Nathalie Roos, CEO of ekaterra tea, this week announced “with pride an enthusiasm our corporate name change to LIPTON Teas and Infusions.”
“This change comes together with our commitment to drive the whole tea industry upwards and grow value for all and our planet,” said Roos.
Lipton writes that the rebranding will strengthen the company’s position as the world’s number one tea business and affirm its approach as a consumer-centric organization. Ekaterra currently generates €2 billion in annual turnover from sales in 150 countries. The name change is more inclusive of non-traditional brands in the ekaterra portfolio, such as Pukka and TAZO. The company owns 34 brands including PG Tips, the T2 retail chain, and regional brands such as Brooke Bond Red Label and Bushell’s in Australia.
| The First of Seven Agriculture-Focused Satellites is Safely in Orbit
The SpaceX Transporter safely delivered the first Agri-Focused Earth Observation Satellite (EOS) into orbit Jan. 3. The constellation of seven satellites will each monitor one million square kilometers daily, covering 100% of the largest areas of farm and forestlands, about 98% of the globe’s land surface. The satellites, designed by Dragonfly Aerospace, scan 13 bands to generate panchromatic and multispectral imagery to monitor daily crop growth, water stress, weed spread, the presence of pests, and temperature variations at ground level. Tea growers can use the data to precisely control CO2 emissions, cut energy consumption, decrease water usage and reduce losses to pests.
| The Specialty Tea Institute Ceases Operations According to Peter Goggi, president of the Tea Association of the U.S.A, the decision was driven by economics and a decline in interest. STI will not accept membership applications in 2023 and will not conduct classes anytime in the near future, he said. Goggi writes that STI could not offer many courses over the last three years due to COVID and had experienced a dramatic drop in both membership and interested students. STI is the association’s educational arm, offering basic through advanced training. The institute’s Certified Tea Specialist and Certified STI Instructor credentials and STI Tea Mentors program were well respected with participation by tea professionals around the world.
| PLUS Mou Dasgupta, founder of Brook37 The Atelier in Princeton, New Jersey, is pursuing her passion for tea after 25 years of trendsetting corporate leadership in the financial services industry. She developed a love for fine-quality tea while living in West Bengal, India, where she attended university in Calcutta. She says Brook37 “is proud to bring fresh thinking and an ethical and sustainable mindset to all we do,” she says. “Our unparalleled tea selection of flavors, aromas, and colors from around the world, along with exquisite packaging, help you choose a positive and aspirational lifestyle.”
Grace Farms Foods CEO Adam Thatcher says that even though slavery was abolished globally nearly a century ago, more than 28 million people are trapped in forced labor worldwide. Poverty and lack of access to education create opportunities for those who stand to benefit from the exploitation of vulnerable men, women, and children. In modern times, forced labor takes the form of work with little to no pay, fear and coercion, and restricted freedom of movement. This often occurs at the beginning of the supply chain when our tea is grown, food is harvested, our clothes are made, and the materials used in our buildings are extracted.
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Grace Farms Foods CEO Adam ThatcherGrace Farms Foods CEO Adam Thatcher
Ethically and Sustainably Sourced Tea
What makes our line of organic teas unique is that the herbal blends are naturally sweet ? much sweeter than you’d normally expect. They’ve got about 10% organic stevia leaf in them, just as if you were to pick it out of the garden. Since the success with those blends, we’ve been developing a line of black teas, and we’re getting ready to come out with green tea and wellness blends, says Grace Farm Foods CEO Adam Thatcher.
Grace Farms Foundation aspires to advance good in the world, providing a peaceful respite and porous platform to experience nature, encounter the arts, pursue justice, foster community, and explore faith.
Dan Bolton: Adam, welcome to the podcast. Tell us about your mission and vision and introduce our listeners to how the tea you sell plays a key role in improving suppliers’ lives.
Adam Thatcher: Thank you for having me on the program. I’m a big fan and very excited to share our story.
The story begins at this amazing place called Grace Farms. It’s a cultural and humanitarian Center in New Canaan, Connecticut, where we’re free and open to the public, we pursue justice, and where people can come and encounter the arts.
We also foster community at this place. We want to be open and welcoming and inviting to everyone.
Tea has played a critical role, tea being this common beverage that everyone enjoys around the world that conveys a sense of hospitality of welcoming from a host to a guest, but also the comforting nature that when you come to a new place, whether it’s at a friend’s house, or going to a place like Grace Farms, a nice warm beverage helps you lower your shoulders a little bit, find that commonality and then begin the dialogue.
So, our story with tea begins there. We expanded our tea game to another level when we established Grace Farms Foods, a public benefits subsidiary of Grace Farms Foundation created to share our signature coffees and teas with the world. And that’s really where we got started.
Grace Farms’ elegantly flowing roof. Photo by Sahar Coston Hardy
Dan: Your range of premium teas seeks to end forced labor and mirrors Grace Farms’ aesthetic: Making the world more just, sustainable, and peaceful. Will you tell listeners about your blends and sourcing strategy?
Adam: Our tea blends are unique because Grace Farms resident tea master Frank Kwei developed them.
Frank has welcomed hundreds of thousands of visitors to Grace Farms with a warm cup of tea and fantastic conversation explaining what Grace Farms is. Our first line of teas were organic herbal blends that are his own family recipes.
Frank Kwei
What makes them unique is that the herbal blends are naturally sweet, much sweeter than you’d normally expect. They’ve got about 10% organic Stevia leaf in them, just as if you were to pick it out of the garden. I find it hard to go back and drink a regular herbal tea like chamomile that doesn’t have this natural sweetness. And for us, it’s exciting because we’ve packaged a perfect blend all in one sachet, with no need to add sugar that probably isn’t organic and has been heavily processed.
Since the success with those blends, we’ve been developing a line of black teas, and we’re getting ready to come out with green teas and wellness blends, all using Frank’s expertise to come up with these inspiring blends.
Chamomile Citrus | $14BREATHE | Turmeric-Ginger | $14Herbal Collection | $65Grace Farms sources coffee and tea from organic, sustainable suppliers vetted for ethical labor practices.
Dan: Where are you sourcing your teas from?
