Need to Know

Tea industry news for the week of May 25.

  • International Tea Day
  • Angela Lansbury as teapots
  • India COVID-19 Update
  • Matcha in Demand
The Kao Ting Academy in Jian Yang, Fujian Province celebrated International Tea Day with a demonstration of the ancient Song Dynasty preparation of powdered tea whisked in Jian Zhan tea bowls fired at a local kiln. Photos by Liu Linjiang and Ding Shuliang.

International Tea Day

Carpe Diem

The tea industry seized the day May 21, celebrating with authentic and meaningful exchanges of information globally in contrast to amped up marketing typical of previous years.

The inaugural UN sanctioned-event was grounded in the soil and the people who grow and process tea. Since the 1950s marketers, mainly in developed countries, have promoted tea during the year-end holidays, designating December 15 as International Tea Day. The effort was well-meaning but out-of-sync with traditional spring celebrations in tea producing lands.

Last week the world witnessed a confident and much better coordinated effort, as various tea associations, government tea boards, trading companies and educational institutions followed the example set by the FAO Intergovernmental Group on Tea (IGG). Due to the pandemic, many activities were conducted virtually. The overall impact was significant as media coverage carried the UN messaging.

Tijjani Muhammad-Bande, president of the United Nations 74th General Assembly, took part in an online session with 200 delegates from 20 countries. He said that “we must galvanize multilateral collective action to implement activities in favor of the sustainable production and consumption of tea and join the co-convenors and participants in raising the awareness of importance of tea in fighting hunger and poverty.”

Noting that 60% of tea is now produced by smallholders, FAO (UN Food and Agriculture Organization) pointed out that tea production and processing directly contributes to several of the UN’s Sustainable Development Goals (SDGs), including the first goal, the reduction of extreme poverty; Goal 2, the fight against hunger; Goal 5, the empowerment of women; and Goal 15, the sustainable use of terrestrial ecosystems.

In Rome FAO director-general Qu Dongyu said that a more productive and resilient tea sector calls for better policies, more innovation, increased investments and greater inclusiveness in tea production and processing. This year’s theme is “Harnessing Benefits for all from Field to Cup.”

“Tea, as a source of employment and revenue, can help alleviate some of the hardships resulting from the current economic downturn,” he said.

China invested significant resources with regional festivals and a series of events at the Chinese Businessman Museum in Beijing. More than 50 industry groups took part.

Tea consumption has grown rapidly the past two decades and contributes to the financial well-being of millions. China benefited greatly from this growth. Regional activities included a stir-frying tea competition featuring Yuhua tea in Nanjing in China’s Jiangsu Province and a demonstration of the traditional Song Dynasty way of whisking powdered tea in Jian Zhan cups hosted by the Kao Ting Academy in Jian Yang, in Fujian Province.

Zhang Jun, China’s permanent representative to the United Nations, said the inception of International Tea Day has given tea new life and vitality.

Events were promoted in several streaming videos with brilliant images such as the Food and Agriculture Organization’s “The Art of Making Tea” and the UK Tea & Infusions Association video: “Raising Our Cup to All Tea Drinkers

The Tea and Herbal Association of Canada President Shabnam Weber hosted an all-day “Sofa Summit” that featured conversations with 21 tea experts, retailers, traders, and association directors across the globe.

China hosted a 36-hour live broadcast featuring 29 people from several countries.

Coordinated by the China NGO Network for International Exchange, events in Beijing brought together the China Culture Promotion Society, the Tea Road (China) Cooperative (TRC) and the China Chamber of Commerce of I/E of Foodstuffs, Native Produce and Animal By-products (CFNA).

FAO formally commended the effort and Wang Shi, chairman of the China Culture Promotion Society cited China’s responsibility “to work with peers in the world to promote the healthy and sustainable development of the tea industry and exchange of tea culture. It can help to build a community of shared future for mankind.”

India announced a special auction organized by the Tea Board of India from tea plucked on Thursday by planters across the country. This special edition is limited to five packages in a lot with a maximum of five lots from each factory. Proceeds from the June auction will be shared with relief funds.

Messaging in every country amplified the global trend toward transparency. FAO organizers used the occasion for an honest assessment of tea industry opportunities, challenges and potential shortfalls.

“Tea can play a significant role in rural development, poverty reduction and ensuring food security in developing countries because of it being one of the most important cash crops,” according to the UN.

Joydeep Phukan, secretary of the Tea Research Center at Tocklai, in Jorhat Assam, formally proposed the UN initiative in 2015 and proudly carried it forward though the General Assembly vote in November 2019.

Angela Lansbury as teapots

Amanda@pandamoanimum posted a clever Twitter thread in tribute to Angela Lansbury and tea. The thread portrays the beloved actress in her many outfits, each meticulously matched with a tea pot. The effort was rewarded with 20,000 retweets and many many “likes” including my own.

The effort inspired others to post their favorite shot of Lansbury and a suitable teapot to share the spotlight.

India COVID-19 Update

The Indian Tea Association (ITA) estimates first quarter COVID-19 related losses will exceed $275 million.

Tea production declined by 65% in March and by 50% in April in Assam and West Bengal following a March 21 lockdown that stopped the harvest and led to transportation and logistics delays.

ITA, which represents planters, urged the federal government and state governments to provide financial support and relief payments. Growers are pressing for an increase in working capital. Operations resumed April 12 but with a limited workforce. Pruning overgrown bushes delayed plucking an additional two weeks. In the meantime, dry weather has lowered yields.

Production totals are 140 million kilos below normal output according to ITA. Export demand is increasing from key trading partners that include Russia, UAE and Europe.


This map shows relatively few cases in Assam as rural areas in general experienced lower rates of infection than crowded Mumbai, but that is changing as the contagion progresses and migrant workers return to their home villages. Sikkim, for example, only reported its first case last week and the rate of infection remains low in Ladakh as well as in the union territories of Goa, Puducherry and Dadra & Nagar Haveli. Maharashtra was the Indian state hit hardest by the coronavirus on May 23 the state saw a record of more than 3,000 new infections in the span of just 24 hours surpassing the mark of 50,000 cases.

Matcha in Demand

Matcha continues to experience strong growth and sales estimated at $2.26 billion by the end of 2025, according to market research aggregator Million Insights. The combined average growth rate during the five years beginning 2019 is 4.7%, according to the Matcha Tea Market report.

Rising demand for organic, natural and nutrient-rich products are likely to have a positive impact on market growth as consumers demand healthy beverages, containing vitamins and antioxidants.

The report claims that matcha “improves focus, calmness and concentration as well as it enhances metabolism, gastrointestinal functioning, immune system, natural detoxification and inhibition of cancer cells.”

Little of the tea is prepared in the traditional Japanese style of whisk and bowl. Dunkin, for example, introduced a stone ground powder produced in Nishio in Aichi prefecture. The tea is blended with milk (or plant milk) and can be served hot or cold. The matcha lattes were tested in Springfield, Mass., and Phoenix, Ariz., and rolled out nationally Feb. 26.

During the company’s the first quarter earnings call, Dunkin’ specifically mentioned matcha as a sales driver. Comparable sales declined for the three months ending April, but during the early weeks of the quarter comparable sales were up 3.5% “and were on pace to be the highest quarter comparable sales growth since 2013,” according to the company. “The increase in average ticket was driven by a favorable mix shift to premium priced espresso and cold brew beverages, including the launch of Matcha Latte,” according to the company.

Need to Know

Tea industry news for the week of May 18.

