Popular Tea Brands Exceed Threshold for Pesticide Residue

The Canadian Broadcasting Corp. (CBC) aired an exclusive report backed by laboratory findings showing several popular tea brands contain pesticide residue exceeding the government mandated threshold.

Test results from the CBC’s Marketplace Consumer Watchdog Blog can be viewed here.

Responses from tea companies tested in the report can be viewed here.

LOGO_Marketplace_ConsumerWatchdog

Authorities stressed that minute traces of residue found in samples of Lipton, Tetley, Twinings and other popular brands were not a health risk.

“Health Canada reviewed the information provided by Marketplace and for the pesticides bifenthrin, imidacloprid, acetamiprid, chlorfenapyr, pyridaben, acephate, dicofol and monocrotophos determined that consumption of tea containing the residues listed does not pose a health risk based on the level of residues reported, expected frequency of exposure and contribution to overall diet. Moreover, a person would have to consume approximately 75 cups of tea per day over their entire lifetime to elicit an adverse health effect,” a spokesperson wrote to the CBC in a statement.

Canada’s Food Inspection Authority (CFIA) previously disclosed concerns about pesticide residue in 2009 and again in 2011 following tests of tea. Marketplace commissioned testing through an accredited lab to see if the teas exceeding Canada’s allowable limits were still in violation. In several instances that was the case.

Eight of the 10 brands sampled from grocery shelves in Toronto contained multiple chemicals and one brand contained residues from 22 different pesticides. Traces point to the use of endosulfan and monocrotophos, both banned by the United States and Canada as well as China and the European Union.

Brands purchased at grocers including Loblaws included Uncle Lee’s Legends of China, King Cole and Signal tea. Only Red Rose came back free of pesticide residues.

Environmental lawyer David Boyd told Marketplace “the presence of so many pesticides on a single product and so many products that exceed the maximum residue limits for pesticides, suggests that we’re seeing very poor agricultural practices in countries, which poses risk to the environment where these products are being grown; which pose risk to the farm workers who are growing these crops, and ultimately pose risk to the Canadians who are consuming these products.”

“The whole point of pesticides is that they’re chemically and biologically active in parts per million or parts per billion,” Boyd told the CBC. “Pesticides can have adverse effects at what are seemingly very small concentrations,” he said.

According to Boyd, these results “should raise a red flag for the regulators whose job is to protect the health and safety of Canadians in our environment.”

Here is a statement from the Tea Association of Canada:

“In Canada, the Tea Association continues to work with the Pest Management Regulatory Agency (PMRA), The Canadian Food Inspection Agency (CFIA) as well as the Food and Agriculture Organization of the United Nations’ Intergovernmental Group (IGG) on Tea, which is spearheading an agreement to harmonize pesticide standards, making tea production safer for consumers and protecting the livelihoods of millions of smallholder producers worldwide.

Consumers should continue to consume and enjoy the many varieties of tea for its health promoting and protective effects as well as its delicious taste. “There is now an overwhelming body of research from around the world indicating that drinking tea benefits human health,” says Dr. Carol Greenwood, Professor of Nutritional Sciences at the University of Toronto and a Senior Scientist at the Rotman Research Institute at Baycrest.”

Source: CBC

See: Uncovering the Truth: Is Tea Full of Pesticides?

China Tightens Pesticide Use in Tea Gardens

STiR Tea & Coffee International

Last November the Chinese Food and Drug Administration proposed a major revision to its food safety laws that will likely be approved by China’s congress late this year.

14i2_ChinaPesticides_QualifiedTeaResidueChange

Pesticide residue has steadily declined in China’s tea leaves

This is a high-priority initiative motivated by recent food safety scandals, according to the U.S.-China Health Products Association. It will clarify government oversight, increase regulatory obligations for food manufacturers and distributors; enhance controls over food products and increase penalties for non-compliance. Individuals sentenced for imprisonment will not be allowed to engage in food manufacturing or distribution in his/her lifetime. During the past three years more than 2,000 people have been prosecuted for food safety-related crimes in China.

The amendments continue a sweeping reform of the country’s food safety standards following a national scandal in 2008 involving melamine-tainted infant formula. That breech led to the execution of violators to make the point China was serious. Enactment will further efforts to curb pesticide use in tea gardens

By 2005 93.1% of tea products already had attained or exceed the Green Food standard, according to a presentation by Mao Limin, then chairman of the Zhejiang Tea Industry Chamber of Commerce. Limin told delegates at the 2011 North American Tea Conference that random inspection of tea had reached 100% at government owned gardens. In addition 267,000 acres (108,000 ha) of organic tea plantations had been certified organic and pesticide free.

The Green Food standard permits chemical pesticides and fertilizers but mandates residue levels meet export standards. The European Union and Japan set the highest thresholds but all trading partners have Maximum Residue Levels (MRLs). Organic certification in China is under the IFOAM rules with annual re-certification. Organic teas for export must comply with rules established by certifying bodies such as Swiss-based IMO, the British Soil Association, the USDA’s National Organic Program and JAS Japan.

Every pesticide approved for use has a required safe harvest interval, which is the time lapse between application of pesticides and harvest. In China preference is given to pesticides that are not easily dissolved in water. This reduces the portion that actually gets into the liquor. Most chemicals biodegrade leaving residue trapped in the spent leaf.

14i2_ChinaPesticides_QualifiedTeaExportResidue

Use of dangerous pesticides has fallen over phase out.

“It shouldn’t come as a surprise to anyone that there are pesticides used in commercial tea production, and that third-world countries are using some illegal ones, which are probably cheaper,” writes Austin Hodge, founder of Seven Cups Fine Chinese Tea in Tucson, Ariz.

“The boney finger always gets pointed at China, the great polluter, with pollution in Beijing as bad as when I was a kid in Los Angeles. It can all be explained in three words: cheap prices, commodity, and quantity. For the most part, bugs come in the summer. In the tropics, however, bugs are omnipresent. It’s always summer. It provides for a long growing season and an abundant yield. It is a broader truth that if you want cheap tea and cheap food, pesticides come along with the price,” he wrote in in a T Ching post last May.

In April 2012 Greenpeace issued a report: Pesticides: Hidden Ingredients in Chinese Tea following an investigation that showed chemical residue from pesticide. The organization sent samples purchased from well-known tea companies to an accredited third-party laboratory that found residues of various types on all 18 of the samples submitted. A total of 29 different pesticides were detected, several known to cause harm. Six samples contained more than 10 different pesticides. Twelve samples showed traces of banned pesticides including methomyul, endosulfan and fenvalerate which are known to impair fertility, harm unborn children and cause heritable genetic damage.

14i2_ChinaPesticides_QualifiedTeaProductsa

Inspections show greater compliance over time.

What the report did not state is that most of the residue was within established standards.

