Tea producing nations across the globe are realigning their export strategies following UK's referendum on EU membership. The UK is not only one of the highest per capita consumers of tea in Europe with traditions going back hundreds of years, but also a major producer and re-exporter of tea towards the European continent. Growers in countries like Kenya and India now fear that the possible tightening of access to the EU market for Britain's goods may hit its blended tea exports. Currency fluctuations are also a concern, with the British pound losing about 10% of its value versus the US dollar, making any imported tea more expensive for the Brits, although famous teas from Darjeeling and Assam are not expected to suffer much. Depending on how other currencies readjust to the pound, some countries may see their exports impacted more than others. Finally, this may result in more direct trade between growers and individual EU countries.
Reports suggest that Kenya, the world's largest exporter of black tea, is considering introducing tea futures contracts in an attempt to stabilize volatile prices and offer a degree of income guarantee for growers. New York-based INTL FCStone held talks with industry representatives and prepared a report on the prospect of introducing the derivatives, something the local stock exchange is open to. According to the Nairobi Securities Exchange, tea futures would help growers hedge their pricing risk and attract new investors to the tea market. The average auction price for Kenyan tea has recently been extremely volatile, surging by 34% last year, but falling by 22% in 2016. Coupled with increasing production costs, this volatility, which the futures hope to address, has made the sector unattractive for growers and investors alike.
Orthodox tea produced on the Nepalese side of the Himalayan mountains is increasingly seen as a threat to the famous Darjeeling tea grown in neighboring India. While very similar in taste and appearance, Nepalese tea has thus far lacked the brand awareness and reputation associated with Darjeeling, especially among western buyers. Until recently, it was even missold as Darjeeling tea due to its lower price point. However, Nepalese mountain tea has been gaining fans in recent years on the back of improved quality and industry's promotional initiatives, driving prices and popularity upwards. But prices remain competitive compared to Darjeeling tea because the teas are produced by small growers rather than big estates, which have higher operational costs because they traditionally provide schools, hospitals and food for the workers.
Tea trade unions are urging India's Prime Minister to intervene in order to address some of the industry's most pressing issues as it faces a huge drop in first and second flush teas. Growers are campaigning to get rid of the mandatory auction system, whereby 50% of all tea produced has to be sold through auctions. They claim it disproportionately benefits middlemen and plantation workers. Furthermore, the unions are seeking to establish a minimum selling price for tea to compensate for increased production costs associated with increased use of irrigation and pesticides.
Growers in India, the second largest tea producing country in the world, are bracing themselves for a significant fall in tea output due to unfavorable weather conditions over the past few months. Rising production costs and low auction prices are only exacerbating the effects in Assam and Bengal, which represent around three-quarters of India's annual 1,200-million-ton output. Estimates by the Tea Association of India suggest a loss of up to 30-35% of first flush tea harvest, which has just ended and usually fetches premium prices compared to subsequent ones. And while production costs keep climbing given irrigation and pest management expenses, prices fetched at auctions are decreasing by about 5% year on year.
Tea Journey, a collaborative magazine launched by industry veteran Dan Bolton, reached its funding goal on Kickstarter today thanks to around 500 backers and with less than two days remaining. Tea Journey sought just over $96,000 to help launch the proof of concept and fund content creation, production and marketing for one year. The aim of the magazine is to secure 5,000 subscribers immediately and a minimum of 15,000 during the first year to make the venture sustainable over the long term. According to details provided on Kickstarter, the greatest challenge will be to ensure continuous subscription renewal. Tea Journey is a specialized digital magazine aiming to connect tea growers, experts and enthusiasts via a rich multimedia platform including articles, photos and videos.
India's Tea Research Association is experimenting with a bio-sensing system to detect pesticides in tea. The device, dubbed "e-nose", will be able to detect pesticides in tea leaves and then measure the exact composition of the residues. It works by testing tea leaves that are washed and cut, and uses a color- and multiple reader-based system to estimate the pesticide concentration. Given that it is intended to be used in remote areas, the creators aimed to make it simple to use and requiring minimal maintenance to operate. Having completed the proof of concept, the machine is currently in the prototype stage with field trials required to test its commercial viability.
This year will mark the end of private auctions where one of the most famous and prized teas in the world is auctioned to select buyers from around the world. For decades, large buyers, especially from the US, Europe and Japan, would participate in weekly private auctions in one of seven major auction centers across India. While other grades of Indian teas have already been trading on e-auctions for several years, Darjeeling teas, which can see large swings in prices during the bidding process, have thus far been exempt. Growers hope that opening the market up to more buyers and introducing more transparency will result in higher prices. Auctions across India offer around 2.8 million kilograms of Darjeeling tea per year with prices varying from $8 to $1,800 per kilogram.
Sri Lanka's government is considering the possibility to allow tea imports into the island country in a bid to boost exports and value creation for exporters. Importing tea into Sri Lanka has been prohibited to discourage lower quality teas to be blended with Ceylon tea and then mis-sold as pure Ceylon on the international markets. At the request of exporters, the government is now taking a fresh look at the issue in a bid to boost the country’s exports and encourage the creation of added value. This is despite opposition from growers, who fear a dilution of the Ceylon tea brand.
Some of Taiwan's most famous and highly prized oolongs are threatened by a government clampdown on high mountain agriculture due to its impact on the environment. High mountain oolongs, grown at more than 1,000 meters above sea level, benefit from a unique microclimate and limited sun exposure that produce particularly fragrant teas with floral aromas and a milky aftertaste. However, their cultivation is a danger to the environment because pesticides and fertilizers used in farming contaminate water sources and land beneath, as well as strip the soil of moisture. High mountains are also susceptible to erosion, requiring vast amounts of trees with strong roots to prevent it. It is based on these environmental considerations that the Taiwanese government decided to curtail high mountain tea farms and is repurposing a sizable amount of their land.
Kenya is looking at ways to reduce the tax burden on tea production in a bid to boost the local industry and ensure a competitive playing field with neighboring countries. The world's largest black tea exporter is reviewing the 1% levy on tea sold at the Mombasa auction and the 16% value-added tax on local tea processing and consumption. This comes in response to claims that Kenyan tea is at a disadvantage compared to teas from other African countries sold at the same auction site since these are not subject to the same taxes and levies. Farmers complain that they do not benefit from high auction prices and export volumes. Kenya earned about $1.24 billion from tea exports in 2015 on output of nearly 400 million kilograms.
Growers of organic tea in Nepal are reporting significantly lower purchases from Western buyers, particularly Germany, over the threat of anthraquenone. Organic Nepali tea from Ilam region, usually snapped up by buyers from Germany, USA, UK, Austria, France and Japan and often purchased in advance, has seen demand and prices collapse due to the presence of the chemical anthraquenone found in a shipment to Germany last year. According to growers, the quantities were not significant to pose risks to human health, yet it is unclear how the chemical showed up in tests. Despite trying to address the issue, interest seems to remain dampened and is compounded by the lack of rainfall, which affected the quality of this year's leaves.
A first-of-its-kind climate study that looked into the evolution of monsoon seasons, critical to tea cultivation, may pave the way for better crop and harvest management in the face of climate change. The study, led by Tufts University researchers, analyzed historical weather and tea production data of the past 30 years using a new dynamic approach that takes into account how monsoon seasons affect productivity and nutritional profile of harvests in China. Scientists noted that longer monsoon seasons with increased daily rainfall are contributing to reduced tea yields, making precise data valuable for better crop management and harvesting strategies. This may lead to farmers choosing tolerant tea varietals or managing soil in ways to increase water holding capacity.
Recent closures of several plantations in the Dooars region of India, neighboring Darjeeling, put into question the financial viability of gardens facing mounting labor costs. Seven tea gardens have recently shut down due to a combination of increased wages and low auction prices, which may result in a shortfall of 50 million kilograms against India's annual output estimates of 1,250 million kilograms. Given that labor costs represent 60% of inputs, recent wage increases negotiated between unions and plantation managers were not recouped on the auction floor, jeopardizing the viability of several operations and plunging the wider industry into disarray.
The popularity of green tea, prized for centuries in China, is finally transitioning to the digital realm, as shoppers get more accustomed to purchasing leaves online. While e-commerce only accounted for 8% of tea purchases in China in 2014, the China Tea Marketing Association qualified its growth as “remarkable” since then, especially among young people. Major online marketplaces Alibaba, JD and Suning Commerce have recently introduced spring tea offerings with tens of thousands of orders reported for this year’s harvests. Differently than in Western markets, the teas are often purchased directly from growers and shipped direct from the respective plantations based on current demand.
The latest market report by Canadean suggests that the US hot tea market is increasingly driven by gourmet varieties with a bigger focus on product provenance and background. The “Top Trends in Hot Drinks” report claims that the takeaway coffee culture has upped the quality and variety expectations for beverages consumed at home leading to a greater focus on the story and provenance of the base tea and other ingredients. The second major market trend relates to healthonism, or the idea of combining health and hedonism, which translates into the use of alternative and functional brew bases such as yerba mate or rooibos to boost the health benefits. Finally, the report noted a pivot towards seasonal flavors and sharing experiences with others, with a sizeable part of consumers declaring their preference for season-specific blends and experience-based products.
Industry veteran and editor of various tea-related publications Dan Bolton will soon launch a Kickstarter campaign to help fund a new magazine about tea. Tea Journey is a digital magazine that aims to connect tea growers, experts and enthusiasts via a rich multimedia platform including articles, photos and videos. The mobile magazine is expected to have three issues annually, starting with one focused on origins in April, then later ones on tea reviews and gifts. Each issue will also feature tasting notes and brewing instructions for a wide array of specialty teas, as well as grower interviews, expert profiles and other tea-related content from around the world. The collaborative effort will be self-funded by editors, writers, consultants and experts, while the Kickstarter campaign, aiming to raise $125,000 CAD, is expected to assist with the launch.
The specialty tea sector is providing a valuable sales channel for US tea growers as they perfect their craft and bring more varieties to the market. Americans are willing to shell out more for quality produce and local provenance, two of the main differentiating factors of the budding US tea industry. While growers with plantations in states like Hawaii, Mississippi and British Columbia cannot compete against Asian rivals on the price of commodity-grade tea, specialty tea gives them a better opportunity to find their niche audience. Experts point out that millennials are especially attune to new and varied flavors, as well as the rich stories behind the products, enabling some American-grown teas to fetch prices above $250 per pound wholesale and more than double at retail.
Kenyan government announced plans aimed at encouraging farmers to embrace specialty tea as a means of increasing earnings and conquering new export markets. While commodity-grade black tea accounts for 95% of local production, industry leaders view orthodox and specialty tea types, such as white and purple, as more lucrative to farmers and more differentiating on the world market. The price fetched can be several times higher than commodity-grade teas. Kenya has already identified China, Canada, Europe and North Africa as potential suitors for such high quality teas. The country will now introduce cultivation and processing guidelines for growers in order to increase adoption, which has been lagging in recent years.
Growers in Darjeeling and surrounding areas are reportedly worried that lower rainfall may have a devastating effect on first flush teas that fetch the highest prices. Some predict a genuine crash in production, with estimates of output decline reaching as high as 70%. The region has experienced 60 to 90% less rainfall in the crucial winter months resulting in very low soil and air humidity. This is likely to require extra irrigation and approved pesticides, thus increasing production costs. First flush teas from Darjeeling are prized by western countries and fetch prices higher than subsequent harvests. For example, first flush teas make up only 20% of the volume produced in the Terai, Doars and Darjeeling tea belt, but represent over 35% of the value, making them a vital part of the production cycle.
This year's World Tea Expo is to return to Las Vegas for a show accompanied by a strong educational program and many business-oriented activities. The leading specialty tea trade show in the US, held on June 15-17 at the Las Vegas Convention Center, will highlight a rapidly expanding US specialty tea industry driven by product innovation, increased retail presence and a growing number of tea professions. The business-oriented core conference and workshops will be supplemented by various tasting events that explore the various types and provenances of tea. World Tea Expo will also host the New Product and World Tea Awards, as well as the North American Tea championship. The event will be held under the auspices of new owners Penton, an information services company based in New York.
Kenya's tea industry recorded annual revenues of $1.38 billion, or about 23% higher than the previous year, thanks to improved auction prices and a weaker Kenya shilling. Exports made up the majority of the revenue, with $1.23 billion originating from 68 export markets in 2015, including the top five countries of Pakistan, Egypt, Britain, Afghanistan and the United Arab Emirates. A diversified export market was one of the priorities of the local government with some of the fastest growing markets identified as Poland, Somalia and Nigeria. The lifting of sanctions against Iran is also expected to boost the local industry. Average auction price at the Mombasa auction was $2.98 per kilogram in 2015, compared to $2.16 a year earlier.
Britain's status as a Nation of Tea Drinkers may soon need to be revised, as tea intake continues to dwindle since WWII. According to the National Food Survey, which analyzed data from 150,000 households over a period of 40 years, tea consumption fell by almost two thirds, from 68 grams (2.4 ounces) per household per week to just 25 grams (0.88 ounces) or the equivalent of 10 cups. The decline is attributed to evolving palates and the rise in popularity of other hot drinks, particularly coffee, which managed to capture the public's imagination. However, while traditional black tea consumption has decreased, the intake of green, herbal and specialty tea is on the up.
The Tea Board of India recently issued the latest version of guidelines for safe use of Plant Protection Formulations in tea plantations across India. The Plant Protection Code is intended to ensure safe use of agricultural protection products and to promote alternative pest and herb control strategies. It aims to provide farmers with more information on the appropriate use and dosage of various pesticides and herbicides, and hopes to foster a more critical look at their use. The latest version contains 37 Plant Protection Formulations, two of which were recently cleared by local authorities.
Kenyan president called on the Mombasa auction, the biggest of its kind in the world, to adopt electronic trading in order to increase transparency and dispel perceptions of a "house of collusion". Automation is expected to aid transparency and incentivize farmers following increasing suspicions about deals brokered behind the scenes and at a time when farmers may be susceptible to start growing other crops or sell their land to property developers. The Mombasa auction handled 358.6 million kilograms of tea in 2015, which represents about 70% of tea exported from Kenya. Transactions of tea leaves from the neighboring countries also take place in Mombasa, whose main competitor remains the Colombo auction in Sri Lanka.
A report for the foodservice sector suggests that tea is likely to boost restaurant sales in the coming years. According to market research by Packaged Facts, tea will be instrumental in growing restaurants' lunch and afternoon sales given broader industry momentum and premium price point. The market is driven by increased presence and clout of established players such as Starbucks and Peet's via their recent acquisitions of Teavana and Mighty Leaf Tea respectively. As far as consumer preferences within the foodservice setting go, great taste remains the deciding factor for many, which correlates to quality and available flavors. Other factors, all cited by at least 15% of respondents, include price, time of day, temperature, convenience and health.
After a year marked by lower exports and stagnant prices, the new year is expected to usher in a recovery for Indian growers, with latest numbers showing a healthy rise in exports. Provisional data for April-October 2015 shows a 4.2% gain in earnings and about a 10% rise in volumes, which is welcome news for an industry that suffered crop losses and faced oversupply from Kenya. Early estimates for the latest period suggest even better numbers based on increased demand from key markets in the Middle East. However, prices remain subdued, showing a decline of more than 2% between April-October 2015 and potentially further exacerbating tensions between plantation managers and workers seeking higher wages.
After introducing coffee leaf tea, the coffee industry is turning to coffee cherry tea to highlight the diversity of the Coffea plant. Coffee cherry tea, also called cascara, is a tea-like infusion of coffee husks that are usually discarded and end up as compost. The tea-like infusion has recently been gaining awareness for its hibiscus-like smell, fruity flavor and caffeine levels similar to those of black tea. Cascara now appears on drink menus across several states and is even used as an ingredient in cocktails and beer. Similar to nose to tail eating, the niche drink is part of a broader trend of extracting more interesting flavors and rediscovering new consumption methods of plants and animals. Historically, cascara has been consumed in Yemen and Ethiopia.
Planters in India are considering mechanizing tea harvesting to keep production costs from spiraling out of control. Workers and politicians recently negotiated wage increases of up to 30% that have failed to translate into higher earnings due to subdued auction prices, leaving growers worse off than before. Also, absenteeism is rampant in tea gardens, with up to 30% of the workforce not showing up on a daily basis. This forces growers to look towards automating the harvesting process, despite many tea-growing areas not being ideal for such endeavors due to uneven or mountainous terrain. Plantations have called on the government and scientists to encourage the adoption of mechanization and the development of new technologies in robotics via appropriate infrastructure and loans.
Widespread droughts in South Africa, the main producer and exporter of rooibos tea, is likely to have an impact on supply and prices of the popular beverage. While the local trade council recently walked back predictions that prices were likely to increase by 90%, concerns remain that insufficient rainfall during the planting months of July and August could lead to the worst harvest in years. Last year, South Africa produced over 11,000 tons of rooibos and it's likely that this season's harvest will be insufficient to cover local and export demand. More than half of the output is exported to countries like the US, UK, Japan and Germany, with exports earning an estimated $35 million for the local industry.
Fitch Ratings agency expressed worries about weakening credit profiles of Sri Lanka's tea plantations, as depressed prices and high wages impact profitability and future outlook. Fitch expects high levels of combined leverage, calculated as net debt/EBITDA, to continue amongst many Sri Lankan tea plantations due to regular wage increases and low productivity compared with other leading tea exporting countries. Auction prices have suffered recently in Sri Lanka due to lower demand from key customers, including Turkey, Russia and the Middle East. At the same time, labor costs, which represent about 70% of the production costs and are not linked to profitability, have risen sharply in the last few years. This eroded company margins and profitability, with many companies posting an operating loss in the first half of 2015.
Official health guidelines in the Netherlands recommend regular tea intake to support a healthier lifestyle and cardiovascular health. The Health Council of the Netherlands, an independent scientific body that advises parliament, published new guidelines recommending that people drink between three and five cups of tea each day. According to a spokesperson of the health council, the guidelines are based on recent scientific literature that clearly shows that regular tea consumption can reduce blood pressure, diabetes and stroke risks. The instructions relate explicitly to black and green tea, not rooibos and other herbal varieties.
High taxes on tea produced and exported from Kenya are adding to spiraling production costs and risk hurting its competitiveness on the international markets. The East African Tea Trade Association claims the industry is overburdened by up to 35 different taxes and levies at all stages of the value chain thus making the final product uncompetitive compared to neighboring countries and other top producers. For example, 95% of tea produced in Kenya is exported and traders pay a 1% "ad valorem" tax on those exports to fund research and infrastructure. They also claim that local consumption, which could shield the industry from volatility on international markets, is stagnating due to a 16% Value Added Tax.
As the tea industry expands and demand for experts grows, the International Tea Masters Association and its three certifications are becoming the standard-bearers for tea masters and shop managers alike. Over the course of the last 8 years, the organization has trained tea sommeliers from some of the finest dining establishments in the world, including The Ritz in London and Eleven Madison Park in New York City. There are three levels to the program that covers topics from provenance and production methods to tasting and vocabulary, with a particular focus on sensory memory and descriptions. Testing consists of questionnaires, tastings and dissertations. Most participants either go on to become tea sommeliers at restaurants and hotels, or start their own businesses as tea shop or tea room managers.
Tea is increasingly popular as in ingredient various drinks and foodstuffs, from cookies to lattes, but a bartender from Portland, OR is keen on using it to infuse his spirits and to give cocktails more depth. Apparently tea is particularly suited to be infused with spirits in advance, because it is consistent and versatile. Pre-infused spirits also help behind the bar, as they are ready to pour and do not require lengthy mixing like bitters. Justin Diaz, bar manager at Jackknife, suggests infusing a bottle of selected liquor with two teaspoons of tea for 5-7 minutes. He aims to have at least two tea-infused cocktails on the menu at any given time.
The global ready to drink tea and coffee market is set for rapid expansion in the years ahead, according to a report by Transparency Market Research. Two factors predicted to drive demand in key international markets are urbanization and increasing health awareness, which will likely come at the expense of carbonated soft drinks, perceived as unhealthy by many. Hot beverages, consumed in the mornings or evenings, will continue to play a central role in many countries. However, busy modern lifestyles are prompting consumers to choose more convenient formats like ready to drink tea. Growing awareness about the health benefits of tea and its antioxidant content, as well as increasing disposable income will also support demand through to 2018.
The recently signed Trans-Pacific Partnership has already boosted the share price of Japanese tea manufacturer ITO EN and is likely to have favorable long-term consequences for tea trade. The treaty, signed between 12 countries, including US, Canada and Japan, and encompassing about 800 million people and about 40% of global gross domestic product, is intended to bring down trade barriers for a wide variety of industries, including tea. For example, following the announcement of the deal, share price in ITO EN, a Japanese iced tea maker with a sizeable presence in the US, rallied, as TPP will enable the company to import tea leaves from abroad without the 17% tariff currently in place in Japan. Many other companies are likely to benefit too, as trade regulations will be harmonized to enable free movement of goods, services and capital among the participating countries.
With the popularity of coffee rising rapidly in China and a frugality drive by the government, tea retailers are devising new strategies to lure back shoppers and attract younger generations. Experts claim that the tea experience needs to be better adapted to modern lifestyles, for example with the use of innovative brewers or capsules that reduce brewing times. Flavored tea is another area of growth in China, a country usually accustomed to traditional, unflavored varieties. Including fruits and flowers or mixing the drink with sugar or alcohol may appeal to younger niche audiences. Finally, some companies try to improve the tea experience itself, with Papp’s Tea trying to infuse traditional tea with a modern café feel.
Last Sunday, San Francisco hosted the 4th annual San Francisco International Tea Festival that serves as a platform to connect consumers to smaller tea producers. The event showcased over 15 artisan suppliers and hundreds of teas to sample from companies like the Imperial Tea Court, Chado, Red Circle and Zu Chang Tea Company. Larger companies present were ITO EN and the Republic of Tea. According to the founder, the event is intended to help artisan suppliers present their products and raise awareness about specialty tea. Organizers were optimistic to surpass last year's 1,500 visitors.
Taiwan unveiled an innovative traceability system that allows consumers to trace the source and production of a specific tea. The cloud-based initiative is aimed at boosting the quality and traceability of tea on the market, and to ensure correct labelling for organic and pesticide-free crops. The online platform currently stores information on 60 tons of tea and allows consumers to check a product's place of origin, manufacturer, pesticide test results, certificates and the flow and volume of each harvest. Four major tea manufacturers have subscribed thus far, as well as 200 small-scale farmers, but the organizers hope to have 1,000 tea farmers on board by year's end and half of Taiwan's 12,000 farmers by 2017.
Research suggests that tea time may shed light on drinkers' social variables such as socioeconomic status and geographical location. The British study, carried out by Harris Interactive, found that those in a low income bracket were twice as likely to have two or more sugar cubes in tea as those with on a high income. Furthermore, sugar intake was indicative of geographical location, with Londoners and Yorkshire residents likely to consume less sugar than Welsh or Scottish ones. Beyond socioeconomic factors, the study uncovered a deep age divide when it comes to the perception of tea, with younger people more willing to purchase better quality teas and pay more for a cup than seniors. Those in 16-24 bracket were also more likely to drink green and herbal teas.
Growers in Darjeeling report stronger demand from Europe for this year’s harvest in anticipation of tighter regulations relating to its provenance that take effect in 2016. In line with the Protected Geographical Indication status achieved in 2011, all tea sold as Darjeeling within the EU needs to come from that specific region and cannot be blended with other teas. Until now, only 51% of leaves needed to be from Darjeeling to qualify for the label and retailers were granted a transitional 5-year period. However, despite stronger exports to the EU this year, purchase prices have not increased, while costs of production have. Compared to 2014, overall annual exports of Darjeeling tea are expected to inch 1% higher at most to 4 million kilograms, while total production is estimated to reach 8 million kilograms.
The mass-market appeal of kombucha hangs in the balance as manufacturers and federal regulators remain at odds over alcohol content and health claims. Kombucha, a tea brewed with yeast and bacteria, contains trace amounts of alcohol that may sometimes exceed federal laws on labelling of beverages with more than 0.5% alcohol. The US Alcohol and Tobacco Tax and Trade Bureau recently issued warnings to several manufacturers for exceeding those limits, sometimes by just a few tenths of a percentage point, citing consumer information for health or religious reasons. Many in the industry, which is expected to grow three-fold to $1.8 billion from 2015 to 2020, see this as counterproductive and are asking for new testing methods or exemptions. Manufacturers also remain under scrutiny by the FDA for dubious health claims lacking scientific proof.
