North Carolina
    Hear the interview
    Mary Cotterman on crafting teaware in the US and state of mind of artisans embracing native clay.

    Mary Cotterman at home. COVID kept her away from the clay but her fans remain loyal and supportive.

    Teaware Born from Native Mud

    In 2015 Cotterman moved to China to learn from the old masters how to pour Chaozhou Gongfu at the Ming de Yuan production studio and to speak Mandarin. She spent two years there learning Cha Yi (tea arts) from a master in the Beijing school, becoming the first westerner to throw shou la hu teapots. She next studied at the San Bao International Ceramics Village in Jingdezhen, the home of porcelain for 1700 years. Her residency included helping run a gallery, curating shows, and translating for international artists.

    In 2018 she returned to the United States after a long sojourn across Europe. She makes her home in Asheville, North Carolina where you will find her crafting water jars, pitchers, teacups, celadon gaiwans, and ash-glazed Japanese-style Kyusu teapots in a wood-fired kiln. By day she forages for local plants, studies traditional folkways and earth-based practices.

    Dan Bolton: Your arrival in Asheville anchors the western end of a bridge that spans Europe and leads to ancient China where you spent several years learning Gongfu Cha style pottery and to speak the native language of porcelain and Yixing clay. Will you describe for listeners the state of artisan teaware in the US?

    Mary Cotterman: Teaware in the US is a reflection of the amalgamation of different traditions from throughout the world, wherever tea goes, it creates its own unique culture based on how the people in the region live. In the US we’ve got the British teaware, a lot of us ceramicist make teaware and teapots in that style.

    I don’t. I specialize in small Chinese teapots.

    Cotterman throwing a teapot body. Photo courtesy Mary Cotterman Pottery.

    As the tea community gets more educated and broadens, people are getting excited about teaware from different places. So, Gong Fu Cha, the Chinese tea service is becoming quite popular in the United States and throughout the world.

    To me, it’s a really lovely experience pouring tea in this way because it lends an aspect of ritual to people’s lives that I think we miss a lot in our quotidian daily lives because we’re rushing to and fro.

    The Chinese tea service invokes this sense of process and ritual.

    I also make Japanese-style Kyusu pots, which are side-handled teapots with big openings. They’re typically used for green tea so a lot of steam needs to be able to escape the opening. You don’t want your pot getting too hot.

    As people get familiarized with the different styles of tea and regions, they’re starting to collect teaware from all over.

    Dan: On your website you mention that every vessel contains the wisdom you absorbed from around the world.  How do you see the wisdom manifest in your work?

    Mary: That is a good question. The foundation is functionality, because for me, no matter how it looks, if I’m making a piece of teaware it needs to be a precise tool for pouring tea, so a lot of my design I take from traditional Chinese vessels, but I have learned small techniques and vernacular styles from all over.

    I’ve been doing wood firing recently, which is a really magical process, very labor-intensive. That style of wood ash glaze was taken to its height in Japan. It’s done all over the world. But the particular long firings in very hot kilns for the buildup of wood ash to create this really natural glaze is a long-standing Japanese tradition.

    I think of lineage a lot as a craftsperson. There’s a gift that you’re given by your teachers especially with pottery. It’s difficult, and it’s a steep learning curve, and you can practice for many, many, many years and still not be an expert.

    I think of lineage a lot as a craftsperson. There’s a gift that you’re given by your teachers especially with pottery. It’s difficult, and it’s a steep learning curve, and you can practice for many, many, many years and still not be an expert.

    – Mary Cotterman

    Dan: Will you describe the artisan spirit and state of mind of those embracing native clay to make teapots and teaware in the US and elsewhere?

    Mary: This is an interesting area of exploration because it is at once new in that we’re trying to be more ecologically friendly and our artists and practices, we’re trying to be climate-conscious in our practices so that we can continue making pottery, as humanity always has, but it is also something that is historical.

    Throughout the world’s pottery, artisans gather around natural sources of clay. And each source of clay has its own life story. Yixing clay is very touted and it’s incredible, and it’s very good for what it is, but it is not special in its uniqueness. Every native clay has unique properties based on its life story, the mineral composition, and what bacteria is in the soil will affect how it can be worked.

    Native clay is integral to pottery itself. Finding that relationship between the Earth and us between the life story of the clay began on the top of the mountain, rocks eroded over millions of years added plant material and bacteria, and then it gets deposited in a place where you can go and dig it.