“If you take the considerable trouble of comparing the Greenpeace data with EU pesticide limits for the 28 chemicals mentioned then 5 of the 18 teas accused actually fall below the MRL limits for all 28 and two teas exceed by a trace level of 1 mg/kg on two chemicals,” writes Nigel Melican, founder of TeaCraft, a widely acclaimed British tea consultancy. He goes on to say: “This leaves 11 teas non-compliant for  one  or  more  pesticides, were they to be sold in the EU.”

The sampled teas were from local Chinese vendors and not subject to more stringent export rules.

“Nowhere in the report does Greenpeace China suggest that the non-compliant teas are representative of China teas presented for export – but commentators in the USA and UK have erroneously and immediately jumped to this conclusion,” he writes.

More troubling is the CBC investigation of tea for sale in Canada.

Source: STiR Tea & Coffee Industry International, March-April 2014.

— — —

Tea Biz serves a core audience of beverage professionals in the belief that insightful journalism informs business decision making. Tea Biz reports what matters along the entire supply chain, emphasizing trustworthy sources and sound market research while discarding fluff and ignoring puffery.


Tea Biz posts are available to use in your company newsletter or website. Purchase reprint and distribution rights for single articles or commission original content.  Click here for details.

Need to Know (March 3, 2014)

What tea professionals need to start the week —

European restrictions on the import of Japanese tea ease April 1… Meet 700-year-old ChigusaCredit markets are expected to be more active in 2014… Numi Organic Tea secures $4.75 million working capital… Jamba is juiced over Drink Green offerings… Zest high octane tea triples the caffeine of regular black tea… Tea Magazine evolves.

European Restrictions on Japanese Tea Eased

The European Union has eased stringent tests of Japanese foods including tea after examining 85,000 products harvested in the third growing season following the nuclear accident at Fukushima.

FLAG-EuropeanUnionThe decision by the Standing Committee on the Food Chain and Animal Health follows a recommendation to lift emergency restrictions on goods from two prefectures and eased restrictions for seven other prefectures. Restrictions on mushrooms from the four prefectures nearest the breached reactors remain. Three additional prefectures, Nagano and two newly added prefectures Akita and Yamagata, face restrictions on mushrooms and a few edible wild plants.

Shortly after the March 2011 disaster importers of Japanese tea, fruits and vegetables, meats and some seafood were advised their goods would be quarantined and subject to additional tests for radioactive cesium and iodine. The cost of sampling and the lengthy delays required to test foods virtually closed the European market to perishables from half the country.

All products had to be tested before leaving Japan. All costs resulting from these checks, including the cost of sampling and analysis and any enforcement measures taken in respect of a failed consignment must be met by the importer, according to the standing committee.  Ten percent of arriving goods were examined. Costs at the English Port of Suffolk are typical, adding $400 to the price of landing a container. Items that failed tests faced an additional $185 in fees.

Few of the prefectures grow substantial quantities of tea except Shizuoka which accounts for much of the country’s production and processes tea from the nearby prefectures. It is the home to the great port of Yokohama. Shizuoka, As of April 1 Yamanashi, Niigata and Aomori no longer have to contend with restriction on tea.

The next review is March 31, 2015 at which time most of the remaining restrictions are expected to be lifted.

Source: Food Safety, Port of Suffolk, Japan News

Tea-leaf storage jar named Chigusa with mouth cover and ornamental cords Photo credit: Courtesy Freer Gallery of Art The mouth cover for Chigusa was made by Tsuchida Yuko in 2013; the cords for tying ornamental knots are from the Japanese Meiji era (late 19th–early 20th c.)

Tea-leaf storage jar named Chigusa with mouth cover and ornamental cords Photo credit: Courtesy Freer Gallery of Art The mouth cover for Chigusa was made by Tsuchida Yuko in 2013; the cords for tying ornamental knots are from the Japanese Meiji era (late 19th–early 20th c.)

Meet Chigusa, a 700-Year-Old Tea Jar

By Stephenie Overman

Introductions are in order.

Please meet Chigusa. At first glance an ordinary Chinese tea storage jar, over the course of centuries Chigusa has become one of the most revered objects of Japan’s chanoyu, or “art of tea.”

“Tea men looked at Chigusa and found beauty even in its flaws, elevating it from a simple tea jar to how we know it today,” says Louis Allison Cort, curator for ceramics at the Smithsonian Institution’s Freer Gallery of Art and Arthur M. Sackler Gallery.

“This ability to value imperfections in objects made by the human hand is one of the great contributions of Japanese tea culture to the world,” she said.

Only a few hundred similar tea storage jars survive and fewer still are accompanied by such a wealth of artifacts and documentation.

Japanese tea enthusiasts awarded each jar its own name, often tied to poetry or literature, as a sign of respect and reverence. The name Chigusa means “abundance of varieties” or “abundance of plants.” Since Chigusa has its own distinctive name, “we can trace its story precisely to the present day,” Cort says.

These Japanese tea enthusiasts often kept extensive diaries, which recorded detailed descriptions of Chigusa’s physical attributes and accessories, allowing contemporary scholars to see the jar through their eyes, notes Andrew M. Watsky, professor of Japanese art at Princeton University.

“Looking at, appreciating objects’ shape, size and so on was part of the pleasure of tea,” Watsky says. “They took this very seriously.”

Ciphers of past owners on the base of the tea-leaf storage jar named Chigusa Courtesy Freer Gallery of Art

Ciphers of past owners on the base of the tea-leaf storage jar named Chigusa Courtesy Freer Gallery of Art

From these extensive records, scholars know how Chigusa originated as one of countless utilitarian ceramics made in southern China during the 13th or 14th century and was shipped to Japan as a container for a commercial product.

In Japan however, Chigusa, like other Chinese storage jars, was endowed with special status, and over the years it became a highly desirable antique. One eyewitness, who saw the jar at a gathering in 1586, admired its large size and the reddish color of the clay and noted that it was a “meibutsu,” meaning “celebrated tea object.”

Chigusa is visiting the Sackler Gallery in Washington, D.C, through July 27. Chigusa then travels to the Princeton University Art Museum in the fall. The exhibition is accompanied by a book of essays by a number of authors narrating Chigusa’s 700-year-history.

In the exhibition, “Chigusa and the Art of Tea,” Chigusa holds court over other cherished objects, including Chinese and Korean tea bowls and Japanese stoneware water jars and wooden vessels that were used and enjoyed during this formative time of Japanese tea culture.

The goal of the exhibit, Cort says, is “to show the total package used in a 16th century ceremony,” based on the tea diaries.

In the 15th century participants in Japanese tea ceremonies were impressed “by the quantity of objects,” she says. But in the 16th Century – the high point of chanoyu – the emphasis was on the harmony of the objects within the group.

“There was a combination of precious and easily available objects and the contract of highly different materials. It was a powerful aesthetic experience for guests” at tea gatherings, Cort says.