  • Boba Tea Tops Beverage Delivery Lists
  • East Africa Update
  • Turkish Tea Harvest
  • Robotic Waitstaff Serves Tea
  • Nepal Asks India to Resume Tea Imports

Boba Tea Tops Unique Food Orders

In March YELP! marketers decided to find out what food and beverages people across the country were being delivered right now! Data scientists tracked how frequently a dish is ordered in each state relative to its popularity in other states.

“When we first looked at the results, pizza delivery reigned supreme, which is no surprise since it delivers well and it’s perfect for a family night in. However, we dug into the data to find the most uniquely popular delivery order in every state*, and that’s when things got interesting,” writes YELP!

Winners include a run on crayfish in Texas, poke bowls in Indiana, pad thai in Washington, sushi in South Carolina and naan in Wyoming but guess what topped the list of delivery orders in California last week? How about Michigan? and Hawaii?

Boba tea.

“What we found was a mix of delectable dishes and drinks that tell a story of how American taste buds differ from state to state and region to region,” according to the company.

Click here to see the full list.

*Samuel Hansen at Yelp! employed a natural language processing technique called term frequency-inverse document frequency (TF-IDF), which quantifies how frequently a dish is ordered in a state relative to its popularity in other states.

East Africa Update

Rwanda’s tea sector, largely spared from lockdowns, saw a marked increase in production during the first quarter. The harvest totaled 9,000 metric tons generating $27.6 million in revenue, which is up by 15% from the same period in 2019.

But there are still formidable challenges getting that tea to market.

East African tea growers truck tea destined for export to the auction at Mombasa. Kenya’s borders remain open during the coronavirus pandemic, but Tanzania and Kenya required each driver be tested before crossing.

The result offers a lesson in what can go wrong. A shortage of testing supplies and the sheer number of truckers led to delays that extended from hours, to days, to weeks. Few of those who were tested showed symptoms and none were quarantined while they awaited results. Unable to afford hotel rooms they slept in or under their trucks, cooked together and played sports to kill time. Some wore masks but many did not and very few practiced social distancing. During the two weeks ending last week 150 truckers crossing into Kenya at Namanga tested positive and were eventually ordered back across the border but by then they had infected hundreds of local merchants and fellow truck drivers.

The Washington Post reports that beginning this week, only drivers that have tested negative prior to arrival at the border will be permitted to cross. Uganda has since discovered dozens of infected truck drivers crossing from Kenya. Zambia closed its border to Tanzanian truckers. Kenya is the largest tea producer in the region at approximately 500 million kilograms followed by Uganda which harvests 60 million kilos annually; Tanzania at 35 million, Rwanda at 30 million and Burundi at 9 million kilos per year.

At the Mombasa auction Rwanda growers earned an average $2.68 per kilogram of tea last year, followed by Kenya growers who received an average $2.59, Burundi at $2.21 per kilo, Tanzania $1.36, and Uganda $1.21. The overall average price was $2 per kilo.

Kenya currently has 1,214 confirmed COVID-19 cases, according to Johns Hopkins Coronavirus Resource Center. There have been 51 deaths. Tanzania is reported to have 509 confirmed cases with 21 deaths. Rwanda has 327 confirmed cases with no deaths reported as of the second week of May.

Holiday Travel Restrictions Eased for Turkish Tea Growers

Climate dictates that Turkish tea be harvested in three flushes, unlike Africa, Sri Lanka, and Southern India where plucking continues year-round. Tea is grown there on sparsely populate hills facing the Black Sea where growers depend on seasonal labor.

This year’s spring flush was interrupted by a March 28 lockdown to prevent spread of the coronavirus. Fatma Genc, a researcher at Istanbul’s Marmara University, told The National, that 50,000 tea farmers were unable to prepare their fields for the harvest. Ramadan, which began April 23, complicated timing for Muslims.

“The failure to harvest this year will make it difficult to meet even domestic demand,” said Genc told the newspaper. “Tea prices, which have been hiked twice in a row this year, will increase even more if the producers cannot go to the field.”

This week farm owners and laborers from across the country were finally able to travel to northern Turkey on trips extending through the three-day Eid al-Fitr festival that follows the Muslim holy month of Ramadan. Seasonal labor from neighboring Georgia and Azerbaijan continue to face border restrictions leading to some creative solutions. The city of Findikli in Rize hired locals to harvest around half of the 30,000 metric tons produced nearby in an agreement that spans six months. Workers harvest for 10 days and while the leaves for the next flush are growing they complete municipal projects.

In Rize Province, the heart of the growing region, 16,000 laborers were given permission to travel between fields and home. The Provincial General Hygiene Council required testing at least one member of each family, about 6,000 in all. Screenings continue.

The provinces of Rize, Trabzon, Artvin and Giresun produce around 260,000 metric tons of tea annually, most of it sold domestically. Turks consume an average 3.5 kilos of tea a year, more than any other country. While much of the tea is imported, a significant shortfall is expected due to rising costs and the fact that much of the domestic tea went unpicked. Caykur, the state-owned producer that supplies 60% of the country’s tea is running a deficit and facing additional costs due to the pandemic. Caykur purchases tea from 200,000 independent farmers.

Turkey has 157,814 confirmed COVID-19 cases with 4,369 deaths, making it ninth on the list of countries most impacted by the pandemic, according to the Johns Hopkins Coronavirus Resource Center.

Tea garden in Turkey’s Rize Province, along the Black Sea.

Robotic Waitstaff Serves Tea

Tearoom Robot Reduces Contact with Waitstaff Easing Customer Concerns

The Tea Terrace, a small London-based chain of tea rooms that was forced to close during the March outbreak intends to open this July with the assistance of family-friendly robots.

Forbes magazine reports that managing director Ehab Shouly found while surveying customers that fear of crowding and contamination by waitstaff were their greatest concerns. Spacing tables was a relatively simple adjustment but a previous experiment with automated service at the company’s Surrey tearoom proved prescient. Last July The Tea Terrace became the first restaurant in the UK and Europe to introduce a robotic waitress, named Theresa.

Theresa is summoned by guests using controls at the table. The robot responds to voice commands. Shouly has also introduced functional assistants such as Captain Tom, a bot that delivers up to four trays each with teapot, teaware, and food.

Modifications are underway to expand robotic services to all four tearooms which serve 200 to 300 guests per day on weekends.

Nepal Asks India to Resume Imports

Tea growers in Nepal are seeking the resumption of exports to India, according to Nepal’s Ministry of Commerce and Supplies.

India stopped importing tea the week of May 6 and has not responded to Nepali officials. Periodically India has shown its displeasure with Nepal by refusing entry of tea and other exports such as palm oil.

Purna Kumar Karki, president of Jhapa Tea Entrepreneurs Association, told My Republica that Indian authorities impose non-tariff barriers on Nepali products from time to time “for no reason.”

Sanjay Bansal, chairman of the Darjeeling Tea Association (DTA), recently appealed to West Bengal Chief Secretary Rajiva Sinha to regulate the sale of Nepal tea to save the Darjeeling Tea Industry. Darjeeling growers maintain that Nepal undercuts their unique tea which is protected with a global Geographical Indication certifying its authenticity.

Bansal told The Statesman Nepal did not impose a lockdown and growers there have been producing at a high rate since February. “These teas are ready and are in the process of being shipped to India through the Indo-Nepal land borders in West Bengal to be sold in the local markets by taking advantage of the absence of Darjeeling Tea in the market due to the lockdown restrictions,” said Bansal.

In a related matter, Federation of Chambers of Commerce & Industry, North Bengal (FOCIN), has requested Chief Minister Mamata Banerjee to allow small wholesale and retail shop owners to open their establishments.