Adam: We source teas and herbals from around the world. So right now, our teas are coming from India and Sri Lanka. We’re now going to begin bringing in teas, green teas from China, and Matcha from Japan. The herbals come from a wide variety of places. For example, rooibos comes from South Africa, lavender from Croatia, and chamomile from Egypt. We are trying to find the best origins from a quality standpoint and then digging into the supply chain to ensure that they are ethically and sustainably produced, sourced, and traded.
Dan: Let’s talk about your concerns about forced labor and the problems associated with child labor. Describe for our listeners what can be done and how.
Grace Farms Foundation is a not-for-profit organization, and its stake in the ground is to end forced labor worldwide. It has a particular focus on supply chain analysis and a priority on the building materials supply chain because it sits at the interesting intersection of architecture and human rights.
Tea has given us this new opportunity to not only demonstrate through building materials, which is a very unconsumed friendly industry, right? You build a building once, and it lasts for 50 years, whereas tea is something that’s consumed daily. So, when we decided to start Grace Farms Foods, we ultimately decided to start it with three goals. The first is to share our signature teas with everyone. The second is to demonstrate and educate about ethical and sustainable supply chains. And the third is giving back 100% of the profits to support Design for Freedom. This initiative began at Grace Farms to stop forced labor in the architecture and construction industry.
We began building a program to demonstrate and educate about ethical and sustainable supply chains during the pandemic. The opportunity to travel to origin wasn’t an option, to begin with, so we started by saying, okay, how do we have some reassurance that we’re not participating in forms of child labor but also make sure that human rights are being respected and, and that fair pay is being given to those farmers or those tea workers for the work that they’re doing?
So, we looked at Fairtrade certification and changed our Fairtrade certifier to partner with Fairtrade International and the US branch of Fairtrade International, which is Fairtrade America; it’s the most globally recognized Fairtrade certification around the world. It began in Europe and works with FLOCERT. We saw this as an opportunity to lead the conversation in the tea industry here in the United States by partnering with Fairtrade International to become Fairtrade America’s first US brand to use Fairtrade-certified ingredients in our teas.
Fairtrade International has more rigorous standards, and it is producer-led. It focuses on smallholder farms and includes those stakeholders in every conversation, from setting standards to paying premiums and minimums to the ecology and environmental practices exhibited by these certified farms that we sourced from, so that was the beginning for us. But then that’s just using a third party to say, Okay, there’s been an audit, they’ve met our standards, but then there’s this need for what I think is the most important is that first party audit you going to the origin, meeting with the tea pickers, talking with the team managers, and making sure what they’re saying aligns with what the factory worker is saying, as you’re asking these questions, and getting to really immerse yourself in the culture. Tea in some of these areas around the world, like Darjeeling, is more than just a job or an industry. It is life. It is culture. And so, for us to experience that was incredibly validating. It creates an opportunity for long-term relationships when you find a partner with values alignment like your own.
Dan: Two-thirds of the transaction price is concentrated toward the retail end of the tea supply chain. How do you bridge the gap between a consumer paying a higher price and a producer not fully benefitting from that well-intentioned purchase?
Adam: As I mentioned, partnerships are the cornerstone to creating a fantastic and sustainable product, not only from the conventional view of sustainability, environmental and from humans, right said but also from a business side, right, because as you develop a stronger relationship and partnership, then you find more efficiencies, and you’re able to supply even a larger market. Our partnership began, ultimately, with a fantastic individual by the name of Kunall Patel, who is the owner and CEO of Davidson’s Organics.
In my opinion, all tea needs to be organic. It is crazy that the wide, very large share of the tea market is grown with pesticides sprayed on it and synthetic fertilizers put into it. This is a very, very lightly processed product that is put in a cup with boiling hot water poured on it. Then you drink it. So growing tea organically addresses two issues, the consumer’s health and the lasting effect on our environment.
Organic farming practices have been proven to protect soil health, improve water retention, create more resilient plants, and create a more reliable crop year after year. So that should be the non-negotiable, lowest common denominator the entire tea industry should be moving towards.
Now, beyond that, right? Let’s be honest, deforestation is also occurring because there is not a proper living wage for small farmers which is the reason they need to continue expanding their growing areas. The last consideration is whether the suppliers are using biodynamic practices. Biodynamic farming is essential. Intercropping with native species of trees and other shrubs that attract different types of microorganisms and insects that all benefit the soil health, not only helping to trap carbon tea, is actually a very effective plant at absorbing CO2 and trapping it in the soil. Biodynamic farming practices accelerate that process.
So, that’s where there needs to be buy-in, and that does have to come from consumers. Right? Consumers need to stop buying tea that’s not organic and does not meet those standards.
Our commitment is that the tea source will meet these minimum requirements. One of the reasons we chose to partner with Fairtrade International is because they have a whole Climate Resilience Program that helps educate the producers at origin on how to create more resilient farms and how to use more organic practices that will combat climate change.
As we grow and we’re able to generate a profit, nothing would make us happier than to continue to strengthen those relationships with the producers where we’re sourcing our teas.
Wednesday afternoon tea serviceOnce the snow falls visitors can experience the wonders of nature by snowshoeing across a mesmerizing winter landscape .
Grace Farms: The Season of Light
During the winter season, Grace Farms offers opportunities to reflect and engage in programs for people of all ages, from afternoon tea on Wednesdays, served by expert Frank Kwei, to helping those in need to listening to improvisational arrangements of seasonal music, to participating in one of our many programs related to our initiatives of nature, arts, justice, community, faith, and Design for Freedom.
As in all seasons, visitors are invited to explore our nearly 80 acres of natural landscapes and walking trails. For those interested in a deeper understanding of nature and our universe, there are a variety of facilitated programs such as bird watching and astronomy. Grace Farms is open and free to public six days a week.
Sandip Thapa, the founder of CuppaTrade, an eMarketplace that enables bulk growers to sell online, says the newly launched B2B eMarketplace exploits new-age tech, including AI and VR, to offer the expanding segment of small tea growers access to a diverse and global base of tea buyers. not interested in maintaining the status quo, “the old way of doing business needs an overhaul,” he says, adding, “We want to blow up the market basically, and to bring in efficiency, make trade much faster, make it extremely dynamic and bring the sellers and buyers closer.”
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Cuppa Trade Founder Sandip Thapa on fixing the old way of doing business in tea.
A Fresh Perspective
Sandip Thapa started his career as a tea taster and auctioneer. He later spearheaded India’s first tea eMarketplace – the Jorhat Tea Centre, working with the Tea Board of India.