For display in the tea room, Chigusa has been outfitted with accessories bestowed upon it by its successive owners: a mouth covering of antique Chinese gold-brocaded silk, a netted bag of sky-blue silk and a set of blue silk cords used to tie ornamental knots attached to the four lugs on the jar’s shoulder. A video in the exhibition follows a tea master in the elaborate process of dressing Chigusa in its adornments.

In order to create the intimate feel of a 16th-century tea gathering, and to give the sense of how the objects would fit into the space, part of the exhibition recreates a Japanese tea room.

Set of three nesting storage boxes for the tea-leaf storage jar named Chigusa Courtesy The outer storage box is the most recent, from the Meiji era (late 19th– early 20th c.). The middle box, formerly the outer box, is from the Edo period (1615–1868), and is made of cedar stained with persimmon tannin. The inner storage box, from the same time period, is made of lacquered paulownia wood. All three are Japanese, designed to nest within one another. Photo Credit: Freer Gallery of Art

Set of three nesting storage boxes for the tea-leaf storage jar named Chigusa Courtesy The outer storage box is the most recent, from the Meiji era (late 19th– early 20th c.). The middle box, formerly the outer box, is from the Edo period (1615–1868), and is made of cedar stained with persimmon tannin. The inner storage box, from the same time period, is made of lacquered paulownia wood. All three are Japanese, designed to nest within one another. Photo Credit: Freer Gallery of Art

“Tea is a living activity,” Watsky says, and visitors to the exhibit will have an opportunity to experience a traditional Omotesenke tea presentation, including the preparation of matcha, the whisked green tea made from leaves of the kind that Chigusa would have contained.

The museum acquired the 16.5-inch tall jar at auction in 2009. Believed to have been made during the Yuan dynasty, it is colored with a mottled amber glaze with four lugs on its shoulder and a cylindrical neck with a rolled lip sealed by a silk cover and secured with cord.

The jar bears four ciphers written in lacquer on its base. The oldest is attributed to Noami (1397-1471), a painter and professional connoisseur for the Ashikaga shogun. According to researchers, this suggests the possibility, otherwise unrecorded, that the jar circulated among owners close to the Ashikaga government. The next oldest cipher is that of Torii Insetsu (1448-1517) an important tea connoisseur and collector in the international trading city of Sakai, known for innovative tea activity. The next owner to inscribe his cipher was another Sakai tea enthusiast, Ju Soho, who hosted a tea in the new year of 1573 for guests, including the esteemed tea master Sen no Rikyu (1522-91).  Learn more: Chigusa and the Art of Tea 

The Arthur M. Sackler Gallery is located at 1050 Independence Avenue S.W. and the Freer Gallery of Art is located at 12th Street and Independence Avenue S.W. both on the National Mall in Washington, D.C. Hours are 10 a.m. to 5:30 p.m. daily, except Dec. 25. Admission is free.
Source: Smithsonian Institution

Credit Markets Active

A poll of middle-market executives by KPMG predicts an active credit market in 2014.

“Executives anticipate a shift from opportunistic deals to corporate M&A, which will be driving activity in the 2014 credit markets,” according to the U.S. audit, tax and advisory firm.

The market has been slow the past few years according to Joe Rodgers, co-head for Capital Advisory for KPMG Corporate Finance.

“With economic indicators improving over the latter part of 2013 and the credit market remaining very supportive, all signs pointed to an uptick in M&A activity for 2014 at the turn of the year,” he said. Thirty-six percent of the executives expect corporate M&A will be the primary driver. Twenty-six percent expect refinancing will drive credit markets and 23% anticipate private equity funded buyouts with 15% of the financing used for restructuring.

Tea companies routinely secure financing this time of year to insure sufficient goods for the peak sales season. Numi Organic Tea recently obtained $4.75 million to keep pace with its rapid growth in major retail outlets.

Teas from the Oakland, Calif.-based firm can be found in Whole Foods, Stop & Shop, Safeway, Target, Balducci’s and Trader Joe’s. It is also the tea of choice of Marriott and Hyatt foodservice buyers.

Business Capital, which recently provided the $4.75 million credit facility and a $750,000 seasonal over-advance, praised Numi as a company “that cares so much about their suppliers, quality of product, customer experience and our planet. This company’s financing needs were significant and were happy to deliver a solution beyond what most formula based lenders can fund against,” said Chuck Doyle, Managing Director of Business Capital.

“They took the time to understand our complex global business model and deliver a financing structure tailored to ensure the best possible outcome for Numi,” said Ahmed Rahim, CEO of Numi Organic Tea.

Triple caffeine

Triple caffeine

Zest Tea Company

Caffeine fortified Zest Tea is a new loose-leaf and bagged line developed to wake you up in the morning.

Founder James Fayal couldn’t find a traditional tea with enough caffeine to keep him alert so he blended caffeine rich teas, oils and other natural ingredients to triple the caffeine of regular black tea.

“I wanted to increase the energizing caffeine punch, but not at the expense of quality, that’s why we start all of our blends with premium base teas,” he said.

Pomegranate Mojito

Pomegranate Mojito

His proprietary blending process maintains tea’s healthy dose of tannins and antioxidants while avoiding the “jolt and crash” impact of coffee, said Fayal. A cup sustains alertness over a six to eight hour period.

Flavors include Apple Cinnamon, Earl Grey and Blue Lady black teas and Pomegranate Mojito green tea.

The project was crowd funded in a competition co-sponsored by American Express and Venture For America.

Learn more: Zest Tea

Jamba is Juiced Over Drink Green Smoothies

Jamba Juice is rolling out custom-ordered whole food blends.

The new offerings far exceed the nutritional value of carrot juice and squeezed oranges by introducing beets and kale and ginger to the menu. The Orange Fusion combines fresh-squeezed orange juice blended with whole fresh carrots with bananas, mangos, chia seeds, soy milk and nonfat Greek yogurt. An infographic on the company’s website summarizes a survey on beverage preferences that indicated 1 in 5 prefer to drink beets and dark leafy greens in juice rather than eating them whole.

Many of those who participated in the survey believe green juice to be the most nutritious juice, but are skeptical that it could also be great-tasting.

  • More than one-quarter (28%) of U.S. adults say they “fear the look” of green juice;LOGO_JambaJuice
  • Green represents the juice people drink least often
  • 32% say green juice is the one they like the least, and;
  • Only 9% of people like green juice best.
Kale, mangos, passion fruit-mango juice, chia seeds and nonfat Greek yogurt

Kale, mangos, passion fruit-mango juice, chia seeds and nonfat Greek yogurt

“Just like we should be enjoying a wide range of all the colors of the rainbow in the food we eat, drinking colorful fruits and vegetables is an easy way to satisfy your daily requirements, too. Juices made from ingredients like kale, spinach, beets and chia seeds are powerhouses of good nutrition and they can actually taste good,” said Kathleen Zelman, MPH, RD, LD and member of the Jamba Juice Healthy Living Council.