Scientists in India have demonstrated new ways of growing and harvesting tea, which could pave the way for wider cultivation at cheaper prices and less human involvement. Researchers at Indian Institute of Technology Kharagpur have devised a new CTC (crush, tear, curl) machine that reduces tea processing costs due to lower energy consumption. The machine is dubbed a "game changer" and may represent up to 30% cost savings for small farmers. Scientists also encourage farmers to grow tea in plain lands (as opposed to hills) by turning them into slopes and by using shade management and irrigation. These developments are welcomed by small farmers across India, with several participating in trials for these various solutions.
Vietnam, the world's fifth largest exporter of tea, saw export volume and value decrease as it tries to increase quality standards and fend off foreign competition. The country's woes are mainly attributed to tea being exported as raw material with very little added value. In fact, Vietnamese tea fetches prices about half the world’s average for commodity-grade crops, which contributed to annual exports dropping around 5% in volume and value compared to last year. Main factors behind this are scattered cultivation, lack of management of pesticide use, outdated farming techniques and lack of coordination between plantations for processing and distribution. The industry wowed to address the quality issues and improve the image of Vietnamese tea to better compete against countries like India, Sri Lanka and Kenya.
A BBC / Radio 4 investigation uncovered "dangerous and degrading living and working conditions" at major tea estates in India's Assam region owned by Assam Company and McLeod Russel that supply tea to leading brands such as Twinings, Tetley, Harrods and Fortnum and Mason. The report found deficiencies in housing, sanitation, malnutrition, as well as working conditions and pay. For example, workers' homes were in disrepair, with leaking roofs, cracked walls and clogged toilets. There were also reports of child labor and poor health and safety standards in the fields. While most companies concerned acknowledged that more needs to be done to improve living and working conditions of pluckers in Assam, the investigation also highlights the failings of ethical certification organizations like the Ethical Tea Partnership and Rainforest Alliance, which has conceded that flaws exist in its audit process.
Researchers are racing to find tea varieties able withstand the effects of changing climate that may impact leaf quality, yields and production methods in tea growing regions. Experiments in India are under way to analyze how varieties react to different climatic models by modifying the temperature and carbon levels in laboratory growing conditions. Scientists are testing field varieties and clones to see which ones can adapt to future climatic conditions. Growers are bearing the brunt of the effects of climate change, with erratic weather conditions impacting harvest schedules, pest attacks and yields. Quality may also suffer as a result, leading to negative effects on sales of specialty varieties. In the region of Assam, scientists have recorded a drop of 200 mm in average annual rainfall and an increase in minimum temperature of 1.3 degrees Celsius over the last 100 years.
Unphased by a constant rollout of beauty fads, from bone broths to nut milks, Vogue heralds tea as a beauty and wellness elixir that has stood the test of time and is only improving with age. Thanks to a large selection of plants, leaf types and consumption methods, health and wellness benefits are far more diverse than those of green tea. With ingredients such as licorice, chamomile and rooibos, herbal teas in particular are experiencing renewed interest from the health and beauty conscious due to a wide array of benefits, including anti-inflammatory properties, relaxation and sleep aid. New preparation methods include overnight steeping and uses as part of beauty treatments and cosmetics.
A new business report identifies matcha as one of the hottest trends in the industry, combining impressive health properties and opportunities for various applications in food, beverage and cosmetics sectors. According to research by Sage Group, an industry think-tank and publisher, the market is beginning to catch on to the unique properties of matcha in terms of antioxidants, vitamins, minerals and other beneficial compounds, and the next three years will be a breakout moment for the Japanese green tea powder, driven by massive media coverage and product innovation. Sage Group forecasts a compound annual growth rate of 25% in the US and Canada between 2015 and 2018 thanks to increasing use in ready-to-drink beverages, food dishes and dietary supplements.
As the effects of climate change become more severe and tea growing regions experience higher temperature and humidity fluctuations, tea farmers are looking for new ways to predict and manage changes in growing conditions. NASA's "Soil Moisture Active Passive" mission, launched in January, may be of great use in crop planning, thanks to its capacity to map soil moisture. The orbiting space vehicle measures the moisture in the top 5 centimeters of surface soil before beaming the data back to Earth. One organization with access to the data is the Tocklai Tea Research Institute in Assam, India. It hopes to use it to manage pest attacks, which are increasingly common with higher rainfall fluctuations.
The United Kingdom, historically associated with black tea and one of the highest per capita consumers in the world, is in the midst of a revolution as far as its favorite cuppa goes, with drinkers ditching the classic black tea in droves. Figures from Mintel show that UK tea sales fell by 22% to 76 million kilograms between 2010 and 2015. This trend is predicted to continue with another 10% decrease by 2020. Experts say black tea is held back by its traditional image, especially amongst younger generations, and is having trouble competing with other beverages for Britain's share of throat. On the other hand, demand for specialty teas, including green and herbal varieties, is rising rapidly, with sales having jumped by 31% to $118 million between 2012 and 2014.
Kenya's Makomboki tea factory is pioneering a greener and forest friendlier way of drying tea leaves that is saving tens of thousands of trees every year. Makomboki switched from firewood to briquettes made of biomass byproducts that would otherwise be treated as waste. Made from macadamia, cashew and rice husks, they also include sawdust, which is usually discarded by timber producers. For Makomboki, the briquettes represent substantial savings of around 60,000 trees every year and also cost almost half as much. This form of tea drying also reduces the emission of carbon dioxide, which contributes to climate change.
The ready-to-drink tea market in China, worth about $29 billion, remains largely untapped on the upper end and offers great opportunities for companies such as Teavana, according to a research note. While tea is a national beverage and part of everyday life in China, RTD tea consumption is lagging behind neighboring countries like Hong Kong and Taiwan. Furthermore, Euromonitor expects rising disposable incomes and a growing middle class to boost demand for premium beverages. Foodservice is a particular area of interest, since the country's 60,000 tea rooms are more focused on the beverage, as opposed to the customer experience, which is a strength of many Western companies. Starbucks has recently partnered with RTD tea market leader Tingyi Holding to manufacture coffee beverages, but the deal is likely to expand to tea beverages, as the company tries to fill in the gap left by the departure of Nestle and Coca-Cola in 2013.
As specialty tea is embraced by a wider audience, top restaurants are adding tea sommeliers to their teams to oversee tea menus and add excitement to food pairings. Similarly to wine, the tea sommeliers' aim is to unlock new flavor dimensions by recommending teas that go well together with certain dishes or at specific times of the day. According to Le Palais des Thés, a French specialty tea company specializing in sommelier courses, both tea and food should complement each other by forming interesting layers of taste. Some high-end restaurants in New York City, such as Eleven Madison Park and Atera, have already hired tea sommeliers to source specialty teas, improve tea service and explore new food pairings.
Environmentally friendly LED lights are being tested to grow tea indoors, a method that may pave the way for indoor farming beyond the usual tea growing regions in Asia and Africa. Tea requires specific growing conditions as far as climate and soil is concerned, but light remains the essential ingredient. A farmer in Japan has been toying with LED lights to find the right light spectrum to grow tea commercially, both in terms of quantity and quality. Until now, the leaves are used for food and not brewing, but he hopes to compete with traditional growers soon. This novel method may be particularly interesting to expand tea cultivation to other regions and to shield harvests from adverse weather conditions.
The tea industry in Sri Lanka is celebrating the end of economic sanctions on one of its main trade partners, Iran. As the country's tea industry faces international competition and rising production costs, the resumption of direct exports to the former largest overseas market for Ceylon tea represents a big boost for the farmers. While tea exports to Iran were never formally banned, restrictions on banking made the transactions complex and onerous. Now, experts hope trade volumes can double and usher in a new era of cooperation between the two countries.
Dry weather in Kenya, the world's largest black tea exporter, is expected to offer some much-needed relief for other manufacturers across the globe. Following several bumper harvests and falling prices, recent drought-like conditions are threatening Kenya's output, which is likely to boost demand and auction prices of Indian black tea. According to data by the Indian Tea Association, global production dropped over 7% to 435 million kilograms in the first quarter of 2015 driven by a 31% slump in Kenya’s output. Large Indian manufacturers are likely to benefit most, with McLeod Russel expecting prices to edge up by as much as 8% this year, while other experts anticipate gains in the 10-15% range.
New archeological evidence suggests that tea culture in China is much older than previously thought. Archeologists found that tea cultivation existed at least 6,000 years ago around the city of Yuyao in east China. Following the excavation of roots and pottery from the Tianluo Mountain, researchers from Japan's Northeast University and the Chinese Academy of Agricultural Sciences took many years to study the artifacts and recently confirmed that these contained theanine, an amino acid produced by tea plants. The latest discovery pushes proven Chinese tea heritage back by about 3,000 years.
Kenya's Williamson Tea and Kapchorua Tea both reported significant annual losses due to global oversupply of black tea, which has been putting pressure on prices. Williamson reported a full-year loss of roughly $2 million compared with a profit of about $7 million a year earlier. Kapchorua also found itself in the red with a loss amounting to $250,000 compared to a profit of over $1 million the previous year. The companies claim the losses, which affect both large companies and small farmers in Kenya, are due to an oversupply of tea caused by favorable weather conditions in recent years. They have, however, predicted that prices will recover on lower output.
Pairing whiskey and tea is the latest trend originating in the Far East and making its way into bars and restaurants closer to home. Following the popularity of green tea and blended whiskey in China and other Asian countries, some tea manufacturers and restaurateurs are experimenting with premium teas and single malt whiskies. According to them, tea and whiskey pair well together, since they have similar flavor profiles like peatiness and floral aromatics, and do not overpower each other's taste. Furthermore, the combined flavors seem to evolve over time in the glass and offer a more balanced and delicate drink.
Academics have stumbled upon what may be the oldest tea in the United Kingdom, brought in at the turn of the 18th century and decades before tea became popular. The dried green tea leaves were part of a collection that was stored in the Natural History Museum and were confirmed as the oldest known version of the national drink, dating back more than 300 years. They were purchased by James Cuninghame, a Scottish surgeon and collector, during one of his two trips to China in the late seventeenth and early eighteenth century. At the time, tea was considered a luxury item and was ten times more expensive than the best coffee.
The European Food Safety Authority published its opinion on safe levels of caffeine consumption. The assessment covers all sources of caffeine, such as tea and coffee, but also chocolate and energy drinks, and deems that daily consumption of up to 400 milligrams does not raise any safety concerns for healthy adults in the general population. For tea drinkers, this amount equals to roughly 8 standard cups. Among pregnant women, caffeine intake of up to 200mg per day was deemed safe for the fetus. The assessment was carried out following concerns from countries about adverse health effects associated with caffeine consumption, particularly cardiovascular disease and problems related to the central nervous system.
Tea grown in India's northern Kangra district is to be awarded the coveted Geographical Indication status by the European Commission. Following a similar successful bid by growers of Darjeeling tea, the Kangra tea industry is next in line to benefit from the protected status, which is expected to open new markets for the crop and ensure better prices for growers. In a region where production has been falling in recent years due to high labor costs, the move is expected to infuse new life and encourage farmers to take up cultivation. There are currently 5,900 tea gardens spread over an area of 2312 hectares in the Kangra district. Annual production stands at around 900,000 kilograms, which is about half of what it was less than two decades ago.
A report commissioned by South Africa's Department of Environmental Affairs urges the rooibos industry to negotiate benefit-sharing agreements with local peoples. The findings encourage businesses that buy rooibos and honeybush crops to sell in international markets to acknowledge, recognize and protect the interests of indigenous Khoi and San communities. Historically, Khoi and San peoples played a critical role in nurturing knowledge about the two plant species, as well as in cultivating and distributing them. The report also details the history of the natural plantations, including how the land was occupied and how the traditional knowledge has been developed and passed on from one generation to the next.
The tea industry is an ever-evolving marketplace worth more than $4.3 billion in annual sales, according to the American Botanical Council. More than half of that comes from the ready-to-drink sector thanks to increasingly positioning itself as an alternative to soft drinks. Currently, there are two new categories to keep an eye on: functional teas and teas for children. One example is Blu-Dot Beverage Company, which manufactures bottled teas enriched with whey protein and root fiber. Blu-Dot teas try to maintain the flavor of tea while adding functional elements valued by sporty consumers. For kids, Little Me Tea offers tea-based drinks with only 6 grams of sugar and no caffeine. The juice box sized drinks are intended to steer children away from sugary sodas and juices thanks to infusions of white, rooibos, hibiscus and chamomile teas.
Sales of tea packaged in single-serve portions are gathering pace and may account for up to 10% of all US tea retail sales in 2015. This stems from the growing popularity of tea and a significant household penetration of single-serve brewers. About 32 million households are currently equipped with such brewing systems. Despite exact numbers being hard to come by because many companies do not break down sales between loose teas, teabags and capsules, Euromonitor says they accounted for 6% of tea sales in 2014, compared to 4.5% in 2012 and 2% in 2009. According to Dan Bolton, an industry expert, sales of capsules may even reach 10% of all tea retail sales in 2015. In terms of value, the US pod market has tripled in size over the last five years. 14 billion capsules are expected to be shipped in 2015 in total, with 20% of them filled with tea.
A new generation of tea farmers is pushing the Hawaiian islands towards the forefront of US specialty tea production. Volcanic soil and high altitudes attracted a wave of farmers and scientists that established several cultivars in the 80's. This has resulted in a budding local industry made up of approximately two dozen tea farms that produce every major type of tea, including oolong and white. Hawaii's volcanic soil is said to produce a distinct brew, one that is bright and clear, with elements of citrus and a subtle honey sweetness. The island's Hilo climate is ideal for growing tea thanks to acidic soil, good drainage, higher elevation and favorable humidity and temperatures.
Changing weather patterns and their effects on tea output are putting pressure on plantations and their workers across India's Assam region. Uneven rainfall and higher temperatures are not only cutting yields, but are also lifting productions costs due to an increased risk of pests, which requires higher pesticide use and human intervention. With labor costs accounting for 60% of the total cost of tea in Assam, companies are reluctant to raise wages, upsetting farmers and pickers. Some companies are even exploring greater use of machines to harvest and spray nutrients or pesticides, while others are moving into cultivating other plants, such as black pepper, turmeric or ginger.
Sparkling iced tea and its offshoots are all the rage in cafes and bars nationwide. Combining refreshment and many flavor profiles, carbonated iced tea beverages made from specialty teas offer a credible all-day alternative to beer and cocktails. According to baristas and cafe managers, specialty tea lends itself particularly well to experimentation, given its nuanced flavors and potential to mix with other botanicals. Creations include alcohol-free hoppy tea, green tea - lemonade combinations and various Chinese specialty tea varieties infused with CO2. Artisanal sparkling teas are expected to make a more prominent appearance this summer on tap or in the form of ready-to-drink bottles.
There are growing concerns among farmers in Darjeeling and West Bengal that the prolonged lack of rainfall may adversely impact the quantity and quality of high-value first-flush teas. According to local meteorological data, the region received only 6.8mm of rainfall during the critical period of March 1 through 18, which represents about half of the normal level. Furthermore, no rain is predicted for the next 10 days. Lack of rainfall not only stunts bush growth and affects quality, but also increases the chances of pest attacks. Farmers are using irrigation to water the bushes, which, along with lower yields, will inevitably increase production costs and eat into profit margins of this lucrative harvest.
Steven Smith, the prolific entrepreneur and co-founder of Tazo Tea, Stash Tea and Smith Teamaker died at the age of 65. Smith started out selling herbs and coffee in the early 1970s, before turning to tea and building Stash into a one of the largest specialty tea companies with sales of $10 million. In 1993, the company was sold for an undisclosed amount to Yamamotoyama, a three-century-old Japanese tea company. His focus then turned to Tazo Tea, a quirky specialty brand with an appeal for increasingly health-conscious baby boomers. Starbucks bought the company for $9.1 million in late 1990s and turned it into a billion dollar brand, with Smith involved on the creative side until 2006. His latest venture was a specialty tea company called Steven Smith Teamaker that he co-founded with his wife Kim in Portland.
While Kenya is one of the largest tea producers and exporters in the world, trailing only India and China in terms of volume, its growers have struggled to break into the premium tea segment. The country may have recently found a solution in the form of purple tea, a variety specifically designed for medical uses. The unique purple color comes from high levels of anthocyanins, the antioxidants that give other foods like blueberries or grapes their purple or red color. Anthocyanins have a reputation in the alternative medicine community as a possible treatment for everything from high blood pressure to cancer, although scientific evidence remains inconclusive.
UK's prestigious University College London claims the vast majority of tea drinkers do not brew tea correctly by not letting it steep long enough. After studying the habits of 1,000 British tea drinkers, scientists discovered that although three quarters drink tea daily and the nation consumes 165 million cups every day, 80% of drinkers do not let the leaves brew long enough. Most drinkers infuse tea for 2 minutes at most, instead of the 5 minutes usually required to bring out the complex flavors emanating from thousands of different molecules. For a fuller infusion, the study also recommends steeping loose tea leaves in a teapot instead of using teabags in a mug.
New research suggests the global tea industry is set to expand by an annual rate of 5.8% in the coming years, fueled by demand from Asia, Middle East and the US. However, according to data compiled by Global Research & Data Services, this estimate represents a substantial deceleration compared to the 2008-2014 period, when the industry grew by an average annual rate of 10%. Largest markets for tea will remain China, India, Japan, Sri Lanka and the US, while strongest relative growth is expected to originate from Morocco, Panama, Bolivia and Rwanda, all expected to showcase double-digit numbers. The market is currently dominated by unfermented green tea, popular in Asia, at 42%, and is then quasi-equally split between black tea and tea concentrates.
Coffee leaf tea, made using dried leaves from the coffee plant, may turn out to be the next big thing in the industry. It combines an approachable taste similar to that of green tea, no caffeine, many antioxidants and a promise of a stable income for farmers. While coffee bean harvesting remains very seasonal and leads to big fluctuations in income and employment, coffee leaf cultivation can take place all year round, ensuring a consistent income for farmers. The leaves, waxy and dark green, are left to dry in the sun before being slightly toasted, a similar process in the making of some green tea.
Farms and factories in Kenya are cutting back operations after a sustained drought reduced tea output, as some small-scale farmers face a "drastic reduction" in volumes. Lack of rainfall since the beginning of the year has stunted bush growth and even caused tea scorching in worst hit areas. Factories are reportedly receiving leaves only three or four days a week. Prices have jumped to a high of $2.50 per kilogram at the Mombasa auction last week, while the amount of tea on offer plummeted by over 7%. Kenya exported over $1 billion worth of tea last year.
A new YouGov poll suggests that younger Americans are ditching their coffee habit and are increasingly turning towards tea. The US remains a major consumer of coffee, with the average person drinking 23 gallons of it in 2013, although that's only half of what a typical American drank in 1946. On the other end, the consumption of tea grew by 20% from 2000 to 2014 and is increasingly popular among young adults. Of people under 30 surveyed about their beverage of choice, tea garnered an equal amount of votes as coffee, both at 42%. Over a quarter of under-30s say they only drink tea, compared to only 18% of them who only drink coffee.
As UK sales of Fairtrade goods fell for the first time in 20 years, reports claim the scheme is overly focused on minimum price as opposed to quality, pushing gourmet manufacturers to enact own initiatives. While the slide of almost 4%, following years of double-digit growth, is mainly attributed to UK's shrinking shopping budget, some critics claim the Fairtrade model doesn't reward quality. Upscale suppliers believe their trade is already fairer than Fairtrade, since prices paid for specialty goods are several times higher, creating an initiative for farmers to compete on quality rather than lowest price. Furthermore, Fairtrade reportedly doesn’t provide farmers with any greater guarantee of future income, since it sets a minimum price but not a minimum size of order.
Assam tea industry is under pressure to increase output despite two decades of rising production costs and erratic weather conditions of recent years. The Assam Branch of Indian Tea Association urged growers in Assam to maximize yields as the local industry grapples with rising input costs, which have eroded returns on investment. In recent years, the region also experienced high temperatures, uneven scattered rainfall and pest attacks, which have lead to some of the crop losses that need to be recouped. A solution to reach production targets that is already adopted by some growers is the mechanized plucking of leaves.
As India's tea industry seeks to improve sustainability and production methods, small farmers may turn out to be the first ones to enact change and pioneer organic farming practices. While large growers like Unilever and Tata, which together control more than half of the domestic market, announce lofty goals and pilot programs, some small growers are already in the process of adopting organic farming methods. However, this remains an uphill battle in India, partly because of patchy regulation and lack of governmental guidance. The government and the Tea Board of India are under increasing pressure to adopt a pro-active stance to reduce pesticide use and are being supported by outside initiatives, such as Tea 2030, backed by the Ethical Tea Partnership, Fair Trade and Rainforest Alliance.
In a sign of increasingly interdependent global tea industry, the current dry weather spell in Kenya may translate into better export numbers for growers in India. Following a bumper crop in the past couple of years, which led to lower prices and higher exports at the expense of other producing countries, Kenya is now facing an unusual spell of dry weather that has sent prices up as high as 60%. This plays into the hands of farmers in India, whose tea is usually more expensive due to more labor-intensive farming practices. They hope to recover some of the ground lost in major markets like the US, Iran and Pakistan, although exports may remain subdued in the short-term due to strong local demand.
World Tea Expo is once again looking to offer a solid educational program on the sidelines of the leading specialty tea trade show in the US. The 13th annual event, held on May 6-8 in Long Beach, CA, will feature a wide range of industry topics on trends, production and sustainability, as well as presentations on popular categories, such as organic teas, matcha and iced teas. Speakers include industry experts from companies like ITO EN, Tealet, Teacraft and The Tea Spot. Companies and professionals from more than 50 countries are expected to attend.
The omnipresence of tea across Turkey, traditionally drunk from tiny tulip glasses, has propelled the country to the very top of world rankings in terms of consumption and production. Yet, despite the world's highest per capita tea consumption and fifth highest output in volume, Turkey's tea industry remains particularly sensitive to the effects of climate change. In recent years, farmers have dealt with erratic conditions: from land slides caused by heavy rainfall, to heavy frost, which delayed harvesting by several weeks. However, the most pressing issue remains the gradual reduction of overall rainfall in the region, which is crucial for plant growth. Turkey's output reflects this and has been deteriorating quickly since 2011, dipping below 200,000 tons last year.
Chinese government's austerity drive and anti-graft campaign are blamed for the continuing fall in sales of high-end Chinese teas, which are particularly popular as personal and corporate gifts. Despite stable tea output of around 1.95 million tons, China Tea Marketing Association reports lower sales of gift sets and group-purchasing, which led some manufacturers to drop prices by more than 50%, while others were forced to close their businesses. More consumers are also turning to mid-range teas purchased online - still a new trend in China. The country's biggest shopping day of the year, dubbed "Single's Day", saw sales of tea products reach almost 5 million items on Alibaba's Tmall, surging more than 50% compared to last year.
Twinings is mounting a challenge to Unilever's PG Tips for the crown of Britain's bestselling tea brand following increased demand for herbal and specialty teas. The company posted a 5% jump in annual sales to reach £107 million thanks to UK's growing appetite for herbal infusions and flavored specialty teas, thereby overtaking Tetley, former number two brand operated by Tata Global Beverages. PG Tips remains UK's dominant brand with £149 million in sales, with Yorkshire Tea and Typhoo at number four and five. Research suggests young consumers are more adventurous in their tea choices and perceive herbal and green teas as beneficial for health. Demand for green tea alone grew by 8% last year in the UK.
Producers in India's famous Darjeeling region are feeling the heat from illegal imports from neighboring Nepal that are then repackaged and sold on as Darjeeling tea. Nepalese teas, which are a third cheaper than their Darjeeling equivalents, come through the porous mountain border and are then repackaged for the domestic market. The tea industry is therefore seeking to have all imports register with the local Tea Board, as is already the case in Sri Lanka, where similar issues have arisen in the past. Some tea experts feel the quality of Darjeeling tea should also be improved to ward off such practices.
The US iced and ready-to-drink tea sector is expected to continue its growth path, according to the latest market report by Companies And Markets. Ready-to-drink tea consumption in the US has skyrocketed over the last decade, growing by a factor of 15 thanks to a plethora of perceived health benefits associated with hot tea. The report notes more than 5,600 scientific studies on tea over the last 5 years, involving potential benefits against weight gain, diabetes and cognitive decline. Iced teas are also expected to continue reaping the benefits of customers' declining thirst for fizzy drinks, whose market has declined for the last 8 consecutive years in the US.
Speaking ahead of a major trade event, an expert warned that Indonesia's tea industry is on the brink of collapse due to unfair trade rules, which have led plantation owners to destroy more than 2,500 hectares annually in favor of more profitable crops. The lack of added value in the local tea sector has caused output to drop rapidly, from approximately 152 tons in 2009 to 137 tons in 2012. Exports followed the same trajectory, decreasing from 92 to 70 tons over the same period. This is also reflected in global tea production rankings: Indonesia now ranks seventh and has recently been overtaken by Turkey and Vietnam.
