• Tea Biz Podcast | Episode 36

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    Listen on your favorite player

    Hear the Headlines

    | Retail Sales Forecast Happy Holidays
    | Restaurant Reticence is Declining
    | A Restructured DAVIDsTEA Expands into Pharmacies

    Seven-minute Tea News Recap
    Tea Price Report
    Sept 18 – Sale 37

    India Tea Price Watch

    India Tea Price Watch | Aravinda Anantharaman
    The Indian Tea Association has asked the government to introduce a minimum import price for teas imported into India, to ensure they meet the requirements of the Food Safety and Standards Authority of India and to see that these teas are not sold in India as domestic tea. Learn more….

    Aravinda Anantharaman

    Features

    This week Tea Biz travels to Guwahati in Assam, India where the co-founders of Folklore Tea discuss how they engage customers at an unusual level of intimacy.

    Processing raw leaves at Folklore Tea in Assam. Photos courtesy Folklore Tea.
    Processing raw leaves at Folklore Tea in Assam

    Exceptionally Local Teas that Connect with Consumers

    By Aravinda Anantharaman

    A recent development in tea in India has been the rise of new brands, many that have their roots in tea regions. Almost all of them seek to bridge producers and consumers. Most rely on the narrative that accompanies a product from its place of origin. For consumers, it’s in part vicarious living and a window to another world. Folklore Tea is as good as it gets for those who want to know who made their tea and where it comes from. Read more…

    Listen to the Interview
    Folklore Tea introduces the growers, village and even includes an original poem describing its teas.

    News

    Shoppers weary of COVID lockdowns say they are eager to splurge.

    Retail Forecasters Predict Happy Holidays

    By Dan Bolton

    Marketers anticipate strong holiday sales despite fewer footfalls at physical outlets due to surging sales online.

    Projections range from $1.28 to $1.3 trillion during the November to January gifting season. Mastercard’s SpendingPulse projects a 7.4% holiday sales increase, and the widely cited Deloitte annual holiday forecast estimates US holiday spending will grow between 7% and 9% in 2021. Ecommerce sales are anticipated to be between $210 and $218 billion, a gain of 11% to 15%, according to Deloitte.

    Last year’s holiday sales came in higher than expected, increasing by 5.8%, according to Deloitte. The consensus is that consumers have spent down debt and are eager to counter a gloomy summer that curtailed entertainment, dining out, and travel as COVID restrictions forced many to vacation close to home. In the US consumers have an estimated $1.5 trillion in extra savings to splurge, according to Bloomberg.

    As restrictions lift, retail marketing group Shopper, in Australia, predicts consumers will embark on what has been coined as “revenge spending” sprees.

    The publication AdNews writes that Australian households squirreled away more than $100 billion (AUD$140 billion) during the COVID pandemic, with 26% of Australians saying their families are better off financially than this time last year. Shopper’s Urge to Splurge Post-Pandemic Revenge Spending Study, conducted in August, revealed that during the holidays:

    • 47% of shoppers are planning on making a major purchase (a third indicated they would spend $500-$2000);
    • 40% of Australians are looking forward to spending on dining out and entertainment and 19% will book holiday travel
    • 35% say that now is a good time to buy major household items.

    A consumer survey by AlexPartners found 88% of US consumers plan to spend the same or more this holiday season, up 12%, as reported by Chain Store Age. “There’s unprecedented pent-up demand out there, consumers have lots of money in their pockets, in part due to recent government programs,” according to the firm.

    Countering that optimism is the fact that in September new COVID cases are averaging 145,000 a day in the US with more than 2000 deaths. Consumer confidence declined mid-summer during the latest wave of infections. Market research firm Numerator reported that in July and August consumers expressed big concerns over the Delta variant with 46% reporting they were “highly concerned” a number that grew 10% between July and August as hospitals filled. The majority (51%) cited the Delta variant with 66% of vaccinated adults expressing worries about family and friends becoming infected.

    Vaccination mandates and more widespread use of masks are working to bring down case loads. California, a state with 39.5 million people that reported 65,000 cases a day last December, is now reporting fewer than 8,000 daily with an infection rate of 22 cases per 100,000. In contrast, Texas reported 44 cases per 100,000 the first week of September and Florida is experiencing 42 cases per 100,000.

    Deloitte vice chairman Rod Sides, the company’s US retail and distribution sector leader, writes that “While consumer concerns about health and safety have eased since the last holiday season, pandemic-influenced shopping behaviors continue to gain traction.”

    Biz Insight – The big question now is which channel will outperform? The majority of shoppers say they want to get out of the house and visit stores but that depends on local outbreaks. A big concern for online buyers is on-time delivery. Savvy tea retailers finalized preparations before September, borrowing in the spring to stock teaware and gift selections for the holidays. Manufacturing was in full swing across Asia all summer but shipping delays and the extraordinary spike in container charges make it imperative that holiday promotions begin early this year. MasterCard suggests Oct. 11 as a start date for a 75-day sales season. The president of international operations at UPS advises consumers to “Order your Christmas presents now because otherwise on Christmas day, there may just be a picture of something that’s not coming until February or March.”

    Proof of vaccination at restaurants is encouraging frequent diners to venture out

    Restaurant Reticence is Declining

    By Dan Bolton

    Frequent diners are determined to return to their normal routine of dining out.

    OpenTable’s most recent quarterly survey of 20,000 restaurant fans finds that 62% are now dining out at least once a week. During the first quarter, only 39% of frequent diners were eating out at least weekly. Takeout remains the most popular alternative to dining in with 34% of respondents ordering takeout at least once a week. In 2020 35% of all restaurant orders were from drive-throughs, according to NPD Group.