The results of the YouGov study of 2,200 Americans also highlighted a discrepancy between Baby Boomers’ and Millennials’ views on juice. Not only were Millennials more open to green juice, but also to the broader notion of drinking vegetables.

  • Millennials are twice as likely as Boomers to think that vegetables taste better in juice (39% vs 18%);
  • Millennials are twice as likely as Boomers to prefer green juice (13% vs 6%); and,
  • Millennials are twice as likely as Boomers to most often drink green juice (13% vs 6%).
  • Combined, two-thirds (66%) of Americans believe fresh-squeezed juice is healthy.

According to a 2013 report published by the USDA based on MyPlate serving suggestions, men, women and children are only eating 1/3 of the fruit (33%) and 2/3 of the vegetables (63%) they need each day.  “It gives us the opportunity to democratize this really healthy trend that is largely unattainable for most consumers because of either availability or cost,” CEO James White told CNN Money.

Whole food smoothies are available at 50 locations equipped with new juicers and mixers. Whole food juices will be available at 300 of Jamba’s 800 locations later this year.

Learn more: Jamba Juice

Tea Magazine Evolves…

Tea Magazine® a 20-year-old consumer publication for tea enthusiasts is replacing its bi-monthly print edition with a combined print +online content package for its readers, including a new book-style softcover guide to tea published annually.

LOGO_TeaMagazine_400pxIn mid-April ITEM Media will launch The Daily Tea (www.thedailytea.com) a subscription-based tea portal replacing www.teamag.com. Visitors to the site will see a mix of free and paid content, along with new articles each month, and some previously published in Tea Magazine. Subscribers have their choice of several different newsletters — for example, newsletters targeted to those interested in cooking with tea; Yoga and tea; tea travel and terroir.

Subscribers will get at least three new feature articles a month, “…the articles will be accompanied by video, behind-the-scenes interviews and picture galleries, which is a lot more than we could do in print,” said Chief Media Officer Graham Kilshaw.

Since acquiring the magazine in January 2012, “we have built the audience from just a couple of thousand to more than 30,000. Most of this growth has come from our digital platforms, and very little has come from our print media,” said Kilshaw.

“We now see an opportunity to grow our audience significantly beyond its current 30,000 people – digitally. Consequently we are going to make several changes starting in May 2014,” he said.

The 150-page book-style magazine, often referred to as a “bookazine” will have longer in-depth feature articles on science, geography and history and “great photography,” said Kilshaw. There will also be a catalog of tea products, said Kilshaw. The publication will be mailed to all subscribers and sold nationally in bookstores and by grocers including Whole Foods Market.

Chief Media Officer Graham Kilshaw

Chief Media Officer Graham Kilshaw

Annual subscriptions are $24.99 and include the new $9.99 “Tea Magazine 2015 Tea Guide” mailed annually in September.
Kilshaw was upbeat about the new direction which he described as “evolving from predominately print with a little bit of digital to becoming predominately digital with a little bit of print.”

“This is all about aligning our goals and strategy with our resources. Producing the print magazine required us to spend 80 percent of our resources on 20 percent of the content. During the past 24 months print subscriptions increased by a couple of thousand while our digital audience has grown by five times,” he said.

“The change in the mix of media is driven by our readers,” said Kilshaw. “Print generally-speaking attracts an older demographic and we want to reach a broad audience. Younger tea drinkers are forming their tea habits now, experimenting widely and trying out lots of different teas. They represent the future customers of our media clients,” he said, adding , “We want to build a very large audience for the tea community.”

The company expects to soon announce a new content manager to replace Kate Sullivan who left in December.

Learn more: www.thedailytea.com

— — —

Tea Biz serves a core audience of beverage professionals in the belief that insightful journalism informs business decision making. Tea Biz reports what matters along the entire supply chain, emphasizing trustworthy sources and sound market research while discarding fluff and ignoring puffery.


Tea Biz posts are available to use in your company newsletter or website. Purchase reprint and distribution rights for single articles or commission original content.  Click here for details.

Tea Magazine Evolves…

PHILADELPHIA, Penn. — Tea Magazine® a 20-year-old consumer publication for tea enthusiasts is replacing its bi-monthly print edition with a combined print +online content package for its readers, including a new book-style softcover guide to tea published annually.

In mid-April ITEM Media will launch The Daily Tea (www.thedailytea.com) a subscription-based tea portal replacing www.teamag.com. Visitors to the site will see a mix of free and paid content, along with new articles each month, and some previously published in Tea Magazine. Subscribers have their choice of several different newsletters — for example, newsletters targeted to those interested in cooking with tea; Yoga and tea; tea travel and terroir.

Chief Media Officer Graham Kilshaw

Chief Media Officer Graham Kilshaw

Subscribers will get at least three new feature articles a month, “…the articles will be accompanied by video, behind-the-scenes interviews and picture galleries, which is a lot more than we could do in print,” said Chief Media Officer Graham Kilshaw.

Since acquiring the magazine in January 2012, “we have built the audience from just a couple of thousand to more than 30,000. Most of this growth has come from our digital platforms, and very little has come from our print media,” said Kilshaw.

“We now see an opportunity to grow our audience significantly beyond its current 30,000 people – digitally. Consequently we are going to make several changes starting in May 2014,” he said.

The 150-page book-style magazine, often referred to as a “bookazine” will have longer in-depth feature articles on science, geography and history and “great photography,” said Kilshaw. There will also be a catalog of tea products, said Kilshaw. The publication will be mailed to all subscribers and sold nationally in bookstores and by grocers including Whole Foods Market.

Annual subscriptions are $24.99 and include the new $9.99 “Tea Magazine 2015 Tea Guide” mailed annually in September.
Kilshaw was upbeat about the new direction which he described as “evolving from predominately print with a little bit of digital to becoming predominately digital with a little bit of print.”

“This is all about aligning our goals and strategy with our resources. Producing the print magazine required us to spend 80 percent of our resources on 20 percent of the content. During the past 24 months print subscriptions increased by a couple of thousand while our digital audience has grown by five times,” he said.

LOGO_TeaMagazine_400px“The change in the mix of media is driven by our readers,” said Kilshaw. “Print generally-speaking attracts an older demographic and we want to reach a broad audience. Younger tea drinkers are forming their tea habits now, experimenting widely and trying out lots of different teas. They represent the future customers of our media clients,” he said, adding , “We want to build a very large audience for the tea community.”

The company expects to soon announce a new content manager to replace Kate Sullivan who left in December.