Need to Know

Tea Industry News for the Week of May 11.

  • Tea & Tariffs
  • Export Value of Tea Declined in 2019
  • U.S. Consumers Remain Wary of Reopening
  • Tea is Piling up
  • Attend the SofaSummit on International Tea Day
Global Tea Exports Declined 18.8% year-over-year in 2019.

Tea Export Value Declined in 2019

Logistical hurdles in tea producing countries greatly complicated export this quarter as demand declines and prices remain low. Recessions in Russia, Europe, and North America dim prospects of a profitable return for the export segment where sales have declined in value by an average 12.8% since 2015.

The declared value of global tea exports depreciated 18.8% year-over-year in 2019.

Sales from tea exports totaled only $6.4 billion in 2019, according to analyst Daniel Workman at World’s Top Exports. Tea shipments worldwide were valued at $7.3 billion five years ago.

China, at $2 billion in sales, remains the leading tea exporter, accounting for 31.8% of total exports by value, up 13.5% compared to 2018.

China faced several impediments to growth prior to the coronavirus outbreak but retained its rank as the top tea exporter globally in 2019. Green tea exports, the main tea crop, totaled 304,000 metric tons and were valued at $2.02 billion. The average price of exported green tea was $4.34 per kilo in 2019.

China’s tea exports were generally stable and of improved quality, despite the U.S.-China trade dispute and uncertainties in the world economy, according to agricultural and trade officials. Tea exports to the U.S. in 2019 were down 5.1% to 15,000 metric tons, but this was easily offset by a 15.6% increase in purchases by ASEAN nations. The 23,000 metric tons sold to ASEAN countries was valued at $400 million, up 55.7% compared to 2018.

China reported a 13.6% overall revenue increase year-over-year. Black tea exports were up 6.7% to 35,000 metric tons increasing in value by 24.5% to $350 million, according to China customs statistics. Black tea averaged $9.92 per kilo, up 16.72% year-on-year.

Yu Lu, vice president of the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal By-Products (CFNA) said the average annual compound growth rate of exports was 3% during the past three years. Green tea accounts for 82.8% of the total volume, which topped 367,000 metric tons last year.

Trade with countries along the Belt and Road increased 4% last year, earning China $560 million, a year-on-year increase of 307%, according to Yu Lu.

India exported $803 million worth of tea in 2019, up 4.6% compared to the prior year. India set a production record in 2019 growing by 3.8% thanks mostly to smallholders, but while volume reached 1,390 million kilos, the country accounted for only 12.6% of tea exports by value.

Sri Lanka’s 11.3% market share by value and Kenya’s 5.7% share also contribute significant volume, but each saw steep declines in value as prices for cut, tea, curl CTC grades fell. During the past five years (2015-20), the value of Kenyan tea exports declined by 71.3%. During that same period, the value of tea sold for export by Taiwan increased 131.3%; sales of Japanese tea are up 59.6%, and the value of Chinese tea for export is up 46.5%, according to World’s Top Exports.

Selling to domestic consumers is appealing in China and Japan, where higher prices are the norm, but India may benefit most from increasing domestic consumption.

Tea & Tariffs

The economic impact of the pandemic makes it unlikely that China will meet the expectations of a “phase one” agreement negotiated with the U.S. in January. As a result, U.S. President Donald Trump said he might initiate another round of tariffs targeting China.

Or maybe, not.

“I’m very torn, I have not decided yet, if you want to know the truth,” President Trump told reporters last week.

On Friday, to keep what have been productive discussions on track, the U.S. Trade Representatives’ office released this statement: “In spite of the current global health emergency, both countries fully expect to meet their obligations under the agreement in a timely manner.”

In January, China agreed to a 2020 increase of $76.7 billion over 2017 imports. China has since purchased less than $25 billion of U.S. goods, which is a decline of 5.9% through April compared to 2019, reports Bloomberg. The 2020 goal is almost $200 billion in sales.

U.S. trade plunged in March. Overall the U.S. bought 6.5% fewer goods than during the same period in 2019. Imports of Chinese tea through March 2020 declined 23% compared to the same period in 2019, according to the Global Agricultural Trade System database (GATS). Lower sales are due, in part, to a 15% tariff imposed in September 2019. The duty was later reduced to 7.5% in February 2020, but by then, many blenders had switched suppliers. During the first quarter in 2019, the U.S. imported Chinese tea valued at $32 million, a total that declined to $24.7 million during the same period in 2020.

Volume is down 31% from 8.7 million metric tons to 6 million metric tons through March. China is predominately a green tea exporter, but volumes of every category slid, except organic flavored green tea.

Jason Walker, marketing director at Firsd Tea in New Jersey, the U.S. offices of China’s largest tea exporter, writes that while “U.S. imports of Chinese black tea have generally declined over the past five years. More recently, the U.S.-China trade war and coronavirus pandemic have contributed to this slowdown. However, organic black tea imports from China have been rising, with a 66% increase in volume.”

Since workers were able to return to the fields before April, tea production China was spared the pandemic-associated drop in yield experienced in India and Sri Lanka. Imports recorded during the first quarter include little of the spring harvest. Second-quarter statistics will be more revealing as they will reflect the logistical challenges that are still rippling through the supply chain.

“Firsd Tea has been watching the activity at U.S. ports for indications of delays and disruptions. We have not seen any to date,” writes Walker. “In terms of containers leaving China, we have not seen any disruptions since normal business resumed around the end of February in China. At this point, China operations have implemented monitoring systems and PPE (personal protection equipment) requirements for workers. We are watching for indications of flare-ups, but so far, we don’t see evidence of another wave of infection,” writes Walker.

Blenders initially found themselves racing to meet the demand for packaged goods, particularly private label for grocery, but orders for foodservice grades has virtually disappeared due to the unprecedented restaurant and retail tea closures. This alone will substantially reduce tea imports from every producing country.

Specialty tea importers receiving Chinese tea this spring say that demand remains steady despite a three-fold increase in airfreight, which is a far greater expense than the 7.5% tariff.

“Importers were working with a three-fold increase in air freight delivery in April. Rates are still high, but at least cargo is moving faster now,” writes Andrew McNeill with Seven Cups Fine Chinese Tea in Tucson, Ariz.

China recognizes the desirability of retaining a presence in the U.S. market as Europe is likely to experience a more severe recession than the rest of the world. The European Commission last Wednesday released projections that show economic activity shrinking by 7.4% in the 27-nation bloc, according to the New York Times. Economists predict the deepest economic recession in EU history.

While the U.S. administration is angry at China, the escalation of retaliatory measures challenges the prevailing business assumptions guiding American companies in China. U.S. companies invested $14 billion in new factories and other long-term investments in China last year, according to the National Committee on U.S.-China Relations and the Rhodium Group, a consultancy that tracks foreign direct investment flows.

Shawn Donnan, writing in Bloomberg Supply Lines, suggests, “it’s worth remembering every so often that it is still businesses and not governments that really make the decisions that drive globalization and supply chains and that they aren’t decoupling yet.”

Reenergize Local Consumption

Pradyumna Barbora, a specialty tea producer in Assam, points to a straightforward solution: Increasing average per capita consumption from 750 to 800 grams will “uplift the Assam tea industry,” he writes.