    OpenTable reported a pronounced decline in July and August over concerns about the spread of the Delta variant. Seated dining at US restaurants is down about 11% below 2019 levels. In August the National Restaurant Association found that 60% of restaurant-goers had changed their use during the pandemic with most opting to eat outdoors and 19% saying they completely stopped going out to restaurants.

    OpenTable found that 27% of Canadians intend on eating out more frequently than before the pandemic, citing a need to take a break from home cooking (40%) and support for local restaurants. Diners were more likely to have dined solo (33%) in 2020 and now eat earlier, making reservations for 5:30 and 6 pm.

    Proof of vaccination should be a requirement for staff, according to 46% of OpenTable diners, up from 25% during the first quarter. A 71% majority are willing to show their vaccine cards and 23% say that restaurants must require proof of vaccination before they will dine indoors. In the San Francisco Bay Area 37% say proof of vaccination is a must.

    Overall, 48% of frequent diners are willing to show proof of vaccination, but mandatory proof of vaccination isn’t necessary for them to dine in. Nationally 15% of respondents say they will refuse to show proof of vaccination if required for dining-in. In Florida, Nevada, and Arizona 23% say they are unwilling to show proof of vaccination*.

    Biz Insight – When asked what they miss, 93% of frequent diners cite dining at their favorite restaurant, another (42%) are longing for their favorite menu items with (39%) hoping to attend happy hours with friends and (26%) looking forward to wine and beer tastings.

    *Footnote: San Francisco Bay Area: 37% say vaccination proof is a must, the highest of any region. In Canada: 34% say vaccination proof is a must. In Vegas, Orlando, and Phoenix: 23% say they’re not willing to show vaccination cards, the highest of any region

    Restructured DAVIDsTEA
    Expands into Pharmacies

    North America’s largest tea retail chain has emerged from bankruptcy, named a new chairman to replace co-founder Hershel Segal and is now “moving forward with a number of initiatives,” according to CEO and Chief Brand Officer Sarah Segal.

    DAVIDsTEA display in Rexall Drug stores

    Jane Silverstone Segal, Herschel Segal’s spouse, was named director and chair of the board on Sept. 14. Hershel remains a strategic advisor and retains 46% of the company’s stock.

    During an earnings webcast Sarah Segal said that DAVIDsTEA is “successfully transitioning to a digital-first company.” The company is laying the groundwork for a successful omni-channel presence that retains key retail stores, a strong and growing online business and new emphasis on placing our products on the shelves of well-place retail partners, she said.

    In a release following the quarterly disclosure, Sarah Segal announced the expansion of a store-within-a-store concept to 156 Rexall pharmacies. The four-foot in-store displays showcase 25 SKUs. The Montreal-based chain offers a mix of tea and herbal infusions at 18 stand-alone locations with 3,300 retail partners including Canada’s major grocery outlets.

    Sales declined 18.6% or $4.3 million to $18.7 million during the quarter ending July 31. Pandemic-driven sales were $23 million during the same period in 2020.

    Biz Insight – During the earnings webcast, Sarah Segal said that “After a period of dramatic changes and transformation to our business over the past nearly 18 months, we are eager to connect with our customers in new ways.” “We are laying the foundation to scale and expand to become a truly global tea company,” she said.

    — Dan Bolton

    • Read more… links indicate the article continues. Learn more… links to additional information from sources.

    Upcoming Events

    September 2021

    Level Up, Virtual
    September 29 | The Tea & Herbal Association of Canada will host a mid-year Meet-Up from 10 am to noon. Admission $55 (CAD) Members $50. Agenda | Register

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  • Tea Biz Podcast | Episode 35

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    Hear the Headlines

    | Bids Top $4 Billion for Unilever Tea Portfolio
    | India Considers Halting Imports of Nepal Tea
    | Sales of Herbal Supplements in US Top $10 Billion

    Seven-minute Tea News Recap
    Tea Price Report
    Sept 11 – Sale 36

    India Tea Price Watch

    Growers no longer must seek permission to plant tea in India, a move that could encourage new tea regions to add tea cultivation, increase the number of small growers cultivating tea, and possibly increase the volume of production.  Circulars from the Tea Board follow the Commerce Ministry’s announcement of new rules regarding permits. In Darjeeling, planters are calling for a ban on Nepal tea imports. Learn more….

    By Aravinda Anantharaman

    Features

    This week Tea Biz travels to Switzerland to learn from Caroline Giacomin at ETH Zurich the physics behind that colorful sheen that rises to the surface of black tea. Is tea scum just that or a revealing indication of goodness in the cup?

    … and then we travel to New Delhi, India where the Rainforest Alliance’s Madhuri Nanda reveals how practitioners of RA’s sustainable farming practices are evolving toward broader, more holistic ecosystems in Part 2 of our series on Regenerative Agriculture.

    Interfacial surface film that forms on black tea.
    Interfacial surface film that forms on black tea.