The Vietnam Tea Association expects the Asian country to earn $245 million from foreign tea trade by the end of this year. Tea exports rebounded strongly in October with 12,000 tons, worth $21 million, despite unfavorable weather conditions and lackluster sales year to date, when exports totaled only 109,000 tons for the first ten months at a value of $186 million. The pick up was achieved thanks to increased promotional activities aimed at foreign buyers and improvements in product quality. Pakistan remains the leading export market for Vietnamese tea, having increased purchases by 67% in volume and 94% in value from a year ago. Similarly to other tea producing countries, parts of Vietnam were plagued by prolonged droughts and heavy rainfall earlier this year.
McLeod Russel, the world's largest tea producer, predicts that commodity-grade tea prices will rebound in 2015 due to declining inventory and output. Prices of tea used by supermarket brands have been under pressure for a while now as result of oversupply, political instability and falling consumption in markets like Russia, Pakistan, Egypt and the Middle East. However, a likely drop in production and a rise in local demand will lead to depleted inventory levels in India, which should strengthen prices by up to 9%, resulting in a price of $3.2 per kilogram. McLeod Russel owns more than 97,000 acres of tea plantations in India, Vietnam, Rwanda and Uganda.
Tea sales across multi-chain supermarkets grew at an annual rate of 5.9% last year and this year's performance is likely to be similarly good. According to aggregated market data compiled by market research firm SPINS, sales in mainstream channels totaled $1.75 billion at the expense of carbonated beverages and mainly driven by health and wellness trends, positive media coverage and an evolving retail landscape. Black tea in teabags performed best, followed by loose iced tea / powder mixes, and green & white teabags. Supermarket sales increased this year too, growing by 5.2% in 52 weeks ending in August 2014. However, these figures do not include foodservice, online and specialty retail channels, which are estimated to bring the overall US tea sales closer to $15 billion.
The 3rd Annual San Francisco International Tea Festival was held at the Ferry Building on Sunday in a bid to raise consumer awareness about specialty tea on the West Coast. The event featured a variety of lectures on tea's past and present, as well as several tea tastings organized by companies such as Harney & Sons and The Republic of Tea. The festival reportedly attracted 16 specialty tea suppliers and about 1,000 tea lovers - both amateur and connoisseur.
Falling tea prices are prompting tea farmers to consider uprooting their plantations in Kenya. Growers face a peculiar conundrum: while demand outstrips supply in the global tea market and good weather conditions lead to a bumper crop this year, prices have simultaneously fallen by up to 40% compared to three years ago. This endangers the livelihood of many small-scale operations, which represent two-thirds of Kenya's 432 million kilogram output. The local industry and politicians are now looking to diversify their export markets beyond the UK, where demand for mass-market tea has plateaued, and countries in the Middle East, where political turmoil frequently disrupts purchases. There are also plans to create a price stabilization fund, which would cushion farmers against big price fluctuations.
Local demand continues to drive prices of Pu Erh aged tea upward despite the anti-corruption campaign by the Chinese government. As incomes rise, many Chinese tea consumers are becoming collectors of rare and aged teas, which become finer with age. Such alternative investments have become particularly appealing in recent years due to a lackluster local stock market and curbs on real estate, as well as the government's drive to root out lavish lifestyle and gifts. Recently, a 2-kilogram piece of Pu Erh tea was sold at a record price of about $800,000.
Sri Lankan tea planters submitted a proposal to increase the daily plucking average as a means of reducing high unit production costs. The Planters' Association of Ceylon estimates that a 2-kilogram increase in the daily plucking average of each worker can bring down unit cost of production by 6.5% and keep plantations financially viable. This would help the industry deal with substantially higher cost of labor and lower productivity compared to countries like Kenya and India, whose teas already fetch about 30% less than those from Sri Lanka. Also, a Sri Lankan plucker currently earns about twice as much as counterparts in Kenya or India.
An authoritative consumer group pitted supermarket tea brands versus their specialty counterparts in a blind tasting test to determine the local preference of English Breakfast and Earl Grey blends. The UK study, organized by Which? magazine, scored each tea on appearance, aroma, taste, body/strength and aftertaste. Supermarket own-brands beat their expensive rivals for the English Breakfast blend. In the Earl Grey category, a product by Aldi, a discount supermarket chain, topped blends several times more expensive. Some of the brands that were tasted include Twinings, Whittard, Pukka and Teapigs.
The earthquake that recently rocked China's Yunnan province left tea plantations in and around Pu'Er City unaffected, but prices of pu'er tea are likely to rise nonetheless due to curtailed production. The 6.6-magnitude earthquake that hit the Yunnan province last Tuesday spared Pu'Er City, the main production area for the famous pu'er aged tea, but supply is threatened by extended dry weather conditions and price rises. Some producers are reportedly hoarding tea leaves in the hope of bigger returns in the future. Pu'er prices have doubled in the past three years.
Russian customs officials refused the import of two shipments carrying tea produced in Germany and the US. The refusal is apparently part of Moscow's ban on Western food imports, which came into effect in August and covers fruit, vegetable, meat, fish and dairy products. 970 kilograms of German herbal tea were intercepted in the Siberian region of Novosibirsk and were refused entry seemingly because they contained pieces of dried fruits and berries, which fall under the category of foodstuffs. About 28 kilograms of tea and iced tea mixes originating from the US were detained in a separate incident aboard a vessel from South Korea.
Many leading companies are coming together to form a new coalition in an effort to improve lives of young people and stamp out exploitation in rural areas of India. The partnership brings together key stakeholders in the tea industry and includes big names such as UNICEF, the Ethical Tea Partnership and retail giant Tesco. Over a 3-year period, it will be involved with 350 communities on over 100 tea estates in three districts in the Indian state of Assam. The partnership seeks to prevent exploitation and abuse of children in rural areas, where poverty and lack of education are prevalent. Assam is one of the largest tea growing regions in the world and a sixth of its population works or depends on tea plantations.
Kenya Tea Development Agency announced that its members' revenue had plunged by 24 percent this financial year due to excess tea supplies. Following a spell of favorable weather conditions and bumper crop, prices at Mombasa auctions averaged $2.43 per kilogram in 2014 compared with $3.26 last year, while output of small-scale farmers remained steady. This is a concern for over 500,000 small farmers in Kenya that account for about 60% of its tea output, with the rest coming from large plantations. Kenya is the world's leading exporter of black tea with about $1.3 billion in foreign currency earnings last year.
Scientists and farmers have joined forces in an effort to investigate the effects of climate change on tea bushes and the resulting infusion. A group of researchers from the US is analyzing how the erosion of climate patterns in growing countries impact the appearance, taste and health properties of tea. So far, laboratory studies indicate key health compounds can decrease by almost 50 percent when the leaves are harvested after the monsoon season, compared to those harvested after a drought. This correlates to farmers' sensory perceptions, which indicate that infusions are more intense in taste and aroma following droughts, whereas those that follow monsoons are usually more diluted. The aim of the research is to enable a better crop management and to enhance resilience and adaptation of tea bushes.
The US tea market has more than quadrupled in the last twenty years and now represents more than $10 billion in sales, according to the US Tea Association. Imports, from countries like China and India, have also skyrocketed, growing nearly 70 percent over the past 20 years and more than 700% over the last 50 years. Figures from Euromonitor show an almost 20% increase in daily consumption since 2000, with more than half of the US population now enjoying tea on a daily basis, mostly in the form of iced tea. While black and herbal teas remain the most popular, the green tea category grew immensely in early 2000's and now represents 6% of domestic consumption. Currently, white, oolong and artisanal teas are on the fastest growth path.
Kenya, the world's largest black tea exporter, has renewed its bid to automate the Mombasa tea auction, where most of African teas are traded. Electronic trading is intended to eliminate middlemen, who are blamed for the recent slump in auction prices. 12 brokerage firms control the bulk of trading and online sales should enable to bypass them. A similar government initiative failed to take off in 2007 due to competing interests at the auction and lack of funds. A kilogram of commodity-grade black tea is currently trading at an average of $2.20.
Packaged Facts, a market research firm, projects that sales of tea in the US will reach $25 billion in 2014. Retail sales are expected to account for a quarter, or $6.2bn, with the remaining $18.8bn coming from foodservice. In the report's fifth edition, Packaged Facts paints an ambivalent picture of the US tea market. While foodservice will continue to drive growth thanks to the iced tea category and niche beverages such as chai tea, retail sales of ready-to-drink tea, a former growth driver, will remain flat. Loose and bagged tea manufacturers will face increasing threat from single cup producers, whereas coffee establishments may offer a new avenue for growth.
As auction volumes and prices of Darjeeling teas continue to dwindle, Nepalese teas started to garner attention from local and international buyers. Grown on the same Himalayan mountain range as Darjeeling tea and cheaper to produce, Nepal tea is making inroads in India and Europe, threatening growers in Darjeeling, who urge the government to assess the volumes that enter the country and are then sold onwards. They also seek funds for the legal protection and enforcement of Darjeeling's Geographical Indication status. Finally, there are calls to further bolster quality to ward off competition from Nepal tea, which is currently priced a third lower than the Darjeeling equivalent.
A study conducted by the United Tea Workers Front in West Bengal, India, found an increase in deaths due to diseases related to malnutrition in 2014. The report highlights the persistent poverty and exploitation of tens of thousands of Indians working in the country's tea plantations, including the famous Darjeeling region. Wages may be as low as $1.50 a day - not enough to feed and provide medical care for workers and their families. The sudden increase in deaths, which amounted to more than 100 this year alone, is also attributed to the closure of several tea gardens due to various entrepreneurial and legal disputes. Local officials are providing subsidized food rations and are trying to negotiate with tea plantation owners to re-open the estates.
Growers of famous Darjeeling tea, dubbed the Champagne of teas, are facing unsold stock and falling prices due to subdued demand from local and international buyers. Despite significantly lower output, prices at auctions are around 20% lower than last year as summer harvest second flush teas become available. Experts attribute this to lower demand from large domestic buyers like Tata Global Beverage and HUL, who may be buying directly from growers, thereby bypassing auctions. Interest from the European Union, historically the largest buyer, has also been dwindling, especially for conventional second flush teas, whereas first flush and organic teas remain popular. In the last auction to date, 178,213 kilograms of Darjeeling tea came under the hammer, but only 73,846 were sold.
In a case of disputed advertising claims, the UK's advertising watchdog ruled that pyramid teabags are more efficient in brewing tea than round teabags. The Advertising Standards Authority backed advertising claims made by PG Tips, owned by Unilever, that pyramid teabags provide greater brewing efficiency compared to round teabags, used by Tetley, which is owned by Tata Global Beverages. Evidence supplied by Unilever showed that the infusion of tea, at 40 seconds and two minutes into the brewing process, was greater when using a pyramid teabag than when using a round teabag. Furthermore, the ASA found no basis for Tetley's complaint that the commercial in question targeted Tetley specifically, since many companies sell round teabags in the UK.
Tea farmers in South India are bracing themselves for a potential crisis due to falling auction prices. Prices have fallen more than 5% so far in 2014 compared to historically low prices of the previous year, despite a significant shortfall in output due to extreme weather conditions. Furthermore, farmers have to deal with increased production costs and the possibility of lower tariffs imposed on imported teas, which would depress demand even more. The local tea industry is looking for government intervention to ensure fairer prices for producers and support the industry's 2.5 million workers.
Rooibos, a South African herb widely used in tea infusions, received the coveted EU Geographical Indication status within a broader trade deal between southern African nations and the European Union. This means that the term rooibos will be trademarked across the EU and can only be used to describe products hailing from South Africa. Honeybush, a similar plant to rooibos also used as an herbal tea, will benefit from the same status, as well as some South African wines. The agreement was part of a broader deal that included trade arrangements for a variety of goods, including cheese and sugar.
Organizations have put forward a set of measures aimed at securing better wages for tea farmers in Malawi, the second biggest tea producer in Africa. The Ethical Tea Partnership, Oxfam, IDH – the Sustainable Trade Initiative and the German development agency GIZ are leading a project to establish a living wage following a study in 2011 that found some tea pickers in Malawi were only paid around $2 a day. The coalition hopes to help tea estates improve their productivity and profits and make more finance available to invest in improvements in return for a commitment to raise wages. They will also work with employers, unions and governments to agree phased improvements to wages and increase worker representation in negotiations.
The founder and director of the World Tea Expo is moving on from tea to another natural crop - marijuana. George Jage, who launched the World Tea Expo 10 years ago and, more recently, introduced the Healthy Beverage Expo, will head CannaBusiness Media, a publishing and event company serving the medical and recreational marijuana trade. Jage also founded the North American Tea Championship, World Tea Academy and World Tea News. When he launched the show in 2003, the US tea business was worth about $5.7 billion. The industry is currently worth up to $16 billion. In 2012, F+W Media acquired World Tea Media and relocated the show from Las Vegas to Long Beach, California.
A study conducted by researchers from the University of London found that agricultural workers employed by Fair Trade certified farms were actually worse off than their colleagues. Researchers studied small farms in Ethiopia and Uganda producing coffee, tea and other agricultural products for four years. They discovered that while Fair Trade premiums boosted incomes of farm owners, the benefits failed to trickle down to workers. In some cases, modern toilets were reserved only for senior managers and money allocated for schools went to build teacher's housing instead. The study also found that long-term relationships built around a commitment to quality produce ensured better returns and treatment of workers.
With the National Iced Tea Month of June just around the corner, the North American Tea Championship announced this year's 25 best iced teas. The list of first-place winners includes Argo Tea, Dr Pepper Snapple Group, Shangri La Tea and Walters Bay. Most first-place awards were picked up by S&D Coffee and Tea, followed by Ito En, QTrade Herbs & Spices and Kelley Organic / Eastsign Foods. Best Packaging award was given to Honeybush Health. According to the organizers, more categories were added for foodservice items, reflecting an increase in premium iced tea offerings in the sector. All entrants were evaluated blind and through organoleptic analysis of dry leaf, brewed color, brewed aroma, brewed flavor, brewed mouth-feel and brewed harmony.
Burma's tea growers are struggling to stay in business due to labor shortages and a surge in untaxed tea from neighboring China. The local tea growers' association claims that the biggest cause for concern are tea imports that evade commercial taxes and is calling on the government to impose tax regulations. Local farmers are also at a technological disadvantage compared to their Chinese counterparts, as Chinese production methods have a much higher yield than the traditional organic methods still used by many in Burma. Growers in Namhsan, which accounts for roughly 60% of Burma's tea output, also report labor shortages following a mass exodus of workers to neighboring countries.
Organizers of the World Tea Expo revealed the finalists of the inaugural World Tea Awards, which will be held during this year's event in Long Beach, California. The nominees were selected from thousands of submissions in 10 categories, including Best Tea Book, Best Tea Room, Best Tea Retail Website and Best Tea Spirit. Author and tea expert Jane Pettigrew received the most nods as the co-author of 2 books about tea and for her work as a tea consultant. The Aubrey Rose Tea Room and The St. James Tea Room received two nods each in Best Tea Room and Best Tea Menu categories. Other nominees include Adagio Teas, Bigelow Tea and Harney & Sons. The awards ceremony will take place on May 30, on the second day of the World Tea Expo.
A continuing lack of rainfall in India's main tea growing regions of Darjeeling and Assam is putting increasing pressure on the local industry, with both quarterly and annual outputs predicted to fall as a result. In Assam, which accounts for more than half of India's total 1,200 million kilogram output, industry officials predict up to a 10% fall in annual volumes due to scarce rainfall and rising temperatures. Gardens in Darjeeling, which produces much less tea than Assam in terms volume, are also reportedly impacted in the run-up to the lucrative first and second flushes, which are mainly exported. Fears of damaged crops are reinforced by the local weather office, which predicts below-average rainfall in 2014 due to risks from the El Nino weather pattern. However, overall impact on earnings of local growers remains limited at the moment, as the resulting fall in volumes would be compensated by price rises.
Latest numbers from CHD Expert, a foodservice data and analytics firm, suggest that the US coffee and tea vendors are heavily split between independents and large chains. Coffee and tea is the eighth most popular menu type among restaurants, with over 28,000 establishments serving it, but the market remains split between two opposite types of players. Independent operators, which run one to nine outlets, account for just over 40% of the market. Chains with more than 500 outlets represent slightly more than 50% of the market. In terms of the number of coffee and tea foodservice establishments, California, New York, Massachusetts, Florida and Washington dominate the national map and account for roughly 40% of the overall market.
Latest numbers offer one more reason for widespread enthusiasm about Rwanda's tea industry, which currently exports over 23,000 tons of tea and brings in $66 million in earnings annually. Following a wave of privatizations over the last decade, there are currently 23,000 hectares of land under cultivation and 13 operational tea factories. The industry plans to build on this success, with further 5 factories and 18,000 hectares of plantations to be added by 2018. This is expected to increase earnings from tea exports to $147 million. Recently, Rwanda's tea industry has been under pressure due to price fluctuations and high supply levels, but local experts claim that its status as a niche beverage in countries such as Pakistan, Egypt, Russia and the UK will sustain demand.
While France is famous for its penchant for coffee, the country is reportedly undergoing a silent tea revolution, with consumers rediscovering the long-lost tradition of tea drinking. Tea was popular in the 18th and 19th centuries, especially amongst the aristocracy, but interest dwindled in the first half of the 20th century. Now, the health and fashion conscious French middle-class is rediscovering these roots and is carving out a new identity for itself based on refined and delicate teas, as opposed to Britain's predilection for a strong black cuppa. Dammann, Marriage Frères and Kusmi are just some of the local companies making inroads at home and abroad, while tea salons continue to pop up in cities and towns nationwide.
Experts from 30 tea producing and consuming countries urged to strengthen sustainable production practices to ensure future growth of the industry. Speaking at the 5th Global Dubai Tea Forum 2014, representatives from China, India, Kenya, Sri Lanka, Vietnam, Indonesia, Turkey and Iran identified rising production costs and environmental sustainability as two of today's major challenges. Some of the measures discussed include soil improvement, water and pest management, as well as planting shade trees and complementary crops. Participants also discussed the importance of coordinating any strategic decisions with small farmers worldwide, which represent approximately 73% of labor and around 60% of the output.
The Dubai Multi Commodities Centre announced that imports and exports of tea through Dubai doubled to 129,000 tons in 2013, making it one of the industry's major trade hubs. The emirate serves as a temporary stop for African and Asian teas, where they are blended, packaged and then exported elsewhere. While some doubt DMCC statistics indicating that Dubai is responsible for 60% of the world’s tea re-exports, it is clear that its location, tax-free living and transport links make it an attractive destination. However, industry experts claim Dubai and the rest of the Middle East are lagging in innovation, which may impact future trade. For example, flavored teas, one of the hottest trends in the market, are mostly absent in the Middle East, despite huge popularity in Russia, Europe and the US.
India's tea industry is bracing itself for lower output and revenues following an extended dry spell in Darjeeling, Dooars and parts of Assam that may affect first flush tea production. First flush teas, particularly from the region of Darjeeling, typically fetch the highest prices from overseas buyers. This year, the region hasn't seen substantial rainfall since October 2013, whereas parts of Assam recorded only modest rainfall in March. If the weather does not markedly improve in the days ahead, output and quality of leaves may be severely affected. Initial reports suggest local production may already be down 20-30% in March. The number of tea auctions has therefore been reduced from two to one per week in Calcutta.
The vice president of marketing and product management at Tetra Pak US & Canada, a food and beverage packaging manufacturer, advises ready-to-drink tea companies to start focusing on naturally brewed iced tea to satisfy the region's thirst for premium products. According to Suley Muratoglu, the industry must find ways to improve current production methods, which involve adding ascorbic acid to stabilize the beverage and then adding sweeteners to mask the resulting bitter taste. Instead, companies should consider adopting aseptic processing and cartons, where flash heat treatment renders tea shelf stable and retains its quality without the need for preservatives. IRI market research firm predicts that the super-premium volume share of the $3.5 billion US ready-to-drink tea industry will rise from 6.8% in 2010 to 9.8% in 2015.
The ready-to-drink tea category continued to post solid growth numbers in convenience stores across the US, as consumers' penchant for healthy alternatives to soda takes hold. According to Nielsen data, the tea category grew by 9.1% in convenience stores during the past two years. New flavors, line extensions and packaging kept the offer appealing for shoppers and generated total sales of $1.23 billion last year. IRI data also indicates that Arizona was the undisputed leader in 2013, with almost $270 million in sales, followed by Lipton Brisk and Lipton PureLeaf at $153m and $125m respectively. Lipton PureLeaf benefited from the highest average unit price amongst the top ten brands at $1.76. The biggest sales increase came from Coca-Cola's Fuze brand, which experienced at staggering 250% annual growth in US convenience channel.
Honeybush, one of South Africa's rarest indigenous flowering plants, is in danger of extinction due to unsustainable harvesting practices of the past decade, local experts have warned. Currently there are about 200 hectares of cultivated Honeybush in the mountain ranges of South Africa's Southern and Eastern Cape regions, but demand for honeybush tea far outweighs supply, with over 80% of it exported to the US, Germany and the UK. Conservationists say the local industry needs to protect the species from extinction by using permits and regulations to limit supply. Nurseries are also set up and used by farmers to relieve pressure on natural sources of the plant.
The World Bank announced an investigation into labor practices at a tea plantation project that it jointly finances with tea giant Tata Global Beverages in Assam, India. This follows a recent report by the Columbia Law School's Human Rights Institute alleging that plantation workers were bullied over sick leave, denied free health care and subjected to excessive deductions from their meager pay. Other reports by charities also cite long working hours and restrictions on freedom of association among workers, all of which are in violation of Indian law. The joint project was set up in 2009 to acquire and manage tea plantations previously owned by Tata Global Beverages - which owns Tetley, the second largest tea brand in the world. Tata Global Beverages denies any violation of workers' rights.
Some of the largest tea companies in the world released a document detailing plans to tackle some of the major issues facing the tea industry, namely the environment and worker welfare. The initiative, called Tea 2030 and coordinated by Forum for the Future, brings together some of the biggest names in the tea business, such as Unilever and Tata Tea, and aims to develop sustainable production processes and improve standards for all participants in the value chain. It also seeks to engage consumers to increase awareness about sustainability within the industry. Some of the specific challenges facing the industry include demographic changes, water demand, competition for land and improving wages and welfare in the supply chain.
World Tea Expo, the leading trade event for the US specialty tea industry, will be held in Long Beach, California on May 29-31, 2014. It offers buying, selling and educational opportunities with a focus on the premium tea sector, one of the main drivers of the $8 billion US tea market. World Tea Expo 2014 will take place alongside the Healthy Beverage Expo and both events are expected to attract around 5,000 attendees, more than 260 collective exhibitors, and professionals from more than 50 countries. The robust educational program will include courses on tea sourcing, health benefits and regulatory issues.
2013 will go down as a memorable year for Sri Lanka's tea industry as far as output and foreign revenues go, both of which surpassed previous records. The local Plantation Industries Ministry confirmed production at just over 340 million kilograms, an increase of 11% over 2012, and export earnings of $1.54 billion. Improvements in ethical management on behalf of plantation owners were also highlighted in areas such as social, health and housing services. The average priced fetched at the auctions edged slightly higher to 414 Rupees per kilogram, from 392 Rupees in 2012.
Buyers from the European Union are expected to increase their purchases of Darjeeling tea in 2014, following a Protected Geographic Indication status obtained in 2011. The status sets forth a Europe-wide goal of selling 100% pure Darjeeling tea by 2016, whereas until now, teas labeled as Darjeeling may have contained only 51% of leaves from Darjeeling. Given that Darjeeling tea has a shelf life of about 3 years, many of those blenders are expected to finish offloading their inventory this year and start sourcing pure Darjeeling tea for the EU market. The Darjeeling region in India produces around 9 million kilograms of tea per year, with European buyers purchasing 3-4 million kilograms of that. In 2013, the quality of tea suffered from heavy rains and political unrest in the region contributed to lower export volumes.
A chart by Quartz, an online news publication, identified the biggest per capita consumers of tea in the world, with Turkey far ahead of everyone else. The data, pooled from figures provided by Euromonitor and the World Bank, suggests that Turkish drinkers consume almost 7 pounds of tea per person each year. Turkey is followed by Ireland and England, with per capita consumption of 4.8 and 4.3 pounds respectively. The US is at the lower end of the list, with half a pound of tea per person. Of the countries studied, Mexico has the lowest per capita consumption, with just 0.034 pounds. As far as total country consumption is concerned, China tops the list with 1.6 billion pounds of tea leaves a year.