    There are many ways you can use this in the process; you can make things out of native clay, and you can also use them as slips or decorating or crush up rocks to use in glazes. It’s really all about coming back to the origins while also looking forward to a sustainable practice.

    Lotus San Jian Tao, traditional vessels for Chaozhou Gongfu Tea created from North Carolina wild clay

    Wheel thrown from North Carolina wild clay, the rims are cut, then the interior is coated in white slip.

    Dan: Asheville is a thriving community of artists. How has covid impacted the arts community there in general and you as a tea artisan.

    Mary: The shift to lockdown personally wasn’t huge because I’m already kind of a hermit. It’s mostly just me in the clay all day, which continued throughout COVID.

    Our studio, which is a big warehouse, subdivided into different studios, was shut down formonths, Not being able to get my hands on play was pretty tough. It’s a deep source of grounding and a spiritual connection did for me So that part was hard.

    Once our studio opened back up, in the summer of 2020, it was pretty normal. My sales, thankfully, were doing pretty well.

    I think people getting stimulus checks in the US were putting those to good use.

    I haven’t met most of you, but you’re all online all over the world, and really just showed up for the small businesses in the tea community in a really inspiring way.

    As far as the tea places everyone shifted, I think everyone sort of had to suddenly become more online and do different things like subscription services, and, you know, selling more loose tea. I know, for some of those sit-down businesses, it was quite rough, but I think everybody made it to the downhill side intact from the tea businesses that I know.

    As a creative person, it was really nice to have the social pressure taken off, because I have some social anxiety, and so being social definitely takes a lot of energy for me.

    During COVID, I went into a monk-like creative state because all I was doing was staying at home with my dog and my sweetheart and then sort of meditating for hours on end in the studio, silent and almost nobody else in there.

    It was a really lovely time where the whole world slowed down like I feel when I’m working late at night in the studio, and I could just tune in and listen deeply to the craft.

    Wood fired Pear Kyusu
    Lachrymose Gaiwan
    Wood-fired Shino glaze tea cup
    Three “Dragon Egg” teapots made from Yixing clay, Carved by Chun Zhu
    Shop Mary Cotterman Pottery
    Mary Cotterman on the GONG FU CHA’dcast

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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: Shekib Ahmed at Koliabur Tea Estate in Assam
    Hear the interview (Part 2)
    Abhijeet Hazarika and Shekib Ahmed on frugal innovations that scale
    Tea bushes ready for a plucking round at Koliabur Tea Estate, Assam, India

    Embracing Simple Technology with Scalable Impact

    By Aravinda Anantharaman

    Frugal innovations utilize simple technology to address some of the most vexing challenges facing the tea industry. It’s an umbrella term for innovations that do not require much capital, carry a low financial risk and can be done safely with high reliability. Abhijeet Hazarika, former head of process innovation at Tata Global Beverages, describes several innovations that have moved from the drawing board to become successful pilots at partner estates. In Part 1, Aravinda Anantharaman looked at frugal innovation in buying and selling tea. In Part 2, she explores the application of frugal innovations in the tea garden.

    Shekib Ahmed of Koliabur Tea Estate in Assam talks about experimenting with frugal innovations in the field, but it’s in the factory, he says, that these simple technologies show the biggest impact.

    “With data,” says Ahmed, “I have an objective source of attention to detail. I don’t have to depend on someone who has been working in the industry for 40 years, who uses his expertise and muscle memory to guide us. I have objective data. And that really helps me change the conversation in the factory. I’m not talking of vague concepts. I’m talking about numbers. I’m saying, this is the parameter that we want, and we must keep it within this threshold. It makes it scientific.

    “What happens is that even the youngest boy or girl who’s joining as an executive, he or she can pick it up very quickly. She doesn’t have to be there for 20 years. Now, we have a young lady in one of our factories in Dubba. She’s running a 12-hour shift by herself and it’s just data. She has the data. She knows that we must stay within these parameters for the quality to be good.

    “She’s in her 30s. Normally, guys running factories at that level, are in their late 50s and 60s, because you need to have that much experience. But if we can objectify data, we can have younger blood come in quickly. They are also not operating blind. I’m not just telling them, make good tea. I’m telling them this machine should be running from this much to this much. The sensor will inform you whether you are in that range. In our shared platforms, we have a cloud-based platform where we share the data, and we keep verifying it. There are many little things in production where we were operating blind and now, we have a certain level of clarity so that really helps us improve.”

