Listen to the Tea Biz Podcast for the week of February 05

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This week Aravinda Anantharaman speaks with Narendranath Dharmaraj who has spent nearly five decades in plantation and agribusiness management. In the conversation around the viability of the Indian tea industry and in particular the outdated nature of the plantation model, Dharmaraj has proposed an alternative where he recommends that estate owners distribute land-ownership in favor of the plantation employees and buy back the raw material through a co-operative. Here, we speak to Dharmaraj on how this model will address the issues of labor and wages that have hit an impasse. Read more…

Traveling to origin is no long practical, yet tea retailers must still learn tasting skills essential to selecting fine tea. Dan Robertson, founder of the International Tea Cuppers Club, has constructed an international tea training center in Mexico where tea masters share their knowledge during a week-long immersion program. The soon-to-open facility is on the Riviera Maya near the Mayan Ruins, south of Cancun and Cozumel.

News you Need to Know

Shipping container shortage threatens timely tea deliveries

The cost of shipping a container of goods increased 80 percent since November and nearly tripled in 2019. One third of the containers transiting the world’s 20 largest ports failed to ship on schedule. Unlike grains, tea is not shipped in bulk. Depending on its density, 10 to 12 metric tons of tea can be loaded into a 20-foot container.

Beginning last spring the pandemic shifted the normal shipping cycle leaving hundreds of thousands of empty shipping containers at destinations with no loads to return. In China and India, the shortage is acute. Bloomberg reports that in January India shipped less than a fifth of its normal volume of sugar. Responding to a 30 percent surge in orders for goods, last fall China offered top dollar for the return of empty containers. The strategy is working so well that coffee and rice are piling up at the docks in Thailand and lentils in Canada as shippers rush return containers instead of filling them with Asian-bound goods. Gradually equilibrium is returning with predictions that the shortage will abate in time for the first of the tea harvest shipments in April.

Kenya’s High Court has ruled against unions seeking to prevent mechanical harvesting of tea

The appeals court decision follows a 2018 ruling that Unilever Tea Kenya had the right to adopt new technology. The Kenya Plantations and Agricultural Workers Union sought a universal ban on tea harvesting machines.

Biz Insight – Kenya’s flatland tea farms are uniquely suited to mechanical harvesting, but planters have faced stiff opposition to mechanization since 2010. In 2018 workers led a strike in protest. Lower courts sided with workers initially but were overturned on appeal, a reversal that allowed planters to dismiss all who joined the boycott. During confrontations, several pieces of expensive harvesting equipment was destroyed. The expansion of mechanical harvesting (and subsequent loss of jobs) now appears likely.

Bombs away

Tea encased in confectionary sold as Tea Bombs are easily created in partnership with a local candy company or with the use of silicon molds in your own tea shop. Made with a shell of liquid sugar, the two-inch translucent spheres can be filled with tea leaves, tea bags and a variety of inclusions such as edible flowers, spices, and herbs. The bomb explodes as hot water is poured into the cup, lightly sweetening the mix. Bright colors, food-safe glitter and sparkles add to the fun.

Biz Insight – Nudge Coffee bars are an example of beverages sold as food. Ultra fine powdered roasted coffee beans are processed with cocoa butter into a shelf-stable paste similar to Nutella that can be molded into bars. The company’s candy coated coffee pellets resemble M&Ms and deliver caffeine in consistent doses. Natural grocer Sprouts reports a strong debut among coffee lovers.

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Listen to the Podcast for the week of January 22

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This week we travel to India to discover a charming and earth-friendly alternative to the millions of plastic tea cups discarded at 7,000 train stations…

… and to California Author Lisa See has led a remarkable life in tea. Her great-great grandfather worked his way from a laborer on the transcontinental railroad to become a leader in the prosperous Chinatown in Los Angeles a century ago. Listen as she discusses how tea has influenced her life

News you Need to Know

The Global Tea Initiative at UC Davis Hosts First Digital Colloquium

“The Stories We Tell: Myths, Legends, and Anecdotes About Tea,” hosted by the University of California at Davis, transported hundreds of online participants to Vietnam, Colombia, Sri Lanka, the United Kingdom, and China. Presentations by experts on agriculture, medicine, and the science of tea were complimented by biocultural research and storytelling exploring spiritual beliefs. The day ended with a panel featuring Finlay’s Head of Sourcing Helen Hume, Santiago Gonzalez at Bitaco Tea in Colombia, and Mighty Leaf VP Eliot Jordan, introduced by Manik Jayakumar, founder of QTrade Teas & Herbs.