Sustained demand, dwindling inventory levels and low production growth may lead to higher prices for Indian tea in 2014, says Crisil Research. Over the last five years, local and international demand for Indian tea has steadily outpaced production growth, which has been hovering around 1.6% annually. Inventory levels dropped from 5.3 months in 2009 to 2.6 months in 2013. In 2014, this trend is set to continue, with output growing by 1%, compared to a 2% increase in demand. The export market offers a mixed picture, according to Crisil Research. CTC exports are estimated to decline sharply, by as much as 14%, due to lower demand from Egypt and the Middle East. Exports of orthodox tea, on the other hand, should rise by 5% to 95 million kilograms thanks to sustained demand and flat global production.
Aging consumers in Asia, Western Europe and the US are expected to drive growth in the global tea polyphenol market, according to Grand View Research. The research firm predicts that the market will be worth $367 million by 2020, as aging populations in developed nations become increasingly receptive to health benefits associated with polyphenols, which are mainly found in green tea. Research suggests that tea polyphenols, such as catechins and flavanoids, may play a preventative role in neurodegenerative diseases such as Alzheimer's and Parkinson's, as well as diabetes and cancer. Functional beverages, which constituted 40% of the market in 2012, will continue to make up the bulk of the demand for tea polyphenols, with a compound annual growth rate of 8.6% through 2020, followed by functional foods.
A report by IBISWorld predicts that the read-to-drink tea industry will continue to expand at a strong rate in the US, driven by increased consumer health consciousness and competition in the marketplace. According to IBISWorld, though a discretionary good, RTD tea was perceived as an affordable luxury during the recession and did not suffer much from macroeconomic pressures on demand. The industry revenue increased at an annualized rate of 6.1% over the last five years and is expected to jump by 3.3% in 2014. Profit margins also remained high, especially in 2013, when tea prices plummeted to an all-time low. In the next five years, new product development is set to drive demand and revenue growth, although average industry profit margins are likely to decrease due to higher costs of tea and sugar.
Global black tea production saw a healthy rise of 9.18% in 2013, according to the Indian Tea Board and traders' bodies. Global Tea Digest 2013 says that black tea production around the world rose to 1,860 million kilograms from 1,703 million kilograms a year ago, with almost all producing countries registering a bumper crop. The largest black tea producer was once again India, with 1,028 million kilograms, or more than half of the total. It also witnessed the biggest production increase of 76 million kg. India is followed by Kenya (354 million kg) and Sri Lanka (278 million kg). Then come Bangladesh, Indonesia, Malawi and Tanzania, all with higher output. Only Uganda posted a shortfall in its production of 45 million kg, albeit a marginal one.
The latest trend forecast by Baum + Whiteman, a team of influential restaurant consultants based in New York, identifies specialty tea, handcrafted sodas, vermouth and sour beer as some of the beverage trends to make headlines in 2014. According to the report, coffee giant Starbucks is positioned to lead many of those categories. Teavana is expected to make further inroads in the specialty tea market, whereas Evolution Fresh, acquired by Starbucks in 2012, will benefit from increasing popularity of juice bars next year. Baum + Whiteman claim artisanal sodas will be the next big hit in the soda category in 2014, as at-home machines enable consumers to prepare fizzy drinks with quality syrups. The alcoholic beverage market is expected to witness a rediscovery of vermouth and the spread of sour beers brewed with wild yeasts and aged in wood barrels.
The price of rooibos, also known as red bush tea, is expected to rise by 15% from January 2014, one of the largest producers Rooibos Limited announced recently. The increase is attributed to growing demand and lower-than-expected output in 2013. The company said that the harvest of 2013 was not as big as initially projected. Furthermore, demand for rooibos, a bush that is exclusively harvested in the Republic of South Africa, has continued to grow hand in hand with awareness about the beverage. Although output should increase in 2014, current reserves are described as "alarmingly" low, as demand continues to outweigh supply. Interestingly, Rooibos Limited claims that the biggest growth in demand comes from South Africa itself, not from abroad.
Euromonitor International, a market research firm, just released a new e-book with top trends in the non-alcoholic drink markets of North and South America. According to the report, which encompasses 15 countries, mature beverage markets in North America will see convenience and market innovation drive growth in areas such as coffee and tea pods, coconut water and liquid concentrates. In South American countries, the health and wellness trend looks to play a defining role in many sectors, as consumers turn towards functional drinks and more natural ingredients. As far as ready-to-drink tea is concerned, biggest gains have been made in Argentina, mainly due to government price controls on juice, and Ecuador, where shoppers consider the product to be more natural and healthier than carbonated drinks.
Farmers in Kenya are bracing themselves for heavy losses due to rapidly falling tea prices at the Mombasa tea auction. CTC black tea fetched prices at five-year lows, with some crops selling below their cost of production. Recently, tea traded at $2.17 a kilo, compared to $3.17 a year ago. Experts say the crisis is caused by a drastic increase in supply. Kenya produced 314 million kilograms of tea in 2009. This year, that number is expected to reach 415 million. In the meantime, CTC tea output continued to grow in competing countries like India and Sri Lanka. According to the East Africa Tea Trade association, the whole industry is facing serious cash flow issues and high production costs have only exacerbated the problem. Kenyan tea accounts for about 10% of the world's total output and 23% of the world's tea exports.
Honk Kong's first tea auction will feature some exquisite varieties of tea, including a very rare oolong expected to fetch $130,000. More than 40 lots of vintage tea leaves from private collectors in mainland China, Hong Kong and Taiwan will be on sale, with the total sum raised at the auction expected to reach $400,000. The main attraction is a box of narcissus oolong tea, which was first exported from China's famous tea-producing region of Wuyi to Singapore in the 1960s. The 20-kilogram box is expected to sell for $130,000, whereas a pack of pu’er tea from China's Yunnan province from the 1950s may sell for up to $50,000. By hosting such a marquee event, Hong Kong hopes to establish itself as a major auction hub for tea among wealthy Chinese buyers.
Buyers of Assam black tea have expressed concerns over food safety following reports that tea shipments were found to contain excessive levels of certain chemicals. Teas originating from India's Assam region recently tested positive for nicotine and heavy metals like arsenic. This echoes reports that some growers may not follow the norms of usage of pesticides, iron filling, artificial coloring of tea and packaging standards. Experts warn that it is currently very hard to determine at which production stage banned substances are introduced, because tea changes hands several times during the process. As a result, there are calls to establish system of multiple checks in an industry that encompasses nearly 69,000 small tea gardens.
China's Yunnan province is the historical birthplace of tea and one of the country's most prolific tea producers, known especially for its many black tea varieties. But recently farmers have been making the jump from leaf to bean in search of better financial returns. While per capita consumption of coffee in China remains modest, it has seen double-digit growth in the last decade, as young people are more willing to shell out more for coffee. There is also growing demand from foreign buyers. One of the biggest buyers is Nestlé, which purchased 11,500 tons of Yunnan-grown green coffee beans from about 2,200 farmers last year. The Swiss company expects to increase that number to 15,000 tons by 2015. Other international coffee companies interested in Arabica beans grown in Yunnan include Starbucks and Maxwell Coffee. Last year, Yunnan's coffee exports increased 38% and totaled 42,000 tons, representing $150 million in value.
Sri Lanka, one of the world's most prolific tea producers, vowed to drastically increase tea exports. Tea Exporters' Association of Sri Lanka presented proposals to ramp up annual exports from current $1.5 billion to $3-$5 billion in the next few years. The tea sector would become one of the major contributors to government's plans to reach $20bn in exports by 2020. The island nation seeks to regain lost markets and attract new ones by establishing itself as "the tea nation". It plans to invest heavily in marketing, especially in strategies to promote added value crops in large markets like Russia and China. Tea currently accounts for 15% of Sri Lanka's total export earnings.
The tea industry in Darjeeling witnessed prices in freefall, as concerns linger about crop quality and regional political situation. Prices dropped by more than 50% compared to last year in recent auctions, which is likely to have an impact on the bottom line of many growers. This reflects quality concerns stemming from excessive rainfall, with Tata Global Beverages, one of the largest buyers of Darjeeling tea, reducing purchases on quality issues. Furthermore, the region is in the middle of a political crisis, with local Gorkha population on strike, demanding a separate homeland in Darjeeling. With employees on strike and many roads blocked, tea stocks remain piled up in the estates. Finally, several cancelled export orders have created a surplus in the marketplace.
A compressed brick of tea dating back at least a century was auctioned off at a record price of $1.2 million in central China's Hubei province. The tea "cake", dark brown in appearance and fermented for dozens of years, was produced during the Qing dynasty, China's last dynastic period stretching from 1644 to 1912. This type of tea usually contains hundreds of layers of pressed leaves that are allowed to ferment under controlled conditions. Demand for black and green fermented teas has been growing steadily in China, where they are seen both as everyday luxuries and as investments. This has given rise to reports of inconsistent quality and fears of a new investment bubble forming. The auction winner, who owns a trading company in Shenzhen, claims the tea brick may be worth up to $1.3 million.
Assam tea industry is grappling with the effects of climate change, as rising temperatures and decreased rainfall threaten yields and overall leaf quality. According to Tea Research Association, which records temperatures and rainfall in the region for over 100 years, the minimum temperature has risen by 1.5 degree centigrade, and the annual rainfall has fallen by 200 millimeters. This translates into decreasing lifespan of high yields in tea bushes, from 40-45 to 30-35 years. Furthermore, climate in Assam has eroded from a sub-tropical to fully tropical, with temperatures reaching 40 degrees in shaded areas and more than 50 degrees centigrade in non-shaded spots. In this environment, photosynthesis slows and leaves stop breathing. Experts recommend increasing shaded areas, expanding water systems, using organic manure and testing tea clones resistant to climate change.
In response to increasing availability of caffeine in food and beverage products, the Food and Drug Administration is launching an inquiry into safe consumption levels. As explained in the FDA's blog, there has been an explosion of non-traditional products containing added caffeine and marketed as energy boosting. These include waffles, syrup, candy and chewing gum. Current caffeine proliferation is likely to increase the average daily intake and raises concerns about its effects on consumers, especially children and adolescents. The FDA recently requested the Institute of Medicine to convene a workshop on the potential hazards of caffeine. The input will help shape further research and a science-based approach to establishing a regulatory framework for the food and beverage industry.
Many tea-growing regions across China are suffering from an extended heat wave that may have significant effects on next year's crops. Plantations in Taizhou, Anji, Fenghua and Zhejiang provinces are facing drought-like conditions and temperatures above 40C (104F) for over a week. Farmers report dried bushes and toasted leaves, which raises the risk of tea bushes withering and dying en masse. This is likely to result in lower harvests in 2014 and may even have lasting effects on yields, as it takes 4 years from planting a tea bush to harvesting quality leaves. Efforts are underway to irrigate bushes, cover them with black nets to minimize exposure to the sun and protect the roots with soft weeds.
The Detroit metropolitan area is seeing a surge in tea establishments. The tea wave sweeping Motor City comes in the form of a variety of individually owned teashops, restaurants and retailers offering a more relaxing setting for caffeine lovers. According to the article published in the Detroit News, as the coffee market becomes saturated, many local entrepreneurs turn to tea for an alternative source of business. But many identify Starbucks' purchase of Teavana last year as the key event in bringing tea to the mass market. Local business owners are now certain that this newfound interest in tea on behalf of the general public is more than a fad.
In the US, iced tea is traditionally enjoyed with sugar or other sweeteners. But as consumers shift towards healthier food and beverage options, demand for zero-calorie and unsweetened iced tea is picking up. As BevNet reports, the US ready-to-drink tea category, worth about $3 billion in sales, is currently experimenting with several alternative sweeteners intended to reduce the amount of calories in drinks. However, if recent market research is of any indication, consumers are more interested in reducing their overall calorie intake rather than avoiding a specific sweetener. That opens the door to zero-calorie drinks, such as Steaz, using innovative sweeteners that are calorie-free and to unsweetened tea manufacturers, such as Ito En.
Tea production in Darjeeling is about to grind to a halt if a political strike in the region is not resolved. Ethnic Gurkhas are staging a total shutdown of Darjeeling hills in West Bengal to demand the establishment of "Gorkhaland", a separate political and administrative unit in Gurkha populated districts of West Bengal. Although the tea industry is exempted from the shutdown, reports suggest that tea transport from factories has effectively ceased and producers are forced to store large amounts of tea on limited factory space. Also, vital supplies such as coal, used in furnaces to turn green tea into black tea, cannot reach the factories and are running out. While end consumers are unlikely to notice any impact, auction prices of Darjeeling tea may go up if the strike continues for more than a few days.
A new study claims that people who drink 4 daily cups of economical supermarket teas may be exposed to high concentrations of fluoride and an increased risk of skeletal and dental illnesses. Researchers from the UK compared fluoride levels of black teas from major local supermarkets, branded black teas and branded green teas, as well as Oolong and Pu Erh blends. Budget black tea blends showed the highest concentration of fluoride: around six milligrams per liter or 75-120% of the recommended daily intake. Oolong and Pu'er teas had the lowest concentrations of fluoride: 10-16% of the daily reference intake. The results are down to the fact that mature tealeaves, containing higher amounts of fluoride, are more frequently used in cheaper blends, whereas younger leaves and buds are used for higher grade and specialty tea products.
Local farmers in Iran halted this year's third tea harvest due to financial mismanagement and poor weather conditions. The head of the Iranian association of tea farmers said producers could not properly prepare themselves for the third harvest because the government had transferred just 2% of total payments due from first and second harvests. He also blamed inappropriate pricing policies and poor plantation management. Output from second harvest was already down 40% compared to last year, whereas only 10,000 tons of green tea leaves were plucked during the third one, compared to 40,000 tons in the same period a year ago. Iran exports tea to many international markets, including Germany, Canada and the United Arab Emirates.
Producers in Darjeeling, India's most renowned tea growing region, face a dilemma when it comes to who will enjoy this year's harvest of the famous tea, known for its unique muscatel flavor. As India's national currency, the rupee, continues to decline against the US dollar and other major foreign currencies, Darjeeling tea is becoming increasingly expensive for local drinkers. This comes in spite of industry's recent efforts to attract increasingly affluent Indian consumers. However, recent rupee devaluation has forced producers to shift their focus back to foreign markets, where Darjeeling tea is experiencing solid popularity. Latest market entrant prepared to shell out a premium for Darjeeling tea is the US, a country traditionally dominated by iced teas, where interest in hot tea is on the rise.
Kenya's tea industry is scrambling to stem the fallout caused by recent political unrest in Egypt, Kenya's main export market that accounts for roughly one-fifth of its foreign tea trade. Exporters are seeking alternative buyers in China, Pakistan, Sudan, Somalia and Europe to absorb some of the losses suffered following more than two weeks of political demonstrations that led to the ousting of Egypt's president. Reports on the ground suggest that not a single order from Egypt was placed at last week's tea auction. The slump also coincides with increased crop production due to a long rain season, which is likely to further depress falling prices. Kenya is on course to produce a total of 410 million kilograms of tea in 2013.
India's Tea Board announced plans to introduce a wide-ranging sustainability code for all participants of the tea industry on July 11. The initiative will focus on bringing India's tea sector in line with global sustainability standards and ensuring its long-term economic viability. It will involve everyone from large plantations to small farmers, and will oversee all aspects of the industry, including production, product certification, worker welfare and food safety. The goal is to boost productivity, mitigate the effects of climate change and establish high food safety standards. The draft code will be launched on a pilot basis and tested in the months ahead.
Latest numbers from tea producing countries suggest that black tea production increased by almost 22% during the first four months of 2013. Global output jumped by 73.25 million kilograms to 412.94 million kilograms between January and April, compared to 339.69 million kilograms last year. Biggest increase came from Kenya, the world's largest black tea exporter, which almost doubled its capacity to 155.49 mkg, compared to the same period last year. Local experts attribute this surge to timely showers and expect Kenya's numbers to be revised upward later on in the year. Sri Lanka also added a healthy 10% to its output, with a total of 113.48 mkg produced so far this year. India's production figures, which are only up to March, show that the country harvested 5% more tea this year, also due to favorable weather conditions.
The New York City launched a new advertising campaign in its long-running "Pouring on the Pounds" initiative to raise awareness about sugar levels in sweetened soft drinks. While previous ads targeted sodas, the latest ones focus on sports drinks, energy drinks, fruit-flavored beverages and sweetened teas. The health department says it is trying to stem the tide of non-carbonated beverages that "sound healthy", but may pack similar amounts of sugar to sodas. The latest ads say that such drinks can lead to obesity, type 2 diabetes and complications like amputation, heart attack, vision loss and kidney failure. The TV and poster ads invite New Yorkers to consider water, seltzer, unsweetened teas and fresh fruits instead.
Evolving consumer demand is inspiring retailers, restaurants and fast food chains to expand their tea offering. NPD market research shows that specialty retailers like Starbucks increased their servings of hot tea by 18% this year, while iced tea sales grew 5% over the same period. Technomic's market studies also found significant growth in the variety of tea flavors and ingredients in restaurants nationwide, as large fast food chains like McDonald's, Wendy's and Burger King continue to roll out sweetened and unsweetened hot and iced options. In retail, ready-to-drink tea category grew 58% in the last 6 years and 5% last year alone, making it the fourth-fastest growing beverage category in the US. According to market research firm Mintel, one of the explanations for this trend is the coffee category becoming oversaturated.
Growers and trade organizations are looking to improve the image of Sri Lankan tea by marketing it as a healthy luxury item. Some companies are highlighting supposed superior health benefits and aphrodisiac qualities of Ceylon tea in a bid to move its image away from the traditional perception of a poor man's drink. Others are seeking to reposition Sri Lankan tea as a luxury item, not a cheap commodity. This new initiative is based on projections indicating that the island will soon reach its maximum production capacity. Given the situation, industry insiders are forced to shift focus from increasing volume to improving value.
The famous Darjeeling tea from India, usually popular with European and North American tea aficionados, is finding a new audience in China, as the country's rich snap up the premium beverage. Darjeeling Tea Association says that Chinese buyers have purchased 20 tons of tea so far, reflecting its growing popularity among young people in Beijing and Shanghai. The tea is also increasingly used for corporate gifts and on special occasions. New business from China, traditionally a green tea consumer, comes at a time when exports to established markets are dwindling. For example, India's total black tea exports to the UK, the biggest European market, declined by roughly 25% to 16 million kilograms in five years.
The US tea industry is gearing up for the annual World Tea Expo taking place on June 7-9 at the Las Vegas Convention Center. The event, now in its eleventh year, will host 200 exhibitors from 50 countries, over 4,000 attendees and more than 200 tea-related product launches. It will also feature 50 conferences, a new business bootcamp and the North American Tea Championship. Organizers identify two key demographics driving growth in the specialty tea industry: baby boomers entering retirement and seeking to maintain a healthy lifestyle, and globally connected and environmentally conscious generation Y / millennials. The event will be co-locating with the Healthy Beverage Expo for the first time.
A new report assessing the state of pay and benefits of tea plantation workers revealed systemic problems with remuneration in Malawi, India and Indonesia. The study by Oxfam and the Ethical Tea Partnership also confirmed recent reports that workers on tea estates certified by Fairtrade International, Rainforest Alliance and UTZ Certified do not earn more than those who work in non-certified estates. Researchers found that even if pay was pegged to legal minimum wages, it was usually insufficient to cover basic expenses. Also, the majority of workers, particularly women, had little say in pay and benefit negotiations. Finally, regional governments were sometimes responsible for overburdening plantations with excess workers in order to maximize local employment.
The Food and Drug Administration announced plans to take a closer look at foods containing added caffeine. This comes as manufacturers of several product categories with a potential appeal to children, including potato chips, nuts and chewing gum, began using caffeine as an additive to boost energy levels. According to the FDA, the agency explicitly approved the added use of caffeine for colas back in 1950s, but recent proliferation of new and easy sources of caffeine is raising concerns about its impact on children's health. Medical experts warn that too much caffeine can be dangerous for children, who have less ability to process the stimulant than adults. Caffeine has also been linked to neurologic and cardiovascular disorders among young people.
Tea manufacturers are becoming increasingly disenchanted with the Fairtrade Foundation as questions arise about the efficiency of the initiative. Insiders cite operational and personnel issues, as well as questions about transparency. Increasingly onerous paperwork, changing regulations and inconsistent audits are also of major concern. Finally, very little money reportedly reaches the workers and restrictive Fairtrade rules prevent them from spending it how they see fit. Given the situation, Williamson Tea, one of the first major tea manufacturers to endorse the project back in 2006, has decided to withdraw support. The company that produces 23 million kilograms of tea a year has launched its own initiative to support employees and communities in the areas of health and education.
After causing a humanitarian crisis, the recent earthquake in southwest China's Sichuan Province is threatening to undermine local tea production. As rescue teams continue to search for survivors, experts warn that the 7.0-magnitude earthquake may have a lasting impact on the local tea industry, which remains one of the pillars of the local economy. The city of Ya'an is one of the birthplaces of Chinese tea with a rich history dating back over 2,000 years. It remains an important tea-growing region to this day, having produced about 66,000 metric tons of tea last year. Ya'an was located just a few miles from the earthquake's epicenter and there are reports that a number of tea processing factories and workshops have been impacted. The city already suffered massive losses during an earthquake 5 years ago, when 6667 hectares of tea farms were damaged.
Having correctly predicted the price recovery of Indian tea back in 2005 and successfully overseen the expansion of the largest black tea producer in the world, Aditya Khaitan, managing director of McLeod Russel, expects tougher road ahead for India's tea industry. In a recent interview, Khaitan claims that despite global demand continuing to outstrip supply in the coming years, the industry faces a major challenge from the effects of climate change. River beds are rising due to heavy siltation, which leads to drainage problems and water logging. This, in turn, may damage tea bushes and impact output. According to Khaitan, the tea industry must focus on making tea bushes more resilient to weather conditions by replanting them to bring down their age. He also predicts future challenges relating to energy infrastructure and short supply of farm labor.
In the ongoing saga surrounding trademark rights of rooibos tea in France and beyond, South Africa announced plans to seek protected Geographical Indication status in the European Union. This is in response to a French investment company, Compagnie de Trucy, submitting documents to obtain exclusive marketing rights to rooibos tea in France earlier this year. Geographical Indication is a trade protection system that protects specialty goods produced in a certain region. But before submitting the paperwork to Brussels, it turns out that the product must be protected in its country of origin. This means that rooibos, also known as red tea, needs to receive official trademark status in South Africa first. There are also plans to seek trade protection for honeybush, a similar herbal tea grown in South Africa.
Small-scale tea growers in Kenya are in a bullish mood following increased worldwide demand for Lipton teas, one of the largest buyers of Kenyan tea. According to local industry representatives, Lipton has seen demand for black tea rise by 10% last year. Growers in Nyeri county are therefore looking to expand plantation areas and build new tea factories. Some are ditching dairy production, which has almost immediate returns, in favor of tea crops that have been fetching high prices for some time now. In response, many factories have reopened tea nurseries to supply enough planting material. The industry is also looking to sustain this growth by boosting profitability, sustainability and agricultural practices thanks to farmer field schools and a new hydropower plant.
Producers of some of China's most renowned foods and beverages are feeling the pinch of a nationwide campaign against extravagance called by China's political leaders. The Chinese government ordered senior officials to reject extravagance, formalism and bureaucracy in a bid to combat corruption and improve working styles. According to reports, this has had a negative effect on prices of premium fish and green tea. Farmers from around the city of Hanghzhou, known to produce the most expensive Dragonwell (Longjing) tea, have seen demand and prices tumble in 2013. Orders for luxury tea boxes, popular with political and business leaders, are down by 40% so far. Prices are also expected to see at least a 10% decrease.
According to the Darjeeling Tea Association, the next few days will be crucial for first flush teas in Darjeeling, India. First flush teas are typically harvested in April and rely on proper distribution of rainfall. The crops require about 2-3 inches of rain each month to ensure an optimum yield. This year however, the region got its first rain in February, following dry conditions since October 2012, and there has hardly been any rain since. This may have an impact on the quality and the output of highly prized first flush tea, half of which is destined for export markets in Germany, the US, Japan and beyond. Officials in the region of Assam issued a similar warning just a few days ago.
South Africa's rooibos industry is seeking to block an attempt by a French company to trademark the words "South African rooibos" and "rooibos" in France. Rooibos tea is made from the leaves of a unique shrub, indigenous only to South Africa. The country's department of trade and industry has raised its objection with the local French Embassy and the European Commission Delegation in a bid to defend South Africa's trade and intellectual property interests abroad. The registration of such a trademark in France could have a significant negative impact on South Africa's exports of rooibos to France, one of the key markets in the European Union.