Sandip Thapa, Founder CuppaTrade
CuppaTrade is a newly launched B2B platform offering the expanding segment of small tea growers access to a diverse and global base of tea buyers.The platform exploits the new-age tech including AI (artificial intelligence) and AR (augmented reality) to connect tea producers across the world directly to buyers worldwide. It facilitates the sale of authentic GI tea to buyers, reducing cycle-time, ensuring quality, providing better renumeration to sellers and making procurement cost-effective for buyers.
In this conversation with South Asia Correspondent Aravinda Anantharaman, Thapa describes a sales cycle that takes far too long, lacks transparency and favors large buyers. Stakeholders shows little interest in innovation. “The need of the hour is a fresh perspective,” he says.
Aravinda Anantharaman: Congratulations on launching CuppaTrade. Will you tell us a little about it?
Sandip Thapa: Thank you. CuppaTrade is an online marketplace catering to the tea ecosystem. We are focusing on the small tea growers’ cooperatives, the bought leaf factories, and the small producers. And we are increasing their buyer base. We are working on their market expansion, and we are going to the secondary and the tertiary buyers. We are connecting the small producers with a very large number of small buyers across the country. This is the plan in phase one, and in phase two we intend to open up for cross-border transactions as well, wherein we focus on the exports.
We want to blow up the market basically, and to bring in efficiency, make trade much faster, make it extremely dynamic and bring the sellers and buyers closer.
Aravinda: Looking at the Indian auction system, where did you feel there are gaps that needed to be plugged?
Sandip: The entire process should have evolved. It is almost 180 years old and by this time everyone knows how tea is to be treated. So, the quality assessment is set, the pre-sale and the post-sale processes are set. What are the responsibilities of the seller? What are the responsibilities of the buyers? These are set and on the basis of these conventions, you see a lot of comfort in private sales. Wherein, the seller is sending samples directly from the garden; the seller is taking the onus of taking care of the quality and the buyer is taking the responsibility of timely payment or whatever the understanding is, with regards to paying prompts or credit terms.
What we should have done is, in the auction system, we should have gone many years ago directly to ex-garden sales.
Technology has yet to play a pivotal role in the ecosystem. So if it’s a broking house or an auction organizer, they could have come up with an app or platform wherein directly from the garden, the tea invoices for sale, could be uploaded and by the time it’s come to the warehouse, your kuchcha or the provisional catalog would be ready. They could have reduced the cycle time. And this is very easy. These are very common sense interventions. Nobody’s doing it, so we might as well do it through CuppaTrade.
Now, we have knowledge in the palm of our hands. Why can’t trade be that quick? You have the learnings of the marketplaces like, Amazon and Flipkart. Unfortunately the tea industry has been bereft of these innovations. You have pockets of innovation, but they’re very tiny. You have progressive sellers and buyers, that’s why you’ve seen the plethora of D2C brands coming in directly trying to sell from the gardens.
So for us, the number one concern is the pace of transaction.
Second is opening up of the market or the platform to add a very large number of buyers and sellers and to showcase small tea growers and producers because the kind of teas they are producing, although the volume is very small, has limited representation.
Next you have to consider credit facility, with regards to receiving the material and making the payment, already set.
It is a Tea Board run auction. The banks and fin-tech companies, could have easily opened up credit facility to the buyers or even to the sellers through the platform. That takes care of the working capital concern.
CuppaTrade offers buyers four ways to complete a transaction.
Finally, I feel it’s very restrictive in the sense that it’s not enough to have a tea board license if you are a buyer. Even if you have a license, you probably will not be able to operate out of any auction center if the committee doesn’t allow it.
So the Buyers Committee is almost like a club. New buyers do get added in the auction system, but if you dig deeper, who are these new buyers? It’s the same old firms registering their new firm. So that is how the new buyers are coming in the platform. But it’s the same handful of 20, 30, 35 buyers. So these things should have evolved. Who should have anchored these? It could be the auction organizer, CTTA (Calcutta Tea Traders Association) or the GTAC, or STAC. It could be the Tea Board, it could be the brokers. But unfortunately, because the industry is so old, you have various interest groups and they run in their own direction. They have their own agenda, they have their own interests to fulfill, and that is how you see where the industry is at the moment.
“The only segment that has made headway are the traders, packeteers, and merchant exporters. They buy low and sell high. That premium never returns to the small tea grower (STG) or producer (STP).”
– Sandip Thapa
Aravinda: In terms of price discovery and in setting prices, the auction offers the benchmark. How would CuppaTrade do that?
Sandip: It’s very unfortunate because when you have a very limited set of buyers, price discovery will suffer. We respect the buyers version, because they also have their own interest to protect because they are looking for value. And with the commodity prices going up, it’s not just the tea price, you have other various costs which is going up, one has to control cost somewhere. Unfortunately, the producers are at a receiving end, where they don’t have much of a say.
And you have to understand the buyers are mostly either traders or agents or packeteers in the auction system. So the procurement cost has to be low so that they make a larger margin. The platform has not been opened to the secondary or tertiary buyers, no one would want to go there and bring them onboard. Else, then what happens to the primary agents and buyers?
We feel everyone can coexist. A small buyer can become a medium-large buyer. A large buyer can become a very large buyer because, when you look at the FMCG industry, everyone is going rural, everyone is going to tier-two, tier-three cities. Everyone is trying to get into just-in-time to fill the shelves, use technology so that inventory is just right and operational costs are down. Similar things could have happened, but when you have a very limited base, how would you expect a fair price discovery?
Yes, you need discipline and you need to put systems in place. But why can’t teas be bought by international buyers at the same time? You have to have mechanisms in place. And it may not be suitable for all kinds of tea. That’s all right. But even on an experiment basis the platform should have been opened up. If it’s a very high quality tea, anyway it’s going to Europe, why can’t the importers be asked to be part of the platform. With a click, you would have expanded the market. And it would be all digital. You log in, explore the catalogue and you bid. How difficult can it be? And now we have working examples, it’s not that we are reinventing the wheel. It’s been many years that Amazon and Flipkart have been in our lives.
If we don’t focus on an alternate, wherein we are speeding up the cycle time, we are reducing the inventory turn-around or providing easy credit in a transparent and open manner from the platform, then when?