Best-selling author Lisa See delivered the colloquium keynote from her home. She humbly acknowledged that she is not a tea expert and then described her fascinating journey of discovery to Yunnan with her friend Linda Louie. Louie, the founder of Bana Tea Company, talked about “traveling back in time” in south China’s ancient tea forests where Pu’er tea is made.

A roll call via chat revealed attendees from the tea lands (where it was 4 a.m.) and consuming countries, including Europe and New Zealand. Memorable talks included a presentation by Nguyen Dinh Thien Y in Ho Chi Minh City, Vietnam. The journalist and filmmaker shared his documentary films of tribal rituals of tea practiced by the Hmong people. Sacrificial altars and chants are believed essential to please the tree gods, manifest in the trunks and branches of a tea forest near the China border.

Biz Insight – Tea scholars publish reams of research that rarely find an audience beyond academic journals and small gatherings at symposiums. The great majority of this work is published in Mandarin and Nihongo and circulated in China and Japan, cultures that deeply explore and embrace every aspect of tea cultivation, social impact, and health and wellness. The work is fascinating and relevant, and thanks to Prof. Katharine Burnett’s Global Tea Initiative, four of the 50 curated presentations were readily accessible during the day-long digital event on Jan. 21. The rest will be posted soon along with a recording of the event. The second portion of the colloquium will be April 23. View program here.

Coffee an Tea Shop Losses averaged $32,500 per month in 2020

In 2020 coffee and tea shop owners estimate losses averaged $32,500 per store per month, according to Allegra World Coffee Portal. Sales were down 24 percent for the year. There was a net decrease of 208 shops – the biggest decline since the Great Recession. Starbucks and Dunkin’ outlets now comprise 66% of the total US coffee market by store count. Last week Starbucks announced it will close 300 of its 1400 Canadian locations by March. The company operates 30,000 stores worldwide.

Biz Insight – Tea accounts for between 12 and 20 percent of beverage sales in a US coffee market valued at $36 billion in 2019. Allegra predicts that will rise to $40 million in 2021, a total below 2019 revenue. There were an estimated 1,606 specialty tea shops operating in January 2020, according to Sinensis Research. Attrition due to the pandemic appears to be much higher in tea shops than among the 37,200 coffee shops due in large part to the prevalence of coffee drive-thru locations. Allegra say it will take until 2023 for operators to fully readjust.

US Tea Council Consumer Survey

Consumers choose tea not only for cardiovascular health and immune-supporting benefits, but for improvement of mood, too, according to a 2020 survey commissioned by the Tea Council of the USA to celebrate National Hot Tea month. 93 percent of respondents said they felt calm while drinking tea, while 84 percent said they felt centered. Respondents associated green tea with emotional and mental health. Black tea is thought of as a pick-me-up. The 2020 survey of 395 Americans conducted by Seton Hall University found that 86 percent of respondents cited having a unique, preferred tea routine to unwind, making it clear that consumers are counting on tea-time as a relaxing ritual.

Biz Insight – A 2020 review of studies examining pure L-theanine, concluded that 200-400 mg/day of L-theanine may help reduce stress and anxiety in people in stressful conditions. A systematic review of research on tea has shown green tea supports anxiety reduction, cognition and brain function. The benefits of black tea are bountiful too, with a separate study demonstrating when subjects consumed two cups per day, they demonstrated greater levels of attention.

Kenya’s Parliament Re-establishes Tea Board

Kenya’s parliament has re-established a national tea board after dissolving the regulatory body six years ago. The industry has since endured several setbacks. New tea board directors representing growers, smallholders, traders, government, and factory operators will be named in March. The transformational Tea Act of 2020 prevents traders from selling tea directly to foreign buyers. Tea must now be purchased at auction, a decision that the industry hopes will lead to higher prices. Tea costs at least $2 per kilo to produce in Kenya but a surplus in 2020 kept prices below break-even.