Tea producers in Darjeeling are bracing themselves for the possibility of increased political tensions in the region, which may cause impediments to first flush tea output. There are growing political divisions between Gorkhas and Tribals, two major communities in the workforce of the tea gardens. Gorkhas are also involved in a territorial feud with the local government that might lead to general strikes and social unrest. These factors may cause havoc during a period when maximum resources are necessary to harvest the most lucrative crops. First flush tea is harvested in March and is characterized by high yields and highest price. It represents 20% of Darjeeling's annual tea output.
Some of the biggest tea producing nations have agreed to join forces in a bid to address major industry concerns. Following talks in Colombo, Sri Lanka, India, Kenya, Indonesia, Malawi and Rwanda announced the formation of the International Tea Producer's Forum. As it stands, it represents more than 50% of global tea production. Prior to the event, the body was said to focus on operational and promotional tasks. However, the talks hinted at the possibility of forming a tea cartel intended to control the global price of tea, akin to the oil cartel Opec. The idea of production quotas was also floated. China, the largest producer of tea in the world, will remain on the sidelines of the Forum and has been granted observer's status.
Ministers from top tea producing nations are set to meet next week in Colombo, Sri Lanka, to discuss setting up an industry body to deal with the concerns of tea producing and consuming countries. Representatives from China, India, Sri Lanka, Kenya and other countries seek to set up the International Tea Producer’s Forum to harmonize norms for maximum permissible levels of pesticides, which currently differ from one country to another. The new organization also aims to position tea as a natural beverage and raise awareness about its health benefits on a global scale. Finally, the industry body is expected to undertake joint market studies, surveys and research projects.
Some of the biggest stakeholders across the tea value chain are coming together to work on securing a bright future for the industry. Tata Global Beverages, Unilever, the Ethical Tea Partnership, Rainforest Alliance, Fairtrade International, the International Tea Committee and many others have launched the second phase of the Tea 2030 project to address some of the biggest challenges facing the sector. These include climate change, increased demand for energy and water, competition for land use, environmental and social sustainability, and rapidly changing markets. The goal of the initiative is to adopt a collaborative and systemic approach in response to these new trends and potential threats.
Tea, one of India's top commodity exports, earned less foreign exchange in the first nine months of 2012 due to lower volumes. According to official statistics, the country exported 125.7 million kilograms of tea between January and September 2012, which is 22.7 million kilograms below previous year's volume. Tea gardens in south India experienced a drop in exports equivalent to 15.2 million kilograms, which is two times higher than that from the northern part of the country. Statistics released by the Tea Board of India show that India lost ground in all major export markets, with the biggest losses coming from its largest market of former Soviet Republics, followed by the UK, Pakistan, Iran, Iraq and the United Arab Emirates.
World Tea Media, organizers of World Tea East, and Clarion Events North America, manager of Atlanta Foodservice Expo, have announced plans to collocate their shows in 2013. According to organizers, cohosting the regional show in Atlanta presents significant benefits to attendees and exhibitors of both events, because there is a growing synergy between the two industries. With consumers shifting their focus to healthier beverages, tea is becoming an important element of foodservice and the show will offer a chance for the foodservice industry to learn about high quality tea and how to profit from it. Apart from hosting the largest tea trade show on the East Coast, World Tea East also features education events, tea tastings and workshops for professionals.
An extremely rare porcelain tea set fetched a sum of over £500,000 at Bonhams auction in London. The "Half-Figure Service", made in around 1723, was hailed as the very best Meissen porcelain and was eventually snapped up for £541,250, believed to be a world record for a tea service. Experts claim that the set was so valuable because it was intended only for display purposes and was probably never used for tea drinking since it was made. Meissen's extremely detailed and intricate decorations were the dominant style of European porcelain among royals and nobility in the 18th century. The tea set, featuring Oriental-style art, was part of a lot of porcelain collection that raised more than £1 million in total.
Industry insiders report that tea from the Darjeeling region in India has been fetching higher prices from European buyers this year. According to producers, buyers from Europe are prepared to pay up to 18% more than last year, because they are satisfied with the quality of the crop. Particularly the more costly first and second flush teas seem to be in high demand, despite economic woes across the Eurozone. In recent years, Darjeeling's tea industry has sought to ensure high quality standards and protect the identity of its famous tea. The efforts seem to be paying off, with prices for better quality leaves reaching €30 per kilogram. That said, experts admit that there is still more to be done to protect the Darjeeling brand. For example, in 2011 there was four times more Darjeeling tea available on the global market than was actually produced in the region.
Figures suggest that black tea production has seen a considerable drop in the first three quarters of the year. According to data from major producing countries and trade bodies around the world, black tea output has fallen by 2.85 percent compared to the same period in 2011. This represents a drop of almost 42 million kilograms to 1427.49 million kilograms despite rising demand. Almost all black tea producing nations have seen declines, with Kenya being the hardest hit. The African country saw it’s output dip by almost 12 million kilograms, closely followed by India that lost almost 11 million kilograms in yields. Uganda, Indonesia, Sri Lanka, Tanzania and Zimbabwe all saw declines, whereas the only country that posted an increase in production during the period was Bangladesh.
The Indian tea industry is making a push to improve the quality and output of its tea crop in order to meet rising demand. The Tea Board of India has set aside almost $3 million for research and development projects, which include funding for the development of weather resistant tea clones. This is in response to changing weather patterns that have brought warmer weather and decreased rainfall in parts of the country. India will invest a further $6 million to replant aging bushes in a bid to increase annual production that has been stagnating at around 980 million kilograms for the past two years. Aging bushes is the biggest concern for tea producers, because yields decrease significantly with age. For example, in Darjeeling, 75 percent of tea bushes are between 50 and 100 years old. Finally, funding will also be made available to improve the welfare of tea estate workers and clamp down on low quality re-exports that tarnish the reputation of Indian tea abroad.
Russia, the world's fifth largest consumer of tea, has seen its consumption volumes stagnate due to demographic changes and the situation looks to worsen once it enters the World Trade Organization. Despite tea sales increasing from around $2.9 billion in 2010 to $3.3 billion in 2011, the market has actually shrunk 1-2% in volume during that period. Experts say that the tea market has reached its physical limits in Russia, with more than 90% of its residents already drinking tea. The market may only rise in value terms, as the share of people drinking better quality tea increases with prosperity, while the actual population continues to shrink. Furthermore, Russia is also facing shrinking domestic production, which has dropped by 30% since 2008. More pressure on production is expected in relation to its future WTO accession, which will force a reduction of import duties on packaged tea, from 20% at present to 12.5% in four years, thereby further transferring production capacity to other countries.
A report published by MarketsandMarkets, a research and consulting firm, predicts that global ready-to-drink tea and coffee industry will be worth $125 billion in five years. Revenue was estimated to be around $69 billion in 2011, which implies that global bottled tea and coffee market is expected to grow at a compounded annual rate of over 10%. Main drivers for this international trend are increasing disposable incomes, fast and busy lifestyles, as well as consumers transitioning away from carbonated beverages for health reasons. Asia-Pacific is expected to remain the largest market, although North America should experience solid growth on the back of increasing health awareness among shoppers.
A parliamentary panel has urged the Commerce Ministry and the Tea Board to review India's current tea auction system, which is said to prevent maximizing prices for farmers. The standard auction system presently in place makes it hard for farmers to control prices once the crop is offered at the auction, whereas the newly introduced e-auction platform remains inaccessible to those without an Internet connection. The panel is also concerned by a steady decrease in India's annual output from 986 million kilograms in 2007 to 966 million kg in 2010, while China's production rose by roughly 30% in the same period. Finally, the committee will look into the issue of aging bushes, with 37% of tea bushes being over 50 years old.
Recent archeological findings suggest that a caffeinated beverage was consumed in North America centuries before the continent was discovered. Ceramic beakers found at the ancient city of Cahokia, outside what's currently St. Louis, MO, contain traces of a highly caffeinated black drink brewed from a species of holly and hint at the popularity and cultural significance of the beverage. It turns out the beakers were found 400 kilometers from the nearest source of holly plants and 500 years before the Europeans described the brew in their journals. This suggests elaborate trade routes existed to supply the crop, while the high quality finish of the beakers indicates that the drink was highly valued.
The price of supermarket-quality tea has increased dramatically in recent months due to adverse weather conditions in many producing countries. Wholesale price of black tea has risen by 41% since the beginning of the year, surpassing $4 a kilogram last month. This is the highest price since late 2009, when prices reached $5.45. The shortfall in supply is primarily attributed to erratic weather conditions across the globe. Kenya, the largest exporter of black tea, experienced dry spells, poor rains and frosts, whereas a bad monsoon has reduced yields in Sri Lanka and India. Experts predict that this rise may continue, as production shortfalls squeeze the market and demand rises quickly in India and China.
The Canadian Food Inspection Agency has released a set of studies that confirm that tea sold in Canada is safe for consumption. The surveys analyzed almost 200 dried tea samples for over 340 different pesticide residues and 18 different metals, including mercury. Despite trace amounts of these elements being detected in some samples, the agency concluded that the levels were consistent with the scientific literature and none of them posed a health concern to consumers. Follow-up studies have confirmed the findings and further studies are ongoing. According to the report, the relatively low consumption of tea and other beverages contributes very little to a person's total mercury dietary intake.
Global production of black tea, the most popular variety of tea across most of the Western world and India, has taken a big hit this year. In the first five months of 2012, total output has fallen by 64 million kilograms, or roughly 10%, compared to the same period in 2011. 575 million kilograms of tea were harvested so far in 2012, compared to 639 million kilograms last year. Biggest losers were India and Kenya. India has seen the largest drop in numbers, with a shortfall of almost 28 million kilograms (roughly 10%), whereas Kenya's black tea output is down by a sixth. Uganda and Sri Lanka also recorded dips in production. Growers blame adverse weather conditions for the losses and expect the global tea shortfall to hover around 60-65 million kilograms in the current year.
The Tea Board of India has announced plans to promote Indian tea during this year's Olympic games in London. The organization will spend roughly £150,000 on branding material in the Olympic venue and Heathrow airport, and for other promotional activities during events and exhibitions taking place at the same time. A buyer-seller meeting will also be organized, as well as a high-profile "Indian Tea Dinner" that will include guests from national delegations and important players in the UK and European tea market. The goal is to showcase some of the most famous Indian teas from Nilgiri, Darjeeling, Assam and Kangra.
Known for their high tea consumption and rich heritage associated with the beverage, the Brits actually think coffee is trendier than tea. Despite consuming over 2 kilograms of tea per capita annually, nearly half of adults in the UK believe coffee has a higher social status than tea, while only 12% believe the opposite is true. This is particularly true for high earners and people working in the financial field, with 70% of high earners preferring coffee over tea and 77% of senior managers choosing coffee over tea when meeting important business colleagues or clients. This trend also extends to younger consumers, with with three quarters of those questioned saying they had their first cup by the age of 15.
Taiwanese oolong tea has found a passionate following among affluent Chinese connoisseurs who are prepared to pay huge sums for best-rated teas in local competitions. Two years ago, the year's winner was able to sell his harvest of 12 kilograms for over $200,000, which was twice the previous year's price. Therefore, competitions attract a huge audience of growers. This year's championship drew 5,729 samples of oolong tea harvested by hundreds of farmers all across the island. And winners are rewarded by higher price premiums due to a special flowery fragrance that is sought by Chinese buyers, but that does not exist in mainland China. Taiwan currently has 15,000 hectares of tea plantations and the vast majority of the crop is destined for export. A medium-priced oolong fetches $100 per kilogram over there.
McLeod Russel, the world's biggest tea grower, expects tea prices to rise in the coming years due to sustained growth in demand and weak output levels. The company, which owns 38,000 hectares of tea plantations in India, Vietnam and Uganda, is expected to announce strong revenue and profit growth because of a "pipeline deficit" in global tea supply, as global black tea consumption is projected to rise 21% in the next 10 years. Kenya, Sri Lanka and India have already reported lower outputs this year due to adverse weather conditions and the situation is not likely to improve given that tea plantation area around the world remains the same, while demand continues to rise. Companies like Unilever and Tata Global Beverages are expected to be negatively affected by these commodity price rises.
New research by Travelodge, a budget hotel chain, confirms that tea is firmly entrenched in British culture, with over half of the nation relying on a traditional cup of tea to kick-start their working day. Despite the pervasiveness of coffee shops in urban areas, only 35% of Britons choose coffee in the morning. Contrary to popular belief, it turns out that 18-24 year olds are very much into tea, with 51% choosing tea in the morning and nearly half using tea as a comforting beverage. According to the survey, the quality of the brew can still be improved upon, with only 16% of respondents brewing tea in a teapot and only one in ten brews it for the recommended amount of time. Finally, the study identified Wales as the most hardcore region for tea drinkers in the UK.
Sage Group Network, a Seattle-based tea industry think-tank and publisher, estimates that the size of the US tea market has been grossly underreported and is actually greater than $27 billion. The latest edition of Specialty Tea Is "Hot" Report, which encompasses industry trends, investment activity and many other relevant topics, covers all tea product types sold through all distribution channels. This includes the massive foodservice segment, which is of critical importance given that more than 75% of all tea consumed in North America is iced or cold. The new gross revenue estimate of $27 billion in 2011 places tea at a similar level to coffee, whose foodservice and retail sales are estimated to lie between $30 and $40 billion.
Authorities in India are setting up crop insurance aimed at tea farmers in order to mitigate the effects of erratic weather conditions. Indian Tea Board and Agriculture Insurance Company of India Limited seek to develop an insurance scheme to cover tea plantations against risks of heavy showers, droughts, hailstorms, frost and snow fall. As there are large variations in weather patterns across India, the group is now compiling nationwide weather data to determine thresholds and premiums for each region. Experts say that tea needs specific insurance features, because, contrary to most other crops, its price depends greatly on quality and any damage to tea bushes may lead to long-term losses that are difficult to assess.
This year's World Tea Expo, held June 1-3 at the Las Vegas Convention Center, has seen solid growth in numbers of exhibitors and attendees. According to organizers, the largest trade event of its kind attracted more than 4,600 trade visitors and 220 exhibitors. In comparison to last year, that represents a roughly 10% increase in both categories. When the show started a decade ago, it attracted 1,000 attendees and 65 exhibitors. This year's event sought to pair special events with the business functions, including a tea auction, a series on tea-infused cocktails and a cooking-with-tea demonstration. The US tea sales totaled $8bn in 2011 and are expected to reach $15 by 2015, with an estimated 30 percent of the market coming from the specialty and premium categories.
China and India, two of the world's powerhouses in terms of tea production, are witnessing expanding tea trade between the two countries. Indian manufacturers are benefiting from growing popularity of black tea among young Chinese consumers, who associate it more with the British or American way of life. Indian exporters expect to sell up to 10 million kg of black tea this year in China, where the demand is estimated to rise rapidly to 100 million kg by 2015. On the other hand, Indians are increasingly turning towards green tea as a way of experimenting with new varieties and tastes. Both countries hope that growing trade ties will offset lower exports to other regions.
The US tea industry is gearing up for this weekend's World Tex Expo, held in Las Vegas. The event is the largest trade show and conference in the world for premium tea and related products. This year, the expo will feature more than 200 key tea suppliers from across the world and a "no repeat" educational program with 40 educational sessions. The show will also include a world tasting tour, tea infusion challenge and an interactive art exhibit on tea. Organizers expect to welcome more than 4,500 professionals from diverse areas of the industry that include retailers, distributors and tea room owners. World Tea Expo will be celebrating its tenth anniversary this year.
The US tea industry is gearing up for this weekend's World Tex Expo, held in Las Vegas. The event is the largest trade show and conference in the world for premium tea and related products. This year, the expo will feature more than 200 key tea suppliers from across the world and a "no repeat" educational program with 40 educational sessions. Organizers expect to welcome more than 4,500 professionals from diverse areas of the industry that include retailers, distributors and tea room owners. The show will also include a world tasting tour, tea infusion challenge and an interactive art exhibit on tea. World Tea Expo will be celebrating its tenth anniversary this year.
World Tea Media, organizers of the North American Tea Championship, announced winners of the 2012 Iced Tea Class on May 15, 2012. The Championship assessed premium iced teas in Ready-to-Drink, Food Service and Instant tea categories based on organoleptic analysis of flavor, body, color, clarity and balance. Highest overall score was awarded to Teafinity Raspberry made by S&D Coffee and Tea in the Foodservice category, followed by Cooper's Half & Half Lemonade Tea by Cooper Tea company. Other winners include products from companies like China Mist Brands, Rishi Tea, QTrade Teas & Herbs, Shangri La Tea, Xing Beverage, Ito En and many others. According to organizers, nearly 250 products participated in this year's class, comprised of 20 categories.
Recent hopes to declare tea as the national beverage of India have come under attack from the local coffee lobby. Similar demands in 2006 were shelved after objections were raised by some of the state governments that such plans could hurt the interests of coffee. Proponents of the plan claim that tea is part of Indian culture and is deeply rooted in country's history. Numbers seem to support this, as India consumes roughly ten times more tea per capita than coffee. Furthermore, coffee consumption is confined to a handful of regions, whereas tea is widely drunk throughout the country. India's annual coffee production is 302 million kilograms, whereas that of tea is 988 million kg.
The Sri Lankan government says it opposes plans by local tea industry to create a global blending hub on the island. The move comes after several major packers and producers put forward plans to blend highly regarded local tea with lower-quality imported leaves. They claim that import liberalization would benefit from local blending talent and fast shipping connections, and would allow Sri Lanka to become a key link in the global tea supply chain. However, government officials seem more concerned about maintaining local tea's reputation in export markets. They hope that phasing out imports will ensure superior quality and strengthen the "pure Ceylon tea" brand. Last year, Sri Lanka exported 322 million kilograms of tea, including 22 million kilos of imported tea.
A report on the state of the US hot tea industry predicts solid growth for the years ahead thanks to health-conscious consumers shifting away from sugary drinks. For the past five years, sales grew at an annualized rate of 3.1% to reach $987 million in 2012. This year will see growth of 1.8%, as awareness about tea's health benefits spreads and consumers continue to shift away from sugar-rich beverages. The report, compiled by IbisWorld, also points to an increasing variety of flavors, strengths and sweeteners that benefits companies at the top of the sales list, such as Unilever and Hain Celestial. On the other hand, research suggests that niche markets, such as specialty and gourmet tea segment, will drive growth in the future, helped by America's aging population receptive to tea's health attributes.
Argentina's favorite beverage has fallen prey to inflation that is plaguing Latin America's third largest economy. Yerba Mate, which is sipped through a metal straw and is quintessentially Argentinian, has seen its price skyrocket in the last few weeks due to severe droughts that hit crops in the main northern growing areas and because many farmers prefer to grow more lucrative soybeans. Prices in supermarkets are approaching $9 per kilo, despite government regulations that indicate a price range more than twice as low. The situation has attracted the ire of Argentina's president, who has threatened to import yerba mate from abroad or possibly nationalize the industry. Inflation in Argentina currently stands at about 25% according to experts.
India is moving ahead with plans to declare tea a national beverage on April 17, 2013. The date will coincide with the 212th birth anniversary of first Assamese tea-planter who was hanged by British colonial rulers for taking part in the rebellion of 1857. Maniram Dewan is celebrated for introducing commercial tea production to the region of Assam, currently India's largest tea-growing region, and for his role in a plot to throw the British out of Assam that was crushed by colonial forces and resulted in many casualties. The tea industry will also be celebrated as an important employer of women and the largest employer in the organized sector. The move is set to face opposition from proponents of other popular Indian beverages such as coconut water, lemon water and yoghurt-based lassi, considered by some as healthier choices.
Rooibos output has skyrocketed in the past decade due to increasing popularity among health-conscious consumers and interest from companies like Starbucks and Nestlé. The caffeine-free herbal tea is grown exclusively in South Africa and now represents an estimated 10 percent of the herbal tea market and 1 percent of the global tea market, valued at $23 billion. Production of the crop more than tripled to 14,000 metric tons in the past decade as 600 or so growers expanded rooibos plantings to meet demand from biggest export markets, such as Germany, the Netherlands, UK and the US. Red bush tea became popular because, like green tea, it contains antioxidants, calcium and fluoride, yet is caffeine-free.
China is experiencing another food safety scare, this time with its tea. Greenpeace, an environmental advocacy group, announced that it found banned pesticides in all of the 18 samples of local teas that were tested. 14 out of the 18 teas tested contained pesticides that may affect fertility, harm an unborn child or cause genetic damage. Companies at the center of the scandal include the biggest tea brands in China, such as Eight Horses, Zhang Yiyuan, Tenfu, Wuyutai, and Richun. China is the largest exporter of tea in the world and has around 8 million tea growers. It is also the largest user of pesticides, with farmers around the country spraying 1.76 million tons of chemicals a year.
Figures from Mintel, a market research firm, suggest that tea drinkers in the UK are shifting from traditional brews to healthier green tea. In fact, green tea sales have doubled in two years since 2009 to reach £22 million ($29m) in 2011, whereas consumption of "builder's tea", a mix of black tea, sugar and milk, is falling. Sales of English Breakfast tea bags fell by £7 million, or roughly 2%, to £463 million. Although black tea still remains the most popular variety by far, young people in particular are turning away from the traditional cuppa. Furthermore, young people are also the biggest users of loose leaf tea, with 12% of people aged between 25 and 34 making tea without the use of tea bags, compared to 10% of people aged 65 and over.
Africa's tea auction capital Mombasa is set to move away from traditional auction format by adopting electronic trading by 2013. Mombasa's tea auction, dating back to colonial times, trades approximately 380,000 tons of tea every year and the electronic trading platform, already used in India, should improve transparency, increase efficiency and save on warehousing costs. The teas will henceforth be shipped directly from the producer, saving a trip to Kenya's capital. Mombasa's tea auction sells tea from nine East African countries to around 70 buyers that gather every Monday and Tuesday to purchase the crop. Most shipments are currently destined for Muslim countries including Egypt and Pakistan. According to market data, Kenya is the world's third-largest tea producer after China and India.
South Africa's largest tea farm Magwa, which is also the largest tea plantation in the southern hemisphere, is hoping to bounce back after a bitter pay dispute. The 1,800-hectare farm has been plagued by strikes, violence and financial strife that have brought production to a standstill. When tea prices declined and demand shrank a few years ago, Magwa faced yearly pay strikes and violence due to inadequate wages and financial mismanagement. Current administrators hope a truce between workers and managers can be maintained in order to secure the future of South Africa's last tea farm. Focus is now switching towards the government to supply necessary funding to invest in tractors, trailers, coal and diesel.
Indian tea industry is bracing itself for a steep decline in UK tea consumption, as Brits shift to herbal teas and higher-quality brews. The UN food agency predicts that by 2021, tea consumption in the UK, currently the highest in the world per capita, will be slashed by 15%. Imports from India have already taken a hit, falling from 22 million to 16 million kilograms in five years. Industry insiders say that this decline can be attributed to the rise in popularity of herbal teas, like camomile, and premium quality leaves. India hopes to compensate this by tapping into the growing instant tea market. Tea was first imported into the UK in 1660 and the country now consumes 100 million kilograms of tea per year.
The North American Tea Championship has announced its 20 best-tasting hot teas available on the US market. The independent and professionally-judged tea competition saw 50 companies compete with a record of 230 tea entries. Largest category was Flavored Rooibos with 35 entries. Most notable winners were Rishi Tea and QTrade Teas & Herbs. The former collected six first-place wins, two second-place wins and six third-place wins. QTrade Teas & Herbs scooped four first-place, one second place and five third-place awards. According to a judge, Oolong, Rooibos, Breakfast Blends, Jasmine and Assam categories stood out as the most competitive among the fall 2011 harvest. Winners will be honored at this year's World Tea Expo in Las Vegas later on in the year.
World Tea Media, organizers of the World Tea Expo and the North American Tea Championship, have revealed six market trends that will shape 2012. They include the rise of quality tea and tea retail outlets, as well as the growing popularity of green tea, matcha lattes and specialized tea accessories. According to World Tea Media, increasingly knowledgeable consumers are looking to buy better quality tea, which, in turn, has led to more retail outlets popping up across the US. In terms of varieties, green tea is set to continue expanding its customer base due to its perceived health benefits, as is cold-brewed green tea. Packaged Facts, a market research firm, predicts that the US tea market will continue to grow beyond 2012 and will expand by 8.7% in 2014 to reach $8.3 billion in sales that year.