    Ahmed meters temperatures in the factory. Incidentally, this was developed by a young boy at a cost that Hazarika only will say, “is laughable”. Three machines are ready, and one of them is at Ahmed’s factory. Attention to detail, which was once subjective, has now become scientific and objective, says Ahmed. He likens processing tea to cooking, and how by tweaking the temperatures and the RPM of machines, the quality of tea changes exponentially. These innovations are sensor-based, that are already in use in other industries. Ahmed reminds me that the color sorters in orthodox tea production were derived from rice sorters.

    Saurav Berlia with visitors at LR Group’s Dooars estate.

    And finally, innovation in the field

    During our conversation, Hazarika discusses people, welfare, and productivity. Speaking on low productivity, he says, it’s not because people are shying away from work but because of the nature of the work.

    Hazarika says “There are times when I stand in the gardens in August, and it is so hot that I could not stand more than 45 minutes to an hour before I felt unwell. But these people do it day in day out. It’s difficult and I don’t think anybody talks about this. So much hype about the romance of the woman carrying the bags, how many realize what goes on in that case, it’s like a furnace!”

    We talk about harvesters. Most of the harvesting machines, he explains, are handheld machines and they tend to be noisy and heavy to carry. Therefore, men are assigned the machines. Not only is it tiring but it’s hard to keep one’s hands steady with them. This means that the quality of the plucking is not very good. Terrain poses another challenge for harvesters even in Assam’s valleys, where it is an uneven terrain. This challenge is amplified in the hills. Hazarika talks about harvesters not as a means to increase quantity but to aid quality.

    He is looking at two major deliverables. One, the quality of the finely plucked should be at least 5x better than what is plucked by current machines and at least 2x better than what has been plucked by hand. Two, pest controls. The cost of pest and disease control is significant, especially where there are large areas to monitor, which is the case with estates that span many hectares. Pests can spread within two to three days offering a very small window to arrest their spread. An early warning system, says Shekib, can make an enormous difference. However, this seems to be a mammoth task — perhaps the most challenging space to build innovation — because, for every pest, Hazarika says, a year’s worth of data needs to be collected to feed the algorithms.

    Nowhere does the conversation turn to machines replacing people. Instead, the conversation repeatedly brings up utilizing labor effectively to increase output but with better quality.

    “I think the tea industry supply chain is completely out of sync with the way modern supply chains work. There is no concept of made-to-order.”

    – Abhijeet Hazarika

    From ‘make to stock’ to ‘make to order’

    Ultimately, it comes down to the perennial problem of oversupply and reduced demand, and the mad scramble for markets. Indian tea producers do not make to order but make to stock, their priority is to sell. And the circle that begins with variability in the quality of tea closes with variability in price realization. Made-to-order brings other advantages, as it is collaborative and brings both technical and technological inputs as part of the process.

    “I think the tea industry supply chain is completely out of sync with the way modern supply chains work,” says Hazarika. “There is no concept of made-to-order. They will say forward contracts are made to order. I beg to disagree because, when you say I will take a tea from you, I mean I will take a tea off a particular quality from you. The guy who’s making the tea, in many cases, is not even aware of what you want. So, the buyer has permission to reject it.”

    “One of the most important aspects of made-to-order is to leverage the unique aspects of an estate of the factory that has consumer value. Somebody might make tea that makes good color which is preferred in Maharashtra or some may make tea with a sweet after taste which the Gujaratis like. We need to be able to treat every garden as unique and not as a commodity.”

    While this is a familiar story, of not treating tea as a commodity, Hazarika offers a roadmap of sorts that is possible with frugal innovation. Once you have quality specifications, a producer can do real-time monitoring during manufacturing. All the resources are focused on producing only what meets the specs. This in turn optimizes the cost of production and increases the likelihood of the customer buying it because it’s been made to their specs.

    Which brings the conversation to buyers because the change has to begin with them. If the large tea buyers are procuring 1,000 mn kilos of tea a year, assuming an average estate produces 1 mn kilos of tea, that’s 1,400 estates that can cater to one single buyer. Change can begin with one single buyer.