Even for that matter sampling. If you go to a buyer’s place, a fairly large or medium sized buyer, the amount of samples they get, it’s humanly not possible to taste all those teas. In many cases, they know what a garden or a particular mark is making. They know the flushes and they know the quality that would be coming out at any particular point in time. So it’s just the type samples they would see seriously at the start of the season or flush, and occasionally the usual sale samples, that’s about it. They do not have the bandwidth to see all samples, because they’re buying from auctions, they’re buying from private sale, they have 2, 3, 4 local brokers sitting outside the office with the samples pushing for sale.
For certain category, you have to see the sample and then only purchase, definitely. Why not? But not for all categories. If you look at the BLF category or the variety that is mostly bought within a particular price range, that anyway is bought on the basis of touch and feel. No one would make the cups and taste. That category is increasing. So if you do something about it, digitize it or have a data set, that one can refer to, instead of just receiving sample, it would make things easier for both buyer and seller.
Here also, CuppaTrade will be using a lot of tech like digital catalogue to make catalogues a bit more interesting and offer more than an Excel sheet; Augmented Reality so that buyers don’t have to go through physical samples. This will save them a lot of space and time. And with our quality assessment, it’s going to be very interesting. They will be able to buy teas on the go, even if they’re travelling or wherever they may be stationed. Once fully ready, we’ll showcase it and we’ll take feedback from the stakeholders. So far it’s been very, very encouraging.
Aravinda: I would also think it addresses one of the concerns that producers have about how many samples they send. Small producers can’t afford to send so many samples in the hope that they get somebody to taste the tea and set a price for it.
Sandip: Correct. So while we are building the AR module, we have already taken steps to get into focused sampling. The process begins right from registration. It’s very thorough. It’s a two step process, where initially, the buyer just uploads the basic details. Then the team sits with the buyer over a call and captures which grades do they buy, at what levels, what are their preferences and so on. And then we also push or showcase the teas that they’re not purchasing. And that is how we nudge them to try new varieties and steadily expand the market.
You would be surprised and happy to know that while it’s been only about three months that we are active and live, we’ve handled teas from Arunachal, Nagaland, Himachal, Upper Assam and South India. And of all shapes and sizes. It could be a five kilo pack, it could be a two kilo pack, all are welcome; green tea, oolong, orthodox, tippy, non tippy, CTC, many varieties.
When we discuss with buyers who mostly deal in CTC, Bolder Grades, Dust and so on and so forth, we ask them, if they would buy green tea as well, or would they be interested in Arunachal Orthodox or some other varieties? They usually say, “No, we do not deal in these teas.” Then we counter, “You haven’t dealt because you haven’t had a platform where you could be assured of a constant supply. Here is your chance, we are showcasing these variety and sending you a few samples.” We encourage them to test it out with their clients, and tell them that now they have a seasoned partner in CuppaTrade who can offer a smooth supply. So this is how we are expanding or helping the small producers expand the market.
Aravinda: The traditional auction system, especially with the mix of commodity and CTC and Orthodox (ODX) has a very complicated grading system that is very intimidating for any new buyer. Unless they already have a sense of all these finer differences between grades.
Sandip: It’s a very interesting point. We have a plethora of grades and most are not required. We had discussed this with Tea Board earlier. Everyone agrees that we need to reduce the numbers and have only the standard ones like you find in Sri Lanka. But here comes the problem, when you say, a particular grade, let’s say a BOP or a BP, it varies between garden to garden because of the sizing of the grains. And that happens because of quality of mesh in sifters, as it varies between manufacturers. You’d be happy to note that during our quality assessment, we are pointing out the mesh size for each invoice.
This is a foundational work that we have started wherein we are providing as many data points as possible for the comfort of buyers. We are laying this foundation so that slowly, we may do away with the samples altogether. This may sound impossible now, but with technology, this is possible.
We realized early, that after a point, when we have lakhs of buyers in the platform, it’ll not be possible for us to send out samples even if we do focused sampling.
It’s a process. Sellers realize it. Buyers also realize that there are too many grades in the market. We need to reduce it. We are talking to Associations too, because it reduces cost for the seller as it helps in streamlining packaging, and is less confusing for buyers.
Aravinda: With the small tea farmer and the bought leaf factory how do you ensure, because the volumes are so small how do you ensure there’s a sufficient supply of a particular tea, a particular grade, which has already found a buyer and who’d like a, the assurance of a steady, consistent supply
Sandip: For stabilizing the supply chain for a buyer with a particular set of variety, we have a mechanism for requirement matching. We use AI to educate the platform that for a particular buyer, a certain category of tea is suitable. Thus, after a point, when we have enough data, the platform will give us and the buyer suitable recommendation basis her buying history. Then, we shall position the new marks accordingly. This way we are trying to bring some semblance and ensure that the buyers have the required supply.
Aravinda: And I think there’s also the opportunity to take back market insights to producers, or to the factories, to the small tea growers, and say, okay, I have an estimate of how much tea of a certain grade, of a certain kind at a certain price band in demand and sort of establish those sort of conversations also
Sandip: Yes, this is what the market is demanding and perhaps they could tweak manufacturing to stay relevant and take advantage of the prevailing market. We want to rely on data and market feedback for this. We are earnest in developing a robust database and analytics to improve all-round offerings.
The other thing with small growers is that, they are defined by one segment, but within that segment itself, there’s such a huge range, isn’t it? There are those who are producing these uber specialty and extremely fine quality tea, and there are those who are still starting out and figuring out a way around making tea. So how do you then navigate this spectrum of small tea growers?
We have already faced this kind of a dilemma because you have certain bought-leaf factories who are working very closely with smart growers and they’re putting in 70% to 80% fine leaf in manufacturing. But the moment the buyer hears it’s a bought leaf factory, the perception gets colored. It’s a constant education process with them. And we insist that they shouldn’t judge either by the mark or where it’s coming from. They should assess and pay only basis the quality.
It’s a process because the perception of BLF is very strong. It’s a volume game for BLF producers with less regard to quality. But when you come across exceptions, you’ve got to fight for them.
Here, we have an advantage because the buyer set is very large and it’s increasing every day. So I think from the traditional platform point of view, when they are selling through CuppaTrade, the biggest advantage is the market base. There is somebody who’s working hard towards positioning them, and we do get into a bit of confrontation with buyers, and urge them to stick to apple to apple comparison on quality because we know what we have, we know the producers, the team and advisors have gone to the factory, we click pictures, we make videos, and we know some of them are very disciplined producers and the result is in the cup. When you taste you know immediately that these have been manufactured with very finely plucked leaves and they’re different. Some of the invoices are even better than many agency gardens, I must say.