    The Physics of the Film that Forms on Black Tea

    By Dan Bolton

    Have you ever noticed a colorful sheen on the surface of your tea? It appears to break like ice floes in the arctic as the tea cools. Researchers once thought tea film was due to waxy substances contained in tea leaves released during steeping. That is not the case. The delicate film is an interfacial interaction of oxygen, tea polyphenols and calcium carbonate ions in water. It does not form on white, yellow, green, or lightly processed oolong teas, only black tea. In many parts of the world, soft water prevents the film from forming. Is tea film a fleeting glimmer of color to enjoy or an ugly scum to quickly dissipate with a squeeze of lemon? Caroline Giacomin, a physicist at ETH in Zürich, Switzerland joins us to explain the physics of tea film from a study she and colleague Peter Fischer recently published in the Physics of Fluids. Learn more…

    Listen to the Interview
    Physicist Caroline Giacomin explains the physics of black tea film
    Madhuri Nanda
    Madhuri Nanda, Rainforest Director, South Asia

    Regenerative Agriculture: A Holistic Approach

    By Dan Bolton

    Madhuri Nanda, the Rainforest Alliance’s director, South Asia, explains that while sustainable farming ensures that agricultural practices do not negatively impact and degrade the environmental, social, and economic aspects of the surrounding ecosystem ? the focus shifts in regenerative agriculture toward adopting a broader holistic approach that enhances biodiversity and improves soil health through increased microbial activities that build resilient systems capable of withstanding adverse climatic scenarios. Read more…

    Listen to the interview
    Madhuri Nanda Rainforest Director, South Asia, on the evolution of sustainable farming.

    News

    Bidding for Unilever’s tea portfolio underway. Photo Photo © Vladimir Akin`shin | Dreamstime.com

    Advent International Will Bid $4 Billion for Unilever’s Tea Portfolio

    By Dan Bolton

    Advent International and the Singapore Government Investment Corporation (GIC) will bid $4 billion in a joint offer for Unilever’s tea portfolio, according to a report by Sky News.

    The Advent-GIC consortium is competing with at least six other large private equity firms that hope to acquire fabled brands Lipton Yellow Label, PG Tips, Lipton Iced Tea, Australia-based T2, TAZO, Pukka Herbs and several other regional brands.

    Unilever will retain its most profitable tea holdings in India and Indonesia as well as the Lipton-PepsiCo partnership in the US.

    Bloomberg estimates Unilever’s entire tea business to be worth $5.7 billion. Other bidders expected to meet next week’s deadline are the Dhabi Investment Authority, KKR and Clayton, Dubilier & Rice.

    Biz Insight – In a July earnings call, Unilever CEO Alan Jope said “The balance of Unilever’s tea brands and geographies and all of our tea estates have a very exciting future, but this potential can be best achieved we believe as a separate entity.”

    The divestiture is expected to conclude by the end of the year.

    Tea factory and garden in Nepal
    Tea factory and garden in Nepal. Photo by © Ar-tem | Dreamstime.com

    India Considers Halting Imports of Nepal Tea

    By Dan Bolton

    The Terai Indian Planters’ Association (TIPA) and the Darjeeling Tea Association (DTA) are seeking a “blanket ban” on the import of Nepal tea.

    DTA Chairman BK Saria complained to the West Bengal Chief Minister Mamata Banerjee that a decline in production from 9.5 million kilos to 6 million kilos in 2020, and rising costs of production have affected both the domestic market and exports. He writes that “The crisis has been further compounded by the sale of deceptive Nepal tea being sold in the Indian market as ‘Darjeeling Tea’.” Immediate action is essential to save the industry’s 87 registered gardens, he said.

    Nepal is a landlocked tea producer that relies on India’s much more developed tea industry for re-export, shipping about 69.4 million kilos there in the past four years, according to the Tea Board of India. Tea board data shows that only 26.6 million kilos have been re-exported during this time, making it likely that 42.8 million kilos were sold domestically, exempt from import duties, and in direct competition with Darjeeling producers. Teas exported from India pay a 40% tariff to enter Nepal but Nepal pays no tariffs to ship tea to India due to terms of the South Asian Free Trade Agreement.

    Imports of tea to India are up a surprising 176% year-on-year, according to the Tea Board of India. Growers in Nepal and Kenya shipped 12 million kilos to India during the first six months of 2021, more than three-fourths of the full-year average for 2019. Traders pay as little as $1.70 per kilo for Kenyan tea, compared to the $2.50 per kilo all-India average. India’s thirst for tea has increased as COVID restrictions and drought significantly lowered yields of tea grown in India. Since there is no country of origin labeling requirements, it is likely the imported tea is being blended and marketed domestically as Indian tea.

    “Nepal tea is sold at a much cheaper rate than the Darjeeling cuppa as its cost of production is very low owing to rampant use of child labor and gross violation of labor laws,” according to DTA.

    DTA Advisor Sandeep Mukherjee told the Times of India, that “unless import of Nepal Tea into India is banned, the livelihood of those dependent on it would be at risk and may reach a point of no return, where more tea gardens in the Hill would shut down.”

    Biz Insight – Indian efforts to limit Nepal tea imports have ebbed and flowed over the past decade. In May 2020 India halted tea shipments from Nepal for several weeks by imposing non-tariff barriers tied to sanitation and quality control. India growers complain that bulk tea shipments do not require a label of origin, FSSAI (food safety compliance), or rigorous customs checks. Low prices induce tea brands such as Tata Consumer Products (TCP) and bulk exporters to rely on Nepal to supply India’s domestic blenders, but do not purchase direct.

    US Herbal Supplement Sales Set Record $10 Billion in 2020

    Sales of herbal supplements in the US grew a record 17.3% in 2020 exceeding $10 billion for the first time. The total excludes brewed teas but includes green tea powders marketed as supplements.

    The 2020 Herbal Market Report, released annually by the American Botanical Council, using transaction data from SPINS, reveals sales in the mass market channel grew by 25.1% to $2.1 billion in 2020. Direct sales, including online, grew 23.7% about twice the rate reported in 2019. Sales in traditional natural and health food stores grew 1.6% to $2.95 billion. Total supplement sales were $11.26 billion.