The Coffee and Tea Festival, which took place in New York City last weekend, showcased some new and innovative interpretations of tea and tea accessories. A notable example is gourmet tea from Europe. Gorreana Tea Estate, located in Portugal, cultivates tea since 1883 and because the region does not have many insects, the crops are grown without any pesticides. Another hot find was Guayusa, a plant with high levels of caffeine hailing from the Ecuadorian part of the Amazon. It is brewed like regular tea, but has a natural sweetness that blends well with other herbal teas. Finally, an artist presented her vision of tea infusers made from wood and steel as a way to avoid plastic screens and help people with arthritis, who have trouble using tea balls.
Tea exporters in India fear a slowdown in exports to Iran, one of the biggest destinations for their orthodox tea, as trade sanctions by Western countries take effect. Iran is a major consumer of India's orthodox quality tea and imports 15 million kilograms directly, with a further 50 million kg imported through other routes, according to industry insiders. This represents a considerable part of India's total exports of 187 million kg in 2011. Such a slowdown could lead to an increase in the production of lower quality CTC tea at the expense of higher quality orthodox varieties. According to the Indian Tea Association, this, in turn, may negatively impact foreign exchange earnings and domestic prices of CTC tea. Experts hope that Pakistan will be able to offset some of the decline due to rising demand.
Teas from India's most famous tea-growing region of Darjeeling are to become available through e-auctions from April 2012. Electronic auctions were launched in 2009 and currently sell close to 55% of the 980 million kilograms of tea produced in India. They mostly auction CTC and orthodox teas. Darjeeling's annual tea output is mere eight to nine million kilograms and half of the sales are private. However, the other half of specialty leaves is sold through manual auctions and industry insiders hope that this sales method can be enhanced by IT. As far as prices are concerned, auctioneers predict that they will remain stable in 2012 after a tumultuous few years. Russia is seen as one of the most promising trading partners and is expected to offset some of the temporary drop in exports to Iran.
On his visit to Sri Lanka, Joe Simrany, president of Tea Association of USA, encouraged local tea professionals to tap the continuing growth of the ready-to-drink tea market in the US. According to Simrany, the future looks bright for the bottled tea sector due to a recovering economy and relatively low penetration. For example, although North Americans consume about 85 percent of their tea over ice, the overall tea market in the country is 14 times smaller than the carbonated beverage market and 9 times smaller than bottled water market. Young people also seem to be increasingly drawn to bottled teas, which is attracting large multinationals like Coca-Cola and Pepsi, fueling further growth. In 2010, the US iced tea market experienced its fastest volume growth since 2007 with sales up 11.5% over 2009.
Recent wage hikes agreed by tea estate managers and workers are putting a strain on many tea estates in the Dooars region in West Bengal, India. As many as 40 plantation owners are looking to offload their farms, because they cannot cope with the increased costs of producing tea. The new wage deal, which saw worker compensation increase by 27% from November 2011, has pushed many tea estates into the red and many of them have been losing money since. The other major factor is the stable auction price of tea leaves, which has not budged since 2010, despite increased production costs. The companies are now calling on the local government to shoulder some of the costs associated with running the estates, that include expenses like accommodation, subsidized food grains, health care and educational facilities.
Kombucha, a fermented tea associated with foodies on the West Coast, is gaining popularity in the New York City area thanks to novel blends that give the beverage a new twist. The drink that is traditionally brewed using tea, sugar, yeast and bacteria can be found in restaurants and bars across the city as a mixer or on tap. Some of the most interesting versions use kombucha in alcoholic cocktails, as a mixer with beer or for salad dressings. Manufacturers of the beverage are even obtaining licenses to brew it with higher alcoholic content, in order to avoid the need to comply with federal regulations that limit its alcoholic content to 0.5%.
A group of scientists from Africa is working on helping tea bushes withstand drought and increase crop yields. This may prove a game-changing event for the continent, which aims to dethrone India as the world's largest producer by 2020. Researchers, studying the drought-survival mechanisms of camelia sinensis, have identified a DNA marker for plants more able to withstand drought, insects, diseases and low temperatures. This means that they have found a shortcut that indicates whether a particular tea plant will tolerate stressful conditions, without having to wait to see if and how the plant grows. Scientists hope this will help countries such as Kenya, Uganda, Malawi and South Africa increase their tea output and avoid loss of earnings due to droughts and other hazards. Researchers behind the project have decided not to claim the results as intellectual property, allowing them to become free knowledge to the international scientific community.
India's tea industry is expected to generate $5.5 billion in sales by 2015, according to a report by an industry association. Current tea sales amount to $3.7 billion. India has 600,000 hectares of land under tea cultivation and its tea industry is growing at a compound annual growth rate of about 15%. 3.5 million people work in the industry and more than 90% of Indian households drink tea. According to the report, increasing awareness about health benefits associated with moderate intake of tea is a significant factor behind this upsurge in demand. Another factor driving sales in the upcoming years will be the penetration of iced tea, as well as technological advancements in agriculture. India currently is the world's largest consumer, second largest producer and fourth largest exporter of tea.
A CNN poll established a list of world's most delicious drinks with tea being mentioned several times in the survey. Tea, the world's second-most widely consumed beverage, was ranked fifth overall in the poll. The main reason was how the drink is consumed around the world, in a diversity of forms and flavors specific to each region. Other honorable mentions include bubble tea from Taiwan, a concoction made of tea, milk, fruit juice and chewy balls, and thai iced tea, comprised of black tea, condensed milk and spices. While not technically tea, South American herbal tea yerba mate claimed the 35th spot. Water was crowned as the most delicious drink, followed by Coca-Cola, coffee and beer.
The cultivation of redbush, also known as rooibos, is being threatened by climate change in its native country of the Republic of South Africa. According to the Intergovernmental Panel on Climate Change, the region is particularly susceptible to changes in climate and its redbush tea industry will be severely affected by extreme weather such as droughts and floods. Local farmers say that if rainfall is delayed even by a month, output may plunge by as much as 50%. In fact, farmers are already struggling to keep crops alive amid droughts and erratic rainfall. One solution that experts suggest is developing of the wild redbush plant, which is more heat resistant and forgiving. Rooibos tea grows exclusively in the region of South Africa and all attempts to cultivate the bush in other, more forgiving landscapes have failed so far.
During the inauguration of the three-day World Tea Science Congress in Assam, India, the chief minister of Assam declared tea as the State Drink. According to him, this would help increase its value and promote Assam tea as a brand. The region of Assam represents 51% of India's tea output and 13% of global production. Local industry employs over 500,000 permanent workers and approximately the same amount of seasonal staff. Also speaking at the event was former president of India, Dr APJ Abdul Kalam, who suggested that the next step would be to declare tea the national drink of India. He also recommended to diversify into value-added areas, such as medicinal tea, organic tea and flavored tea in order to grow the industry.
Holiday weekend was very busy for online retailers, with both Friday and Monday sales exceeding last year's numbers. According to preliminary data, Black Friday saw a 24 percent increase in online sales with a total value of $816 million. E-commerce sales on Cyber Monday were up 33 percent over 2010, and up 29% over Black Friday. Mobile devices accounted for 10% of online visits this year, up from 4% the previous year, and mobile sales accounted for 6.6% of the total, versus 2.3% in 2010. According to IBM, the average order amount was slightly up this year from $193.24 to $198.26. An increasing number of retailers lured shoppers with steep discounts and free shipping offers. Exact figures are expected to become available in the coming days.
Iced tea has been gaining ground in quick-service restaurants, with many big-name eateries expanding their offer of sweet tea. According to the US Tea Association, chains like McDonald's and Subway are embracing tea like never before. In fact, tea sales have grown by 3 to 5 percent in foodservice and tea accounted for 15% of restaurant beverage menu items during the fourth quarter of 2010, making it the third most-available type of nonalcoholic beverage. Market research firm Mintel estimates that 39 percent of restaurant-goers drink cold tea, about twice as many that have hot tea. Restaurants are increasingly using their tea offer to differentiate themselves and create a unique experience.
A report by market research firm IBISWorld predicts that healthy eating and living trends will drive growth for the US tea industry in the years ahead. As consumers change their dietary patterns and seek healthy alternatives to soft drinks and coffee, the tea industry is expected to reach $1.1 billion in sales by 2016. The gourmet and specialty tea segments will likely be the largest beneficiaries of these trends, because they cater specifically to fragmented consumer needs. Other growth drivers will be the increasing variety of flavors, strengths and sweeteners, as well as marketing messages based on various health benefits of tea consumption.
Labor unions, estate managers and government officials have reached an agreement to increase the wages of tea workers by 27%. This came as a response to massive movements in tea-growing regions of Dooars and Terai, which had resulted in strikes and embargo on tea trading. The local government took an active role in brokering the deal, because the situation had crippled the massive tea industry. Officials also announced plans to reopen five state-owned gardens, as well as to improve living conditions of workers. There are 153 tea gardens in Dooars and 42 gardens in Terai, which respectively produce 180 million kg and 50 million kg of tea annually. Together that represents approximately a quarter of India's total output.
India's tea region of Darjeeling has been granted the coveted Protected Geographical Indication (PGI) by the European Union. Protected Geographical Status is a law that protects the names of regional foods and eliminates unfair competition or misleading of consumers by non-genuine products. The status implies that tea produced only in the Darjeeling region can be sold as Darjeeling Tea in the European Union countries. The seal will also apply to blends of Darjeeling and non-Darjeeling tea for a transitional period of five years. Darjeeling tea is the first Indian commodity to achieve this feat and only the seventh non-EU product receiving the protected status, following one from Colombia and five from China.
The price of tea in the UK may go up by as much as 7% next year, if an anticipated drought in Kenya wipes out a sizable amount of the crop. The droughts that have affected over 13 million people across this part of Africa have also devastated export crops like tea. According to an analyst from the market research firm Mintec, tea prices had resisted the recent turmoil in global commodities markets, but they are bound to be affected by droughts in tea-producing countries and rising demand. There are hopes that increased production in China and India may offset some of the price rise. Tea drinkers in the UK consume 165 million cups per day, or 62 billion per year. Kenya supplies over half of the UK's tea.
According to data from the Indian Tea Association, total tea production in India is likely to exceed one billion kilograms this year and reach its highest level ever. The current record stands at 984 million kilograms achieved in 2008. Reaching the symbolic mark appears realistic after August output figures came in 33 million kg higher than a year ago and experts believe this trend will continue for the next months. Domestic consumption typically rises by 30 million kg per year, so the growth will barely compensate for the increased demand. Last year, production had suffered significantly and was at 966 million kg, primarily due to adverse weather conditions and pest attacks.
The United Kingdom, one of the biggest consumers of tea in the world, is facing an alarming decline in young tea drinkers. According to a survey, more than half of British tea drinkers are over 45 years of age, while just four per cent are under 25. Young people usually drink just one variety of tea and often opt for other types of beverages, such as soft drinks, bottled water or fruit juice. Time constraints in the workplace were mentioned as one of the major causes for the declining numbers. The survey, commissioned by Typhoo tea company, also found that the UK population is increasingly sipping on healthier and trendier varieties, like green, jasmine or mint teas. While 80% of Britons still enjoy at least one cuppa per day, the traditional English Breakfast tea currently accounts for only 40% of the volume.
According to latest numbers, Kenya is facing declining tea production and exports. Tea output fell 12% to 229 million kilograms in the January-August period, compared with the same period last year. The country also expects its full year production to come in 9% lower than last year. The Tea Board of Kenya blames the decline on hot and dry weather conditions, as well as depressed rainfall during the first half of the year. Exports also declined by 2% during the same period and amounted to 286 million kilograms due to political unrest in a number of Middle East and North African countries, which are some of Kenya's biggest markets. However, Kenya expects full year export earnings to exceed the $1 billion mark, up 9% over last year.
A recent report by IMARC Group suggests good times ahead for India's domestic tea market. National tea consumption, which is already the highest in the world, is expected to reach $7.2 billion by 2016. This represents a compounded annual growth rate of 11%. High penetration of tea in both rural and urban areas will push companies to create value-added products and increase differentiation. According to the report, penetration of tea in the cold beverage segment will also drive the market. So far, tea is considered to be a predominantly hot beverage in India, yet popularity of iced tea has started to gain pace in recent years. The report expects iced tea to account for more than 10% of the entire cold beverage sector in the coming years.
Guizhou province in China is set to become the capital of the tea industry. The region benefits from ideal conditions for cultivation of tea, cool and pleasant monsoon climate, and high altitudes. It currently stands as China's second largest tea-producing province and is ranked number one in green tea production. More than $60 million have been invested in tea plantations in recent years, with the tea-growing area expanding by 30,000 hectares each year. The province plans to devote more than 300,000 hectares to ecological tea plantations by 2020. According to the local tea association, six types of most famous Chinese teas are grown and more than 600 varieties in total.
Tens of thousands of tea producers in Uganda are expected to suffer from eroding weather conditions. According to a report by the International Center for Tropical Agriculture, some of Uganda’s most lucrative tea-producing areas could be completely wiped off the map by 2050, if the temperature rises by an expected 2.3 degrees Celsius. The report found that even an expected one-degree rise by 2020 in average temperature could significantly reduce productivity, even as cooler areas are likely to experience improved tea growing conditions. Uganda's multi-million dollar tea industry employs over 60,000 small farmers and supports the livelihoods of up to half a million people along the supply chain.
Sri Lanka's tea industry is facing a production slowdown due to employees protesting against pressures on working conditions and wages. Workers staged a "go-slow" campaign, plucking 5 kilograms of tea per day, instead of the usual 10 to 15 kg. Proponents of the campaign claim they are protesting against a possible cut in wages and disproportionate plucking requirements. A 18-20 kg requirement is seen by many as excessive during a period of drought. Sri Lanka's tea industry is already facing difficult times with reduced tea prices, volatile market conditions in the Middle East and significant cost increases.
India has seen its tea output rise by 8 percent to 133 million kilograms in July, compared to the same period last year. According to numbers from India's Tea Board, production for the first six months of 2011 has also grown by 6% to 491 million kg. This is mainly attributed to healthy growth figures from the region of Assam, which accounts for more than 50% of total Indian output. However, the country has seen a drop in exports with a decline of 8% to just above 15 million kg in July 2011. Foreign trade numbers are even worse for the first six months of the year, as India's exports fell by 16% to 89 million kg. India is the world's second largest producer and the biggest consumer of tea.
Organizers of the World Tea Expo are hosting their first trade show on the East Coast in Philadelphia this weekend. The event will feature 100 exhibitors and many new products, as well as various conferences, tea tastings and workshops for tea professionals. According to the organizers, the trade show is aimed at providing professionals the tools needed to drive business and increase sales in tea and related products. In addition, World Tea East debuts the Cha Jing Lifetime Achievement Award, which will be presented to distinguished tea leader John Harney, founder of Harney & Sons Fine Teas, for his significant contributions to the industry. The trade show will be held at the Pennsylvania Convention Center on September 9 - 10.
Sri Lanka's Tea Exporters Association gathered to discuss some of the underlying issues facing the industry, such as increased costs of production and lessening international demand for Ceylon tea. One of the main challenges that the country faces is the inability to meet growing demand for extremely low priced produce such as from Kenya or Vietnam. Sri Lanka is also facing decreasing demand due to changing tastes and young people turning away from the beverage. Finally, experts discussed the need to radically rethink the way the industry works. They suggested creating a $1 billion fund to create a Sri Lankan multinational to rival Unilever and Tata. They also advocated the idea of marketing Sri Lanka as a global tea hub and creating favorable conditions for importing, exporting and blending.
A recent US foodservice and retail market survey conducted by Technomic found that 60 percent of consumers reported drinking coffee or tea in the last month. Only non-diet carbonated beverages fared slightly better with 62%. 10 percent of respondents also said that they drink more iced tea now than two years ago. Green tea was cited as the most appealing variety for hot or iced tea by nearly three out of four consumers, due to its health credentials. Lemon and honey were the other two flavors that were highlighted by 60% of tea drinkers. According to Technomic, hot and iced tea products have increased in price, from an average of $2.40 in 2008 to $2.57 two years later. In recent years, the number of green tea products has grown significantly on restaurant chain menus across the country.
The government of Eastern Cape, a province of South Africa, is looking for ways to boost its honeybush production. Honeybush tea, also known as bush tea, grows naturally in the mountain ranges of the southern Cape and is a sister to rooibos. The region cultivates only 30% of the crop, with the rest being harvested in the wild. According to an expert, this situation is unsustainable and a cultivation of honeybush on a larger scale will not only help supply the growing demand for the plant, but will also relieve the pressure on wild honeybush populations. At the moment, international demand far outstrips the supply and the industry has the potential to increase output from 150 tons to 1500 tons by involving small and emerging farmers.
Kenya, the world's biggest black tea exporter, has authorized the commercial cultivation of a new variety of purple tea with high medicinal value. The country hopes the new variety will help growers diversify their products through value-addition and penetrate the specialty tea market. The new purple variety, or clone, has higher medicinal properties than green and black tea and its seeds produce oil suitable for cooking, cosmetics and the pharmaceutical industries. Kenya hopes to match last year's record-setting earnings from tea exports, thanks to stable prices and favorable exchange rates. Production is expected to fall by approximately 10% this year, because of bad weather in several tea growing areas.
The North American Tea Championship, the only independent and professionally-judged tea competition in the US, announced winners in its annual Hot Tea Class. The contest identified the highest quality and best tasting teas from the spring harvest of 2011. QTrade Teas & Herbs took home a total of seven awards, which included three first-place honors. Other first-place winners include Dethlefsen & Balk, Tao Tea Leaf and Teas Etc. The highest-rated tea in 2011 was Sri Lankan Silver Beauty, also from QTrade. According to judges, the submissions were fewer, but of higher quality than last year. Generally, the Black Tea category was described as the most modest, due to dry weather conditions in many growing areas, whereas the Flavor and Herbal Blend categories were the most exciting this year.
Following in the footsteps of the UK and China, a tea association in India is urging the country to embrace tea as its national beverage. In order to achieve that, the local government of Assam, which produces half of India's tea, is encouraged to declare tea its state drink. Assam is the largest area under tea plantation in the world and its tea industry is the largest employer of women in the region. Tea plantations in Assam hire approximately a million people throughout the year. As a country, India is the biggest consumer of tea in the world and absorbs around 80% of its total output. According to the proponents of the issue, a drink can become a national drink because of its wide popularity, cultural heritage or local production. It also forms a nation’s identity and self-image.
Ugandan tea exporters have requested the removal of several barriers to trade with neighboring Kenya. According to the Uganda Tea Association, current receipts, verification and clearing procedures put their produce at a disadvantage at the Mombasa tea auction, one of the biggest in the world. Importers of Ugandan tea also want a permit levy charged on shipments to the Mombasa auction scrapped to improve the competitiveness of the commodity. Uganda is the second largest player at the Mombasa auction after Kenya and produced 59 million kilos of tea least year. Tea producing countries in East and Central Africa, with the exception of Malawi which runs its own auction, sell their produce at the Mombasa auction.
Research by New York high school students has uncovered unlisted ingredients in several herbal teas. Weeds, grass, parsley, ferns or bits of tree were found in about a third of 70 tea products that were tested. None of them were listed as ingredients on the labels. According to the authors, some may have accidentally been picked during harvest, whereas others, like chamomile or parsley, may have been added to provide flavor or color, or to act as fillers. While none of the ingredients are outright poisonous, some of them, for example chamomile, may cause allergic reactions to some people. This study hopes to help regulators tighten labeling rules and encourage manufacturers to improve the quality of their products.
The Tea Board of Kenya has forecast a 25% decline in exports due to severe droughts. Foreign trade in Kenya, the biggest black tea exporter in the world, will likely amount to 330 million kilograms in 2011, compared with 441 million kilograms last year. The main cause was unseasonably dry weather in the beginning of the year. Kenya accounts for about a quarter of global tea exports. More than 70 percent of Kenya’s tea is exported to five destinations including Egypt, the UK, Pakistan, Afghanistan and Sudan. Domestic consumption accounts for about 5 percent of total output.
India signed a landmark deal granting the Gorkha people autonomy over their homeland in the Himalayan tea-growing region. Indian Gorkhas, who are ethnic Nepalese, have led a violent campaign since the 1980s demanding that the separate state of Gorkhaland be carved out of the mountainous district of Darjeeling. The deal means that the new Gorkhaland Territorial Administration has been vested with powers to manage public works, social welfare, education, health and the famous tea plantations of Darjeeling. Locals hope that this will give new life to the tea industry, with leases of around 30 gardens planned to be resolved. The regional tea industry comprises over 80 gardens and at least 50'000 permanent workers.
Sri Lanka plans to establish a distinct identity for Ceylon tea by creating a globally recognized industry standard. The standard is aimed at addressing major customer concerns in areas such as ethical trade and environmental impact. International recognition will then be sought to promote Ceylon tea in Western countries, where shoppers are more sensitive to high environmental and labor standards. Tea grown in Sri Lanka will be compliant with international environmental sustainability regimes and the Ethical Tea Partnership. An independent international agency will periodically audit the industry for compliance. The local tea board expects to launch the program at the international tea convention in Colombo, Sri Lanka early next year.
Visitor and exhibitor participation at the World Tea Expo, held in Las Vegas last week, remained broadly unchanged from last year's event. The largest trade show in the tea industry drew 4679 attendees and 204 exhibitors, compared to 4700 attendees and 200 exhibitors last year. Despite the stagnating attendance, organizers and exhibitors remain upbeat about the state of the industry that is projected to double from its current size of $8.7 billion, with specialty and premium tea markets outperforming the field. To highlight this optimistic outlook, World Tea Expo East was announced to cater to local audiences on the East Coast. It will be held in Philadelphia on September 9-10. More than 2000 attendees and 100 exhibitors are expected at the inaugural event.
Kenya, the world's biggest exporter of black tea, is facing a mixed bag of results from its tea industry. Output fell 7 percent in May compared to the same period last year on depressed and poorly distributed rainfall patterns in most tea-growing regions. Tea production in 2011 is already down a staggering 18% due to poor weather conditions. This trend is also reflected on the auction floor in Mombasa, where sales fell 23% in May. There are however positive signs for the industry, with export volumes picking up by 11% year on year, as buyers stock up on supplies. Egypt was the leading export destination for Kenyan tea in May, having imported 6.4 million kilograms of tea or 19% of total exports.
The governor of Shizuoka prefecture, the largest tea producing region in Japan, is urging authorities to revise the provisional limit of radioactive substances in tea leaves. He cited recent tests which showed tea leaves and processed tea to be safe, despite exceeding radiation limits of 500 becquerels per kilogram. The dispute stems from the fact that same limits that apply to food also apply to tea, even though 95% of it is consumed as a drink. The authorities are currently carrying out further tests to verify the safety of the tea leaves and have promised to make a formal announcement about the safety of Shizuoka tea soon.
Japan's famous tea industry continues to be plagued by ongoing alerts about radiation levels in tea leaves. In fact, industry insiders claim that this may be the worst crisis in the country's centuries-long tea farming history. Japan's Tea Exporters Association concedes that foreign and domestic demand has dropped dramatically, even before these radiation discoveries. However, the industry body is now going on the offensive by protesting government regulations in respect to radioactive contamination of tea leaves, that it deems far too strict. According to current regulations, a person would have to eat a pound of green tea leaves per day for a year before hurting his health.
The US tea industry gathers this week in Las Vegas for the World Tea Expo. The annual event, held at the Las Vegas Convention Center, boasts the most comprehensive educational program and will focus on the hottest tea topics, latest trends and most relevant education for tea professionals. Courses cover subjects on professional tea cupping, rare tea varieties, creating custom tea blends and top trends in retail and marketing. The show will also host an interactive tour of the most important tea-growing regions in the world, such as India, China and Taiwan. World Tea Expo takes place June 24-26.
Dubai, part of the United Arab Emirates, hopes to host the largest tea manufacturing plant by 2015, as Unilever's Jebel Ali tea blending and packing facility starts expanding next year. The factory, which currently produces 1.1 million tea bags an hour every day all year round, aims to double its output in four years and become the world's largest tea production facility. According to Unilever, the Middle East tea market has undergone a major shift in the past few years, with green tea gaining a lot of awareness and popularity. And the market has huge growth potential, because per capita consumption is very high. Unilever expects the global tea market to grow by up to seven percent annually in the next few years.