It’s a constant positioning that we have to do. And that is how you set the mark, because it’s not just the seller who’s saying that her tea is good, but the platform too, which is supposed to be unbiased. And because we have a large buyer base, it becomes somewhat easier for us to represent those kind of teas.
Aravinda: CuppaTrade is not just a trading platform, it’s also supports a community where conversations can happen, insights can flow from one to the other. And you facilitate, that direct dialogue.
Sandip: We are not traditional brokers. We are not traders. We don’t want to keep a margin. We are very clear on that. Whatever benefit or the higher price that the seller gets, which the buyer is providing, it has to go directly to the seller. We have a service fee. We charge the sellers, we charge the buyers, but that’s about it. We are pure facilitators providing a platform where everyone is welcome to interact, negotiate in a secure, safe environment, while we take care of quality and payments.
Aravinda: So what is the volume you need of buyers and sellers to make CuppaTrade viable and breakeven?
Sandip: We’re going for all. We’re going for everybody. And it’s because India itself is a very, very large market. If you look at the figures, I think the timing of CuppaTrade is apt.
If you look at the auction versus private sale data, auctions are usually around 45% annually. And there is a constant shift towards private sale. We anticipate that this shift will keep increasing. Within a couple of years it will be a stark 40-60 in favor of private sale. CuppaTrade operates in the private space and we don’t conduct auctions. It’s a marketplace, where buyers and sellers negotiate directly and finalize the price and quantity.
As far as buyers are concerned, internally we have taken a target to have about over a lakh (100,000) of buyers across the country. At the moment, we are somewhere near 500 buyers, and we have not even stepped up because, it’s end season in North India. We are focusing on South Indian producers right now. By late February or early March, we shall go all-out and hasten the onboarding process. It’ll be pedal to the metal, so to say.
We want to go to the hinterlands. We want to go to the destinations, hold buyer-seller meets, do the legwork, also to make the onboarding process as smooth and easy, help them understand our processes, our quality assessment, show the AR version of the sample, gauge their comfort level and tweak accordingly. Again, it’s a process and it’ll take some time and as you know the industry is averse to innovation and tech, we anticipate it’s going to be a long haul. But yes, for us, the figure is over a lakh of buyers on the platform.
Aravinda: How difficult is it to conduct transactions on CuppaTrade? What are buyers and sellers required to do to join the platform?
Sandip: It’s very easy. You go to the website CuppaTrade.com and click Marketplace. You identify whether you are a seller, buyer, or both. And the registration form opens up. Many requirements are not mandatory. It’s left to the seller and buyer. That is the first step of registration. Then the team calls and we get into the detailing bit. So it’s that easy and it’s completely free. We don’t pay to be members of Amazon or buy from Flipkart. So that’s the model.
Aravinda: And it comes directly the product itself, eventually comes directly from the producer’s side, the seller’s side?
Sandip: Yes, fresh and in the shortest possible time. We’re removing many layers of traders or intermediaries. In most cases, it’ll be between seller to destination buyer. For certain categories it could be the intermediaries who would be feeding the destination. We are not averse to, agents or traders being in the platform because we are focusing on the ecosystem. Where we bring advantage for both seller and buyer is better remuneration, a large variety in the shortest possible time on a one-stop shop platform with tech driven value-adds. There’ll be many segments of buyers who will be very interested in the platform.
Few people know that the cuppa tea they cherish is in trouble.
Every mature industry experiences rising production costs, saturated markets, stagnant prices, and a lack of tech intervention – in tea, the over-dependency on subsidies, risk-averse attitude, complacency, and fear of change add to these troubles.
Other industries have found solutions through innovation (product, material), new technology (cloud, platforms, software), market expansion (exports, new manufacturing hubs), and cost-saving (zero inventory, automation). However, the woes of the tea industry seem bottomless.
One of the reasons for this endless nightmare is that since tea is an old industry, many interest groups further their agenda. Due to a lack of consensus, no single entity – the brokers, tea associations, government bodies – has been bold or creative enough to pull the industry out of this rut or at least lead the way.
Sandip Thapa
The only segment that has made headway are the traders, packeteers, and merchant exporters. They buy low and sell high. That premium never returns to the small tea grower (STG) or producer (STP). Thus, many from that buyer segment, flushed with funds, have bought gardens, opened factories, and turned producers. However, the situation is such that they, too, feel the cost vs. poor price pressure.
The old way of doing business needs to be fixed. The sales cycle is far too long, large buyers have cornered the trade, exports usually go to traditional markets, no transparent mechanism for credit disbursal, and no grading or packaging standards innovation. The list of problems is very long.
The need of the hour is a fresh perspective. Green shoots are emerging. Progressive proprietary garden owners have taken the D2C approach and come out with their brands. They are exploring e-marketplaces like Amazon, Flipkart, and even Facebook or setting up their platform and app. Start-ups are directly working with small tea growers, advising them on best practices, plucking standards, and selling those quality teas to consumers while sharing a portion of the premium with the STGs. Many retail start-ups have cropped up and helped the industry by increasing consumption. Taking inspiration from the start-up culture, a few of the old-school plantation agencies have also forayed into tea bars and lounges. And there’s been a gradual shift from regulated auction platforms to private sales. In India, around 55% of total production is sold privately; the rest is through auctions. Private sales will keep growing in the future.
CuppaTrade (CT) is one platform that holistically addresses the industry’s problems. It’s a global B2B marketplace focusing on the entire ecosystem, not just bulk tea. It’s an India-based start-up with global ambitions. Within a short time, many producers across India, Nepal, and even Vietnam have found value in this marketplace. Their buyer base is increasing by 300% every month. The immediate benefit for the producer is that their tea is seen by the whole world and does not remain restricted to just a particular region.
One of the core values of CT is speed. Speed in the transaction process. Speed in arriving at a solution and execution. Speed in customer service and dispute resolution. Speed in listening to stakeholders and introducing value adds. This approach has brought down the traditional sales cycle by 75%. Here, the STPs can list the tea directly from the garden or factory and start receiving interest from buyers who know the ‘Mark’ and do not want to wait to see the samples. Buyers can also buy based on CT’s assessment of quality and cup. Provision is also there for buyers who wish to see the samples first before showing interest. On the other hand, if a buyer has an urgent requirement, she may post the details on the platform, and CT fulfills the same. These features are being offered for the first time in the tea industry through a digital platform. This brings convenience and pace to one’s fingertips.
