Tea Mechanization Must be Well Managed
By Dan Bolton
Nigel Melican is a career research scientist, founder of Teacraft consulting, and President of the European Speciality Tea Association. He has monitored advances in harvesting technology for more than 40 years from crude hand shears and reciprocating blades to the latest generation “selective” harvesters capable of discerning and plucking (not shearing) shoots that consist of two leaves and a bud. Virtually all crops are being mechanically harvested now, explains Melican. Fewer laborers require that mechanization plug the gap. Given the cost and shortage of labor and growth in demand, “There’s no other way that you can make commodity tea commercially viable,” he says. Read more…
Listen to the interview
Tea in Foodservice is Recuperating
By Dan Bolton
Two years of COVID reset tea consumption at restaurants and cafés, initially reinforcing traditional expectations of comfort and warmth but evolving to permanently disrupt delivery, takeaway, menu choices, and celebratory occasions with tea. Tea (except for bubble tea) largely missed out on the rapid growth of restaurant-quality food delivery, curbside service, and take-out.
Beverage service in downtown offices, sales at transit terminals, and inner-city stands remain below pre-pandemic levels. Retail vendors offering afternoon tea at tourist locations, iced tea at sports venues, and food trucks selling teas and juice lost sales to homebound tea drinkers purchasing online or near-to-home suburban locations. COVID reversed the sales growth of tea as a breakfast alternative. Independently operated tearooms with few seats and limited financial resources closed, changed owners, or pivoted online. Tea is now consumed more frequently at home, and with food inflation rising and costs driving up menu prices, it is clear that in 2022 tea retail will not return to the familiar patterns of yesteryear. Read more…
Hear the Forecast
News
Omicron Cancels Restaurant Reservations Globally
By Dan Bolton
The fierce onset of Omicron closed restaurants, cafes, and tea shops in the waning hours of the second year of disruption of the once-lucrative retail segment.
Restaurant cancellations began rising in Europe, the US, and Canada the week before Christmas and continued through New Year’s Eve. In the Netherlands bars and restaurants, stores and schools were ordered closed through Jan. 14. France, Italy, Spain, and Portugal, report infection rates 40% greater than previous highs. Germany closed its nightclubs and soccer games. The UK is open for business despite infections that number 100,000 per day for several days last week but residents there are cautious.
OpenTable’s State of the Industry tracks seated diners (both walk-ins and reservations) in 14 countries. Data indicated a recent high of 4% growth year-over-two-years (Yo2Y) during Thanksgiving week that has since dropped off a cliff globally to -30% Yo2Y. Reservations and walk-ins are down by -69% compared to 2020. In the US walk-ins and reservations declined -67% compared to the same period last year. In the UK walk-ins and reservations declined -83%, in Canada -82%, in Germany 96% for the week ending Dec. 28.
As cancellations grew to 45% in New York and Washington DC, hospitality closures due to staff illness soared. Even before omicron arrived, a survey of 3,000 restaurant operators found that 77% didn’t have enough workers to meet demand, according to the National Restaurant Association. US Labor Department data reported 44,000 restaurant jobs filled in November, down from an average monthly total of 200,000 for the first seven months of the year. Dining will not disappear, but during the past year wholesalers and local tea shops that supply hotels, tourist shops, and restaurants suffered repeated setbacks. Now food inflation weighs heavily on the segment, compounded by increased labor costs and debt. Small businesses were forced to close despite government funds to offset losses. Those still hanging on are raising menu prices by 30 to 50%. As the Omicron wave of infections crests at record highs this winter the till has run dry.
Sri Lanka Barters Tea to Settle Iran Oil Debt
Sri Lanka has agreed to barter $5 million a month in tea with Iran to settle a long-standing $251 million oil debt. The barter circumvents but does not violate US sanctions.
The imposition of sanctions in 2012 restricted Iranian bank transfers and stifled a once-lively tea trade between the two countries. At that time Sri Lanka shipped about 40 million kilos to Iran. Totals declined every year since. In 2016 Sri Lanka still supplied about half the tea consumed by Iran, one of the world’s most valued tea markets. Sales of Sri Lankan tea had declined to $85 million in 2020, down from nearly $200 million in 2013, according to the UN COMTRADE database.
Biz Insight – The agreement did not sit well with tea exporters who will receive Sri Lankan rupees from their government instead of US dollars but the decision conserves foreign currency during a fiscal crisis. Sri Lanka is obligated to make $6.9 billion in debt service payments in 2022. The country’s central bank has less than $2 billion in reserves and its sovereign credit rating was recently downgraded to CC amid growing risk of default.
? By Dan Bolton
- Read more… indicates the article continues. Learn more… links to reliable outside sources.
India Tea Price Watch | Sale 50
News of Assam’s Manohari Gold selling for INRs 99,999 ($1,315) per kilo at the Guwahati auctions grabbed headlines. This is the highest price bid in the auctions this year for specialty tea. And although Manohari Gold is a favorite, generating top prices for the past four years, owners Suntok Tea once again beat their earlier record of INRs 75,000 bid in 2020. A similar lot sold for INRs 50,000 per kilo setting the record in 2019. Only 2.5 kilos of this tea was produced by the Manohari Tea Estate which produces 500,000 kilos annually. In other news, Indian media reported that the Tea Board of India has said that the central government plans to allot about $13 million as part of the Tea Development and Promotion Scheme. This amount is earmarked for projects undertaken between November 2021 and March 2026. The small tea growers, in particular, will stand to benefit from this fund. Read more…
Upcoming Events
January 2022
Tea and Beyond! | GTI 7th Annual Colloquium | January 13 | UC Davis | Day-Long Virtual | Tea and Beyond: Bridging Science and Culture, Time and Space, exploring differences between tea and herbal infusions around the world and in terms of medicine and health, ceremony, traditions, sustainability, marketing, and more. | Program | Register FREE (Zoom)
Share this episode with your friends in tea.
Listen to Tea Biz on Apple Podcasts
Subscribe and receive Tea Biz weekly in your inbox.