    Elderberry, known for its immune boosting properties was the top seller along with apple cider vinegar and ashwagandha. Sales of Elderberry grew by 150% to $275 million in mass market and $54 million in the natural food channel.

    CBD sales plummeted 36.9% to $57 million in the natural channel and declined 30% in mainstream outlets during the first year of the pandemic, the first decline in sales since 2017.

    Sales of dry and bottled green tea soared in mainstream outlets last year, but sales of green tea supplements declined 7.9% in 2020, falling to $31 million to rank 13th among the top-selling herbal supplements, according to SPINS.

    Biz Insight – “US consumers spent more than ever on herbal dietary supplements for immune health and stress relief in 2020,” according to the report. “During a year in which much was out of control, many consumers seemed to take control of their own health and prioritized selfcare with herbal and fungi-based dietary supplements. As the pandemic stretches into its 20th month it remains to be seen whether these trends and record-breaking sales will continue in 2021.”

    Click to download 2020 Herbal Market Report PDF

    — Dan Bolton

    • Read more… links indicate the article continues. Learn more… links to additional information from sources.

    Upcoming Events

    September 2021

    Level Up, Virtual
    September 29 | The Tea & Herbal Association of Canada will host a mid-year Meet-Up from 10 am to noon. Admission $55 (CAD) Members $50. Agenda | Register

    Click to view more upcoming events.

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    https://teabiz.sounder.fm/episode/news-01212021

    Subtext

    Avoid the chaos of social media and start a conversation that matters. Subtext’s message-based platform lets you privately ask meaningful questions of the tea experts, academics and Tea Biz journalists reporting from the tea lands. You see their responses via SMS texts which are sent direct to your phone. Visit our website and subscribe to Subtext to instantly connect with the most connected people in tea.

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  • Tea Biz Podcast | Episode 34

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    Hear the Headlines

    | Sri Lanka Tea Yields Feared to Decline
    | McLeod Russel Settlement Resolves Insolvency
    | Bangladesh Tea Sector Returns to Pre-Pandemic Production Levels

    Seven-minute Tea News Recap

    Tea Price Report
    Sept 4 – Sale 35

    India Tea Price Watch

    The South India Tea Exporters Association, led by Chairman Dipak Shah, identified twin problems that have continued to be a significant challenge this year: one is the rising cost of ocean freight, and the second is the problem of pesticides in tea where the onus of testing for permissible residue levels lies with the producers. But the liability – should tea be rejected by the buyer – rests with the exporter. Learn more…. – Aravinda Anantharaman

    Features

    This week Tea Biz visits with Rare Tea Lady Henrietta Lovell whose passion for tea is exceeded only by her commitment to bettering the lives of those who make it.

    … and then we travel to Banbury, UK to learn how the Tea History Collection is digitizing tea history one tome at a time.

    Rare Tea Lady
    Since founding The Rare Tea Co. in 2004, Henrietta Lovell has charted her own course in tea.

    Henrietta Leads the Way

    By Kyle Whittington | TeaBookClub

    Since founding the Rare Tea Co., in London in 2004 Henrietta Lovell has traveled the globe sourcing direct for the world’s five-star dining rooms and developing relationships at the farm level where her commitment to fair pricing for the finest tea and charitable work set a standard. “If I can make people appreciate tea, it will change the world,” she says. Rear more…

    Listen to the Interview
    Rare Tea Lady Henrietta Lovell.
    Tea History Collection founder Denys C. Shortt OBE

    Tea History Collection

    By Dananjaya Silva | PMD Silva & Sons

    The Tea History Collection in Banbury, UK, founded by Denys Shortt OBE has hosted a full calendar of events since opening in May. This tea industry resource is now undertaking the daunting task of digitizing bound volumes recording the trademark and ownership of colonial gardens from the early days of tea. Listen as Shortt discusses the importance of preserving tea company heritage online to be shared by all. Learn more…

    Listen to the interview
    Denys Shortt on the importance of digitizing tea history for all to share.

    News

    A monument known as the Tea Daughter at the entrance of Moulvibazar district at Srimangal, Bangladesh. Photo courtesy Faizi Tea Estate, credit: Shomoyeralo.com

    Bangladesh Tea Rebounds

    By Dan Bolton

    The tea sector in Bangladesh is expected to return to near pre-pandemic production levels after setbacks in 2020. Like neighboring Assam, Bangladesh experienced a spring drought, high temperatures, aggressive pests, and the onslaught of the pandemic. Despite these challenges production through July is ahead of last year’s totals and estimated to reach 86 million kilos. Read more…

    Spring bounty could become a fall shortfall as synthetic fertilizer supplies dwindle. Kandy tea garden in morning light by © Luboslav Ivanko | Dreamstime.com

    Sri Lanka Tea Yields Feared to Decline

    By Dan Bolton

    Sri Lankan tea growers are experiencing the first effects of the country-wide ban on chemical fertilizers and plant protection chemicals (PPC).

    After a productive spring, the fall harvest is predicted to decline beginning in October.

    Herman Gunaratne, one of 46 experts picked by President Gotabaya Rajapaksa to guide the transition to organic-only inputs told Agency Press France (AFP) that “The ban has drawn the tea industry into complete disarray.”

    Gunaratne who manages the Ahangama Tea Estate, said “The consequences for the country are unimaginable.” was removed from the Green Socio-Economy after disagreeing with the president, according to AFP.