Learn more: www.thedailytea.com

Need to Know (Feb. 24, 2014)

What tea professionals need to start the week —

TEABIZ-NTK_14_02_24_Fif-TEA_Yukari Kasihara_teapotWhimsical teapots are the work of 50 artists celebrating the Fif-TEA Anniversary invitational of the Crafts Alliance in St. Louis, Mo….China and the U.S. make a climate change pledge against a backdrop of air pollution and a summer drought that damaged China’s most valuable tea growing region… the World Bank investigates investments in Assam where plantation practices are subject to a Columbia University report critical of Amalgamated Plantations Private Ltd. (APPL)… Teavana founder and CEO Andy Mack retires from Starbucks Coffee Co., which names Executive Vice President Annie Young-Scrivner president of the specialty tea company which has grown since 1997 to 366 stores in the U.S., Canada and Mexico…. Rossanne Williams is the new president of Starbucks Canada.

Drought Damaged China

On Saturday the U.S. and China pledged to work together restrict industrial emissions which are responsible for global climate change, according to the Intergovernmental Panel on Climate Change.

In a joint statement U.S. Secretary of State John Kerry said “this is a unique, cooperative effort between China and the United States and we have hopes that it will help to set an example for global leadership and global seriousness on the issue of next year’s climate negotiation.”

China is responsible for China’s serious attitude toward environmental protection, according to reports by China’s Xinhua news agency. China’s President Xi Jinping told Kerry “it is not at others’ demand but our own will. We have already taken a lot of measures and will take more in the future,”  according to news accounts.

Summer temperatures in parts of China that reached 107.6 degrees last year severely damaged tea gardens that continue to suffer from the effects of a severe drought.

At question is whether the withered plants will produce the first flush bounty so essential to the economic welfare of China small tea growers.

In much of China, the first flush or pre-Qing harvest is the most lucrative of the year. During this time the tender leaves benefit from long dormancy and the fact that insects that feast on the shoots are awakening from the winter’s cold.

Last summer the Provincial Agricultural Department in East China’s Zhejiang province, one of the nation’s major producers of tea, reported severe stress to 27,000 hectares (67,000 acres) of farms in Hangzhous, Huzhou and Lishui.

Rainfall declined 70 percent compared to 2012. The region experienced two months of severe drought.

Shanghai experienced the hottest July since record keeping began 140 years ago.

China Daily reported that in Tonglu county, Hangzhou, some 40 hectares of tea plants withered due to prolonged high temperatures of around 40 degrees Celsius. It was estimated that tea output in the county dropped 70 percent, according to local authorities.

The drought greatly affected white tea production, according to the Anji County Agricultural Bureau. Tea bushes on 3,000 hectares of tea farms in Anji County were harmed with half suffering serious losses, according to agricultural officials.

Crafty Tea Pots

TEABIZ-NTK_14_02_24_Fif-TEA_Eric Serritella_teapotAn exhibition at the Craft Alliance gallery in St. Louis, Mo., features the work of more than 50 artists challenged to create clever teapots of clay, metal, glass, wood and fiber.

The FIF-TEA 14th Biennial Teapot Exhibition is the first event of the 50th Anniversary season.

The Alliance annually invites local and nationally known artists to take on the challenge of the iconic teapot as a functional or non-functional artistic form.

According to an Alliance release “for more than half of our 50 year history, Craft Alliance’s biennial teapot exhibitions have been a hallmark of our exhibition series, drawing overflow crowds of enthusiastic viewers, capturing TEABIZ-NTK_14_02_24_Fif-TEA_Lucy Dierkst_teapotthe interest of collectors from across the nation and providing a platform for the teapot as an art form that is recognized in art schools, and galleries throughout the U.S.”

“This year we have challenged participating artists to create a teacup as a companion to their teapot,” according to a release. Visit www.craftalliance.org to see photos of the exhibit which is sponsored by Sheila Greembaum and Gary Wasserman and the Republic of Tea.

The Craft Alliance gallery is located at: 6640 Delmar Boulevard, St. Louis, MO 63130. Phone: 314-725-1177. The gallery is open Sun. 11am – 5pm, Tue.-Thur. 10am-5pm, Fri-Sat. 10am-6pm., and closed WTN140224_LOGO_Fif-TEAMonday.  The exhibit closes March 23. Admission is free.

Learn more: www.craftalliance.org

Plantation Practices Under Investigation by World Bank

NEW DEHLI, India — The World Bank has launched an investigation into labor practices on several Assam tea estates managed by Amalgamated Plantations Private Ltd. (APPL).

Tata Global Beverages, which finances APPL operations, has denied any violation of worker rights at its 24 tea estates.  Tata is best known for its Tetley Tea brand.

LOGO_Almagamated Plantations Ltd.A spokesperson for APPL said the company would cooperate fully with investigators looking into a joint-venture funded in part by the International Finance Corporation (IFC).

The IFC, a private lending arm of the World Bank, in April 2009 invested $7.8 million in a program to help find permanent employment for almost 31,000 tea workers. The program is designed to assist hard-working, but largely uneducated, tea workers in profiting from their labor. Tata has a 41% stake in of the project’s $87 million budget; IFC contributed 19% and the remainder is financed by workers who received interest-free loans of $128 to buy shares. Currently there are 21,000 workers enrolled in the program.

The investment is a significant sum for workers making less than $2 per day and will require seven years to repay through payroll deductions. The investment’s returns however, motivate workers to contribute their best effort and to share in the profits of the venture, according to those who developed the program.

About a year ago World Bank received several complaints from non-profit organizations associated with workers’ welfare.

Groups such as Nazdeek and PAJHRA (Promotion and Advancement of Justice, Harmony and Rights of Adivasis) and the People’s Action for Development voiced concern over long working hours, inadequate compensation, unsanitary latrines, inadequate housing and unsafe use of pesticides. Productivity targets are so difficult that tea pickers must engage other family members, according to the charities. The charities cited worker unrest in some instances has led to violence.

About 4.5 million of Assam’s garden workers are Adivasis, a cultural minority forcibly relocated as laborers during the colonial period. They make up about 20% of the state’s population.

The project was harshly criticized last week in a Columbia University report that brought to light “dire living and working conditions, in violation of Indian law and the World Bank’s standards for environmental and social sustainability.”

In the 110-page report Prof. Peter Rosenblum at Columbia Law School’s Human Rights Institute visited 17 tea gardens in Assam and West Bengal during a three year period. His report: “The More Things Change: The World Bank, Tata and Enduring Abuses on India’s Tea Plantations” criticized APPL practices at several plantations.

On Wednesday Thomson Reuters Foundation received an email from Kaushik Biswas, APPL’s company secretary, asserting “We at APPL look after our workers and are compliant with the law. Wages are paid as per industry agreements. Cash wage plus benefits total up to 189 rupees per man day. Working hours as specified in the Plantations Labour Act, 1951,” he said.