    Frugal Innovators from left, Ratan Ghosh, Bappa Dutta, Mr. Sakil, Nayan Sarkar, SN Singh, Jamil Aktar, Prasenjit Mandal, and Sohag Mandal. Photo courtesy LR Group.

    Saurav Berlia talks about how he is piloting the make-to-order model. He has partnered with a buyer who has agreed to buy his tea at a higher-than-average price. In return, Berlia assures the buyer will receive:

    • – quality (achieved by managing the parameters while processing in the factory)
    • – consistency (ensured by recording data such as temperature, moisture levels)
    • – safety (being done by educating growers on chemical usage and monitoring it)

    There may not be certifications here, but data is being recorded digitally and analyzed. For those who have wondered about the alternative to expensive certifications, this may well be it. Because the proof is there for anyone to see.

    Ahmed talks about how the conversations are changing, becoming more specific. It’s helping him build a young team who are learning, not averse to technology, and who are razor-focused on quality. Innovation, he says, is no longer just for multinationals but for everyone.

    “The only way I can do something better than the much larger tea garden groups is if I can execute innovation quickly and if I can execute quality improvement better and in the most cost way,” says Ahmed. And that can only happen with teamwork.

    The larger outcome is more significant. Frugal innovation will change the way the industry is run. It will no longer be about waiting for an executive to invest 30-40 years in the factory to be relied upon to run it. Frugal innovation can bring effective processes into play in a way that someone young can be trained early on. This is important in a state like Assam where migration is extremely high and the intellectually able who leave don’t return.

    The work on frugal innovation is being made possible by harnessing vast industry experience, a wide network, and an active collaboration with academia. Support and partnerships have come from major tea buyers. The possibilities where tech can play are vast and are seen by both Ahmed and Berlia as the way forward.

    “Come in with an open mind,” advises Ahmed. It requires a willingness to try piloting the various options. And because these innovations are frugal by design, it’s affordable even for small growers and small gardens. Berlia confesses that he didn’t buy into it readily but the potential to earn a better price for the tea was a strong pull. Within a month, he says, he could tell it was working and he’s since been advocating it.

    For an industry that’s been grappling with multiple challenges, frugal innovation is a low-risk and impactful option, spearheaded by an industry veteran with an eye for innovation. For every successful experiment, there are many that fail, but these are essential to the process that begins with the question, “What if…?”

    Those interested in pilot projects can contact [email protected]

    Koliabur Tea Estate extracts lab
    Microwave monitoring quality
    Image capture of tea in multiple visual wavelengths for data processing.
    Koliabur simplified tea sorting system
    Hear the full interview (Parts 1 & 2)
    Abhijeet Hazarika and Shekib Ahmed on frugal innovations that scale

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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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  • Q|A John Davison

    In November Luxemburg-based private equity firm CVC Capital Partners, with investments totaling more than $100 billion, out-bid several competitors to acquire Unilever’s tea portfolio, re-branded as ekaterra tea. Lipton Yellow Label, Brooke Bond, Lyons, PG Tips, and 30 more tea brands, many regional, have a combined turnover of $2.3 billion (€2 billion). The agreement is subject to regulatory review and will not close for several months, but there is no time to waste as CEO John Davison takes on the task of re-energizing the largest tea company in the world.

    • Caption: John Davison was the only passenger on the plane from Singapore to Judah, Saudi Arabia
    Hear the interview
    Ekaterra tea CEO John Davison
    “I’m much more of a grower than a cutter,” says ekaterra tea CEO John Davison

    Re-energizing the World’s Largest Tea Company

    By Dan Bolton

    The Singapore sun is high and the room alabaster bright when ekaterra tea CEO John Davison answers the Zoom call. It is the dark of night and snowing heavily outside my Winnipeg window in central Canada. Davison, 58, is energized. Singapore was quick to instituted mass lockdowns in early 2020, becoming one of Asia’s most stringent COVID-zero economies, largely sealing off its borders, and testing. After 18 months of isolation Davison has just returned from the COP26 Glasgow Climate Summit in Scotland and would soon depart for Judah, Saudi Arabia and to visit the company’s massive tea packaging operation in Jebal Ali, near Dubai, UAE.