    President Gotabaya ordered a halt to inbound shipments of fertilizers used to cultivate food crops such as rice and cash crops including cinnamon and pepper. Growers are concerned that plants accustomed to a rich diet of nitrogen and phosphate will take time to adjust to organic compost and manure.

    Tea is the nation’s highest-earning export, generating $1.25 billion in foreign currency from the sale of 300 million kilos of tea annually. Sri Lanka harvested 187.8 million kilos through July. Mid-year crop yields were 20% ahead of the half-year mark set in 2020 but prices were higher on average last year.

    Meanwhile, the fiscal crisis facing the country worsened as the Sri Lankan rupee depreciated 20% against the US dollar and British Pound. Food inflation is at 11.5% and long queues at food markets signal shortages. The government has invoked rules that fix prices and prohibit the hoarding of staples such as paddy, finished rice and sugar which briefly increased to SLRs 200 per kilo.

    Sri Lanka’s economy, heavily dependent on tourism, declined 3.6% in 2020 and foreign reserves are at record lows.

    Biz Insight – During the next month Tea Biz will interview several key decision-makers, tea researchers, and non-government agricultural experts to discuss the pros and cons of switching Sri Lanka to organic-only cultivation.

    McLeod Russel Settlement Resolves Insolvency

    India’s largest bulk tea producer has settled with creditors to resolve financial peril.

    PP Gupta, managing director of Techno Electric & Engineering, agreed to terms for repayment of a delinquent INRs 100 crore ($14 million) loan by McLeod Russel India, saying “this is now behind us, and we wish the company good luck.”

    Techno triggered the insolvency on Aug. 6 by filing a formal application with the National Company Law Tribunal (NCLT) for redress.

    McLeod borrowed the funds in 2018 and failed to make timely payments due to shortfalls in revenue from tea. The company sold several tea gardens to meet its obligations, but the sums were insufficient to satisfy creditors. McLeod currently owes its lenders approximately INRs 1800 crore (about $245 million). A resolution process, led by the Reserve Bank of India (RBI) will now proceed.

    The company operates 31 tea estates in Assam and two in West Bengal, producing a combined 44 million kilos of Indian tea annually with additional holdings in Africa and Vietnam.

    — Dan Bolton

    • Read more… links indicate the article continues. Learn more… links to additional information from sources.

    Upcoming Events

    September 2021

    Level Up, Virtual
    September 29 | The Tea & Herbal Association of Canada will host a mid-year Meet-Up from 10 am to noon. Admission $55 (CAD) Members $50. Agenda | Register

    Click to view more upcoming events.

    Share this episode with your friends in tea.

    Sign up
    News Archives
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    https://teabiz.sounder.fm/episode/news-01212021

    Subtext

    Avoid the chaos of social media and start a conversation that matters. Subtext’s message-based platform lets you privately ask meaningful questions of the tea experts, academics and Tea Biz journalists reporting from the tea lands. You see their responses via SMS texts which are sent direct to your phone. Visit our website and subscribe to Subtext to instantly connect with the most connected people in tea.

    Subscribe to Subtext

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  • Tea Biz Podcast | Episode 33

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    Hear the Headlines

    | Timely Tea Delivery Faces Troubled Waters
    | Tea is Thriving in the Convenience Channel
    | Iran Tea Production Increases 25 Percent

    Seven-minute Tea News Recap

    Tea Price Report
    April 28 – Sale 34

    India Tea Price Watch

    Assam’s annual floods have arrived this week with 16 districts affected. India’s Ministry of Commerce also suspended seven sections of the Tea Act, 1953. It appears several reforms are underway to lift regulations, including the recent relaxation of norms to obtain export and distribution licenses. – Aravinda Anantharaman

    Features

    This week Tea Biz puts Burmese chefs in the spotlight for their culinary contributions to tea.

    … and then we travel to London where Unilever unveiled four guiding principles of regenerative agriculture a topic currently trending in tea.

    Regenerative Agiculture

    By Dan Bolton

    Can a world that has already eroded a third of the planet’s soils feed a population of 10 billion without intensive agricultural practices that rely on heavy inputs of fertilizer, herbicides, and pesticides that sustain monoculture farming?

    To answer this question, the Tea Biz Podcast and Blog is undertaking a series of interviews with thought-leaders in tea from organizations such as the Rainforest Alliance, growers in Sri Lanka, where a nationwide ban on the import and manufacture of plant chemicals was instituted in May; and with multinationals like Unilever, a company with extensive tea holdings that recently unveiled its basic principals of regenerative agriculture. Read more…

    • Next in the series is a conversation with the Rainforest Alliance on how regenerative agriculture differs from sustainable farming.
    Listen to the Interview
    First in a series of podcasts on regenerative agriculture
    Laphet Thoke
    Laphet Thoke, fermented tea leaf salad.

    Tea Leaf Cuisine

    By Aravinda Anantharaman

    Pickled tea leaves may sound a bit out of the ordinary but not for Southeast Asian chefs. Burma, now known as Myanmar, is an ancient crossroads influenced by the cuisine of bordering Bangladesh, China, Thailand, and Laos. It is here that laphet has become a national dish that is now finding its way to US and European consumers as branded packaged goods. Learn more…

    Listen to the review
    Aravinda Anantharaman on the versatility of tea.
    Imports in TEUs are approaching 550,000 per month at Los Angeles area ports, far exceeding totals for the same January through July period during the past four years. In August idled ships numbered a high of 44.