“If every tea lover in the country increases their consumption by a mere 50 grams per month, and starts sourcing their tea locally, the gardens will be able to meet their expected minimum wages whilst creating a better living environment for themselves,” writes Barbora, spokesman for Tea for Unity, a group of Assam planters. “We are losing focus on a high-quality heritage product which fetches much more and is more valuable than commercially mass-produced tea,” writes Barbora. The tea industry employs more than a million workers,” he explains, “Investment will improve the mindset of the workforce, translating into greater efficiency and quality.”

Learn more: Tea for Unity

Tea is Piling Up

Processed tea is piling up as demand declines, and transport is interrupted. Globally, warehouses usually empty by the start of the spring harvest. An abundance of tea stored in 2019 is compounding problems in India. Consider the 21 villages in Champawat, a tea-growing region where warehouses are bulging because drivers are not permitted to travel.

Tea, valued at INRs360,000 ($4,700), was ready to be sent for auction in April, “but we have not been able to transport it due to the lockdown. If the stock is not sent to Kolkata soon, those involved in tea plantation and its selling may face a financial strain,” Desmond Brikbeck, manager of several local tea gardens, told the Times of India.

U.S. Consumers Remain Wary of Reopening

Datassential continues its weekly series of webinars tracking consumer behavior during the pandemic. The COVID-19 series is free and hosted by managing director Jack Li, whose company pioneered the use of menu data to predict flavor trends.

The topic May 8 was “The Next Phase” (download PDF).

Reopening is underway led by Starbucks, which announced that 85% of its corporate stores would soon resume operations.

Li notes that concern has declined somewhat as some states reopen, “but America is still anxious, with slightly more than half of the people feeling very concerned and hugely worried about their own personal health.”

“Avoidance of eating out is steady, but down from a month ago with 55% of those surveyed saying they will “definitely avoid going out” and 27% saying they are “nervous but will still eat out.” The number of individuals reporting “no concerns whatsoever” increased to 18%, up 2% since April 27 but down 23% since March 10, according to Datassential.

Health remains the top concern, but economic worries are intensifying, according to Li, who found that 57% of respondents are more concerned about the public-health crisis (down 2% since April 27 and down 6% since April 10). Those who say they are most concerned about the economic crisis increased 2% from April 27 to 43% of respondents.

“Not much has changed in the past month. America is still at home and still longing to get back out,” writes Li. “People are excited to get back to activities like dinner and a movie, or lunch and shopping at the mall,” he said.

When asked: “Which of the following food & drink places or activities are you most excited to get back to?” 45% selected “dining at my favorite sit-down restaurant,” and 42% selected “visiting recreational places” with 39% longing to “meet family and friends at restaurants.”

Going to coffee shops (20%) and drinking at bars (19%) ranked in the middle. Visiting nightclubs, concerts, and lounges appealed to only 10%. Visiting cafeterias (5%) was the least exciting activity.

Editor’s note: Unemployment increased to 14.7% in April, the highest since the Great Depression. New claims topped 26.5 million during the five weeks ending April. The proportion of employed working-age adults (51.3%) is the lowest on record. Datassential found that 16% of survey respondents are still going to school or working as usual, with 16% stuck at home due to layoffs and furloughs. An additional 33% of those taking part in the weekly survey are working or attending school remotely, with 35% not working overall.

Next episode: “What Consumers Want Right Now.”

EVENTS

Attend the SofaSummit on International Tea Day

Thursday, May 21, is International Tea Day, a global event declared by the United Nations that will, for the first time, be celebrated in every county. The U.N. organized the event to elevate tea by drawing attention to “the importance of tea for rural development and sustainable livelihoods, and to improve the tea value chain to contribute to the 2030 Agenda for Sustainable Development.”

To celebrate, the Tea & Herbal Association of Canada, in coordination with many prominent industry leaders, is hosting an all-day tribute May 21, beginning at 9 a.m. through 7 p.m. EST. The tea and chat will “circumnavigate the globe,” spanning 14 time zones with participants from 13 countries. Watch on YouTube live – no registration required.

Shabnam Weber will host on THAC’s YouTube Channel: http://tiny.cc/gyqdoz

Click to learn more: International Tea Day.

UK Tea & Infusions Association

Raising Our Cup to All Tea Drinkers

The

Participants (in order of appearance) include:

Yu Lu, China Chamber of Commerce CCFNA

Rajah Banerjee, Makaibari

Arun Singh, Tea Vision

Ketan Patel, Jalinga Tea

Stephen Twining, Twinings

Alfred Njage, KTDA

Cindi Bigelow, Bigelow Tea

Gabriella Lombardi, Cha Tea Atelier

Joyce Maina, Cambridge Tea Academy

Will Battle, Fine Tea Merchants

Joe Panter, Camellia PLC

Ramaz Chanturiya, Tea Masters Cup (Russia)

Carolina Okulovich, Don Basilio

Rona Tison, ItoEn

James Norwood Pratt, Author

Jane Pettigrew, UK Tea Academy

Kevin Gascoyne, Camellia Sinensis

Jeff Fuchs, Tea Horse Road

Tania Stacey & David Lyons, Cuppa Cha & AUSTCS

Cecilia Corral, Tian Té Mexico

Fred Yoo, Myung Wong Cultural Foundation

*Corrected 9/13 to clarify this event was organized solely by the THAC.

Virtual Tea Tasting

The Ceylon Artisan Tea Association is hosting its third in a series of virtual tea tasting webinars. Amba Estate was featured on April 30. This week features Forest Hill Tea, which was recently profiled in Tea Journey magazine.

Click this link to join the meeting: https://us02web.zoom.us/j/9997849844

Meeting ID: 999 784 9844

The Zoom event begins at 5.30 p.m. Wednesday, May 13 in Colombo Sri Lanka (India|Asia) | 8 a.m. EST (New York) | 1 p.m. (London) | 2 p.m. (EU) | 8 p.m. (Singapore and Hong Kong) | 9 p.m. (Japan and Korea)

If you miss the live event, recordings of these webinars are available for viewing at no charge.


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Need to Know

Tea Industry News for the Week of May 4.

  • Ominous Fiscal Impact
  • Online Grocery Orders Up 37%
  • Tea Supply Not a Grave Concern
  • Post Offices on the Front Line
  • Seattle Caps Delivery Commissions
Which are you more concerned about: The Economic or Public Health Crisis?

The pandemic is advancing the role and reputation of specialty tea in protecting the health and enhancing human immunity. At the same time, the economic impact threatens every link of the tea supply chain.

Marketers are wise to address health over wealth.

Consumer marketing surveys in several countries, as well as professional opinion research, indicates a “high level of concern” about becoming infected.

Last May, “health care emerged as the top policy issue for American voters at 36%,” according to Real Clear Opinion Research. Concern about the economy was the top issue for 26% of respondents. Health concerns are now top-of-mind for 66% of respondents in the U.S., according to the Edelman Trust Barometer.

Edelman surveyed a representative sample of adults in 11 countries. In Canada, the United Kingdom, and France 70% or more of respondents favor prioritizing health concerns. In Japan, 76% of those surveyed by Edelman cited health concerns.

“A substantial majority of people around the world want their governments to prioritize saving lives over moves to restart economies being hammered by measures aimed at halting the spread of the new coronavirus,” according to the Financial Post,

Overall, 67% of the 13,200-plus people interviewed between April 15 and April 23 agreed with the statement: “The government’s highest priority should be saving as many lives as possible even if it means the economy will recover more slowly.” One third said it is more important that governments save jobs and restart the economy.

Only 29% of those surveyed agreed that CEOs and business leaders were doing an “outstanding job” meeting the demands of the moment.

“It’s complicated because you have two crises simultaneously – a health crisis and an economic crisis,” said Richard Edelman, CEO of Edelman.