    In March 2021 Davison was named to oversee a “carve-out” of the least desirable tea brands from the Unilever portfolio. Unilever CEO Alan Jope announced in January 2021 that the company would jettison underperforming legacy brands Lipton, PG Tips, Lyons, Brooke Bond, Red Rose ? all black tea stalwarts acquired in the 1980s and 1990s ? along with more recently acquired and fiscally promising T2 retail in Australia, TAZO, an American packaged good brand formerly owned by Starbucks, and Pukka, a fast-growing herbal tea brand founded in 2001 in a home kitchen in Bristol.

    Davison spent his first nine months at Unilever reorganizing billions in assets including 11 factories across four continents that employ 4,000 workers doing business in more than 100 countries. A big portion of Unilever’s suppliers and partners will transition to ekaterra at the close of the sale. Ekaterra will operate company owned tea estates in Kenya, Rwanda, and Tanzania and contract with thousands providing a livelihood for one million people.

    Davison, a Harvard Business School Graduate with a master’s from the University of Cambridge, spent five years at Diago as a strategy director during the merger with Guinness and worked for 11 years as a senior executive with Danone. His last job was managing the Asian division of Zuellig Pharma, a $13 billion global leader in pharmaceutical distribution. After leading a turnaround that he initiated in 2014, Davison spent the first year and a half of the pandemic focused exclusively on resolving formidable distribution challenges brought by COVID-19.

    Unilever, ranked 175 on the Fortune 500 with 400 brands and turnover of $58 billion, kept its most profitable and fast-growth tea gardens and factories in India, Nepal, and Indonesia and in North America remains in a joint venture with PepsiCo to manufacture and market Lipton tea in bottles and cans. The portfolio’s remnants are expected to generate more than $800 million annually, making it the world’s fourth largest tea company, according to Euromonitor.

    One man’s cast off is another man’s treasure. Davison is eager to make the most of CVC Capital’s $5.1 billion investment.

    Dan Bolton: John, when a private equity firm puts $5 billion to work they expect sizeable returns. In general, two patterns have emerged, one in which the management team cuts their way to profitability, trimming staff, investing in automation, and introducing efficiencies. The second is spurring growth.

    John Davison: Why would a company like CVC want, as you say, to invest $5 billion in taking ekaterra out of Unilever?

    It boils down to three key points: Number one, it’s a growth category. Tea is on trend, I think COVID, if anything has reinforced the dynamics that tea is a healthy beverage. It has a lot of medicinal qualities, as you well know, in terms of heart health, digestion, you name it. Investors like to be in categories that are on trend and have long term potential.

    Secondly, if you look at ekaterra, we are the largest, by some stretch, I think three times larger than the next player. So, we have a leadership position. That leadership stretches across 10s and 10s of markets ? 3,040 different markets. It’s not been something we’ve built on and really capitalized on.

    I think Capital Partners, CVC has seen that opportunity to capitalize and drive that leadership position to greater heights and with that bring the category into faster growth. That’s the second big reason, the strength of our competitive position, relative to the rest of the peer group in the industry.

    The third thing is the management team. I’m the rookie and just joined nine months ago, but the team we’ve put together in at ekaterra is highly experienced. Our R&D team is really strong. We have 3,540 tea tasters. When you put all that organization together, on top of a great brand portfolio in a growing category, it’s clear to see why CVC or anyone else would be interested in investing in the business.

    Now that said, we’ve now got to deliver on all the promise to your point. And that will be something top of mind as we start to engage with our future owners. And of course, these transactions take time to go through the process. There’s a few months now of anti-trust filings, regulatory processes and approvals to go. We won’t see the close of this deal probably till mid next year.

    Davison at his home office in Singapore

    Dan: At COP26 you sent a clear message that sustainable tea at large scale is doable. So, do you intend to be a tea company that is ethically mindful? Or an ethical firm that sells tea?

    John: That’s a trick question. I think you can be ethically mindful and kind of watch from the sidelines, right?

    We need to get in the game and drive the rules of the game. I don’t mean that in a threatening way, I think part of the reason we wanted to step out at COP26 was to make that point, which is that the status quo ? having a nice program to share with your customers and partners and consumers ? probably isn’t enough at this stage.

    If we don’t get beyond that, towards driving real change, and not just change inside of our business system, but industry wide, as well as with consumers, in 10 years time we’ll be really panicking about what we can do to reverse things that are probably irreversible by that stage.

    We need to get beyond watching and following. We need to get into the game and lead. We have the technologies discussed by the Ethical Tea Partnership, and a bunch of new technologies that are in development that were mentioned at COP26.