The Japanese tea industry is still feeling the aftereffects of the radiation leak at Fukushima power station, as government restricts tea shipments from four prefectures. The restriction applies on dried tea leaves containing more than 500 becquerels of radioactive cesium per kilogram. Shizuoka prefecture, which accounts for about 40% of the country's output, has declared its fresh leaves safe, although questions remain about cesium levels in dried leaves, which may be up to 5 times higher than in fresh crops. Experts expect higher prices as a result, and a shift by local consumers towards cheaper alternatives such as barley or oolong tea. Japan's tea output was worth $1.3 billion in 2009.
The organizers of the North American Tea Championship have announced 14 first-place winners in their annual Iced Tea Class competition. The event is aimed to highlight the best tasting teas available on the North American market. Winners include Milo's Tea Company, Numi Tea, The Republic of Tea and Teas Etc. Ito En's Tea's Tea Low Calorie Mango Oolong received the highest marks. According to the organizers, 43 tea companies of various sizes participated in the event and showcased more than 130 premium iced teas - almost twice as many as a year ago.
According to the US Tea Association, the US iced tea market has come a long way since its humble beginnings. In fact, about 85 to 90 percent of all tea consumed in the US comes chilled. And the country has now surpassed the UK in terms of import volumes: in 2010, the US imported a record 280 million pounds of tea. Over the last 20 years, the iced tea market has undergone a massive transformation, evolving from a $200 million market in 1990 to a $3 billion one in 2010. As the president of the US Tea association explains, this boom in popularity is largely due to increased awareness about its many health benefits. Experts suggest brewing iced tea yourself in order to get the most health benefits and value.
Every year, the US tea aficionados celebrate the National Iced Tea Month in June. The country consumed more than 65 billion servings of tea, or over 3 billion gallons, in 2010. Of that, approximately 85% in form of iced tea, which is a hydrating alternative to sugary beverages like soda and may help boost weight loss efforts. According to a recent study, drinking 2 cups of tea daily is associated with a lower percentage of body fat and weight control. Iced tea also remains a great tasting beverage and is virtually calorie-free and contains no sodium, fat, carbonation, or sugar. 2010 Dietary Guidelines for Americans recommend eating a diet with less sugar and have singled out tea as the beverage of choice.
According to Euromonitor, a market research firm, tea industry must try to find ways to replicate the success of coffee companies in unlocking the potential in the premium market. Data suggests that a liter of coffee commands three times the value of its tea equivalent on the global market. This means that coffee companies have been much more successful in sniffing out profitable niche markets. Examples of such innovative strategies include the meteoric rise of Starbucks in the US and the recent boom in coffee pods in Europe. The research firm expects premium categories such as white and rooibos tea to drive the tea market in the future. Figures show that in terms of constant value growth between 2005 and 2010, the global coffee market has expanded by 14% compared to 16% for tea, albeit the latter has grown from much lower levels.
After recently targeting Rishi Tea for improper use of health claims related to tea, the FDA has now warned Ten Ren Tea about a similar matter. According to a letter sent to the company's CEO, Ten Ren Tea is promoting its products as unapproved drugs on its website and product labels. The company, based in San Francisco, claims that possible health benefits of green tea include a reduction in blood pressure and a decreased risk of suffering from heart attacks and cancer. Those claims are scientifically unsubstantiated according to the FDA. In February 2011, FDA authorized one qualified health claim for green tea: "Drinking green tea may reduce the risk of breast or prostate cancer. FDA does not agree that green tea may reduce that risk because there is very little scientific evidence for the claim."
Japan has reported its first case of excessive radiation levels detected in domestic tea leaves. The discovery was made in Kanagawa prefecture, just south of Tokyo, and represents the first incident in over a month of an agricultural product found to be contaminated by radiation outside the Fukushima Daiichi's home prefecture. According to officials, tests found between 550 and 570 becquerels of cesium per kilogram of tea. The leaves were tested as farmers prepared to ship this year's first crop. The prefecture had previously been testing other agricultural products, but had not found any problems of excessive contamination. All tea shipments from the prefecture were suspended since the discovery.
Tea growers in Darjeeling are optimistic about this year's prospects, due to greater crop output and booming overseas interest. After suffering from adverse weather conditions that caused a steep production decline last year, India's famous tea region is looking to bounce back with a 25% rise in production. The region is also enjoying increased interest from foreign buyers looking to purchase premium first and second flush teas. Furthermore, growers are set to benefit from a favorable currency exchange with the European Union, where much of their produce is exported to. Perhaps most importantly, experts note an emerging domestic market for Darjeeling tea. Last year, Darjeeling produced 8 million kg of tea, the lowest figure in the past decade. Output is expected to reach around 10 million kg this year.
According to industry insiders, Kenya's tea sector is undergoing an unusually difficult time. Majors threats include adverse weather, piracy and political instability in some of its north Africa and Middle East markets. Kenya, the world's biggest exporter of black tea, has experienced very poor rainfall these past few months and the outlook for May remains the same. Oil price increases have affected operational costs, which have gone up by 10%, whereas the threat of piracy in the Indian Ocean has lengthened the time taken to deliver cargoes, further raising costs. Finally, instability in Egypt and several other large importing countries has impacted exports. Due to these factors, Kenya’s tea output may decline by as much as 12% in 2011, according to the nation’s tea board.
Sri Lanka has launched new logos to protect the island's best known brand under the Geographical Indicators (GI) international trade regime and promote it as ozone friendly. The project is aimed to market the island's teas as premium products, similar to French champagne. The new GI logos will denote seven specific agro-climatic regions where tea is grown: Nuwara Eliya, Dimbula, Uva, Udapussella, Kandy, Ruhuna and Sabaragamuwa in the central hills and southern region. Sri Lanka is also the only country qualified to use the 'ozone friendly' logo for tea after it gave up using Methyl Bromide, an ozone depleting substance in tea production.
Tea garden workers in Nepal are continuing their face-off against tea manufacturers for the second week. Their indefinite protest is tied to demands made-up of 28 points that include wage increases and social security. Earlier, both parties agreed to a 10 member taskforce comprised of union leaders, manufacturers and government officials. In the latest twist, talks ended without any positive outcome, as the two sides were divided over the wording for the formation of the taskforce to resolve the issue. Because of the strike, works in tea gardens and manufacturing plants came to a grinding halt in many districts across Nepal.
The US tea market is estimated at $8 billion and encompasses more than 3000 specialty tea rooms and retail outlets across the country. According to experts, it increasingly relies on alternatives to the classic Victorian conception of tea. In fact, tea businesses are shifting away from Victorian-style tearooms into smaller, tea-concentrated urban models. Businesses have also begun adding other services such as bakeries or in-store dining. Some tea stores have branched off to related services like online sales and business-to-business tea consulting. This plethora of strategies is aiding the development of the category and recruiting a new customer base. Despite baby boomers being the most populous target group so far, businesses increasingly seek younger customers who are attracted by tea's unique culture.
World Tea Expo, a specialty tea trade show, has announced the latest and most noteworthy products that will be showcased during the event. 2011 Best New Product Awards cover a wide range of categories in the sector - from ready-to-drink beverages to tea accessories. Winners include a tie between a body lotion infused with tea by Indie Tea and low-calorie iced teas by Ito En in the Tea as an Ingredient category. Best innovative product is a no-fuss filter by Sugimoto America designed to extract the perfect flavor of green tea. One-Touch Teapot by TeaTime Trading scooped the Tea Ware award with a novel glass teapot that allows to control the strength of the brew with the touch of a button. Best Accessory was a double-walled porcelain mug by Dethlefsen & Balk. World Tea Expo 2011 takes place at the Las Vegas Convention Center, June 24 - 26.
Tea prices in India, the world's second largest producer, have jumped this week, tracking global cues. Reports from auctions indicate that new season quality tea sold 29% higher, while the average quality rose 15%, compared to the same period last year. This comes after several major auctions around the world reported high tea prices. Top-grade tea gained 10% in Kenya over the last week, and similar rises were reported in Sri Lanka. Despite India ranking second in tea production after China, its per capita consumption of the beverage is only 0.8 kg compared with 2.5 kg in the UK and 1.5 kg in Ireland. However, there has been a steady annual growth of about 3% in domestic consumption and local consumers are increasingly willing to spend more for a good quality tea.
The Darjeeling Tea Association has signed a deal with the Gorkha Janmukti Morcha and other unions to end an embargo on tea from the region. Under the three-year deal, tea garden workers will receive a 30% wage hike. This increase is the highest one in the history of the Darjeeling tea industry. The daily salary will be $2 from now on, although unions' initial demand was closer to $3 per day. This deal covers 62 out of 85 gardens in Darjeeling and experts expect the remaining ones to hammer out a deal shortly, as a situation where different wages are paid to workers in the same region is unlikely. The Gorkha Janmukti Morcha union had set up an embargo on first flush Darjeeling tea export in the beginning of March.
Despite an 8 percent rise in volume terms between 2008 and 2010, a leading market research firm has warned of a bleak future for mass market tea in the UK. The rise is attributed to more people staying in during the economic crisis and two successive cold winters. The traditional British cuppa is enjoyed by the vast majority of senior people (88% penetration), yet that figure drops to 73% for young adults. And while standard tea accounts for 89% of the £647m ($1,04bn) market, it has failed to resonate with the younger generation, who are more inclined to consume herbal or specialty teas. The research also found that a third of tea consumers do not believe in its health benefits.
The tea industry across the world is stepping up efforts to help the victims of the disaster in Japan. Sri Lanka's tea companies have donated 3 million tea bags for the people affected by the tsunami and earthquake. The country has also donated $1 million and has requested the state-run airlines to continue flying to Japan. In the US, private enterprises in the tea sector have created initiatives to contribute to the relief effort. Online tea retailer Adagio Teas is donating 15% of sales of Japanese teas to the Red Cross. Rishi Tea has pledged 10% of its overall sales to the same cause. Teavana has promised to match all customers' donations up to $50'000 to a relief fund. Japan grows some of the most famous green tea varieties, such as Gyokuro, Sencha, Genmaicha and Kukicha.
The continuing export embargo in the Darjeeling region of India is expected to divert large customers to the neighboring Nepal and severely bring down prices. Exporters fear that buyers from Germany, Japan and UK will shift to Nepalese tea if the prohibition is not resolved. Around 0.5 million kilograms of first flush Darjeeling tea is produced in March, followed by another 1.50 million kg in April, and 90% of the crop is exported. According to insiders, prices may drop from approximately $130 to $20 per kilo. The embargo, in force since March 4, was imposed by a trade union seeking higher wages for garden workers.
The Darjeeling region of India is currently experiencing a political stalemate that may severely disrupt its production of first flush tea. A political party seeking a separate Darjeeling state has introduced a plucking ban as a sign of protest. It is an attempt to drain local government's coffers, which rely heavily on foreign trade of Darjeeling tea. First flush teas, highly prized in export markets, attract highest prices for their lighter liquor and muscatel flavor. Almost 70% of Darjeeling's output is destined for export and the first flush represents a sizable portion of annual income. Darjeeling is home to 85 gardens spread over 18,000 hectares, with an annual production of around 7 million kilograms.
According to the Wall Street Journal, tea is becoming increasingly popular with chefs and bartenders. A big educational push by tea manufacturers and sommeliers has made cooks and customers realize that gourmet tea can be used outside the cup as an ingredient in dishes and drinks. There are now many restaurants and bars across the US that are successfully experimenting with gourmet tea. For example, genmaicha, a Japanese green tea, can be ground with a pinch of salt to create a seasoning for grilled vegetables or meat. Another of Japan's most popular green teas, Sencha, is used by a New York bartender as a base for an alcohol-infused tea punch.
The South African Rooibos Council expects low yields for the country's huge rooibos tea industry in 2011 due to poor rains that may lead to smaller harvests. Oversupply also played a role in the past three years, as export volumes declined dramatically from 7200 tons in 2007 to approximately 6000 tons in 2010. This resulted in a surplus of about 3000 tons last year and prompted farmers to plant less bushes. Despite this, domestic demand has increased by about 5% in 2010 and it is the only tea sector that is growing in South Africa. On a separate note, the council is working on an initiative that would introduce common standards and measures for local farmers to sustainably produce rooibos products, which would be a marketing advantage in foreign markets.
The managing director of McLeod Russel, one of the largest tea growers in the world, says that ongoing droughts in Kenya will weigh heavily on the country's tea production. After a record year in 2010, the world's largest black tea exporter is expected to shed as much as 12% of its harvest this year. Prices are set to firm up as a result, especially when the political turmoil in Egypt, one of the major buyers, settles. As far as India is concerned, the country is running very low on inventory and will likely see price rises in the region of 5% to 7%. Quality teas are especially scarce and the demand from various export regions will remain strong throughout the year.
According to Kim Jage, executive vice president of World Tea Expo, the US tea industry is in line for a busy 2011, with several major trends that will likely have a lasting impact on the market. Some of those trends include modern and user-friendly tea accessories, tea lines created by celebrities and the rise of tea-specific outlets. The hottest demographic is expected to be men and millennials, which are beginning to be targeted with specific product lines and marketing strategies. A shift from specialty to a quality-oriented premium tea category is likely to help manufacturers maximize value. Finally, social media is predicted to play an increasingly important role in marketing and interacting with customers.
A new report by Global Industry Analysts, Inc. predicts that global tea and coffee sales will reach $70 billion by 2015. The key factors driving growth are health, quality and premiumization. The popularity of tea in particular depends on a greater awareness of its health benefits, according to the report. In terms of production, India and China account for more than half of the world's tea output, with a quarter destined for export. Whereas the economic crisis boosted the sales of low priced varieties of green tea, it had no impact on the growth of the iced tea sector, which remains strong in the US and Japan. In fact, the ready-to-drink tea sector grew faster than soft drinks segment in 2008 due to the impact of increasingly health conscious consumers. Despite a smaller market size, tea is expected to overtake coffee in the long run thanks to price, new flavors and a healthy image.
World Tea Expo, the largest and most prominent trade show for the US tea industry, has unveiled many educational and networking opportunities for this year's event. The expo, which takes place June 24 - 26 at the Las Vegas Convention Center, will feature more than 200 exposition booths and host the North American Tea Championship winners' tasting circle. Also, more than 60 conference sessions are scheduled, including hands-on skill building workshops, focused tea tastings, technical education and insightful industry round tables. Adagio Teas will be represented by three of its team members - Cynthia Fazekas will discuss tea blending, Charles Cain will present an advanced seminar on the business of tea and Suzette Hammond will demonstrate proven cupping techniques.
Kenya’s tea output rose by 27% in 2010, reaching a new record of 399 million kilograms, compared to 314 million kilograms in 2009. Production was mainly boosted by favorable weather conditions and generous rainfall. Kenya's earnings from tea reached $1.21 billion in 2010. According to the local tea board, tea is now the leading export earner in the country. But despite the good numbers, the tea board expects production to fall in 2011 due to unreliable rainfall.
Sri Lanka Tea Board expects tea production to exceed 320 million kilograms in 2010 - an all-time high. Previous record was achieved in 2008 with 318 million kilograms. Low-grown tea makes up almost two-thirds of the volume, whereas the superior high-grown crop constitutes a quarter of the total output. Revenue generated by tea exports is also expected to reach a new record at approximately $1.5 billion. Major export regions for Sri Lankan tea are Middle East, accounting for half of the volume, and the Russian Federation at 25%. The Tea Board plans to target the US and China markets in 2011.
Growers in India's Assam region, which accounts for more than half of the country's output, are concerned about the bland taste of their brew. The taste of Assam tea, which is known for its strength and body, and is often used in "breakfast" blends, has weakened over the years, mainly due to climate change. According to local researchers, temperatures in the region have increased by 2 degrees Celsius (3.6 degrees Fahrenheit) in the last 80 years. Climate change has also had an impact on output, with dampness negatively affecting tea growth and encouraging bug attacks. The region produced 564'000 tons of tea in 2007. This figure fell to an estimated 460'000 tons in 2010.
Sri Lanka has lodged a local claim for intellectual property protection for Ceylon tea under global Geographical Indicators rules. It is the first step necessary to obtain a Geographical Indicators recognition and protection under World Trade Organisation intellectual property rights rules. Seven of the island's tea growing areas will seek registration. The rules for geographical indicators enable registration of products based on defined growing areas as well as distinct product characteristics. Sri Lanka hopes that this feature can be used for marketing purposes on the international market.
Kenya's tea industry is looking for ways to improve the recognition and value of its products. The main concern is that the vast majority of Kenya's tea is currently exported in bulk - it is then blended with other teas and sold under foreign brands, thereby losing its identity. The industry is suggesting to encourage a more favorable tax environment for packaging equipment and material imports (which are currently taxed by 25%) and to scrap VAT for tea producers. The goal is to attract companies who manufacture tea in packets, tea bags, instant tea and other forms inside the country. As an example, experts cite Sri Lanka, which has earned 76% more from its exports in 2009 despite lower output.
A study has found that British workers lose 24 minutes a day preparing and drinking tea and coffee. The survey discovered that four in ten workers make a hot drink for more than one colleague every day. Assuming an average yearly wage of £26'000, this adds up to £400 ($625) a year in lost man hours per employee, so for a company of 35 people, that equals to more than £14,500 lost a year, while for a company of 600 it's £250'000. Scientists say that such rituals are an essential part of coping with sedentary office life in front of a computer. However, researchers of various fields are still debating the effects of caffeine on actual performance at work.
According to McLeod Russel, India's largest tea plantation owner, tea prices in India may rise up to 20% in the coming months due to low output and rising demand. Average prices in Assam, which accounts for more than half of production, may reach $4 per kilogram by April from current levels of approximately $3.30. The company attributes the rise to inconsistency in weather or cropping pattern, as well as continuing past attacks. Price rises are set to boost profits of tea growers including McLeod and Jayshree Tea, and raise costs for tea buyers like Unilever or Tata Global Beverages.
According to the Indian Tea Association, India's share of world tea exports dropped by 2 percent from 15% to 13% between 2005 and 2009. High labor costs, heavy dependence on weather and remoteness of tea estates from ports were identified as the main causes. In the same period, China and Kenya continued to expand their tea exports. China, the world's largest tea producer, saw its share grow from 16 to 19 percent, whereas Kenya's chunk increased form 19 to 22 percent. To counter the trend, India aims to improve the quality of its tea and increase the production of orthodox and organic tea. The major buyers of Indian tea are Iraq and CIS countries (21% each), followed by United Arab Emirates (13%) and the UK (11%). The US and Canada account for 4% of exports.
According to a report by the Chinese tea industry, China's tea exports will increase by 2% compared to last year. China, the world's largest tea producer, saw foreign trade exceed 300'000 tons in 2009 and its tea planting area has now reached 1.86 million hectares, about half of the world's total. Green tea remains the clear front-runner in terms of export volume with over two-thirds, or 230'000 tons, sold to foreign markets. On the other hand, exports of flower tea and pu erh tea have begun to fall. China surpassed India to become the world's largest tea producer in 2005. Output reached 1.3 million tons last year, accounting for 31 percent of global tea production.
India's tea regions continue to suffer from fluctuating weather conditions and experts now predict this year's production to come in 70 to 80 million kilograms lower than last year. A crop of 108 million kgs in September had given hope to growers in Assam and Bengal regions of India, which account for the majority of country's tea production. However, October dampened those expectations due to erratic weather conditions and the festive season that had impacted plucking. The shortage is expected to keep tea prices high for the upcoming months. India has suffered from unfavorable weather and pest attacks during first and second flush periods earlier this year.
The Canadian Coffee & Tea Show, the largest coffee and tea exhibition in the country, is set to take place in Toronto on September 26 and 27. The event, held at the International Centre, will highlight the latest in coffee and tea trends and feature the latest equipment, services and products from leading regional, national and global suppliers. It will include an extensive educational program geared for new entrepreneurs, independents and chain operators. The exhibition will also host the Canadian Barista Championship and the first annual Canadian Cup Taster Championship.
As predicted, the Darjeeling region is suffering heavy output shortfalls due to adverse weather conditions. Production is down 12 percent between January and August of this year and may end up with an annual figure below 8 million kilograms. The shortfall is also attributed to deteriorating productivity of tea bushes, which are 80 years old on average, and a shift towards less yielding organic farming methods. Production of first flush tea, harvested around mid-May, was down 35% and the second flush crop was also lower than expected. The Darjeeling Tea Association predicts 2010 to generate one of the lowest crops in the last 40 years.
According to South African Rooibos Council, the local rooibos industry registered a landmark growth last year, contributing $70 million to the country's national domestic product. This has made rooibos the only segment of the local tea market that has grown consistently both locally and internationally, with international consumption outstripping local demand. International exports to more than 30 countries reached about 6000 tons last year, which represents a threefold growth since 2000. Top importers of rooibos tea are Germany, the Netherlands, Japan, the UK and the US. About 15000 tons of rooibos are produced each year, of which between 4500 and 5000 tons are sold domestically and the rest is either exported or used for the production of various products for skin care, baby care, herbal tea, lifestyle programs and color cosmetics.
According to the founder of Dilmah Tea, Middle East markets are moving away from Sri Lankan tea and prefer heavily promoted and cheaper international brand names. Mr Fernando, who turned Sri Lanka's tea industry upside down from a traditional bulk tea exporter to a growing value-added seller, is concerned about weak marketing efforts of the country’s traditional export. He argues that Sri Lanka should not follow market leaders with blended tea and CTC manufactured tea, but to re-launch traditional grades of Pure Ceylon tea and market them strongly. Exports to Saudi Arabia, a prolific consumer of Ceylon tea previously, have declined from 11.4 million kilos in the year 2000 to 4.7 million kilos in 2009.
Local authorities and companies of Shizuoka, the heartland of Japan's tea industry, are gearing up for the fourth World O-Cha Festival. The four-day event, held from October 28 at the Shizuoka Convention and Arts Centre, will celebrate all things tea with a vast array of tea-related events. The Shizuoka festival will include exhibitions on tea culture from around the world, including a tasting area, as well as displays of tea utensils, machinery and confectionary that incorporates tea. An international competition for the best-tasting green tea will also be held. Shizuoka is the most important tea region in Japan accounting for almost half of country's output. Its inhabitants have far lower incidences of many forms of cancer, which some have linked with the relatively high amounts of green tea that they consume.
Hong Kong has reaffirmed its intention to become a global tea trade hub at this year's Hong Kong International Tea Fair, with over 300 exhibitors from 15 countries flocking to the Chinese port city. The fair featured an industry conference on market trends and branding, as well as a variety of tea forums, tea-tasting sessions and other activities showcasing the art and culture associated with tea. Exports of tea from Hong Kong increased significantly in the first half of 2010 to the equivalent of $8.78 million, up 46 percent from the same period last year. Hong Kong has the highest tea consumption of any city in Asia, with tea imports growing by 25 percent to $25.8 million in the first half of 2010.
Tea production in India's northern region has dropped 16 percent in June after pest attacks damaged crops. The region, which accounts for more than two-thirds of total output, declined to 76.8 million kilograms from 91.9 million kilograms a year ago. The Assam region has experienced the biggest decline for its second flush teas, predicted to be close to 40%. The second flush pickings are typically the best quality leaves that fetch a premium from buyers overseas. On the bright side, India's total output in January to June grew 20%, totaling 339 million kilograms, compared with 333.9 million kilograms a year ago. Exports climbed to 83.9 million kilograms in the same period.
Sri Lanka, one of the world's biggest black tea exporters, is on track for a record tea crop in 2010 after a solid growth in the first half of the year. Tea production in the first six months increased by 27.8% to reach 166.9 million kilograms, according to the Sri Lanka Tea Board. This is attributed to favorable weather conditions, better fertilizer use and lack of labor unrest. The Tea Board predicts annual output to exceed 320 million kilos if conditions continue to improve. Sri Lanka is recovering from a steep decline in 2009 that saw production fall by almost 10% due to droughts. Tea prices in Colombo, the world's largest tea auction, recorded an average of $3.37 per kilo due to supply shortages in India.
Kenya, the world's largest tea producer, is experiencing pressure from other tea-producing nations for its biggest crop: low-quality black tea. Despite a 50% growth in output for the first quarter of 2010 and improved prices, the country is struggling to diversify into the lucrative orthodox tea market and is hampered by shifting international trade policies. Most of Kenya's production consists of low-quality dust and fannings, mainly geared towards export markets in the UK, Pakistan and Egypt. Despite various incentives, the country is having troubles diversifying towards cultivation of orthodox tea. The African nation is also lacking a domestic market - it exports 95% of its 200 million kilogram production - making it vulnerable against more advantageous trade deals between other consuming and producing nations.