    Timely Tea Delivery Faces Troubled Waters

    By Dan Bolton

    The disruption of global supply chains is getting worse. Container vessel reliability for tea shipments crossing the Pacific continued to decline this summer as prices reached new heights. The World Container Index for eight East-West routes rose to a composite cost of $9,613 for the week of August 19 – up 360% compared to the same period last year. Consignments of tea shipped from Shanghai to Rotterdam increased 659% to $13,698 last week. Sobhanadri Jonnalagadda at Spisys Ltd. in Telangana, India, reports that the cost of booking a container destined for Hamburg from Hyderabad increased from £3000 to £9000.

    Port congestion, backlogs at container terminals locked down to prevent the spread of the coronavirus, and rapidly increased volume dashed hopes for a return to normalcy until next spring. Logistics costs considered manageable by tea wholesalers early this year are now seen as out of control. Inflation is a growing concern, but the unpredictability of delivery dates is causing far greater problems.

    Green tea exporter Zhejiang Tea Group’s US operation, Firsd Tea, advises tea buyers to calculate projected inventory needs for at least six months and consider adding 20% to projected volumes to avoid out-of-stock conditions and transportation delays.

    This week there were a record 44 container vessels trying to offload at Southern California ports, an all-time high. And ports are getting busier as the holidays grow near. Imports in TEUs are approaching 550,000 per month at Los Angeles area ports, far exceeding totals for the same January through July period during the past four years.

    On arrival shortages of dockworkers, crane operators, warehouse staff and qualified truckers cause further delays. Driver shortages are at all-time highs forcing companies to offer incentives. Qualified drivers are now earning $27 per hour. FreightWaves reports that refrigerated carrier J.S. Helwig & Son increased pay 4 cents to 62-cents per mile for experienced drivers – that’s $1240 for a 2,000-mile round trip. New hires earn 50 cents per mile and a $1000 signing bonus.

    Biz Insight – The likelihood of a ship arriving on time was better than 80% in 2019 is now “hovering around 40%”, according to logistics analysts Sea-Intelligence. Add port and trucking delays and buyers this fall (whether they are consumers ordering Christmas tea online or wholesalers booking containers) — will experience delivery times extended by four to six weeks.

    Foxtrot online for delivery nationwide and locally with a 60-minute guarantee, soon to be 30 minutes.

    Tea is Thriving in the Convenience Channel

    By Dan Bolton

    Convenience outlets thrive at locations near where people live and in 2020 people stayed close to home.

    In-store sales at US grab-and-go outlets rose for the 18th year in a row to $255 billion in 2020. Beverage sales are a top category, accounting for 20% of all sales. Ready-to-drink iced tea makes up about 5% 4.7% of that total, trailing soda, juice, energy drinks, and bottled water, according to the National Association of Convenience Stores (NACS).  

    New York-based Nielsen reports that overall, tea grew by 11.1% through April 2021.  During that period liquid tea generated $3.4 billion in sales, RTD tea earned $142 million. Green tea sales were up 72.7% during the pandemic to $18.6 million, Nielsen.

    In 2020 the dramatic decline in commuter trips, lockdowns and a consumer shift to grocery and home meals increased their spend but cut trips to convenience stores by more than 20%, according to NACS. The number of transactions declined 14% as basket sizes grew 18% compared to 2019.

    The pandemic had a huge impact on self-serve beverages. Hot dispensed sales fell 33.4%, and cold dispensed beverages declined 7.9%, reflecting the drop in footfall amid stay-at-home orders and work-from-home schedules, writes NACS. In contrast, beer saw unprecedented growth accounting for 6.3% of total convenience store sales due to the closure of bars and restaurants (only 12.4% of 150,000 US convenience stores are licensed to sell beer).

    Market research firm Technomic writes that US beverage sales overall declined 31% by volume in 2020. Spending declined 29% with cold dispensed beverage volume down 30%.

    Biz Insight – Foxtrot markets, an upscale convenience chain is known for its 60-minute delivery guarantee “is the corner store reimagined” says venture capitalist David Barber. Stores feature locally baked treats, coffee, freshly brewed tea, and organic wine, craft beer, gifts, and everyday essentials.

    Foxtrot is an upscale, hyper-convenient convenience chain

    CEO Mike LaVitola told Forbes that half of the company’s transactions occur online for delivery nationwide and half in-store. He said the company intends to introduce hyper-convenient 30-minute delivery and expand its selection of private-label convenience items in larger, 4,000 square foot stores.

    The start-up has raised $65 million in January from the likes of former Whole Foods Market CEO Walter Robb and Momofuku restaurant founder David Chang. The chain, founded in 2014 in Chicago, currently has 13 locations with nine to open in 2021 and 50 within two years. New locations include Dallas and Washington DC and Austin, Tex., Boston, Miami, Los Angeles, and Houston.

    Harvesting tea in Gilan, Lahijan province, Iran

    Iran Tea Production is Up 25 Percent

    Iran’s Tea Organization (ITO) reports a 25% increase in tea production so far this year and higher export numbers as well. During the first five months of the year, Iran harvested 114,445 metric tons of raw leaf, valued at 6.5 trillion rials (about $155 million US), according to ITO. The tea organization considers 51% of the harvest premium grade, down from 79% in 2020.

    Iran is a net tea importer, No. 6 in the world, spending $236.3 million on tea in 2020, according to World’s Top Exports.

    In recent years growers began exporting increasing quantities of tea. In 2020 4,000 metric tons of teas were shipped to 12 countries regionally including Azerbaijan, Afghanistan, and Iraq, India, Tajikistan, Turkmenistan, and Georgia as well as Canada, Australia, Spain, and the Czech Republic. In 2020 tea exports averaged 86 cents per kilo. Sales totaled $6.5 million, up 2.6% compared to 2019.

