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This week Tea Biz visits Japan for a victory celebration of the Japanese Tea Marathon, an event during the Tokyo Olympics that drew attention worldwide to 15 tea producing regions in a country famous for quality green teas

… and then we travel to Paris, France as the deadline nears for the AVPA‘s annual Teas of the World contest, a unique global competition in a tea consuming country that focuses on the gastronomic pleasure and profits of tea.

Victory for Japanese Tea Marathon

By Jessica Natale Woollard

As athletes from around the world competed in the Tokyo 2020 Olympics, tea lovers participated in an event of their own: the Japanese Tea Marathon. The marathon included 15 days of online events that shone a spotlight on Japan’s teas, producers, and the 15 tea-producing regions. Led by the Global Japanese Tea Association and Japan Tea Central Council, tea marathoners learned about 30 Japanese teas, how to brew them, and where they’re grown. Kyle Whittington, a Tea Biz contributor and host of the TeaBookClub, attended every tea marathon event, tasting 30 teas over 15 sessions. He gives the event a gold medal! Read more…

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A Gastronomic Tea Competition

By Dan Bolton

The deadline to enter the AVPA’s 4th annual Teas of the World Contest is Sept. 15. Our guest, Philippe Juglar is president of AVPA (Agency for the Valorization of Agricultural Products), a Paris-based, non-governmental, non-profit organization that judges wine, chocolate, coffee, and teas best suited to local preferences. He joins us to discuss what it takes to be a winner in the only “gastronomic” tea competition in a consumer country that evaluates tea solely to promote the good practices of production and trade. Read more…

Listen to the Interview

Delta Delivers Retail Setback

By Dan Bolton

Consumer spending declined in the US, China, and Europe in July. In the US infections from COVID Delta variant surged, reaching 140,000 new cases per day. Sales at restaurants, stores, and online declined 1.1% compared to June 2021, according to the US Commerce Department.

The impact on tea retail is uneven.

Revenue at restaurants and bars sales grew by 1.7% on average with much greater gains in regions where a high percentage of the population is vaccinated. In the US second quarter spending grew at an annual rate of 11.8% with total retail sales 17.5% higher than the pre-pandemic levels  ?  offering a glimpse of how much potential there is for a return to normal.

Economists now say the third quarter will dampen that outlook. Tea shops in downtown locations anticipating the September return of office workers will largely avoid lockdowns but can’t meet expenses in high-rent locations. Meanwhile footfall in European and American malls declined. In China online sales growth slowed to 4.4% from an average 21% in July, confirming consumer hesitancy worldwide.

Biz Insight – Tea retailers occupying valuable real estate face tough choices. Jesse Jacobs, founder of well-respected Samovar Tea House Cafes, a local chain that reliably generated more than $3 million annually for years, was first forced to close its three locations, then hibernate. This week Jacobs and his brother Joshua announced that Samovar will pivot to serving Detroit-style pizza. Joyride Pizza will occupy the Valencia and Yerba Buena locations. In San Francisco where general retail rents average $40.54 per sq. ft. per year and restaurant retail costs $45-$75 per sq. ft., serving pizza is profitable.

Jacobs told Eater San Francisco, “I spent 20 years developing Samovar into an iconic brand. Similar to other restaurateurs across the country, COVID-19 dissolved the brick-and-mortar businesses to the point of no return. We needed to creatively adapt to the moment.” Teas remain on the menu and www.samovarlife.com retains its luster as a premium online tea retail destination but without office workers, and with government bailouts exhausted and commercial landlords agitating for relief, tea retailers in downtown locations are unlikely to survive.

Why are Tea Tariffs Still in Place?

By Dan Bolton

Last week a consortium of 30 major business groups appealed to the US White House to remove tariffs on Chinese goods. Tea exports to the US declined after the imposition of tariffs (initially 15%, currently 7.5%). Tea imports fell to around $50 million in 2020, down from nearly $100 million traded in 2016. China’s tea export volumes are down overall due to the pandemic, but with $2 billion in tea exports, China is clearly finding buyers globally. In June the average price of exported Chinese tea rose 2.54% to $6.86 per kilo. 