CT believes small is beautiful. Small is hopeful. The growing segment of small tea producers (STP) makes a huge variety but needs more means and connections to showcase these teas to a large audience. They are hungry and take quick initiative. They listen and act fast. Thus, it’s a pleasure to work with them.
Siddhadevi Tea Estate, Nepal. One of many small tea producers selling bulk tea on the CuppaTrade online platform.
On the other hand, many buyers do not know so much variety exists at several price points simply because no platform or entity has exposed the small tea buyers (STB) to such teas. CT is bridging this gap. The marketplace connects the STP with STB directly. Without any middlemen, the STP enjoys a price premium, and the procurement cost decreases drastically for STB.
Traceability is a huge issue in international markets, where mostly blended tea is sold. The buyer needs more knowledge of whether teas are ethically sourced following correct GI norms. With Blockchain and AR, CT brings the manufacturing units closer to the buyers and provides authentic teas with full disclosure.
Another crucial problem is working capital, both for producers and buyers. CT resolves this issue with a tie-up with financial institutions. STPs are paid a portion of the total tea value as an advance as soon as the CT team inspects the invoiced teas. The rest of the value is paid after the teas are sold. The credit facility is also given to vintage buyers. This is an interesting space that financial institutions can explore further through either Bill Discounting or introducing long-term bonds based on the sold invoices. These bonds could be sold in rich consuming markets like Europe, the US, Middle East. In addition, a portion may be reserved for the stakeholders at a discounted rate so that they have an opportunity to earn secure, healthy profits after the completion of the tenure. This will also result in good behavior and increase stickiness to the platform.
It is high time that we explore non-traditional international markets. For example, Iran buys loads of orthodox tea; however, due to US sanctions has an issue with payments. In such a scenario, Dubai or UAE can be developed as an ‘export hub’ for that region. While tea is directly delivered to the destination countries, payment comes from a secure source like Dubai. Similarly, Canada, Australia, the US, and South-East Asia must be exposed to quality tea, not the tea-bag variety, but the robust, malty Assam or the fragrant, sweet Nepal. This calls for constant interaction, regular seller-buyer meets, a collaborative approach through country-specific associations, and a non-biased platform that gently binds stakeholders with the proper process and technology, addressing everyone’s needs.
Excellent Tippy Teas being sold through CuppaTrade. Left Donyi Polo, Arunachal Pradesh. Right, Siddhadevi, Nepal.
Many innovative approaches are required to take the industry to the next level. Cuppa Trade is doing its bit. Going by the initial response shown by the stakeholders, CT seems to be heading in the right direction.
Tea is a unique beverage. It’s entrenched in our lives. Its longevity is safe. However, as in any Agri commodity, the farmers’ prosperity and sustainability are paramount. Therefore, the tea grower and producer must be paid well before her sweat dries.
And whatever minutes it took you to read this article, know that globally, about 25,000 cups of tea are consumed every second. Every second. Maybe you also enjoyed a cuppa during this time. That’s the magic of this beverage. It’s huge, and it’s unifying.
“Many innovative approaches are required to take the industry to the next level. Cuppa Trade is doing its bit. Going by the initial response shown by the stakeholders, CT seems to be heading in the right direction.”
THIRST has completed its initial Human Rights Impact Assessment in the global tea sector and is now seeking to understand the root causes. Founder and CEO Sabita Banerji says that, “the voices of producers are, in fact, quite rarely heard. They are often blamed for circumstances beyond their control. We just want to understand how it all works, where the levers for change may be, how the current situation might be driving some of the undeniable problems in the tea sector, and what could be done to address those problems.”
Producers: Tell your side of the story. Fill out this form to receive a link to the Global Tea Producers Survey before January 31, 2023.
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Sabita Banerji on THIRST’s Human Rights Impact AssessmentSince the inception of the tea industry criticism for low pay and poor living and working conditions for tea workers has been directed primarily at owners. Historically, there were undeniably bad practices – many tea producers have since improved conditions on their estates and enjoy good relations with their workforce, complying with local laws and regulations.
Tea Producers Get An Opportunity to Tell their Side of the Story
Sabita Banerji was born and raised on tea plantations in Kerala and Assam. She has spent nearly 20 years working in ethical trade and international development, holding strategic posts at Oxfam and the Ethical Trading Initiative. Sabita was previously a member of the Board of Directors of Just Change, UK – a voluntary community tea trading initiative.
She co-founded THIRST, The International Roundtable for Sustainable Tea. THIRST launched its Human Rights Impact Assessment of the global tea sector last year. Planned as a three-year study, Phase 1 of the literature review has ended, and Phase 2 is set to begin.
Aravinda Anantharaman: I am eager to hear how the study has progressed so far. First, do you want to debunk some preconceptions about this survey, especially as you have just launched the producer’s survey? Because human rights is a touchy subject and you have often emphasized that THIRST wants to work collaboratively with producers.
Sabita Banerji: You’re right, human rights are a touchy subject. But perhaps if we just think about tea workers and farmers as people like ourselves, mothers, fathers, sisters, and brothers, people who just want to live a decent life, who want to have a house that is safe and waterproof in the monsoon and who can afford to educate their children to a decent standard, and who can maybe have some savings so that if a member of the family falls sick they can get medical attention for them. If we think of it that way, then there’s nothing touchy about that. These are things we all want for ourselves; we all want for anybody that we work with. And I’m sure everybody in the tea value chain wants that for tea workers and farmers if possible.
Sabita Banerji
However, we are working in a system established 200 years ago. And it was established with a certain structure, most of which persists today, and it was established at a time when there were very different moral standards regarding how workers should be treated. And so, we need to look at that, too. We live in an age of the UN Guiding Principles on Business and Human Rights. There will soon be legislation from the European Union on mandatory human rights and environmental due diligence. There are growing demands from customers, investors, and potential employers for companies to demonstrate that everybody working in their supply chain has a life that meets those decent standards. And so, I think that’s the way to look at this issue and not worry too much about the phrase “human rights.”