    Iran’s tea industry employs 55,000 families cultivating tea on 70,000 acres [28,000 hectares].

    — Dan Bolton

    Upcoming Events

    September 2021

    Level Up, Virtual
    September 29 | The Tea & Herbal Association of Canada will host a mid-year Meet-Up from 10 am to noon. Admission $55 (CAD) Members $50. Agenda | Register

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  • Tea Biz Podcast | Episode 32

    Tea Biz Podcast Logo

    Listen on your favorite player

    Hear the Headlines

    | Afghan Tea Market Concerns as Taliban Conquers Kabul
    | Foodservice Recovery Rates Vary Widely by Sector
    | Researchers Confirm Heart Healthy Aspects of Tea

    Seven-minute Tea News Recap

    Tea Price Report
    April 21 – Sale 33

    India Tea Price Watch

    Afghanistan is an importer of green and orthodox black tea from India and in 2020-21, about 760,000 kilos of tea was exported from there. At the moment, the movement of cargo between the two countries stands interrupted. – Aravinda Anantharaman

    Features

    This week Tea Biz visits Darjeeling, India on word of the sale of the iconic Jungpana and Goomtee tea estates to Anshuman Kanoria, principal at Balaji Agro International and chairman of the Indian Exporters Association

    … and then to London where Kyle Whittington reviews The Tea Girl of Hummingbird Lane, a novel by Lisa See.

    Anshuman Kanoria discusses his company’s acquisition of two of Darjeeling’s best-known tea gardens.

    Restoring Darjeeling’s Reputation from the Roots Up

    By Aravinda Anantharaman

    The sale of two iconic Darjeeling tea gardens focused attention on the ongoing challenges facing growers in this fabled tea-growing region. Jungpana and Goomtee were acquired by the Santhosh Kanoria Group, which owns the tea export company Balaji Agro International. The group also owns Tindharia estate in Darjeeling. We spoke to Anshuman Kanoria, Chairman of Balaji Agro and Chairman of the Indian Exporters Association about this acquisition. Read more...

    Listen to the Interview
    Anshuman Kanoria on India’s unrealized potential in tea
    Lisa See has written a “brilliantly layered book” writes Whittington

    The Tea Girl of Hummingbird Lane

    By Kyle Whittington | TeaBookClub

    New York Times best-selling author Lisa See has written several novels revealing her fondness for tea. The Tea Girl of Hummingbird Lane, however, uniquely explores the mysterious world of Pu’er. Reviewer Kyle Whittington writes that See’s novel “consists of so many brilliant layers… for the tea reader this is a wonderful story, packed with great tea content that will either develop or ignite an interest in, and a desire to explore the world of Pu’er.” Read the review…

    Listen to the review
    Kyle Whittington reviews The Tea Girl of Hummingbird Lane
    A tea break for Afghan farmworkers. Afghans annually drink 1500 cups of tea per capita. Kahwa (a tea and spice blend) and green tea with mint are favorites. Photo by © Karl Allen Lugmayer | Dreamstime.com

    Afghan Tea Market Concerns as Taliban Conquers Kabul

    By Dan Bolton

    Afghanistan is a major tea-consuming nation and a smuggler’s paradise for tea. The country became a profitable middleman by clever manipulation of border regulations that were only recently reined in after decades of openly flaunting Pakistani Customs enforcement.

    Since tea trades in US dollars, money in Taliban controlled bank accounts is frozen. Bank withdrawals are limited and in-bound remittances from Western Union and MoneyGram have stopped. The East African Tea Trade Association (EATTA) reports bidding at the Mombasa auction on tea bound for Afghanistan slowed as the Taliban occupied Kabul but EATTA explained that Afghanistan gets its Kenyan tea via Pakistan where there have been no disruptions at all, according to The East African. Shipments between India, another major source of tea, and Afghanistan were halted this week.

    Afghanistan’s banks are closed, halting direct deposits for salaried workers. Interbank transfers are subject to sanctions imposed by western powers decades ago to curtail terrorist activity. The Financial Action Task Force, warned member countries they must ensure that “no funds or other assets are made available, directly or indirectly” to the Taliban or face fines and censure by the United Nations and the US along with many of its allies. During the 20 years since the Taliban was last in power, many businesses transitioned from cash and writing checks to digital banking. Prices for basic commodities like bread, oil, and tea have doubled since the government collapsed and the economy is in freefall.

    In 2020 foreign aid from the US and Europe accounted for 43% of the economy. Remittances from Afghans living outside the country were nearly $800 million last year, according to the Wall Street Journal. Given near universal sanctions due to a global blacklisting of the nation’s central bank, the Taliban will find it difficult to borrow or trade essential commodities, making taxes on citizens and local businesses the Taliban’s sole source of funds in a $22 billion economy.

    It is too soon to know how the collapse of the Afghan government and the return of the Taliban will alter the tea market, but smuggling was rampant during the 1996-2001 Taliban regime. In Helmand province, traders said that “if we smuggle 40kg (heroin), we give the Taliban 4kg.”

    Pakistan Customs lists black tea and green tea as two of the five most smuggled commodities. Tea exports to Pakistan surged in 2020, increasing 18.7% in value compared to 2019, making it the world’s highest-valued tea import market at $590 million. Kenya accounted for $497 million of last year’s import spend, growing 27% following a decision by the Indian government to no longer export tea to Pakistan.