LOGO_Almagamated Plantations Ltd.2The act permits garden owners to pay workers a wage below the national minimums. This is because plantations are required to provide food, shelter, education and medical care at no cost for workers. Compensation varies by contract but Assam workers typically earn INRs 89 ($1.44). APPL estimates plantations contribute another INRs 100 ($1.62) per day in-kind for a total wage of $3.06 per day for tea pickers meeting their established quota, typically measured as 42 kilos of plucked leaf.

Research co-director Ashwini Sukthankar told Supply Management: “Worker ownership and diversification – the most highly vaunted elements of the transition – are obviously appealing, but the implementation was so outrageous that it casts doubt on the sincerity of the project.”

Research director Peter Rosenblum said: “The IFC acted with an excess of enthusiasm and an absence of attention to the known problems in the plantation sector.”

After reviewing several complaints the Compliance Advisor Ombudsman (CAO) initiated the independent review. The CAO in an independent body charged with oversight of IFC investments.

A report in the Financial Times states the CAO questioned whether the IFC had “sufficient evidence to support the strong positive findings on labor relations and occupational health and safety issues” before investing. It also expressed concern about the IFC’s supervision, and assessments, after the two incidents of labor unrest.

“In a preliminary assessment last year, the CAO found that the IFC invested in APPL primarily on the strength of Tata’s reputation of “being at the forefront of Indian corporate practices” in regard to labor standards. But the ombudsman said there was no evidence of any IFC discussions with workers or unions to verify the Tata’s claims about conditions at the plantations,” according the Financial Times report.

The IFC responded that it is reviewing the report and working with APPL to “upgrade estate facilities and improve living and working conditions.”

Investigators will present a report for action by the World Bank’s Board of Directors in May. An action plan mandating IFC to address human rights violations may follow.

Sources: Financial Times, New York Times, Columbia University, Thomson Reuters Foundation and Supply Management.

Teavana Founder Andy Mack Retires

ATLANTA,  Ga. — In 1997 entrepreneur Andy Mack and his wife Nancy, a former Walt Disney World Resort customer service manager, opened their first Teavana storefront at Phipps Plaza (Lenox Square Mall).

During the 10 years that followed he changed the name from Elephant Tea Co., perfected the format, acquired prime retail locations in some of the most desirable malls in the country and introduced a remarkable variety of specialty tea blends.

It was always his intent to introduce conventional tea drinkers to specialty tea and the myriad gadgets on display in his stores, he told the Atlanta Journal-Constitution after opening his shop.

Fortune smiled as his business model gained traction. Investors added momentum, doubling the number of stores to more than 50 between 2005 and 2008. By July 2011 he was ringing the bell at the New York Stock Exchange and celebrating a $121 million IPO with a jubilant team. Teavana’s mall locations were earning an enviable $1,000 sq. ft. in retail sales at the time. The following spring Teavana acquired Teaopia, a Canadian-based retailer with an uncannily similar business plan. The company paid a half million each for the 46 Teaopia stores.

Mack received the Ernst & Young Entrepreneur Of The Year® 2012 Award in the Retail and Consumer Products category and by fall the company was earning $43 million a quarter and projecting revenue of $250 million per year.

TEABIZ-TeavanaFounderAndyMack_byLinnea Covington

Retiring Teavana Founder and CEO Andy Mack

Store count had risen to 284. Mack announced plans to build 500 stores. Shortly after the most successful specialty tea retailer in America discovered his pot of gold at the end of the rainbow.

In November 2012 Starbucks bought the company for $620 million paying $15.50 per share. The Macks had retained 21.5 million of the company’s shares to earn a payout of approximately $335 million. Starbucks valued the company’s blends at $13 million and the goodwill associated with Teavana, its “Heaven of Tea” slogan and business plan at an astounding $467.3 million. It was the most expensive acquisition in Starbucks Coffee Co. history.

During the past year Mack has assisted with the integration of Teavana which has continued to grow. It now numbers 366 locations including showcase concept stores in New York City and Seattle, Wash.

Last week Annie Young-Scrivner was promoted to executive vice president of Starbucks Coffee Co. and named president of Teavana today replacing Mack who announced his retirement.

“We are grateful for Andy’s leadership establishing Teavana as a world-class leader responsible for bringing premium tea to millions of customers over the past 17 years,” said Cliff Burrows, group president, U.S. Americas and Teavana.

“Under Annie’s leadership, we plan to do for tea what we did for coffee by significantly expanding the availability of new and innovative Teavana products in Starbucks and Teavana retail stores and through other channels,” he said.

Teavana is positively positioned to capture market share within the rapidly-growing $90 billion global hot and iced tea market. Young-Scrivner most recently led Starbucks Canada’s record Fiscal 2013 performance. Prior to her role leading Canada, Young-Scrivner served for three years as Starbucks global chief marketing officer and president of Tazo Tea. Before joining Starbucks in 2009, she had a successful twenty year career at PepsiCo and held positions such as chief marketing officer Quaker Foods and president  of  greater China for PepsiCo Food & Snacks. Young-Scrivner will continue to report to Burrows in her new role.

See: Teavana update.

Rossanne Williams to Lead Starbucks Canada

Starbucks Coffee Co. last week announced the promotion of Rossanne Williams as senior vice president and president Starbucks, Canada.

Since opening its first store in Vancouver, B.C. in 1987, Canada has grown to nearly 1,400 stores and is Starbucks largest market outside the U.S.  During the last nine years, Williams has held numerous leadership roles both internationally and within Starbucks U.S. business. Prior to her current Partner Resources role leading the company’s Talent Acquisition, Talent Management, Diversity, and Community Investments functions, she served as division senior vice president of Starbucks Sunbelt region in the U.S. Williams also lived and worked in Amsterdam, The Netherlands for three years as a key executive on Starbucks Europe, Middle East and Africa (EMEA) regional leadership team. Prior to that, she held a number of executive roles in Starbucks retail operations. She will report to Cliff Burrows.

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Tea Biz serves a core audience of beverage professionals in the belief that insightful journalism informs business decision making. Tea Biz reports what matters along the entire supply chain, emphasizing trustworthy sources and sound market research while discarding fluff and ignoring puffery.


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Need to Know (Feb. 17, 2014)

What tea professionals need to start the week —

Weathering the retail storm…Tea growers in Sochi share a cup with Olympic Winter Sports spectators and press… Art of Tea CEO Steve Schwartz sounds secure on CNBC… tea offers a welcome relief to snifflers during the latest cold snap... India sets production record in 2013 of 1.2 million metric tons of tea…Rishi Tea breaks ground on a 50,000 sq. ft. facility that opens in late summer.

Snowfall in Manhattan

A Cold Blow

January delivered a cold blow to retailers following a chilly December. Sales for the month declined in the U.S. by .4 percent which added to a somber .1 percent drop in December, according to U.S. Commerce Department figures. December sales were previously reported as positive.