“Business will be looked at very closely in the months ahead,” Edelman said, citing how companies perform in areas such as retaining and reskilling workers or using small businesses in their supply chains.

Between February and March 2020, total retail sales in the United States fell by 8.7%. During this period, retail sales of food and beverage stores grew by 25.6%.

Dramatic Drop in Economic Activity

Economic activity dramatically declined in late March, and consumer confidence plummeted in April as jobless totals soared.

In April business activity at service companies fell to the lowest level recorded. The near-collapse in the service side of the economy has dragged the U.S. into what’s all but certain to be a deep recession. The government has rushed to aid hundreds of thousands of desperate companies with loans and other help, but it’s unclear if it will be enough, according to the Institute for Supply Management.

In tea retail, suppliers that rely on foodservice sales are the segment most impacted. Blenders in the grocery segment are still playing catchup to the stocking-up rush that is now decreasing.

Sales of tea in grocery and convenience will plateau until pantries empty. A fundamental shift away from traditional trips to the grocery store is underway, led by those who order online. Online market research specialists Brick Meets Click found that April sales of groceries sold online grew by 37% to $5.3 billion. Forty million Americans ordered groceries online in April, increasing both frequency and spend, according to the results of a natural consumer survey. Orders increased from 1.2 to 1.6 per month and spend rose to an average $85 per order, up from $82 in March

The April wave of surveys looked at two additional factors to help us understand the health and economic motivators impacting shopper’s behaviors writes Brick Meets Click.

  • Health: 47% of the households surveyed indicated a “high level” of concern related to catching/contracting the Coronavirus.
  • Economic: 39% of the households surveyed indicated that their average monthly household income since the COVID-19 crisis started had dropped dramatically – 25% or more – compared to Jan/Feb 2020. 

Reopen Now or Not?

In the U.S., where the contagion has killed more than 70,000 people, about half of the states are easing restrictions on business.

Retailers considering reopening should bear in mind that most Americans are not ready to risk infection by going out. While 56% say they are comfortable making trips to the grocery store, 78% indicate they would be uncomfortable eating at a sit-down restaurant. “People in states with looser restrictions report similar levels of discomfort as this in states with stricter rules,” according to a Washington Post-University of Maryland poll conducted last week.

In announcing plans to ease the restrictions on businesses, governors have emphasized that their actions represent a gradual and cautious reopening of their economies. Nonetheless, when asked about eight different types of businesses, majorities of Americans say they oppose ending the restrictions on each of the eight.

“Fear of infection, the poll finds, has not abated at all in recent weeks,” according to the Washington Post.

Datassential polls 1000 consumers weekly, beginning in March. The chart below suggests consumer fears have plateaued with 94% either “very concerned” or “somewhat concerned.” Only 6% say they are not concerned.

Note to Brands

Consumer sentiment is clear: Businesses have a responsibility to ensure their employees are protected from the virus in the workplace and do not spread the virus into the community (78%). They want businesses to focus on solutions, not selling. In a survey of 12 countries, many consumers indicated businesses should shift to producing products that help people meet the challenges (89%). One in three (33%) say they have convinced other people to stop using a brand “that I felt was not acting appropriately in response to the pandemic.”

Brands must do everything they can to protect the well-being and financial security of their employees and their suppliers, even if it means suffering big financial losses until the pandemic ends. – Edelman Trust Barometer 2020

Tea Supply is not a Grave Concern

Lockdowns in tea producing countries are gradually easing, permitting the harvest to resume, but logistical hurdles are mounting as the cost of airfreight, the preferred method of transport early in the season, tripled. The availability of cargo space on aircraft is greatly limited due to the virtual absence of commercial flights. Overburdened carriers are increasingly tasked with flying far more precious or urgently required goods. In India, the national rail service is shut down and trucking fleets are idle.

Containers are piling up at ports, and ships lie at anchor awaiting medical clearances.

Available airfreight on passenger planes in March was down 44% globally compared to the same period in 2019. Dedicated air freighters added more flights, but overall capacity was down by 25% in March, according to the Wall Street Journal.

The cost of air freight from China to the U.S. increased from $3 per kilo in March to $11 per kilo in April and continues to climb.

Paul Golland, owner of P.G. Logistics, a freight-forwarding business in Australia, told the Wall Street Journey that. “You used to get a quote valid for 30 days. Now you’re getting it valid for 24 hours, because tomorrow the situation may change again.”

“International postal services have been among the hardest hit. Many have reduced or suspended international mail in recent weeks due to a lack of flights,” according to the article. The U.S. Postal Service last week said it would start shipping mail by sea to 10 European countries.

In India, Amazon and Walmart are restricted from making deliveries except for food and medicine, which greatly increased the workload for that nation’s 400,000 postal workers in 150,000 branch offices. About the only service tea vendors can count on is mail delivery. India operates the largest postal service in the world and is rising to the challenge. As the Wall Street Journal reports, “courier competitors can’t deliver. They depend on commercial flights and trains, which aren’t running, their truck fleets aren’t allowed on their roads, and their employees can not get to work.”

U.S. Postal Service employs 633,000 in 32,000 post offices, annually delivering 142 billion pieces of mail. But in April, due to the Coronavirus, Postmaster General Megan Brennan told Congress that volume declined by a third and is expected to fall by half by the end of June. E-commerce is surging, but bulk and business mail account for far more business. Postmaster Brennan estimates the shortfall at $25 billion.

The Human Condition

Datassential reports that only 15% of Americans are still going to school or working as usual. There are now 17% stuck at home due to layoffs and furloughs. An additional 37% of those taking part in a weekly survey are working or attending school remotely, with 31% not working overall.

“While most Americans are apprehensive about the reopening of non-essential businesses, they favor people visiting open-air locations like parks and beaches, where they can keep social distance. As you might expect, people who are currently more concerned about the economic crisis are much more accepting of visits to all types of venues than those more concerned about public-health implications. Having guidelines in place for reopening and familiarity with grocery store precautions have likely also paved the way for other retailers. One-third of Americans are OK with visits to places like shopping malls, hair salons, and restaurant dining rooms,” according to Datassential.

Jack Li at Datassential is optimistic that restaurants will remain a vital part of social life after the crisis eases:People miss dining in restaurants, not just for the food, but also for the psychological benefits. When dining rooms reopen, there will be a heightened appreciation for them and the sense of normalcy they evoke. Americans associate dining in with better pre-COVID times and happy “milestone” celebrations. Restaurants will also provide an opportunity for people to do their part and reconnect with their communities.

How soon will this end? Simon Baptist, Chief Economist at EIU, writes that “even in countries where containment measures are being eased, economic activity will be slow to pick up. For instance, even though India partially eased restrictions on April 20, high-frequency data on electricity consumption shows no change in demand from the week before.

Delivery Fee Caps

Last week Seattle instituted a local ordinance capping third-party delivery service commissions at 15%. The intent is to address price gouging during lockdowns temporarily. Violators are subject to prosecution by the Seattle City Attorney’s Office and face steep fines. San Francisco is enforcing a similar ordinance capping service commission at 15%. Chicago and New York City are also considering enacting commission caps. In New York, the proposed cap is 10%. The Seattle ordinance mandates delivery drivers get the full amount of tips and makes it a crime for third-party delivery companies to cut drivers’ pay. The ordinance remains in effect until restaurants are allowed to resume unrestricted dine-in services.