The two preconceptions I’d like to debunk with this phase of the Human Rights Impact Assessment are the preconception that civil society is somehow out to attack the tea industry and wants to destroy it. The opposite is true. NGOs (non-government organization) and civil society organizations, as much as the tea industry itself, wants the industry to survive. We want it to thrive. We want everybody within a thriving industry to be treated fairly and have a decent life. So that’s the first preconception I want to debunk.
The second one is that tea producers are solely responsible for the conditions in which tea workers and farmers live. They are part of a wider system. In fact, most of the profit of the margin from the sale of tea is concentrated at the packing and retail end of the value chain. So, we shouldn’t be looking solely at producers to try to solve these problems. We should be looking at the whole value chain and trying to discover what everybody within the value chain can do to make life better for tea workers and farmers.
If we were to use the language of human rights, it’s their right to have a decent life. But it’s also beneficial to the industry. There is a business imperative for ensuring that workers are not so unhappy that they are desperate for their children to get out of tea production. And so, just in terms of retention, productivity, and reputation of the tea industry as whole or individual companies, it is important for tea workers to say we have a decent life and for tea farmers to have a decent income.
Aravinda: Was there anything that came up from the literature review that you were surprised by? Also, where were the gaps in the available literature on the tea sector?
Sabita: The two biggest areas where we found gaps in the information were, first, information from East and Southeast Asia. There is much literature out, you know, and a disproportionate amount of literature about Assam and less so, but still quite a lot from Kenya and Malawi. But very little in other areas. And even in other East African countries like Tanzania, many of the resources we found were quite dated. But from countries from East Asia, Southeast Asia, Indonesia, Vietnam, etc., which are very big, major tea-growing countries, there needs to be more literature on what life is like for workers, tea workers, and farmers there. So that’s a gap that we hope will be filled. I have to say that since we were looking at available English resources, there are likely other resources out there, although we have tried to trace those and have not found any more information as far as we know. If anyone reading this knows of resources, reports, and documentation of situations for tea workers and farmers in those areas, I’d be very pleased to hear from them.
The second area where we found that there needed to be more information was about smallholder tea farmers. Because as you know, there is a huge surge in small tea farmers establishing themselves. And in fact, more than 60% of tea globally is now grown by small-scale tea farmers. I just read the news today that APJ (Apeejay Tea Group, the third largest tea company in India) is pulling out of the tea sector in India. Recently, Warren Teas also pulled out of its tea estates in Assam. It looks like the plantation sector is weakening, and the small tea growers’ sector is growing. And therefore, it’s important that we start to document and research, you know, what is happening to the workers and the farmers and their families? Because if there were problems in estates, and I think this is something that estate managers and owners have been telling us for years that yes, they may not have the ideal perfect conditions, but workers have some protection workers on tea estates. In contrast, small-scale farmers are dispersed across huge areas, there is no organization between them, it’s very hard to monitor. It would be very hard for retailers and brands to monitor what is happening within those farms, whether the human rights of everybody within those farms are being met. And so, this is an area where we need to see more documentation of those issues.
Aravinda: Where were the gaps in the available literature on the tea sector?
Sabita: The two biggest areas where we found gaps in the information were, first, information from East and Southeast Asia. There is much literature out, you know, and a disproportionate amount of literature about Assam and less so, but still quite a lot from Kenya and Malawi. But very little in other areas. And even in other East African countries like Tanzania, many of the resources we found were quite dated. But from countries from East Asia, Southeast Asia, Indonesia, Vietnam, etc., which are very big, major tea-growing countries, there needs to be more literature on what life is like for workers, tea workers, and farmers there. So that’s a gap that we hope will be filled. I have to say that, you know, we were looking at available English resources. So it may be that there are other resources out there, although we have tried to trace those and have not found any more information as far as we know. So, if anyone listening to this knows of resources, reports, and documentation of situations for tea workers and farmers in those areas, I’d be very pleased to hear from them.
The second area where we found that there needed to be more information was about smallholder tea farmers. Because as you know, I’ve been that there is a huge surge in small tea farmers. And in fact, more than 50% of tea globally is now grown by small-scale tea farmers. And I just read the news today that APJ is pulling out of the tea sector in India. Recently, Warren Teas also pulled out of their tea estates in Assam, and the plantation sector is weakening. And the small tea growers’ sector is growing. And therefore, it’s important that we start to document and research, you know, what is happening to the workers and the farmers and their families? Because if there were problems in estates, and I think this is something that estate managers and owners have been telling us for years that yes, they may not have the ideal perfect conditions, but they have some protection workers on tea estates. And but small-scale farmers, they are, you know, dispersed across huge areas, there is no organization between them, it’s very hard to monitor, it would be very hard for retailers and brands to monitor what is happening within those farms, whether the human rights of everybody within those farms are being met. And so, this is an area where we need to see more documentation of those issues.
Aravinda: The second phase of survey and interviews is a key phrase, isn’t it, of surveys with producers and interviews with industry stakeholders, particularly workers. What is the expectation of this phase?
Sabita: The second phase is really key. This is the analysis phase. The first phase was assessment, where we documented both how the industry works, what standards are in place, the human rights in principle and in practice. The second phase is analysis, which is the phase we’re in now. The third phase will be action planning, where we bring together international multi stakeholder players to discuss what should be done. And the fourth phase will be accountability, where we try to support the tea industry to monitor those action plans and how effective they are, whether they need adjustment, etc.
So, this is a key phase, this analysis phase. This phase will consist of three things, a producer’s survey, key informant interviews with a wide range of people throughout the tea sector and technical experts in things like international trade, gender, the tea industry as a whole. And the third element will be looking at alternative approaches, you know, what have different players been trying around the world to improve working conditions for workers or how tea is traded, and so starting to put out some potential solutions. But the most important one of those three, I think, is this producer survey. Because producers’ voices are in fact quite rarely heard. People worry that the voice of workers is not heard. And that is a legitimate worry. But there have been this huge number of reports, many NGOs and trade unions and academics, interviewing workers, finding out their position and their point of view and their lived experience. And obviously, brands and retailers are usually happy to speak out. But for producers, it’s harder because firstly, they are often directly blamed for the condition of workers on their estates. And secondly, they are just part of a wider value chain or wider supply chain. They have little control over the prices that are paid for the tea that their workers produce. And they are also under pressure with increasing costs and increasing climate impacts. Which makes it really difficult to run these estates, as perhaps we’ve seen from some of these companies pulling out and a lot of estates closing, leaving workers in a really vulnerable position. So we need to hear the voice of tea producers. We need tea producers to be able to say what pressures they’re under and what would help them to try and address some of these problems. And they need to be able to do this in confidence, anonymously so that there is no commercial risk to them in speaking out in case some of their answers may seem critical of their customers.