Producers in the famous Assam region of India are continuing to experience huge production losses due to excessive rainfall and pest attacks. Region’s largest tea companies have suffered drops of 20% and up for the month of June, as rainfall continues to exceed season averages. In 2010, many key tea-growing areas reported an increase in cumulative rainfall of 50 to 120 percent. Extremely wet weather and inadequate sunshine impedes photosynthesis leading to a sharp drop in the crop. Furthermore, plantations in Assam have been affected by a tea mosquito bug that is particularly hard to eradicate, given the stringent rules of the European Union in regards to pesticide residue levels.
A report by a leading consumer organization in the UK has criticized the amount of tea bags that are not biodegradable. According to Which? Gardening, tea bags produced by UK's leading brands like Tetley, PG Tips and Twinings are only 70 to 80 percent biodegradable. The conventional tea bag is mainly produced using paper fiber, but the rest is usually made up of heat-resistant polypropylene, which is not biodegradable. Nonetheless, a government body overseeing sustainable practices advises people to compost tea bags even if they contain polypropylene. Tea drinkers in the UK consume 165 million cups of tea per day, with tea bags being used in 96% of them.
According to the Tea Board of Kenya, the African country will seek new international markets for its second biggest source of foreign exchange. Kenya relies heavily on five key markets - Egypt, Pakistan, UK, Sudan and Afghanistan - and fears that any socio-economic instability in any of those countries may have a huge impact on exports. Over three quarters of exports are destined for these 5 countries. Regions in Asia, Middle East, North America and Africa are expected to help the world's largest tea exporter diversify its trade portfolio. Also, the Kenyan tea industry plans to create a "mark of origin", similar to those already developed by Assam and Darjeeling regions in India, that would ensure quality standards for end-consumers and increase visibility abroad.
Figures from the Tea Board of India indicate that exports increased by 19% to 71 million kilograms in the first five months of 2010, compared with 59.5 million kg in the same period last year. Strong demand from the Middle East region and rapid price rises of Sri Lankan tea are considered as the two main factors behind this. However, the Tea Board warned that excessive rains in the prized Assam region may adversely affect crop yields and dampen future export growth rate. India expects to export approximately 200 million kilograms of tea in 2010. Its main competitors remain Kenya and other African nations for CTC (crush-tear-curl) tea, and Sri Lanka and Indonesia for orthodox varieties.
According to UN's Food and Agriculture Organization, there is huge potential to market tea in producing countries, where consumption remains low. The agency urged tea producing nations to market the drink more heavily at home and to publicize its health benefits abroad, cautioning against increasing the size of tea plantations, which would dampen crop prices in the long run. Traditional import markets are said to be less lucrative than the countries where tea is produced, the per capita consumption is much lower. Consumers in tea-producing countries drink just one-tenth of the amount of tea compared to people in mature import markets, the report notes.
In a clear sign of recovery for the tea industry, the World Tea Expo 2010 saw its attendance jump by 68% compared to 2009. The organizers report 5800 attendees visited the specialty tea trade event, including more than 4700 tea industry professionals. According to official figures, more than two hundred companies exhibited at the show held in Las Vegas, with almost half of them not exhibiting at any other trade event in the US. New companies noted good levels of first-time customers' interest, whereas established brands were satisfied with the number of new business leads. The 2011 World Tea Expo will take place from 24 to 26 of June at the Las Vegas Convention Center in Las Vegas.
The World Tea Expo 2010, held in Las Vegas the past weekend, proved once again that it remains the quintessential event in North America to meet vendors, share business strategies and keep abreast of industry developments. Although the official figures are not out yet, the attendance has risen sharply compared to last year, with good traffic reported on all three days. The number of exhibitors has also increased with more than sixty new companies present. Finally, more than a hundred new products were showcased at the event. The most noteworthy ones were green oolongs from New Zealand, courtesy of Zealong, and very rare Hawaiian tea whose production is currently limited to a few kilos at a time.
Heavy rainfall in the Assam region of India is causing damage to the crops and has cut output by up to 20%. Local authorities say that incessant rainy conditions, that have been affecting the area for the last two months, have pulled down the total production figure by almost three percent from January to May, as compared to the corresponding period last year. High levels of rainfall deprived crops of sufficient sunlight and a warm temperature during daytime in May. The ideal weather conditions for the tea crop are rainfall at night and warm weather during the daytime. The rainy weather threatens the second flush from the gardens of Assam.
The 2010 World Tea Expo is once again taking place in Las Vegas, Nevada from the 11th to 13th of June. The annual trade show, dedicated to specialty / premium tea industry, will host a variety of events including educational conferences, tea championship awards and new business boot camp. More than 300 specialty tea wholesale suppliers and related vendors will exhibit new products, services and innovations. Organizers expect thousands of attendees from all sectors: retailers, tea room owners, F&B directors, spa managers, specialty grocers, mass merchants and other business professionals. The US tea industry was valued at $7 billion in 2008 and is thought to reach $10 billion by the end of the current year.
Finlays estates in Passara, Uva Province have become the first to earn the Rainforest Alliance certification in Sri Lanka. The Rainforest Alliance certification indicates compliance with strict guidelines to protect the environment, wildlife, workers and local communities. Finlays, a large tea grower and packer, now boasts 2'500 acres of new rubber and timber plantations, with trees and creepers planted in these fields to improve soil structure. Also, integrated pest control systems are reducing the use of agrochemicals. Finlays employs over fifty thousand workers, mostly on plantations in Sri Lanka, Kenya and Uganda.
Inc., a monthly magazine targeted at people who run growing companies, identified the US tea sector as one of the best industries for starting a business. Tea is the sixth most popular beverage in the US (after soft drinks, water, beer, milk and coffee) and has been growing by about 5 percent over the past five years because of increasing consumer health consciousness. The feature also notes that although the top four tea manufacturers make up 88% of industry revenue, the remaining 12% represents a $264 million market for small, independent manufacturers. The average profit margin of US tea companies is estimated at 18%.
According to Ashok Lohia, the largest Darjeeling tea producer with 13 tea estates under management, output of first flush Darjeeling tea has been adversely affected due to the lack of rain and drought conditions for the second year in a row. On average, he estimates that production will come in 25% lower than normal. In addition to this, the Indian region is dealing with a falling premium on organic teas, where costs are considerably higher and practices more complex, as more than 50% of organic produce is selling below the cost of production.
Kenya, the world's largest tea exporter, is reporting continued high tea output and prices as the country enjoys good rains. Production for the first quarter of 2010 stood at 111 million kilograms, a 69 per cent increase over the 65.8 million kg recorded in the first quarter of last year, when the country was affected by severe droughts. Production was the highest for the first quarter in five years. The average price for Kenyan tea was 15% higher at $3.04 per kg compared with $2.31 recorded in the same period in 2009. Also on the increase is the number of countries buying Kenya’s tea, rising to 38 from 35 in 2009 and 2008 respectively.
The Gossainbarie tea estate in India's Assam region has gone organic and is following the principles of India's ancient plant medicine Vriksh Ayurveda. After seeing its output plummet from its peak 900'000 kilograms to 355'000, the new owner decided it was time to opt for something different in order to save the estate. Going organic can boost the market price of the tea and open up new niche markets in the West, helping to overcome the high production costs caused by rising wages and expensive chemical fertilizers. The estate hopes to produce 600'000 kilograms of tea this year.
The International Tea Committee wants Pakistan, a large tea producer and importer, to become part of the organization. By becoming an associated member of the ITC, Pakistan would get more information about the tea industry and play a bigger role in discussing relevant issues. The ITC is an unbiased, non profit making organization, supported and recognized by many of the major tea producing and tea consuming nations as the official source for tea statistics. There are 85 percent tea producing countries who are full members and small tea growing states are the associate members of ITC.
A new study by Euromonitor on global drinking habits highlights the increasingly heterogeneous nature of the global beverage market. It notes that traditional perceptions of how the world drinks have been challenged over the past decade, and this is reflected by a new generation of dynamic niche categories like functional drinks, soy beverages and ready-to-drink tea. For example, the ready-to-drink tea category in China has outsold its hot tea rival by 1bn liters in 2009, whereas ten years ago hot tea generated more than five times the consumption of ready-to-drink tea equivalent.
This year's Tea & Coffee World Cup Europe will kick off this weekend in Vienna, Austria. The event, taking place from April 25 to 27, will feature exhibitors of every type of service: supplies, machinery and equipment, roasters, packers, tea & coffee traders. There will be interactive events such as coffee and tea cuppings, contests such as latte art and barista competitions and coffee and tea product competitions, as well as educational seminars led by industry notables covering the latest developments and topical subjects, all designed to increase attendance by adding value to the visitors' experience.
According to a report on organic consumption trends, core organic consumers, those who are the most loyal to buying organics, are seeking more authentic, clean foods through farmers' markets and community support agriculture. The study, called State of the Organic Consumer 2010, estimates that these types of shoppers make up 24% of the organic market and sheds light on how they, and other types of shoppers, perceive organic and natural products. For example, core consumers are intensely involved in organics, whereas "peripheral" consumers tend to be motivated by price. Also, the study notes that shoppers see private-label products as being more authentic than mainstream organic products.
Generous rainfall in the past week has boosted tea planters' hopes of a good first flush harvest in the Assam region of India. First flush tea, picked from March to May, is known for its strong, fresh flavor and fetches highest prices at auctions. Nearly 20 percent of the total production of tea in Assam takes place during the first flush period. This comes as a blessing for the region, which experienced a dry spell last year and in the beginning of this year. However, local scientists warn that the state had witnessed a tremendous climatic change in recent times with a decrease of nearly 50% in annual rainfall in the last 15 years.
Honest Tea has been found to have the most eco-friendly products among 23 of America's most popular mass-market beverages. The independent study, published by Greenopia, highlighted which soda, juice, and energy drink brands are the greenest. Honest Tea was the only mass-distributed, retail beverage to earn the coveted Greenopia 4-Leaf rating. It was followed by Steaz and Santa Cruz Organic Sodas - both with 3-Leaf rating. Sales leaders Coke scored two leaves, while competitor Pepsi earned only 1-Leaf rating. Dr. Pepper, Vitaminwater and Red Bull scored a zero rating.
The Rainforest Alliance has seen continued growth in all of its programs despite the tough economic climate in 2009. The international non-profit organization, developing initiatives for sustainable forestry, agriculture, tourism and climate, reported an increase of 26% in the number of companies buying from certified farms and forests. According to Rainforest's president, four out of the five top tea companies worldwide have committed to buying tea from Rainforest Alliance Certified farms. Tea brands that source part of their crops from sustainable sources include Lipton, Peet's Coffee & Tea, The Tao of Tea, Dallmayr, Twinings and Taylors of Harrogate.
Sri Lanka has launched a quality certification program for tea destined for export, to ensure exported teas are devoid of stones and other contamination. Random test will be done on products to ensure they conform to the standards after certification is given and would help tea producers improve standards and act as an assurance of quality. A guarantee of quality is required as food safety standards are becoming increasingly strict in key markets like Europe, Japan and North America.
According to Beverage Marketing Corp, the US beverage category declined 3.1% in volume in 2009 due to economic woes. So-called value-added water and sports drinks, like Coke's Vitaminwater, were the two hardest hit categories, with volume declines of 12.5% and 12.3%, respectively. Carbonated soft drinks, the largest beverage category that includes Coca-Cola and Pepsi, declined 2.3% in volume. On the bright side, ready-to-drink tea segment recorded the biggest gain, posting a 1.2% rise in volume. 2009 marked the fifth consecutive year of declines in the soft drinks category.
Figures for the month of February indicate that Sri Lanka's tea production rose by a whopping 68 percent. The country produced 23 million kilograms of tea in 2010, compared to 13 million in the corresponding month last year. This performance is attributed to correct application of fertilizer, improved weather conditions and a stable labor force. However, these numbers need to be put in perspective, as last year's figures were negatively affected by adverse weather conditions, which saw output sink by 44% in contrast to 2008. The Tea Board also noted a growing demand for low grown tea from the Middle East and Russia.
In light of the success of takeaway coffee cup, making tea convenient for takeaway has been a major issue for some big players in the tea industry. The reason behind the impasse is the tea bag, which somehow needs to get disposed of. Several companies, including PG Tips, Halssen and Lyon and Mighty Leaf are working on different cup lid concepts, which lock in the tea bag into the lid after brewing. The most novel idea to enjoy whole-leaf tea on the go comes from UK's Tea2Fly in the form of a sip-through lid with a membrane that lets only the liquid to pass through while capturing the leaves.
This year's Natural Products Expo West, held in Anaheim, CA., witnessed a wave of kombucha fever. Honest Tea and Celestial Seasonings are some of the larger companies on the market that jumped onto the bandwagon. Both big tea makers showed off flavor and ingredient profiles that masked much of the vinegar bite in an attempt to attract new consumers. This is a clear indication that the sour product of tea fermentation, flavored with fruit juice for a more accessible taste, is rapidly gaining awareness across the US, mainly due to its health benefits.
During the third Global Dubai Tea Forum 2010 it was revealed that Africa and the Middle East account for 13.8 percent of global tea consumption. This puts the region in second place worldwide, after Asia. The biennial forum concluded with discussions of trends in innovation and current market developments, as well as the growing popularity of flavored tea globally. The Global Dubai Tea Forum took place from March 9-10, 2010, at the Westin Dubai Mina Seyahi. The event saw the attendance of over 360 delegates from more 35 countries worldwide.
Sri Lanka has surpassed the $1 billion mark in tea exports for the third consecutive year. As the largest exporter of pre-packaged branded tea, it is also the only country to exceed this symbolic figure. According to the country's Tea Board chairman, the industry will concentrate on re-planting efforts and upgrading tea production. Other initiatives include labor cost reduction and raising the per-head productivity. 96% of Sri Lanka's tea produce is exported.
The Ethical Tea Partnership, an association monitoring the social and environmental conditions under which tea is produced, has linked up with The Fairtrade Labelling Organizations International, responsible for the strategic direction of Fairtrade and the Fairtrade standards, to improve the lives of tea workers and promote sustainability in the tea industry. The two bodies will work together to reduce duplication in auditing for tea growers, facilitate Fairtrade certification of producers in their supply chains and implement joint projects to address specific issues facing producers in the tea industry.
Tea production in Kenya, the world’s biggest exporter of black tea, rose 47% in January because of wet weather in the month’s first half. Output climbed to 37.7 million kilograms from 25.4 million kilograms a year earlier, according to the Nairobi-based Tea Board of Kenya. Kenyan tea prices rose last week before an expected decline in the crop as the pruning season starts. Average prices gained to a record $3.12 a kilogram in December after poor weather cut Kenyan output of the leaves, worsening a global shortage.
The Dubai Tea Trading Centre has revealed a record 7.5 million kilos of tea traded through the Centre in 2009, despite production shortfalls in main producing countries. Prices have also increased in 2009, fetching on average 12 percent more than in 2008. Sri Lanka, India and Kenya are Dubai’s top trading partners, contributing over 65 per cent of the total tea traded through the emirate. Other countries listed include Indonesia, Vietnam, Nepal, China and Iran.
According to the latest numbers from the Tea Board of Kenya, Kenya has overtaken Sri Lanka to become the number one tea exporter in the world. In 2009, the African country exported 342 million kilograms to 47 world markets, accounting for 22 per cent of the world tea exports. Out of the 40 percent of all global tea bags, at least 10 percent of its content are Kenyan. Tea is grown on about 150,000 hectares of land, yielding an average of 10,977 kg of green leaf per hectare.
The prices of top grade African tea are nearing record highs, as they shot up more than 7% at this week's auctions in Mombassa. Tea sold for as much as $3.09 a kilogram, compared with $2.88 last week. The record stands at $3.12 a kilogram reached last year. The rise is attributed to unfavorable weather damaging crops. Experts fear that a gradual rebound in output will still not be able to keep up with even quicker demand growth from around the world.
Tea plantations in west Bengal and Assam continue to be affected by rain deficiency and erratic changes in the monsoon. Last year the country was plagued by lack of rain and thus experienced a plummeting output, as rain is needed for the pruned brushes to recover from stress. On average, the region should have three days of rainfall in January and February combined, yet the plantations are currently still waiting for the first showers. India is the world's largest producer of tea and has about 170,000 hectares of land under tea cultivation.
America's soft drink companies are making a push to make the calories in their products even more clear and consumer-friendly by putting the information on the front of all their packages, vending machines and fountain machines. This answers First Lady Michelle Obama's call for innovative industry initiatives that contribute to her efforts to help families make informed choices as part of a balanced lifestyle. The industry will start implementing the scheme, which goes beyond what is required by the federal agency's food labeling regulations, across the country this year with completion in 2012.
Indian Tea Association estimates that the country's tea exports jumped 37% in December. The rise is attributed to improved demand driven an overseas recovery and a global production deficit, as other producing countries like Kenya and Sri Lanka are facing huge production deficits. Data released by the Tea Board showed total exports in December standing at 22.24 million kilograms, compared to 16.24 million kg a year ago. India's total exports in 2009 fell 5.7 percent to 191.5 million kg, the Tea Board said.
Latest findings from market research firm GIA indicate that the global market for green tea is projected to exceed 1.2 million tons by 2015. The report cites growing health consciousness, increasing consumer awareness about the medicinal benefits of green tea and increasing incidence of obesity as some of the key factors driving green tea market. China is the largest producer of green tea worldwide and is also the leading exporter, while Morocco is the leading importer of green tea worldwide. Green tea is extensively consumed in Mainland China, Taiwan, Middle East, and Japan.
As reported by a survey in the UK, a quarter of workers claim that their employer had taken steps to cut the cost of refreshments over the past year. Many workers were now expected to provide their own beverages, pay for what they use or at least contribute towards the cost. A tenth of the participants admitted that cutbacks on refreshments had affected the atmosphere at work and 20% were left feeling uncertain about the future. On the other hand, a third claimed that such small perks boosted morale in the workplace.
The 2010 Winter Fancy Food Show, taking place in San Francisco last week, showcased several new products in the tea category. Honest Tea launched two new Kombucha flavor extensions, along with a new Honest Mate in Maqui Berry. Oooli Tea from Canada presented several fruit-infused iced teas brewed from green and oolong varieties. BevNovations, a Maryland-based company displayed its new Silence Tea range, geared towards the holistic segment. While there were fewer new brand introductions and product line extensions than last year’s show, the companies in attendance reported very favorable results over the course of the three days.
Tea exports in Kenya have risen more than 10% in value in 2009, despite production being affected by severe droughts. The African country exported crops worth 69 billion shillings (approximately $1 billion), as the local currency depreciated against the US dollar. Average tea prices rose to $2.72 a kilogram from $2.33. Prices at the Mombasa tea auction were also the highest recorded in close to two-and-half decades, according to the Tea Board of Kenya. Export earnings for 2010 are expected to increase marginally.
As market research firm Mintel reports, there were 30% less product launches in the US food and beverage industry in 2009, compared to 2008. A number of small companies have slowed down product introductions due to the economic situation, whereas some segments have become over-saturated. This is the biggest decline in the last decade. Despite the trend, some categories experienced growth, for example ethical and environmental claims increased from 9% to 17% of all product launches in 2009. Products boasting an economy claim have increased by 72% compared to the previous year.
Tea Board of Kenya predicts a more than fifteen percent growth for the country's tea output in 2010. Kenya has seen earnings from tea rise to $896 million in 2009 after prices climbed due to a global deficit caused by dry weather. It produced 315 million kilograms of tea in 2009, down from 345 million in the previous year. The East African nation is the largest grower and one of the leading exporters of black tea, which is an important source of foreign exchange in the region's largest economy.
India, the world's largest tea producing country, has seen its exports increase by a whopping 24% in November. The rise is attributed to rainy weather that boosted crop levels. Shipments were 19.3 million kilograms, compared with 15.6 million kilograms a year earlier. Production in November climbed to 90.5 million kilograms from 89.7 million kilograms in 2008. On the flip side, output for past eleven months has dropped to 920.9 million kilograms from just above 922 million kg the previous year.
Sri Lanka is preparing a claim for intellectual property protection over different types of Ceylon tea under global 'Geographical Indicators' rules. Like the wines of Bordeaux or the Tequila of Mexico, the term 'Ceylon Tea' would be attributable only to tea manufactured in Sri Lanka, and not blended anywhere else. A Geographical Indication is a name or sign used on certain products which corresponds to a specific geographical location or origin, for example a town, region, or country. The use of it may act as a certification that the product possesses certain qualities or enjoys a certain reputation due to its geographical origin.
According to the latest report by the Sage Group, a tea industry think-tank and publisher, Kombucha is becoming one of the hottest selling bottled beverages at natural foods outlets across the United States. The comprehensive study notes that once considered a quirky product limited to hippies and natural foods purists, Kombucha has morphed into a commercially viable beverage category, with sales approaching $100 million per year. The fermented tea has a wide array of ingredients and active constituents — carbohydrates, caffeine, antioxidants, alcohol, various natural acids, and pre/probiotics.
Tea prices are due to come down in 2010 from their record highs this year, the United Nations Food and Agriculture Organisation predicts. A return of normal weather patterns in leading producer regions should alleviate tight supplies that have sent tea prices soaring in 2009, as major droughts have affected the growing regions in India, Sri Lanka and Kenya during Spring and Summer. The FAO tea composite, an indicative world price for black tea, reached a high of $3.18 a kilo in September compared with an average price of $2.38 in 2008.
According to Darjeeling's largest tea producer, premium organic tea from Darjeeling region of India is making grounds in new markets like Germany, Russia, Japan, China and the UAE. Germany is poised to become a major player, as a leading buyer, Projectwerkstatt GmbH, has decided to go for 100% organic Darjeeling tea in 2010. The organic movement is driven largely by the politically correct tone, tenor and mood of the consumer in developed markets such as the US and Europe. With big growth in demand, natural calamities remain the biggest worry for tea growers. This year the production of Darjeeling tea has been affected by drought resulting in a ten percent drop in production.
Travel publishing firm Lonely Planet has revealed ten locations to experience tea in the most unusual places around the world. The new book '1000 Ultimate Experiences' awards the first place for tea experience to the city of London, suggesting the Ritz hotel for afternoon tea. The second place is the Trans-Siberian Railway, a six-day train from Moscow to Beijing, where travelers can enjoy tea brewed in samovars. Other destinations in the top 10 include several countries in Latin America, the Darjeeling region of India and Boston, US.
According to the Tea Board of India, the country's tea production rose 6.2% in October due to crop boosts by post-monsoon rains in the nation's biggest growing region. Production was 133.6 million kilograms, compared with 125.8 million kilograms a year earlier, although total output year-to-date dropped to 830.4 million kilograms from 832.5 million in the same period last year. The world's largest tea grower also witnessed another month of dwindling exports in October, recording an eleven percent decline compared to October 2008.
India's tea industry is planning to improve the image of its tea crop by creating a branded identity of Indian tea. The committee, headed by professionals from country's leading tea companies, will formulate a global branding strategy to market Indian teas worldwide. The commerce ministry plans to create an umbrella brand for Indian tea, similar to Sri Lankan "lion logo", under which all categories will be exported across world markets.
Uganda is expecting another record year for its tea exports, with an anticipated $90m worth of exports for 2009, according to Uganda Tea Association. The African country's exports have steadily increased by roughly 25% in the past several years and have become the nation's third largest foreign exchange earners. The country boasts 12 tea processing and exporting companies operating 21 processing factories, with 62,000 people employed throughout the tea industry. Uganda currently ranks 13th among the world's largest tea producers and third in the East and central Africa region after Kenya and Malawi.
The third World Congress on Tea & Health: Nutraceutical and Pharmaceutical Applications will take place in Dubai from 3 to 4 December 2009. The event will attract participants from various fields: researchers and academic professors, R&D departments, clinicians, pharmaceutical companies, food supplement companies and cosmetics companies. The goal of the congress is to provide answers and to give a future vision of how tea polyphenols can enhance human nutrition and help in the prevention and treatment of many chronic diseases.
India’s tea import bill has shot up by 46% in the first six months of 2009, as it increased imports from Nepal, Vietnam and Argentina. The Indian tea industry is importing these teas, which are primarily meant for re-export, to maintain a competitive advantage in the global export markets. As prices of tea continue to rise due to production shortages, the industry is resorting to imports of cheaper teas from other countries, which are then blended with Indian tea for export markets. In 2009, India has even started to buy tea from non-traditional countries like Canada, Iran and the US.
A recent study by Euromonitor analyzes the hot drinks market in face of recessionary pressures on the global scale. It predicts that core markets of Japan, Germany, US, UK and France will all be seriously impacted by declines in consumer spending. Also, a shortfall in global tea production, in countries such as India and Kenya, in 2009 could push prices to an all time high. Finally, opportunity for consumption growth will be driven through emerging markets, especially the Asia-Pacific region, which is forecast to dethrone Western Europe as the highest spending region on hot drinks by 2010.