Best Retail Practices

  • Daily wellness checks for all employees (back of store and front line)
  • Provide ample (non-medical) masks, single-use gloves and additional PPE as required (plexiglass cashier shields etc.)
  • Clean high-touch surfaces every two hours.
  • Encourage hand washing every half hour for food handlers.
  • Seal orders in packaging and do not let cashiers handle food.
  • Apply social distancing floor decals and display distancing reminders.
  • Make sanitizer available at checkout and in stand-alone dispensers at entry.
  • Avoid cash transactions and sanitize credit-card terminals after each use.
  • Disinfect entire store at the end of each day and schedule periodic deep-cleaning

Encourage customers to order online and at digital kiosks. Avoid face-to-face interaction by offering carry-out, curbside pickup, drive-thru, and contactless delivery. Customers should insert their own credit card into payment terminals (and stores should opt for “tap to pay” where available). Rely on video and remote methods of communication to minimize consumer contact with store personnel.

Need to Know

Tea Industry News for the week of April 27

  • The Pandemic’s Impact on Specialty Tea
  • Starbucks Reports 60-70% Decline in US Sales
  • McKinsey & Co.: Consumers Are Readily Abandoning Brands
  • Sri Lanka: March Tea Exports Drop by Half
  • Retail Innovations: Samovar Tea Lounge Offers Free Meal Monday.
Sri Lanka tea gardens are practicing safe harvesting techniques making up for lost weeks following government-ordered closures. Photo courtesy Lumbini Tea Estate/Gayan Samaraweera.

It is too early to predict the impact of a looming economic downturn with accuracy. Still, a mid-April survey of U.S. tea retailers by Sinensis Research found that 81.8% of the specialty tea business has laid off staff, with 31.7% of American tea shops temporarily closed.

Abraham Rowe, who conducted the survey, reports 2.3% of tea businesses are permanently closed two months into the crisis. “I expect this number to increase if the lockdowns last through the end of May,” he said.

“Many of the businesses still operating report that they expect to close if sales do not pick up, or if they are unable to secure assistance in the form of loans or grants to continue operations,” according to Rowe.

“Specialty tea business revenue is expected to decline to 65% of 2019 sales, suggesting an overall loss of about $133 million to $154 million in tea sales by specialty tea vendors, and likely much greater losses from coffee shops and cafes that sell specialty tea,” writes Rowe.

“The coronavirus pandemic has devastated people and businesses across the world,” says Rowe, but “it’s too early to get a complete picture of the pandemic’s damage to the industry.”

  • Around 9,200 of the jobs held by tea professionals are gone. The average number of staff laid off at closed business is approximately 10, and at open businesses around 5. Layoffs and store closures represent a “devastating loss of talent and expertise” since the crisis first curtailed business activities in March, according to Rowe.
  • Most tea business owners remain optimistic. Rowe found that 93.3% of shop owners expect to reopen after the pandemic has ended and restrictions are lifted.
  • The number of businesses selling online has increased by 7%, and many companies have noted a significant increase in online sales and curbside pickup.
  • Shops that weather the initial lockdowns “can expect sales to decline between 20% and 80% this year, depending on their region and the extent to which the shop had to close or change their business model.”
  • Supply is becoming a challenge: 31% of open businesses report supply chain interruptions.

Revenue Forecast

Assuming that restrictions limiting normal operations last six months, “I predict 2020 revenue to decline to about 65% of the estimated $340 million to $400 million in 2019 sales,” said Rowe, adding that 96% of businesses that remain open expect revenue to decline for the year. “Very few of these businesses expect to grow in 2020,” he said.

A massive portion of specialty tea is sold by cafes and coffee shops, many of which are currently closed. “The number of businesses doing in-store bulk tea retail has declined by almost 50%, and the number of businesses serving prepared specialty tea has declined by more than 50% — afternoon tea service has ended almost entirely in the United States,” he said.

Rowe cautions, “these data only represent the impact on the retail market, and not the wholesale market, though a few comments on the impact on the wholesale market are included in his report.”

“I suspect that the wholesale tea market has seen even more damage than the retail market because of this, with revenue declining perhaps as much as 75% or more,” he said. Tea shops have reported that tea wholesale to foodservice clients has declined to zero, and it seems possible that larger wholesalers are feeling this same impact.

Rowe, who founded Sinensis Research in 2019, said his firm is providing research on the pandemic and its impact on the tea industry at no cost.

“Please support this research by exploring our products, such as the State of the Industry Report ($29.95). If you’d like to work with us to get up and running as an online store and get sales moving again, get in touch,” he said.

See related: Tea Shop Closings.

Starbucks Comps Decline
While Starbucks reported a decline of only 3% in comparable U.S. store sales for the quarter ending March 29, same-store sales plummeted 65-70% as the new quarter began, according to executives. Half of the company’s U.S. stores are now closed, leading to a 46% decline in earnings. Most workers will return to cafés in May, and the chain expects to reopen most closed locations in June, according to Good Housekeeping Magazine. Full-year revenue is expected to decline by almost 10%. In 2019 same-store fourth-quarter growth was a positive 6% for the U.S. division.

Consumer Behavior Insights

McKinsey & Co. is closely tracking changing consumer behavior in response to the COVID-19 crisis.

“Consumer behavior has changed across several dimensions: consumption by category, channel selection, shopper trip frequency, brand preference, and media consumption. These shifts, combined with forecasts for virus containment and economic recovery, are critical for commercial strategies,” according to McKinsey. Beverage sales in the grocery channel were up 36% during the period March 1-21, a situation that has led to restocking issues as consumers stocked up. Consumers are making 15% fewer shopping trips and buying enough for two or more weeks.

“Our research found that 30 to 40% of consumers have been trying new brands and products. Almost half of these consumer switches are because the desired product is unavailable, while an additional 19% decided to purchase cheaper available options. Of the consumers who switched brands, 12% expect to continue to purchase the new brands after the pandemic,” writes McKinsey.

Sri Lankan Tea Exports Decline

The bottom fell out of Sri Lanka’s generally robust tea export market in March following dismal yields in February. Tea export volume and value each declined by half compared to March 2019. Tea in packets dipped to 6.3mn kgs from 12.7mn kgs in 2019. Production of teabags dropped more than 1 million kilos from 2.4mn kgs in 2019 to 1.3mn kgs in March 2020. Revenue for all categories of tea was SLRs11.6 billion ($60.1 million) in March 2020 compared to SLRs22.5 billion ($116.7 million) in March 2019, as reported by the Daily News. Anil Cooke, managing director at Asia Siyaka brokers, explained that export activity virtually came to a halt before the government agreed that growing and processing tea is an essential industry.

Retail Innovations

Samovar Tea Lounge in San Francisco introduced Free Meal Monday in April and has since served 1,100 customers a free lunch of rice stew with vegetables, eggs, and tea. The give-away promotes sophisticated Samovar Life subscription meals starting at $19 for breakfast, $27 for lunch, and $37 for dinner. Meals are delivered Thursday through Sunday, and pickup service is available at all three of the 20-year-old tea room’s locations. Shipping is free from the company’s online tea store. The company is also delivering groceries.

Free Meal Monday

“We’ve never launched so many programs in such a compressed amount of time and while facing so many challenges.”

Samovar Founder Jesse Jacobs

From its inception, Samovar founder Jesse Jacobs viewed customers as a community celebrating the tea lifestyle. That is why he chose the URL: www.samovarlife.com.