    We need to deploy that technology as soon as possible into pilots, which we’re doing. And as soon as we get them into pilot, we need to get them into action on our own tea estates and as soon as possible thereafter, broaden that to the entire supply base. And as soon as possible thereafter, the entire supply base of the industry. If there are technologies that can help other players, you know, I think we need to make them available. There’s no point in jealously guarding a technology that you deploy to 5% of the tea crop of the world, if 50% of the tea in the entire world is at risk.

    We need to develop proper resilience in climatic challenging circumstances, which you know, are becoming more and more difficult, as you said earlier, already affecting crop yields.

    If we can get these technologies properly piloted and properly rolled out, then we should be able to help our tea farmers manage much more productively much more resiliently in the face of real dramatic climate change. And that can only be a good thing, not only for ourselves, but for them and for the industry. And that’s something we’re going to work very hard to deliver.

    So, in that sense I think the answer to your question is that we need to be both an ethical company, as well as a tea company acting ethically.

    Unilever already set us on a wonderful course. It’s a great company. I think in many respects, we’re sorry to be leaving, and they are sorry to be losing us. But at the same time, it is for the best reasons to give us this chance to drive a leadership that I think would be difficult to do inside such a large multinational.

    Davison taking tea with the ekaterra staff

    Jebel Ali
    United Arab Emirates

    Dan: So, let’s talk about the core product. In this case, making tea that people are willing to pay a premium price to drink. I don’t think any brand wants to be known for making tea so heavily discounted that it is perceived as cheap or market blends that taste worse than in years past. Ekaterra tea inherits several brands on the rise, market leaders in 58 regions, but in the west sales are stagnant.

    Senior Beverage Consultant Matthew Barry at Euromonitor writes that “mass-market black tea bags are in consistent decline in nearly all developed markets. Unilever saw retail sales of black tea decline by $27 million from 2015 to 2020 in these countries, even with the benefit of a large 2020 pandemic-related retail spike.”

    Last year Unilever CEO Alan Jope set the dominoes in motion by declaring “insanity is carrying on doing the same thing and looking for different outcomes, and for 10 years we have been trying to ignite growth into our tea business unsuccessfully.” Black tea drinkers were blamed for getting older and starting to fall over, and that is the fundamental problem… said Jope, “younger consumers are looking for novel experiences, and the consumer of ‘builders’ tea’ was someone who was born out of habit and was not into experimentation and trying new products.”

    I know from personal experience tea quality is an issue. Do you agree? And what are you going to do to make better tea?

    John: The tea category within Unilever has been subject to a focus on bringing down costs to manage exactly what you described, declining pricing or stagnant pricing in the market. Any multinational would probably deal with that kind of spiral of decline on value by R&D engineering the product, so I think certain things we are absolutely going to put right very quickly. Other things may take longer to fix.

    We’re going to work very hard at making sure we get our blends back to the top of the tree, in terms of quality and in terms of value to consumers. We can’t live in an industry if we are the leader in that industry, with second rate teas or teas that are not absolutely the best they can possibly be.

    So, I think we’ve got a job still to do. We started that program in the last 12 to 18 months before I showed up and it’s something that we’re now accelerating. That will require clear investments in certain key areas, but also in the way we communicate benefits to consumers. I don’t think we’ve done a very good job on that, either. Historically, I think we’ve tended to pull back on consumer communications. And we’ve not played the powerful cards we have in our portfolio.

    “We’re going to work very hard at making sure we get our blends back to the top of the tree, in terms of quality and in terms of value to consumers. We can’t live in an industry if we are the leader with second rate teas or teas that are not absolutely the best they can possibly be.”

    – John Davison

    Dan: When asked by the online polling site YouGov, consumers say they are willing to pay more for products that are sustainable, and to reward manufacturers who close the loop; traders who reduce transit emissions and growers who conserve water and regenerate soil. So, on one hand we have a price premium of perhaps 20-30% at retail. The premium is similar to that paid for organic goods and by consumers who have demonstrated their willingness to pay more for fair trade goods.

    On the other hand, tea manufacturers face significant additional costs to cultivate and process premium tea. There is the expense of adapting to a changing climate, costs to comply with requirements set by third party certifiers, new equipment and more expensive plant-based tea bags and earth-friendly packaging, and set-asides to pay for carbon credits. Is the premium consumers are willing to pay sufficient to cover the cost of sustainable production? The desire is there, and there’s money on the table, can you operate ekaterra tea in a way that it’s both sustainable and profitable?