    Afghans prefer green tea to black, yet hundreds of thousands of kilos of black tea are landed annually at the Port of Karachi, Pakistan. Until recently Pakistan charged a combined 38% tax and duties on tea making the import cost of tea 32% higher than tea imported into Afghanistan. Afghanistan is a landlocked nation so huge quantities of African tea, mainly from Kenya, are delivered to the Pakistani port tax-free, taxed at a low rate at the Afghan border, and then transported to large warehouses where it is broken into retail packets and smuggled into Pakistan. Smugglers pay a 12%-15% bribe and transportation cost, pocketing the difference.

    Biz Insight – Pakistan’s Competition Commission considers smuggling to be “the biggest threat faced by the domestic tea industry, causing loss of millions of rupees to the government and forcing legal importers out of business,” according to a 2019 report. A crackdown on violators in late 2020 led to a 55% increase in customs duties collected (a proxy for illegal trade) and evidence of a concerted effort by Pakistan to decrease the cost of legal imports, making smuggling unprofitable.

    It will take years to rebuild some US foodservice sectors to 2019 consumer spending levels.

    US Foodservice Recovery Rates Vary Widely by Sector

    By Dan Bolton

    Sales at Quick Service Restaurants (CSR) and the Supermarket Prepared Foods segment are well ahead of pre-pandemic totals but “everyone in foodservice is starting from a really different point,” reports Ann Golladay, senior project director at Datassential Research’s Baltimore office.

    Datassential calculates that — overall — consumer spending in foodservice declined from $806.7 billion in 2019 to $701.4 billion in 2021 and will not return to pre-pandemic spending levels until 2023.

    Golladay explained to webinar participants Aug. 19 that Fast Casual, once the darling of the industry with the largest real growth will not reach pre-pandemic spending levels before 2023 “and that will be nominal growth that does not include inflation,” she said. Golladay estimates inflation at 5% per year “so you will probably have to back down these projections 10% by then,” she said. Consumer spending at fast casual restaurants declined 19% in 2020. The segment is projected to generate $67.4 billion next year compared to almost $68.7 billion spent in 2019.

    A survey of the nation’s grocers found that 74% reported increased sales in 2020. The consumer spend for prepared foods at supermarkets in 2022 will be $38.8 billion, rising by 119% compared to 2019 dollars.

    Recreation, lodging, and convenience store foodservice segments will take even longer to recover. Lodging, for example, will have only achieved 71% of its 2019 consumer spend by 2022.

    Until workers return to downtown offices, the business and industry foodservice sector, projected to reach pre-pandemic sales of $6.9 billion, will never recover.

    Tea Biz Insight – Jack Li, principal at Datassential identified five “x-factors” that could disrupt the official projections. These include new variants, vaccine mandates, additional and extended lockdown, sustained inflation, and a combination of labor and supply chain bottlenecks.

    Tea flavonoids reduce risk and severity of adverse cardiovascular events.

    Researchers Confirm Heart Healthy Aspects of Tea

    By Dan Bolton

    Accumulating evidence of tea’s heart health benefits led researchers to conduct an umbrella review describing and critically evaluating the totality of medical evidence to date.

    Their findings: “It is reasonable to judge that two cups of unsweetened tea per day has the potential to decrease CVD (cardiovascular disease) risk and progression due to its flavonoid content.”

    The peer-reviewed paper authored by Abby Keller and Taylor Wallace and published in the Annals of Medicine, examines 10 years of studies, from 2010 to 2020, that identify several biological mechanisms showing a decreased risk and severity of cardiovascular disease in tea drinkers.

    The authors write that “Results of population studies commonly suggest that tea consumption is inversely associated with several health outcomes. Shorter-term clinical intervention studies provide additional evidence that tea consumption has the potential to affect intermediate outcomes and biomarkers of disease in healthy, at-risk, and diseased populations.”

    Based on this umbrella review, the researchers observed that the consumption of tea as a beverage “did not seem to be harmful to health; therefore, the benefits of moderate consumption likely outweigh risk.” 

    In Memoriam

    Miriam “Mim” Enck, president of The East Indies Coffee & Tea Company, in Lebanon, Penn., passed away Saturday, Aug. 14 after a short illness. Since 2018 Enck has operated the company founded by her late husband, Walter Progner who started the specialty tea retail business in 1976. She was 75.

    Upcoming Events

    August 2021

    POSTPONED: Beijing International Tea Expo, Beijing China
    August 27-30, 2021 | Beijing Exposition Center (the recent coronavirus outbreak forced Beijing authorities to halt all events that attract large crowds. Watch this space for new date when it becomes available.)

    September 2021

    Caffé Culture Show, Business Design Center, London
    September 2-3 | The European Speciality Tea Association will host a Speciality Tea Hub on the exhibition floor with a tea brew bar, a members’ lounge, educational seminars and small exhibitor pods.  Admission is free | Program | Register

    Level Up, Virtual
    September 29 | The Tea & Herbal Association of Canada will host a mid-year meet up from 10 am to noon. Admission $55 (CAD) Members $50. Agenda | Register

    Click to view more upcoming events.

    Share this episode with your friends in tea.

    Sign up
    News Archives
    Tea Journey
    https://teabiz.sounder.fm/episode/news-01212021

    Subtext

    Avoid the chaos of social media and start a conversation that matters. Subtext’s message-based platform lets you privately ask meaningful questions of the tea experts, academics and Tea Biz journalists reporting from the tea lands. You see their responses via SMS texts which are sent direct to your phone. Visit our website and subscribe to Subtext to instantly connect with the most connected people in tea.

    Subscribe to Subtext

    Subscribe and receive Tea Biz weekly in your inbox.

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