The US has not won the trade wars it instigated. Certainly not in tea. US Treasury Secretary Janet Yellen recently admitted that tariffs on Chinese goods are hurting American consumers. The Biden administration is unwinding trade entanglements over aerospace and autos with the Europeans. Last week Chinese Ambassador Qin Gang told Craig Allen, president of the US-China Business Council that trade ties could recover, but first, the US must cancel unfair tariffs on Chinese goods. China has shown interest in hosting Yellen in talks with Chinese Vice Premier [Liu He] this fall. Eliminating the tariff on tea and reciprocating by easing Chinese tariffs on American goods imposed solely in retaliation is an important first step.

Tea Biz Insight – No one in the tea industry wanted the US to levy tariffs on tea. The 7.5% tariff is an unnecessary cost compounded by rising shipping and operating expenses. Miniscule import revenue makes the tea industry a pawn in this geopolitical chess match of billion-dollar multinationals that include Apple, Ford Motor, and IBM yet easing the restrictions on tea could play a symbolic role. In China’s business culture conversations that begin with tea lead to agreements often far more influential than the US preference for confrontations in courts.

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

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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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Features

Tea Biz this week travels to Brooklyn where Rona Tison executive vice president of ITO EN North America explains the appeal of functional tea and introduces a new matcha LOVE ENERGY + line of ready-to-drink teas.

… and then to New York City, headquarters of the World Tea Academy, where online education director Lisa Boalt Richardson describes the newest of six certification programs.

Natural Tea Energy

By Dan Bolton

In the ready-to-drink category, tea-focused brands like ITO EN are innovating. Instead of concentrates and solubles, line extensions are brewed from whole leaves from sustainably grown tea and offered in recyclable packaging. Rona Tison, Executive Vice President of ITO EN North America, joins Tea Biz to discuss what makes tea the ideal base for function-enhancing blends that appeal to health-conscious consumers. Learn more…

Listen to the Interview

An Aromatic Education Online

By Jessica Natale Woollard

Tea industry certifications are becoming sought after in the industry. There are certifications for tea specialists, sommeliers, blenders, health experts, and now tea aroma specialists, a new offering from the World Tea Academy. Joining me on the podcast today are Lisa Boalt Richardson, online education director of the World Tea Academy, and Kathleen Hippeli – Lisa’s assistant and a former tearoom owner.

Listen to the Interview

Tea Giant McLeod Russel Faces Bankruptcy

By Dan Bolton

McLeod Russel India, once the largest producer of tea in the world and currently India’s largest tea producer — is facing bankruptcy. McLeod, a Kolkata-based division of the Brij Mohan Khaitan Group that employs 73,000 workers, operates 31 estates in Assam and two in West Bengal as well as tea gardens in Africa and Vietnam.

The corporate insolvency resolution process (CIRP) was triggered by default on a $14 million (INRs 100 crore) loan dating to 2018 but McLeod carries $270 million in debts and faces a combination of debtors. The application was revealed in a stock exchange filing Aug. 6. An interim resolution professional was named to the National Company Law Tribunal case.

Azam Monem will continue to guide the operations of the company and key managerial staff remain in place with the intent to restructure.

The storied company dates to 1869 when J.H. Williamson and Richard B. Magor operated in Assam. The Khaitan family purchased the company in 1987 and in 1994 purchased 51% of battery maker Union Carbide’s Eveready Industries operating the company in two divisions, electrical and tea. The company went public in 2000 and in 2004 demerged into two separate companies McLeod producing and marketing tea and Eveready manufacturing batteries and flashlights.

In August 2017 McLeod sold Bhatpara TE for $2 million, according to Global Ag Investing. It was the first garden sold in the firm’s modern history as production rose to a peak that exceeded 118 million kilos that year (2017-18). Acquisitions from 2005 to 2010 had increased the number of estates to 48 including Williamson Tea, Doom Dooma Tea Company (2007), Moran Tea (2008), and Borelli Tea (17 tea gardens) bringing McLeod’s total acreage under tea to 98,000 acres (39,770 hectares). Revenue exceeded $265 million with $9.7 million in profits in fiscal 2016.