And you know, the principle that THIRST works on is that we’re not about blaming any player within the within the tea value chain. We’re not blaming producers for how they treat their workers. We’re not blaming brands and retailers for how they do their purchasing practices. But we just want to understand, we want to understand how it all works, where the levers for change may be, how the current situation might be driving some of the problems that are undeniably there in the tea sector, and what could be done by those players to address those problems.
Aravinda: And, as you said, there’s little available literature on small tea growers. Given the changing models, how will you approach Phase 2 given the differences in how large estates, small tea growers, bought-leaf factories, etc., operate?
Sabita: Yes, you’re right. The tea sector is very complex, at that production level, at every level, but the focus of this survey, we had to be very clear about whom we were targeting. And the issues for small-scale farmers, bought-leaf factories, and tea estates are very different, so it wouldn’t work to try to cover them all in one survey. So, we are targeting this survey at large tea estates; we intend to do surveys on factory workers and small-scale tea producers at some time int he future. But currently, we’re using the Indian government’s definition of a larger estate of five hectares or more and employing over 15 people to emphasize that this survey is not exclusively for India; it’s for any country where tea is being produced. So, all tea producers who meet those criteria are invited and encouraged to participate in the survey.
Aravinda: What are the challenges you foresee?
Sabita: The main challenge is getting producers to participate in the survey. Because over the years and centuries, much trust has been lost between the different players within the tea sector. And it will take time and careful work to tear down those barriers or dissolve them between the players. So, I want to reassure the producer that this survey will be done anonymously. And you can confidently answer the questions so that the responses will not be revealed to anybody. But what we’re going to do is we’re going to aggregate the results. So, a certain percentage of respondents confirmed that in the last year, this is how much of their made tea was sold below the cost of production. We’re not naming any producers. We’re not naming any buyers, brands, or retailers. We’re just going to focus on the generic responses that tea producers give us. But we also have space within the survey for producers to give us more detail if they want to. Again, those responses will be treated completely anonymously. And you know, if there’s anything within it that would identify the state or all their customers, we will not publish that. But it will be extremely valuable to have that information to feed that knowledge and understanding into the next phase where we’re developing. We’re working with the industry to develop an action plan. We invite producers themselves to be part of those multi-stakeholder discussions to be part of the discussion about what role they can play in improving the life and work of the workers, but also what they need from the other players within the value chain to enable them to do that.
Aravinda: How different will THIRST’s on-the-ground research be from, say, audits by certification bodies?
Sabita: The Global Tea Producers Survey is a very, very different thing from an audit or certification standard. Audits and certification checks are just checking up on the producer. Whereas this is asking the producer to say what their challenges are, what their opportunities are, and what their situation is. So the data from this survey will complement what you get from audits. But it is a very different kind of study.
Aravinda: Is there anything you’d like to put out there to producers on why they should participate in the survey, what is expected of them, and how the information will be used?
Sabita: All tea producers, managers, and owners of tea estates in whatever country they’re in should seriously consider taking part in this survey. This is not just a brief few questions; it will require an hour of your time and allow you to put your side of the story forward. THIRST is not about blaming any party for the situation of tea workers and farmers. But the voice of producers has yet to be heard. This is your opportunity. Often producers say that what is reported about them needs to be more accurate. This is your opportunity to give accurate information about managing a tea estate, paying workers a decent wage, and providing decent benefits. So please, please do take up this opportunity. Don’t be afraid, don’t be defensive. Because this is not an attack, this is offering you the opportunity to speak out.
If you agree to take part you’ll be emailed a link. The survey is on Survey Monkey, which we’ve researched and have found to be the most secure. This spring we will aggregate the data we receive and we’ll put that together in a report to try to reflect the challenges that producers around the world are facing and what the situation is really like for them. And then, that report will be combined with our findings from the key informant interviews, and we hope that some of you will agree to take part in those interviews. And it will also be combined with the results of the alternative approaches that we hope to document. So when combined with the Phase One report, we looked at the problem. We look at how the tea industry works, and we will look at human rights in principle and human rights in practice. In Phase Two, we will have looked at the producers’ perspective. The key informant interviews will give insights into what could be driving some of these problems. And then also these alternative approaches, which will show us some of the potential solutions that there might be. And we’ll bring all that together for Phase Three when we invite tea stakeholders from around the world to come together to discuss what they, working together or individually or in groups, could do to address these problems. And thereby not only making lives better for tea workers and farmers worldwide but also strengthening the tea supply chain and improving the tea industry’s reputation.
THIRST News UpdatesHuman Rights Impact AssessmentProgress ReportWomen carrying tea in woven baskets in Turkey
If you manage or own a tea estate anywhere in the world, THIRST would like to offer you the opportunity to give your side of the story by taking part in the confidential Global Tea Producers Survey.
— Sabita Banerji
We understand that issues like price discovery and purchasing practices can be commercially sensitive, and the survey provides for anonymity and confidentiality. We also believe the survey will help tea buyers to better understand the pressures that suppliers are under. Pressures which can impact on workers, creating potential reputational risk to both their brands, and to the industry as a whole. Results will be aggregated and neither producers nor buyers will be publicly named.
Consumers, investors and employees around the world are increasingly demanding higher social and environmental standards for those who produce goods and services. To meet that demand in the tea sector, everyone involved needs to explore how they might be unintentionally suppressing workers’ pay and conditions, including tea producers, governments, trade unions, tea buyers, brokers, packers, traders, brands, retailers and tea consumers.
By working together, THIRST believes that a new kind of tea industry is possible – a tea industry fit for the 21st century, a kinder, fairer industry in which everyone thrives. But we can only get there if we listen to all voices, and understand all perspectives – including those of tea producers.
Anyone who’d like to participate in the survey should go to THIRST’s website: www.THIRST.international Scroll down to see a link to the producer survey to register. And we very much look forward to hearing what producers worldwide would like to share about the realities they are facing.
To register and complete the survey, please fill out this form before 31st January 2023.
Listen to the interview