    John: That’s a great question. I think sustainability, and ESG [Environmental, Social, and Governance] philosophies and beliefs are at different stages of development and relevance in different parts of the world. At COP26, you could absolutely feel that the world’s eyes were on everything that was happening. But it’s a difficult balance to strike.

    I would like to believe consumers would sit down and say, ‘yeah, we understand all the packaging, we understand all the accreditations, we get it, here’s an extra 20%, 30%, no problem.’ But I don’t believe that’s going to happen overnight. And I don’t believe that will happen across the world, I think it may happen in certain societies. But it’s not going to be a wholesale phenomenon at this stage, maybe hopefully, in years to come.

    Which means we develop sound business cases to surround the decisions we take to drive a more sustainable approach to business process.

    This is why technology R&D is so important, because to remove plastic from your packaging, you must put in an investment to machines and the X number of factors needed to make that happen.

    If you had the technology to design a fully recyclable or biodegradable pack instead, one that can be made at a lower unit cost, then that’s a win-win.

    But there will be moments where we have to make tough decisions and say, ‘there’s an extra capex’ [capital expenditure] to fit this factory to be able to do X, Y, and Zed in a completely different way.

    I think we’ve got to be courageous enough to make those decisions and figure out how to make the pay back with or without the 20% to 30% extra help from the consumer.

    Right now, and you hear this from anyone you interview in consumer products, or any product category,  there’s an enormous escalation in input costs, not only from commodity crops, but also from logistics supply chain, from packaging, all over the world, big tidal wave effects coming out of COVID and the disruption caused to the planet. We’re digesting those changes, as well as thinking ahead how we motor on, on climate change.

    It’s a VUCA world [Volatility, Uncertainty, Complexity and Ambiguity] a lot of volatility, a lot of uncertainty. Because we’ve generally operated in so many different economies with those kinds of unusually volatile trends, historically, I think we’ve got a team that’s pretty creative, pretty versatile, and is well equipped to deal with challenges that often contradict each other.

    That’s why we are employed to do what we do, if it was that straightforward, it wouldn’t be challenging. It wouldn’t be fun. It wouldn’t be the adventure it is to be in this business.

    Davison signing a distribution agreement with Sheikh Abdullah Binzagr in Judah, Saudi Arabia. Binzagr Group has distributed Unilever products since the 1920s.

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  • Resilient & Resourceful: Evy Chen

    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.

    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.

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

    A Story of Reinvention

    By Dan Bolton

    Seven years ago Evy Chen pioneered small-batch, cold-brewed tea in bottles. Her tea bar at 253 Amory St., Boston doubled in size in 2018 serving cold tea on draft, kombucha, sparkling drinks, iced coffee, and bottomless boba, as well as treats sourced from local businesses such as Pain d’Avignon and Fomu. In early 2020 her carefully constructed venture nearly collapsed. During the months that followed Evy reinvented the product line as a fresh-brewed tea made from concentrate and sold in cans and available direct-to-consumer.

    Dan: COVID lockdowns along the Eastern Seaboard shuttered foodservice operations and led to a surge in online transactions that altered long-established consumer buying habits. The impact on the beverage industry was severe. Tell us about those early days.

    Evy Chen: Everybody was freaking out. Right? People were scared, people were binge eating. A lot of people’s insecurities came out during COVID.

    I was sitting there watching everyone run around like crazy chickens thinking that’s been my world for, you know, the past 10 years.

    I didn’t have a lot to work with, so I had to be very resourceful. Being a woman of color and an immigrant, and a younger person, I think that resilience was always there.

    COVID really brought more of a focus and led me to say, ‘this is my game.” Looking around I said, “Okay, now it’s chaos, but within the chaos, where is the opportunity?’

    This is hands down the hardest thing I’ve ever done. Everything I’ve established in the past 10 years gone, products gone, clients gone, people gone. I practically had to rebuild a company with not much money during COVID.

    Evy Chen

    Dan: So what were your first steps? Let’s get granular for our listeners.

    Evy: Starting from retail pricing, you want to keep your costs at 25%. Right? You have to keep your margin at a certain level, and then it’s reverse engineering.

    So, we do an eight-pack right now on Amazon and www.evytea.com.