Jacobs generates more than $1 million a year at his tea lounges, which feature wholesome food and superior tea. He is grateful to customers, rewards loyalty, and is genuinely concerned with their well-being. He will soon launch a virtual meditation and tea tasting. “I just keep waiting for word that the covid-19 situation has a clear solution, some clean exit plan that gets things “back to normal.” But the reality is, well, more sobering,” he writes. Check out his latest blog post: Reality As It Is: What a U.S. Admiral and Burmese Meditation Master Taught Me About Surviving the COVID-19 Pandemic.

Upcoming Events

The U.S. will report 1QTR GDP on May 1. Globally the impact on economies is “fairly catastrophic” writes market researcher firm Statista.

Singapore reported its economy contracted by 10.6% between January and March despite having initially kept the virus in check. The historic and unprecedented drop in Chinese GDP of 6.8% already made headlines. Japan’s economy contracted by an annualized 7.2% in 4QTR 2019 and is expected to decline another 5% in 1QTR 2020.

Central Banks in France and Italy have projected quarterly losses between 5% and 6%. Experts expect the U.S. economy to contract by 5-10% and the UK economy by as much as 13%.

Global 1QTR GDP

Tea Shop Closings

A running list of permanent tearoom and tea merchant closures in Australia, Canada, New Zealand, UK, and the United States.

To add a business to this list email Dan Bolton (dan@tea-biz.com) with details and a link to a news report, press release, or a Facebook page announcement. Tea Biz also publishes Tea Shop Obituaries that celebrate the life of tea businesses that have served their communities for five or more years. Owners are encouraged to share their experiences so that other shops will benefit.
Tea Shop obituaries are 350-word interviews illustrated with a photo.

CANADA

The Canadian Federation of Independent Business (CFIB), which represents 110,000 small ventures reported in April that 58% of members surveyed said they could not pay May rent without government assistance. Only 18% of small businesses indicated they are now open. The survey of 10,500 businesses was conducted April 17-19.

Victoria, British Columbia
Just Matcha Tea Shop (established 2013-2020)
Locations: 2021 Oak Bay Ave. | 544 Pandora Ave.
Tiffanie and Kip Home announced the temporary closure of their two tea shops in mid-March but could not make rent payments. Unable to reach an agreement with their landlord (who graciously deferred rent) they decided to close permanently in April after seven years, according to the Times Colonist. “I’m not going to triple my revenues when it opens again and you need to do that in order to cover the rent for the three months that you missed,” Kip told the newspaper. Kip said the company spent a lot of money in January and February restocking inventory and buying merchandise for the upcoming tourist season that relies heavily on cruise ship visitors and public events. The couple and their two business partners hope to one day reopen on Pandora Ave.

UNITED STATES

A National Restaurant Association survey of 6,500 restaurant operators found a 78% average drop in sales during the first week of April, compared with the same period last year. The U.S. restaurant industry lost 3 million jobs in March with sales plummeting by $25 billion. The association estimates that 44% of restaurant and cafes operators were forced to temporarily close in March with 3% permanently closed. The survey indicated 11% of respondents anticipate closing permanently due to the crisis. Sinensis Research reports that as of mid-April 31.7% of U.S. specialty tea businesses are temporarily closed with 2.3% closed permanently. In a report on the impact of COVID-19, founder Abraham Rowe estimates 9,200 layoffs. His survey of 1,600 shops showed that “81.8% of specialty tea businesses have laid off staff.”

Doylestown, Pennsylvania
The Zen Den (established 2011-2020)
Location: 41 E. State Street
Owner Annette Coletta announced the closing of the popular shop in April, according to the Doylestown Patch. The shop featured many live events and was favorite of artists and musicians. Coletta intended to sell the business and was in discussion with buyers when the coronavirus lockdown forced her to close the shop. On Facebook she wrote: “I have had some of the best years of my life here and made so many friends and acquaintances that I’m very grateful for having. What began as a way of coping with a personal crisis after a horrific car accident, has now ended through a global crisis. What began as an idea in someone with no business experience, The Zen Den grew to earn “The Best of Bucks/Mont” several years in a row—-I have more gratitude and pride than I can articulate—-I have ALL of you to thank!” Liquidation of inventory is planned by April 30. “I will go forward knowing that I gave it my EVERYTHING and ran an honest, ethical business for 9 years and that I did the best I could—-I have no regrets,” writes Coletta.

New Orleans, Louisiana
Coast Roast Coffee & Tea (established 2015-2020)
Locations: 2381 St. Claude Ave.| 801 Magazine St. (2018-2020)
Owner Kevin Pedeaux, a 12-year veteran with three shops in Louisiana and two in Mississippi closed the company’s St. Roach Market and Auction House Market locations in New Orleans but continues to operate the 3618 Magazine Street store which opened in 2019, according to a report in the Uptown Register. Service is limited to delivery, online order for pickup, and show and order-to-go. Pedeaux said in March he had to lay off 12 staff members but in April is back up to five. “It was personally a huge victory to get back to 7 a.m. to 7 p.m. hours,” he told the newspaper.

Need to Know

Tea industry news for the week of April 20

  • Monitoring Consumer Behavior
  • Record Prices at Colombo’s Digital Auction
  • Kenya May Ban Direct Tea Sales
  • Physical Distancing on 1,500 Acres in Assam
  • Private Investors Back Millennia Flash-Frozen Tea

Monitoring Consumer Behavior

Datassential surveys consumers weekly and hosts a Friday webinar Food + Coronavirus to share what they have learned about fast-changing consumer behavior. The presentations are free. Mark DiDomenico is director of consumer solutions at Datassential. He told participants during a webinar hosted by the National Coffee Association last week that American consumers at this point are more worried about their health than wealth (health concerns peaked at 67% April 1 and remained at 61% the week of April 8). Respondents (64%) consistently say they will “definitely avoid” eating out.

When asked “since the onset of social distancing, where have you cut back on spending?” eating at restaurants topped the list at 57%.

“Consumers are avoiding risk but also seeking ways to adjust,” said DiDomenico, who cited examples such as cooking from scratch (42% say they do this more often), eating comfort foods (+33%), stress eating (+24%), and drinking alcohol more often at home (+14%). Moving forward? “Consumers are likely to avoid buffets and salad bars. Half say they will order for delivery (and disinfect delivery packaging), he said. Shopping for food online (+22%) is a new behavior that is very likely to stick, he said.

Global Impact

David Parnham, Research Director at Café Culture in Australia, recently completed a report on the immediate impact of lockdowns. The impact is sobering. While Australians were not strictly confined to their homes (New Zealand is in lockdown), a survey of cafe owners found that 19% experienced a 70-90% decline in sales, with an additional 19% reporting declines of 50-70% and 29% reporting declines of 20-50% in sales. Café Culture Managing Director Sean Edwards posted several helpful suggestions from café owners for “Staying Afloat in Tough Times.”

Business News

Sri Lanka is embracing a digital future for the Colombo Tea Auction according to Sri Lanka Tea Board Chairman Jayampathy Molligoda. The country’s first three electronic auctions in April resulted in sales of 16.5 million kilos of tea. Efforts to switch from outcry to electronic bidding span 20 years, according to Jayantha Karunaratne, chairman of the Colombo Tea Traders’ Association. “Changing the mindset of some players is not an easy task, said Karunaratne, adding, “Our vision is to go online because it provides advantages such as lower cost, greater efficiency, and more transparency.”

As soon as the auction opened demand from Russia, Turkey, and the Middle East drove record prices. An Uvakellie from Vellapatna Estate, owned by Madulsima Plantations, sold for SLRs810 ($4.21) per kilo and a Uva High from Finlays Oodoowerre Estate sold for SLRs980 ($5.10) a kilo, a record for FBOPF1 grade tea at auction. Akbar Brothers purchased the lot. Dickwella Estate then broke the SLRs980 mark at SLRs1000 ($5.20) per kilo for an FBOPF1 bought by Ceylon Tea Marketing.