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Listen to the Podcast for the week of January 29

Here are the News Headlines

Features

This week we travel to Malawi, Africa where industry veteran Ranjit Dasgupta talks with Honorary Consul Jordan Price about a tea growing region gaining a reputation for producing innovative and sustainable specialty tea

… and to the Nilgiri Mountains in South India where Aravinda Anantharaman reports that hundreds of small growers in 100-member “farm producer groups” are collectively learning how to transition from fertilizer- and pesticide-dependent land practices to the organic cultivation of tea.

News you Need to Know

Sarah Segal began the New Year as CEO of DAVIDsTEA

The Montreal-based brick-and-mortar retailer is undergoing a remarkable transformation. The firm, which operated more than 200 retail locations in the US and Canada until last March was forced to declare bankruptcy, closing 166 locations, leaving only 18 mall and suburban storefronts. The situation looked dire — but within three months the business had returned to profitability —and in its most recent financial disclosures Segal pointed to– a 145 percent increase to $22 million in tea sales online and in grocery – up from $9 million during the same period the previous year. Segal said it is her goal to “solidify our position as a digital-first, industry-leading provider of on-trend, high-quality loose-leaf tea, tea accessories, and gifts.”

Biz Insight – Financial analysts praised the company’s “asset-light” business model, estimating that the combination of labor savings, minimal rent, and reduced overhead multiplied cash flow by 15 times. Segal promised investors that DAVIDsTEA “is on a new path, squarely focused on becoming a more agile organization.”

Innovation Driven by Pandemic

COVID has made consumers recognize that WELL BEING is a vital concern. Tea companies report strong sales and many line extensions for functional, and condition-specific teas. This week Celestial Seasonings Tea announced an expansion of its TeaWell line with Mood Tonic, Laxative, and Gut Health teas. Brands introducing new teas include Tata Tea’s immunity-boosting Tetley Green Tea with vitamin c, TAZO’s Calm in 42oz bottles; new Ayurvedics from India’s Teamonk. and a vegan double spice chai from STASH Tea. Researchers in Singapore recently announced probiotics that can be added to any tea which is then left to ferment for two days – retaining the original flavor — enhanced with fruity and floral notes and a faint acidity.

Market research firm Mintel, which maintains a global database of new products, noted a growing number of “Feed the Mind” formulations. “The events of 2020 caused a fundamental reset in human behavior” according to Mintel. In the coming years, consumers will be looking for more products and services that offer mental and emotional health benefits.”

Biz Insight – Manufacturers are also experimenting with new ways to deliver the goodness of tea. Effusio, a New York-based company, uses flexographic printing technology to make wafer thin dissoluble discs that deliver vitamins, minerals and complex nutrients including prebiotics. The company’s “Sleep” discs contain L-theanine derived from tea; chamomile and melatonin.

Tea Sales Up in the UK as Volume Continues to Fall

Britons increased their tea intake by 27 percent in 2020 consuming 61 billion tea bags, enough to cover the equivalent of 31,000 soccer fields. A survey of 2,000 tea drinkers financed by JING Tea found that during the pandemic UK residents used an average of four teabags a day or 1,460 tea bags per person last year.

One third say they drink tea for comfort and one in 20 said that tea calmed them during a crisis. One third said they plan on sticking with the same tea, prepared in the same way for life but 58 percent say they are willing to experiment.

Biz Insight – The British Isles are a bellwether for western consumption patterns dating back 361 years. Revenue from tea rose slightly in 2020 but consumption continued its 11-year decline in volume. Globally tea consumption grew by 1.5 percent, a retreat from the previous year’s 4 percent pace due to temporary and permanent closures of cafes and restaurants. The Economist Intelligence Unit predicts tea consumption to grow by 2.8 percent in 2021.

Canadian Tea Sales Slid in 2020

Tea sales in the first weeks of the pandemic soared. Canadians, like those in many nations, rushed to fill their pantries. During the early spring and summer sales in grocery grew by double digits leading all FMCC (Fast Moving Consumer Goods) categories and offsetting losses in foodservice. The situation changed as lockdowns returned last fall….

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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.

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Subscribe and receive Tea Biz weekly in your inbox.