Explanations for the declines varied job growth slowed, consumer confidence waned, sales of new autos fell and wage gains are stagnant following a strong fourth quarter but economists could all point a finger at the unusually cold weather.

Snowfall in January across the U.S. was almost four times greater than normal, according to HAM Weather. There were 1,073 snowfall records and 4,406 new cold temperature readings during the month, mainly in the eastern seaboard, Mississippi Valley and southeastern states. New York City reported 8 inches of snow in Central Park on Feb. 4., a record for the date while Chicago received 33.7 inches during January. It was the coldest January since 1994 on average based on a measure of energy demand. The Northeast is on track for the coldest winter since 1982 based on December to February temperatures.

Meanwhile in the West, cities in California and Arizona and the Pacific Northwest recorded 783 record highs during the month.

The Commerce Department said that spending at department stores decreased 1.5 percent in January. Foot traffic at malls continued off pace and McDonald’s Corp. said that same-store sales fell for the third straight month in January, blaming both the weather and declining consumer confidence.

February is looking up somewhat. The Thomson Reuters/University of Michigan index of consumer sentiment is stronger than projected for February, according to Bloomberg.

Sources: Bloomberg TV, HAM Weather

WTN140210_Russian_Izba

Sochi tourists take tea at rustic Russian izba.

Tea Growers Welcome Olympic Tourists

SOCHI, Russia  — Reporters at the Olympics said they are enjoying tea and biscuits at a tea stall developed by people from Russia’s Kuban region. The region, which includes Sochi, is home to several tea gardens.

A reporter for the Boston Globe noted the tea corner in the media center is very popular with the press:

“Women (in traditional costume) pour piping hot cups of black tea, then serve the drink with piles of biscuits, cookies, and packets of honey. For free. “With love from the Kuban people,” the women say.

A Russian peasant who developed a winter-resistant tea hybrid in 1901 established Sochi as an important domestic supplier in a nation of tea drinkers. The region’s six gardens produce about 2,000 metric tons of tea.

Russia imports the largest quantity of tea in the world to serve a population that likes its tea full-bodied and hot. Russians consume 3 pounds of tea per capita to rank 4th behind England among the world’s tea drinkers.

Visitors to the Olympic Games in this Black Sea resort town are discovering Sochi has a long history of tea growing and several tea chalets including the two-story Sochi Tea House where visitors can enjoy locally grown black teas.  Tours also stop at the Museum of Samovars and include a tea party in a Russian wooden Izba.

WTN140210_Samovar_Tula Samovar MuseumTea drinkers will find the ever-present samovar in area restaurants and homes. This large urn is designed to keep water hot and tea on the boil in a kettle at the top of an internal chimney.  Today’s samovars are electrically heated but old style samovars have a fire bin where coal, charcoal and small sticks were burned for heat. The concentrated tea is then diluted about 10:1 and mixed with jam or lumps of raw sugar.

Green tea is preferred in the region bordering China but the people of Eastern Russia are largely black tea drinkers who sometimes place a cube of sugar in their mouth as they sip.

Vyacheslav Moroz, director of the Dagomy-chai tea garden, told USA Today that Sochi tea is grown with little interference from pests as the cold weather proved fatal to insects and also prevents the growth of many tropical blights, fungus and diseases. Tea is ecologically farmed, clean of pesticides, certified organic, harvested mechanically and sold internationally.

The tea is known as Krasnodar Tea after Judas Antonovich Koshman, the Ukrainian peasant whose plants stocked Sochi’s first successful tea plantation in 1905. It is the northernmost commercial growing region for tea in the world.

Tsar Nicholas II owned a large cattle farm and botanical garden in Dagomys, a section of Sochi about 870 miles south of Moscow. Located along the Black Sea coast with the Caucasus Mountains nearby, this former military outpost became a resort for the wealthy.  Since 1689 tea was largely imported from China along an 11,000 mile trade route and very expensive, according to the Liberty Voice. Tea was first introduced in Russia in the mid-1600s as a gift from Mongolia to Tsar Michael I and was used by the nobility for medicinal purposes.

“By the late 1700s, tea was gaining acceptance in Russian society which brought the prices down. It was during this time that the first factory production began of the uniquely Russian “teapot,” the samovar,” according to the Liberty Voice.

Tea growers that settled near Sochi were unsuccessful in the 1870s and 1880s due to the winter weather. The Tea Museum in Sochi tells the story of a Russian expedition in 1896 that purchased 2,000 kilos of Chinese tea seeds but fewer than 5% germinated. Koshman experimented with the stock and managed to grow 800 bushes in Solokh-Aul, a fertile region about 30 kilometers south of Sochi protected from the harsh winter.

Full scale commercial production began in 1936 in Dagomys-chai. By the 1980s the 5,000-acre garden was one of the largest suppliers of tea to the Soviet Union.

Source: Boston Globe, USA Today, Liberty Voice, Tula Museum of Samovars,

Invest in Security

Art of Tea founder Steve Schwartz was interviewed recently on matters of cyber security. His advice to small business owners:  Invest in online security.

Schwartz told a CNBC reporter that security is a priority because cybercriminals don’t discriminate based on business size. “We’re just as sensitive and susceptible to what’s happening with Neiman Marcus,” he said.

The Los Angeles-based tea importer and wholesaler said that his company’s online security software costs about $100 per month, plus an additional charge per online transaction. The system issues an alert when there is suspicious activity.

Two members of his staff of 25 monitor online security since the bulk of his business is online, he said.

CNBC reported that “roughly 77 percent of small firms believe their company is safe from a cyberattack — even though 83 percent of those firms do not have a written security policy in place, according to the National Cyber Security Alliance.”

Consumers are concerned following several high-profile breeches involving sensitive credit card transaction and personal information. According to security experts those who become victims switch banks, switch credit cards providers and they switch retailers.

Source: CNBC

Quell Winter Sniffles with Cup of Hot Tea

It is the season of snow angels, skiing and skating, and coughs and colds. When nasty sicknesses hit, many turn to the tea cabinet. While no tea or herbal remedy can cure a virus, some of them may be able to offer some comfort from the symptoms.

Sore throats can always benefit from warm liquids, so choosing tea is a natural. A dose of honey in the cup can help coat and calm a ticklish throat. Because lemon has natural antibacterial properties, some believe it can help fight the effects of illness. It is also possible that its acidity changes the general environment within the throat, impacting uncomfortable sensations. Licorice root tea helps to reduce inflammation and chamomile may help to relax muscles, easing pain. Tea’s flavonoids also offer anti-inflammatory properties.

Sinus pain is frustrating and uncomfortable. Ginger is a great help when congestion takes hold. The spicy smell opens stuffed sinuses. It also helps to loosen mucus and can serve to increase circulation. Cinnamon’s powerful aroma can also help open up those sinuses as well.