    That’s one single flavor so shipping costs exactly the same whether you buy one or two packs. The math becomes very simple. It’s not necessarily about cutting weight, per se, it’s about what kind of products and services can you provide to add value because your delivery cost is fixed. Our subscription service, for example, lets customers determine flavor and frequency and they are free to swap, pause or cancel at any time.

    From a shipping perspective, where we caught cost wasn’t necessarily at the very end of shipping to customers, it’s chasing it all the way back to the beginning of the supply chain and saying, okay, the containers now cost, you know, 15x more than before. So, how do we engineer this map and identify whose truck we can get on that’s already coming this way, instead of hiring our own trucks? We got really, really creative.

    We also had to figure out a way to raise more capital upfront and work out a contractual deal with our suppliers. You lock in costs where you can to control expenses. So, it’s a lot of tweaking the P&L [profit & loss statement], tweaking the clock, tweaking the engineering where it hurts the most.

    “No one had thought to cold brew tea before, but it brought out all of the great attributes that were lacking in cheap iced tea.”

    – Evy Chen

    Dan: Describe for listeners your innovation in brewing a tea concentrate to trim costs. Previously you steamed the leaf to release flavor and aroma then relied on small-batch brewing for 16 hours before bottling.

    Evy: We developed our own tea base that is a concentrate. It’s one thing I’m most proud of as a food scientist, to scale the exact sensory experience of a craft tea with the stability, the shelf life, and everything that you can imagine about being a larger manufacturer to capture the margin opportunity. So today we are shipping less water, shipping it less often to make more tea at one go. And then it’s a matter of just figuring out a way to stretch that supply throughout the year.

    Every single drop of Evy Tea I engineered from the very get-go. But from now on even scaling to 100 million gallons, the product quality will remain consistent, exactly the same. And the sensory experience is just as, if not better, than when I made you a cup of tea at my tea bar.

    Dan: How will your rebranding and direct-to-customer sales unfold in 2022?

    Evy: I’m not interested in capturing 10 million people next year. That’s a typical play, right, you raise a lot of money, you throw stuff against the wall and see which one sticks, and what doesn’t work, and you move on.

    And that becomes a very data-driven business and very data-driven marketing. I want none of that. I would like to capture people and keep them engaged. I want to keep that person as a lifetime friend because this is a long journey for me.

    I prefer a lower velocity working with our retail partners online and offline so that we can really tell that story and prove that story-centric marketing works.

    I’m looking at it as sourdough starters that I am naturally feeding. This is the best iced tea in the world hands down, I don’t have to sell them on that, all I need to do is to get the product to them and get them interested enough to taste it for the first time.

    Tea is a wonderful ingredient in beverages and food, it has a huge amount of history and culture and a story of humanity within. So why is it being minimized? Why is ready-to-drink tea mainly sugar water? Why are we, in tea, only worth 20 cents a pound?

    Grapes can be sold for $140 a pound. It’s not less labor-intensive, it’s, even more, labor-intensive, right? So why do we do all this work and don’t get the same value?

    “So I’ve done nothing more than simply decide that I’m worth more and that truly is the driver behind this whole rebrand.” – Evy Chen

    The only difference is that we’re not vocal and that we don’t think we’re worth it. Talk to any tea farmers, any distributor anybody you talk to in tea is the most humble human beings on earth, right?

    We’re really nerdy, we’re serious. We truly love this. But who is out there is talking to people drinking tea bags? The perception of value isn’t there. What do we have to do to change their mind? That’s the work we’ve been putting in.

    We need to figure out how to tell the same story in a different way, in a shorter format in a more heartfelt, emotionally filled format, and more truthful format, and throw that against the wall against all the other big companies who are nothing but marketing.

    We need to bring the whole industry into the next century not just the individual entrepreneurs but the entire global community of tea drinkers.

    So I’ve done nothing more than simply decide that I’m worth more and that truly is the driver behind this whole rebrand.

    Cold brewed superberry
    Eight pack 12oz cans
    Evy Palmer (tea+lemonade)
    Cold brewed tea on tap


    Evy
    Cold brewed
    Sourced organic, small lot, direct trade
    0 Cal (Unsweetened Green Tea)
    40 Cal (Black Tea Superberry)
    40 Cal (Hibiscus)
    70 Cal (Evy Palmer)
    $27.99 Eight pack 12 oz. cans

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