Biz Insight – A combination of massive flooding in Assam, rising labor costs and conflicts amid declining exports significantly reduced earnings, eroding profits. Quarterly losses rose to $3 million in recent years. A misjudgement in lending more than $390 million to the closely held battery company led to the default in February 2020 on the loan from Techno Electric & Engineering and two other creditors. To lower its debts the McLeod sold an addition 17 tea estates between March 2019 and May 2020 generating $102 million (INRs 764 crore) but it wasn’t enough. Divestiture of 21 tea gardens in India and Rwanda since 2017 reduced annual production from 118 million kilos to 73 million kilos of tea. Rival Camellia Plc., the holding company of Goodricke Group, is now the largest tea producer in the world. Amalgamated Plantations, owned in part by Tata Global Beverages, is the second largest Indian tea producer, according to Rediff.

Tea Authentication Protocol to Chemically Verify Origins

By Dan Bolton

The Institute for Global Food Security is analyzing the leaf chemistry of tea from a broad range of geographical locations to create a map identifying the “chemical fingerprints” of tea samples. The protocols can be used to verify the tea was grown at the stated origin as marketed. The rigorous examination uses state-of-the art spectrometry and artificial intelligence modeling to also identify the presence of bulking agents, dyes, and adulterants, soapstone, plumbago, and gypsum. In their review of vulnerable food supply chains, Professor Chris Elliott and researcher Dr. Di Wu found tea to be at high-risk due to the complicated nature of tea production, making authenticity testing a tricky undertaking, according to New Food Magazine.

Elliott, a professor of food safety with the (Assured, Safe and Traceable) ASSET Technology Centre at Queen’s University Belfast, said that “once these statistical models are built, they will be validated with further samples of known origins to calculate the predictive capability of the methods. The most robust (accurate) technique will be selected, and the method will be fully validated to international standards. This method will then be transferred to laboratories across the world, said Elliott. Learn more…

Biz Insight – Professor Elliott is seeking partnerships with tea companies and research organization as well as major retailers to join in the effort to improve the integrity of the world’s tea supply chains. Here are his contact details: Professor Chris Elliott, Institute for Global Food Security, Biological Sciences Building, 19 Chlorine Gardens, Belfast, BT9 5DL Northern Ireland | [email protected] | +44 (0) 28 9097 6514.

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Clay Kulhads in Short Supply

Soggy soil and sunless days have curtailed the manufacture of India’s iconic Kulhad leading to widespread shortages of these simple unglazed terracotta clay cups. As a result, chaiwala are forced to switch to paper or plastic. Neither is acceptable to chai drinkers accustomed to crushing the Kulhad underfoot. Near constant downpours in Dakshindari turned clay quarries into soup and persistent overcast skies prevent air drying before firing. The cups still available are selling for INRs 1 (rupee) each in lots of 100, more than three times the typical wholesale cost.

Biz Insight – Last November the Indian government ordered the nation’s train stations to sell tea exclusively in locally made Kulhads, boosting demand to help employ two million potters. India’s Railway Minister Ashwini Vaishnaw said the eco-friendly cups are currently available at 400 train stations. Learn more…

– Dan Bolton

Upcoming Events

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

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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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Subscribe and receive Tea Biz weekly in your inbox.

Hear the Headlines

Features

Tea Biz this week visits the tea lands from on high where rising temperatures in the atmosphere are causing shifts in the jet stream that alter ocean temperatures, causing an unusual period of extreme weather globally. The results from changes in the climate are visible this summer as heat domes, and drought, slow-moving monsoons and violent typhoons and fast-melting glaciers in the Himalayas….

… then to England to marvel at the work of British author and photographer Michael Freeman and co-author Timothy d’Offay whose large-format book The Life of Tea: A Journey to the World’s Finest Teas gets a glowing review from Tea Book Club founder Kyle Whittington.

Children Benefit from Drinking Tea

By Dan Bolton

An extensive review of medical research suggests children as early as age 4 benefit from drinking tea.

In a peer-reviewed paper published in the Nutrition and Food Technology journal, Dr. Pamela Mason identified 60 scientific studies on the health benefits of drinking tea from childhood onward, as reported in The Telegraph of London. Drinking three cups of black tea daily improves cardiovascular health and boosts the body’s immune system, she said.