“The response from industry stakeholders has been fantastic. The Sri Lankan tea industry has once again proven its resilience to upheavals,” said Dhammike Wedande, senior vice president of Asia Siyaka Commodities, a leading tea broker.

Direct Trade Ban
Kenya’s Ministry of Agriculture intends to ban direct tea sales. New regulations state that “henceforth, sale by private treaty (direct sales overseas) is outlawed,” forcing growers to sell exclusively through the auction process.

The new regulations raised concerns voiced by the East African Tea Trade Association (EATTA), which manages auction and direct tea sales in Mombasa.

“Exporters who have long-term contracts with international buyers might have to review those contracts, and we don’t know how this is going to affect the market,” EATTA Managing Director Edward Mudibo told Business Daily.

The Tea Auction in Mombasa, the world’s largest by volume, is experiencing difficulties associated with the spread of the coronavirus and was relocated to a hotel.

The entire auction system is “dysfunctional,” according to small growers who appealed to Kenya’s President Uhuru Kenyatta to intervene to curb predatory behavior amid falling prices. Reformers agree and hope to automate bidding.

Kenyatta’s reforms, announced last week by Agriculture Cabinet Secretary Peter Munya, require the Kenya Tea Development Agency to pay 50% of the price of monthly deliveries. The remainder is to be paid as an annual bonus. In the past, KTDA factories paid farmers KS14-16 per kilo. Buyers will now pay 10% down with the balance due before export. Factories must pay farmers within 30 days after receiving auction proceeds. Also, brokers representing factories will be limited in the number they represent (no more than 15 factories in the current proposal).

Physical Distancing on 1,500 Acres

India reported more than 1,500 new COVID-19 cases in the 24 hours ending Monday, April 20, bringing the national total to 17,656 confirmed cases with 559 deaths. There is no indication of a “flattening curve” with the contagion likely to peak in four to six weeks. West Bengal, which includes the fabled Darjeeling growing region, has 339 reported cases with 12 deaths. Assam reports 35 cases with one death.

Samar Jyoti Chaliha, who manages the Dikom Tea Estate near Dibrugarh in Assam, harvested only 17,000 kilos of tea in March due to government-ordered lockdowns. Usually, the garden produces 40,000 kilos of first flush tea. The early harvest typically yields 70,000 kilos, “but this year, I may be able to make a max of 45,000 to 50,000 kilos,” said Chaliha. The workforce is a concern. “I am limited to 50% of peak season’s employment (3,800 workers),” he said. Chaliha is currently paying 1,800 workers, but few are plucking tea. “Overgrown bushes take a lot of time. Right now, it is more slashing/skiffing and hand breaking overgrown leaves and branches which are tossed to the ground. We cannot make tea out of this stuff,” he said.

Restoring the bushes should be complete by April 23 or 24. It will then take another 15 days to come up with succulent leaves, which brings us to the beginning of the second flush, he explained. A typical second flush yields approximately 260,000 kilos (2.6 lakhs) during May and June.

“I don’t know how the bushes will behave after skiffing at this time of year (pruning is normally done in winter when the plants are dormant). Dikom produced an average of almost 3,000 kilos per hectare last year, a highly productive yield. “If all goes well, the second flush should be fine,” he said.

The garden currently has 1,500 acres (635 hectares) under tea. Given the vast area, instead of limiting the number of workers to one per acre, when they are most needed, consideration should have been given to simply assigning smaller numbers of workers within each block (say 100 vs. 200). Growers could assign 100 masked pluckers to each of two widely separated sections and maintain safe distancing of 10 feet between pluckers. Even with 3,800 workers in the field at the same time, in most of Assam’s licensed tea gardens, there would only be two workers per acre. “Apparently, no one took this up with the government,” he said.

Production News

India will take additional steps to spot-check tea to ensure it complies with the Food Safety and Standards Authority of India (FSSAI ) norms. Random checks should result in higher prices a necessity given the lower volumes at auction. “Tea failing to adhere to the FSSAI parameters may not be allowed to be offered in the auctions depending on the extent of the violations by the producers,” according to the circular issued to planters. Tea Board Deputy Chairman Arun Kumar Ray told the Deccan Herald, “right now, the priority is to comply with the health safety norms and hygienic practices in tea gardens to combat the COVID-19 crisis.”

In Sri Lanka, February Yield Marks Decade Low

Sri Lanka harvested only 17.9 million kilos of tea in February, down 3.8 million kilos from February 2019. High grown and medium grown tea showed marginal gains, but tea from the lowest elevations declined 28.3% due to drought. Forbes and Walker Tea Brokers report the first two months of 2020 yielded only 39.8 million kilos, down 5.1 million kilos compared to the first two months of 2019.

Health News
Sri Lanka is promoting black tea as an immunity booster with the slogan: “Double Your Protection” The campaign online and in print states that “Black tea is not only delicious but packed with immune-boosting theaflavin antioxidants. Enjoy 3 to 4 cups daily, and be protected both inside and out.”

The Times of India reports that the Indian Council of Medical Research (ICMR) will study the antiviral properties of theaflavin-3, a compound found in black tea. The United Planters’ Association of South India (UPASI) circulated a press release citing work by researchers in Taiwan and China, suggesting replication of SARS CoV-2 is inhibited by polyphenols commonly found in tea. These include Theaflavin-1, Theaflavin-2, and Theaflavin-3, all of which are abundant in black tea.

The European Journal of Preventative Cardiology reports fewer heart attacks and a lower risk of dying of heart disease among tea drinkers participating in a Chinese study of 100,000 adults over seven years. Those who consumed three or more cups of tea per week had a 20% lower risk of heart attack or related cardiac incidents and a 22% lower risk of dying of heart disease.

Retail News

Millennia Tea, a Canada-based supplier of flash-frozen tea leaves, closed its first private funding round at $500,000+. The pioneering brand, based in Saint John, processes tea much like leafy produce at origin where it is washed and frozen to preserve antioxidants destroyed during the drying process.

Tea cubes
Millennia also markets cubes of fresh tea leaves

Shelly King, CEO of Natural Products Canada, a key investor and strategic advisor, told Huddle that “today’s health-conscious consumer has embraced ‘food as medicine’ and is looking for ways to optimize the nutritional value of their everyday pleasures like a simple cup of tea.”

“Millennia TEA has a category-changing product that ticks all the boxes for today’s consumer,” said King.

Upcoming Events
The United Nations has designated May 21 as International Tea Day to raise awareness of the need for sustainable production and to honor those working to supply the world with tea. The British have a reputation for never enough when it comes to tea, so they also celebrate National Tea Day (Tuesday, April 21). The Sun once again published a chart of tea in 16 shades from red amber to milky white. The article always leads to squabbles over exactly how much is too much dairy. Historian Seren Charrington-Hollins explains why milk is added last:

One of the fiercest topics is whether to put the milk in the cup before or after the tea. In the early days of British tea-drinking, when the china we had was of such poor quality that it would crack under the heat of boiling water, milk was always put in first to cool the tea.

“But in the 18th century better china started to arrive and those who could afford it switched to putting milk in after the water, as a social signifier. Continuing to put milk in first was associated with the lower classes.

“Tea tastes better if you put the milk in after the hot water because you avoid scalding the milk. You also maintain the perfect temperature for brewing, which is 95C,” advises Charrington-Hollins.