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How medical research on tea can shape your target audience

February 2012

New business consultant?
Evidence about health benefits of tea continues to pile up in 2012. The year is barely a couple of months old, yet it has already witnessed several studies and reviews confirming long-held assumptions about the positive effects of tea drinking. The most noteworthy one is probably a Japanese study that found that green tea drinkers have a lower risk of frailty and disability as they grow older. Over 14,000 elderly citizens were followed for 3 years, which is no small feat in itself, and shows just how rigorous research around tea has become. Green tea drinkers were shown to suffer less from functional disabilities in performing everyday tasks like bathing or dressing. Interpreting these results in the context of West’s aging population shows how much potential the beverage may have as a healthy and cost-effective alternative (or supplement) to traditional medication.

But green tea was not the only variety in the spotlight. A study from Australia and a review from the UK lent further credence to the notion that black tea is just as healthy as its green cousin. According to research, black tea was found to lower blood pressure, thereby reducing the risk of heart disease. It may also cut levels of “bad” LDL cholesterol and blood sugar. Again, given that heart disease is one of the major causes of death in industrialized countries, the regular cuppa is starting to look like an increasingly promising and unobtrusive solution to keep your health in check.

From a business point of view, tea manufacturers operate under two long-held beliefs: that the 30-50 year old female is the current primary customer and that conquering the young and hip generation of teens and twentysomethings is the only way to expand the category in the years to come. Both points are certainly valid, but they somewhat fail to reflect the economic and demographic realities of today. That is because the future, at least for the next couple of decades at least, actually belongs an entire population of baby-boomers that is currently entering retirement.

With vast amounts of wealth and legitimate concerns about ageing and health, this target should not be forgotten by tea businesses. Yes, that population may be not as gastronomically sophisticated or as creatively minded as others, yet no manufacturer or retailer can afford to neglect its impact on the bottom line, especially given that tea is so relevant to its health concerns. Indeed, most of the prominent health benefits of tea, such as reducing the incidence of cardiovascular diseases, cancer, Alzheimer’s and obesity, to name but a few, are obviously more relevant to a baby boomer than a college student. Add to that increased health and medical awareness, more free time to enjoy meals (and brew proper tea), as well as the spending power that the elderly possess and you’ve got an offer difficult to refuse.

Viewed in this light, these medical studies are more than just about tentative scientific findings, because they may point to a somewhat new direction for the entire tea industry. Despite limitations on health claims in marketing, they offer new ways of thinking about the relevance and potential of a population that goes unnoticed far too often.

Stepas Parulis is the editor of TeaTrends and oversees Adagio's operations in Europe. He analyzes the tea industry through the prism of market and consumer trends.

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Tea businesses can take a page out of success of kombucha

February 2012

Source of inspiration

With reports of kombucha gaining a wider following among mass audience, it may be time to start wondering if the gourmet tea industry can learn a thing or two from the way its fermented cousin is making an impact on the market. While tea may be vastly more popular than kombucha, gourmet quality leaves remain somewhere in between mass and specialty sectors despite making enormous strides in the past few years. Initially, kombucha gained traction thanks to the vast array of health benefits that its followers swear by, which include detoxification, cancer prevention and energy increase. Leaving the veracity of these claims aside, this is not that different to the advent of gourmet tea, fuelled by a belief in its many potential health benefits. Later, the category expanded from local markets and delis into aisles and coolers of Whole Foods Market et al., again, similarly to the trajectory of premium tea (hot and iced). On both fronts, products became better tailored to suit mass taste buds with the inclusion of fruit juices or other sweeteners or flavorings to mitigate their unfamiliar taste.

That was then (although, let’s admit that “then” was only a couple of years ago). The interesting part is how kombucha has since been branching out into various neighboring areas of food and drink, thereby increasing its market penetration. One smart idea is to push the beverage as a mixer in alcoholic beverages and an alternative to the usual suspects like Coke & co. What makes kumbucha relevant is not only the taste that it adds to the mix, but also the dimension of healthfulness that other mixers lack. In the back of our heads, we all know that alcohol tends to negatively impact health, so opting for an ingredient to possibly counterbalance some of those effects and detox your body is a winning proposition from a consumer’s point of view. Same can be said about tea, which is a source of various beneficial elements, yet it is rarely found in bars as a mixer. For example, how often do you get to opt for green or rooibos tea instead of soda water or Sprite for a mojito?

Another novel idea envisioned by kombucha manufacturers is to embrace their product for what it is: a fermented drink with a non-negligible alcohol content at the very least. Facing FDA regulations that prohibit the sale and marketing of beverages with more than 0.5% alcohol content as soft drinks, some kombucha manufacturers are owning up to the fact their product is for grown ups and register their businesses as breweries to be able to make the real brew. Such bold moves are refreshing to witness, especially on behalf of small producers that take on extra financial risk just to make their vision a reality. Here again, tea businesses could have something to learn from them and could, for instance, own up to the fact that tealeaves are not meant to taste of fruit and desserts. Real tea requires grown up taste buds. Yes, you can add flavorings to make the infusion more palatable to the average Jane or Joe. Yes, that would add sales to your bottom line in the short run. Yet if a tea retailer’s business is focused on full-leaf teas, wouldn’t it make more sense to try to educate and “train” consumers’ palates instead of pandering to their every (uneducated) wish? Isn’t the goal of such businesses the precise opposite: enabling people to learn to appreciate the fruity, floral and many other nuanced flavors and aromas that linger in a cup of pure premium tea? How sweet would that be?

Although the larger point is that kombucha’s growing success should serve as an example of how niche players are pushing market boundaries and should empower the tea trade to take similar steps of faith in every direction. Of course, they shouldn’t just replicate strategies adopted by kombucha makers, or any other beverage makers for that matter, but be bolder in pursuing their own route. Where that route leads remains a mystery, but learning what works for others and identifying the reasons behind it certainly eases the trip.

Stepas Parulis is the editor of TeaTrends and oversees Adagio's operations in Europe. He analyzes the tea industry through the prism of market and consumer trends.

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