Tea also helps combat obesity, stress, aids relaxation, influences brain functions such as alertness and concentration, and is an ideal replacement for sugary drinks.

Drinking tea daily “could help preserve physical and mental health in childhood, through the teens and adulthood, pregnancy and into old age,” she said.

Biz Insight – The research, commissioned by the UK’s Tea Advisory Panel, showed that clinical and laboratory studies demonstrate how phenolic compounds in green tea boost nitric oxide levels which lowers blood pressure, and act as antioxidants to reduce inflammation. Tea polyphenols also limit cholesterol absorption in the gut and target receptors which regulate blood cholesterol levels.

Citation: Mason P, Bond T (2021) Tea and Wellness throughout Life. Nutr Food Technol Open Access 7(1): dx.doi.org/10.16966/2470- 6086.172

Learn more…

Visual Splendor

By Kyle Whittington | Tea Book Club

One of the lovely things about this book is that you don’t feel that you’re rereading information on tea that you’ve read 1,000 times before. Rather, you go on a journey to each tea type, each country, region, artisan or tea house, and along the way, dotted throughout the text like so many villages amongst the tea mountains are these wonderful gems and nuggets of information. There’s so much to learn and absorb both from the pictures and the text in this book. It sits such at an unusual sweet spot where a visually enticing book meets a well-researched and written reference book. Read more…

Listen to this report

Tea Threatened by Intemperate Torture

By Dan Bolton

The howl of Typhoon In-Fa assailing China, and the monsoons deluging India brought havoc, not relief to parched tea lands this month.

Record rainfalls in central China’s Henan Province forced the evacuation of 1 million people and swamped or swept away cultivars used to make Xin Yang Mao Jian, a prized green tea. Tea retailers Heytea and Nayuki pledged a combined $1.5 million to a local charity in Zhengzhou for flood control and disaster relief.

In India, super-heated air from a heat wave that killed thousands — now heavily laden with moisture — traveled north causing flooding. Chiplun in Maharashtra, received 450mm (17.7 inches) of rainfall in a single day on July 22. For comparison, the highest single-day rainfall recorded in the capital, New Delhi, in the last 15 years was 144mm (5.7 inches) in 2016, writes Al Jazeera.

The Himalayas have been warming for years. Melting ice trapped in 15,000 glaciers is receding at 100 to 200 feet per year, saturating the soil, contributing to landslides and the destruction of two dams in February that killed 200. In Nepal entire villages have been forced to migrate to lower lands to avoid once frozen, now flowing glacial lakes.

Consider for a moment the leaves that sustain the tea industry.

Currently the soil under their feet is either soggy and unstable or dry and unyielding. Tea is heat-tolerant up to a point, but growth of new leaves stops at 95^o Fahrenheit | 35^o centigrade. Insect infestations such as the red mite are now more common. Fungal and bacteria borne diseases are harder for the plants to combat. Leaves of clonal tea bushes cascade to the ground at temperatures above 40^o centigrade. Without rain, cells at the core of the trunk contract, no longer able to transport water from the soil. Branches turn brittle, death quickly follows.

Now, consider China, the world’s largest tea producer.

In the immediate future leaves basking in the sun benefit, especially in the northern regions where long winters and frost limit yields.

In a March 2021 article in the journal Environmental Research Letters, researchers conclude that both heat and cold extremes were associated with significantly reduced tea yields.

“In the present climate, dominating cold extremes influence more than half of China’s tea production, with a maximum of 56% reduced annual production… Climate warming may diminish the negative impacts of cold extremes, they write. However, reduced yields in regions subject to intensified heat extremes will emerge. In the colder regions dry roots withstand frost better than wet — but sustained heat is fatal. In a country that produces billions of kilos of tea, losses are estimated from 14%–26% at the Yangtze River and in southern China regions.

The authors write that “Increasing heat extremes pose the most challenging changes for tea production in China. We expect up to 11%–24% heat-induced yield loss in Chongqing, Hunan, Anhui, and Zhejiang.

China accounts for 41% of global production, India contributes 21% and Kenya 8%. All three are impacted. A decline in yield of this magnitude would make quality tea scarce and while quantities will be sufficient to meet domestic needs little will be left for export. A quality declines, consumer tastes will shift to competing beverages.

Tea is one of the most important cash crops in developing countries, and as a result — tea cultivation is of considerable socio-economic importance for the alleviation of rural poverty. In China, about 80 million people are employed in the production of tea. Smallholders who contribute more than half the volume of tea grown in India and Kenya will be unable to irrigate or relocate to higher, cooler elevations. The World Bank has warned that climate change could sharply diminish living conditions for up to 800 million of those living in South Asia.

Effects of Extreme Temperature on China’s Tea Production
Citation: Yulin Yan1, Sujong Jeong7,2, Chang-Eui Park2, Nathaniel D Mueller 3,4, Shilong Piao5, Hoonyoung Park2, Jaewon Joo2, Xing Chen2, Xuhui Wang5, Junguo Liu6Show full author list Published 30 March 2021 • © 2021 The Author(s). Published by IOP Publishing Ltd Environmental Research Letters, Volume 16, Number 4 Citation Yulin Yan et al 2021 Environ. Res. Lett. 16 044040

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Speciality Tea Definition Refined

By Dan Bolton

Tea Associations in the US, Europe, and Canada responded this week with concerns about the European Speciality Tea Association’s definition of specialty tea. The Tea & Herbal Association of Canada, the Tea Association of the USA, and Tea & Herbal Infusions Europe issued a joint statement expressing “concern” with the language ESTA used to differentiate specialty tea from traditional tea.

Criteria cited in the ESTA definition includes tea’s physical and sensory characteristics and a requirement that it be traceable through details such as location, pluck date, processing facility.

These are the same criteria used by every tea taster in the industry, regardless of “specialty” or “traditional” label, reads the joint press release.

The release points out that traceability is not unique to specialty teas, “Traceability requirements are at the core of food safety laws in place around the world and must be demonstrated as part of regular audits for large retailers as well as certification programs.”

Although all the above may be part of what defines specialty tea “suggesting they are not a part of “traditional” tea is factually incorrect,” reads the release.

In reply, David Veal, executive director of the European Speciality Tea Association writes that “We note the concerns about the language of differentiation between speciality and other teas, but that is the very point of defining speciality, to differentiate it, and so to further distinguish speciality tea from commodity tea we place emphasis on attaining tea excellence from bush to cup. Speciality tea can be defined by the quality of the criteria – not the use of the criteria. ESTA believes that the degree of excellence that a tea reaches in each of these criteria determines specialty versus commodity,” writes Veal.

The joint release states that the signatories “take great pride in our collective approach of inclusion… our members include all parts of the supply chain operating in what is commonly referred to as the “traditional” tea industry as well as the “speciality” tea industry.

Since the release of our definition, we have received very positive responses from small farmers and consumers… and we believe that we are moving in the right direction for the benefit of the speciality tea market, writes Veal.

“We welcome all feedback and hope to be able to continue discourse directly with all parties who are interested in promoting speciality tea,” he added.

Biz Insight – In an updated post on the Tea Biz blog, ESTA continues to refine its  definition with an explanation by ESTA president Nigel Melican of the term hand-crafted and the role of machinery in making specialty tea.

Learn more…

Unilever Tea Brand Divestiture on Pace

During a July 22 earnings call Unilever CEO Alan W. Jope told investors that “the operational separation of our tea business is now substantially complete” but he did not offer a timeline for the divestiture.

He said the company has created “an attractive standalone business with dedicated leadership. We’re very pleased with the progress we’ve made on the complex separation… we’ve filled 3,500 vacancies around the world, we’ve established the sales organizations in our largest markets. We will start to engage externally very shortly to execute on outcome, and this could be through an IPO, through a sale, or partnership,”? said Jope. 

The company intends to divest a sizeable portion of its tea business including the Tazo, Pukka Herbs and T2 brands.

– Dan Bolton

Upcoming Events

August 2021
Beijing International Tea Expo, Beijing China
August 27-30, 2021 | Beijing Exposition Center

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Share this episode with your friends in tea.

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

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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.