As tempted as one might be, cold sufferers shouldn’t sip too hot a cup or it may burn the throat, increasing discomfort, rather than easing it.

Read more about home remedies here.

Rishi Breaks Ground on Warehouse

MILWAUKEE, Wis. – Rishi Tea broke ground on a new 50,000 sq. ft. office, warehouse and blending facility last week

“We’ve laid a foundation for respect in the tea market, a respect for our quality distinction and innovative approach to tea making. Building this facility represents a renewed investment in our foundation – our customers. It also will enable us to improve our ability to deliver the very best tea products in the world,” said Joshua Kaiser, Rishi Founder and CEO.

The new building, located in the Menomonee Valley industrial park, is expected to be completed by mid-August. It is situated on a 3.8 acre site. The company last moved eight years ago when it leased a 13,000 sq. ft. property and quickly expanded to 38,000 sq. ft. of leased space. It has since outgrown its current home.

“We’re more than completely out of room,” Rishi Co-owner and Vice President Benjamin Harrison told the City of Milwaukee’s Redevelopment Authority in July. “We’re bursting at the seams and storing a lot of product off-site. … Quite simply, we are out of space, and we need to grow.”

Rishi now shops to 50 states and 10 countries. “We’re an international company with roots in Milwaukee. The decision to build a production facility here was very important to us. We’re glad to stay in our hometown,” said Harrison.

TEABIZ-RishiExpansionMilwaukee_Courtesy Briohn Building_hirezBriohn Building Corp. Brookfield, Wisconsin, is responsible for architectural design and construction of the pre-cast concrete structure. “They’ve understood our goals and are making it possible for us to achieve them,” said Harrison.

Although the new facility is only 10,000 sq. ft. larger than the space it current occupies, Harrison said Rishi will be able to use the space much more efficiently due to the building’s 24-foot clear height and layout.

In a report in the Milwaukee Sentinel, Harrison said the company currently employs 46 and “could easily add 20 more in the next five years.” The firm is growing at a rate of 10% per year, he said. The building could eventually be expanded by 20,000 to 30,000 sq. ft.

Rishi Tea obtained $1.86 million from a city-affiliated lender to help finance the project. The Redevelopment Authority sold the land for $120,000 per acre.

Sources: Rishi Tea, Milwaukee Business Times, Milwaukee Sentinel

India’s Domestic Consumption

MUMBAI, India – Thanks to the Herculean efforts of India’s small tea growers, the country is approaching China as the world’s largest tea producer.

The Indian Tea Association proudly declared this week that overall production grew by 6.5 percent last year for a record 1.2 million metric tons of tea. Small growers contributed more than 30% of the total according to India Tea Board estimates. India was the dominate producer and exporter for many years but China has since invigorated its production and desire to export.

Last year China produced about 1.75 million metric tons and is expected to produce at least 1.8 million metric tons in 2013 but an official total has not been released. China accounted for 35  percent of the world’s tea in 2012 and India accounted for about 21 percent of the 4.3 billion kilos produced. Kenya and Sri Lanka are distant third and fourth, each producing less than .375 million metric tons. Unlike China and India, relatively little tea is consumed in Kenya making it the largest exporter of black tea. China is the largest exporter of green tea.

China also has a much more robust tea manufacturing, bottling and packaging sector than India. Revenue for China’s Tea Production industry has been increasing at an annualized rate of 17.4 percent to an expected $14.7 billion in 2013. The industry has increased its share of China’s beverage market over the past decade to about a quarter, according to IBISWorld.

Kenya is the world’s largest black tea exporter but adds value to only 8% of its exports while India, the region’s other tea powerhouse adds value to only 11% of its tea exports.

The production increase had little impact on India’s exports however as the majority of this tea was CTC grade and virtually all was consumed by the fast-growing domestic market. India exports CTC mainly to Egypt, Pakistan and the U.K. with orthodox production to Iraq, Iran and Russia. North America is generally the fifth or sixth largest ranked export destination but demand here continues to increase.

Domestic consumption reached 856 million kilos in 2011 and 875 million kilos in 2012. Final numbers are not available but the Tea Board estimates consumption will top 880 million kilos. Growth continues at 2% to 3% annually which will mean India will have to begin importing tea to meet its domestic demand and maintain export targets. Per capita consumption rose to 718 grams (1.58 pounds) in 2011, about triple the U.S. Domestic consumption is rising steadily from a per capita count of 654 grams (1.44 pounds) in 2001.

Assam continues to lead the nation’s five growing regions with an April-December harvest of 607 million kilos, up 5% compared to the previous year. West Bengal tea growers increased yield by 11% to 290 million kilos according to Tea Board data.

The southern growing regions of Tamil Nadu, Kerala and Karnataka showed a 16% increase for the period to 196 million kilos.

Sources: Economic Times the Business Line and China Daily

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Tea Biz serves a core audience of beverage professionals in the belief that insightful journalism informs business decision making. Tea Biz reports what matters along the entire supply chain, emphasizing trustworthy sources and sound market research while discarding fluff and ignoring puffery.


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Tea for your Teeth

TEABIZ_140217_TeaOralHealthTEA & HEALTH — Drinking tea every day may bring happiness, but it can also lead to a less than stellar smile. Tea’s tannins can stain teeth, resulting in unpleasant discoloration over time. The acidity of tea can also cause porousness in the enamel, leading to staining below the surface as well. According to Colgate’s Oral and Dental Health Resource Center, tea may actually stain more than coffee. There are a few ways that that tea drinkers can limit this staining and protect their smiles. Drinking water, brushing teeth, flossing, and chewing gum after sipping tea can remove some tannins, resulting in less impact on the teeth.

For the downsides around staining, tea may have some important benefits when it comes to oral health. Nearly two decades ago, the Journal of Dentistry was already reporting that the tannins, catechins, caffeine, and tocopherol in tea combined with its naturally occurring fluoride to protect tooth enamel from acidic solutions. Another study in the Journal of Periodontology of Japanese men found that those who drank green tea saw improvements in gum recession and bleeding gums also. Those researchers believed that green tea’s catechins helped block inflammation caused by bacteria.

Another benefit, a University of Illinois at Chicago College of Dentistry study showed that polyphenols could block the work of an enzyme that helps to create hydrogen sulfide, a factor leading to bad breath. So raise a cuppa to healthier teeth and gums.

Need to Know (Feb. 10, 2014)

What tea professionals need to start the week —

Coca-Cola’s decision to collaborate with Keurig Green Mountain could put a soda fountain in every kitchen and divert billions of bottles from landfills. The combination presents a great opportunity for tea companies with concentrates… Cupid is torn this week between a desire for chocolate with tea and tea in scrumptious chocolate… a 15% decline in holiday foot traffic slowed mall tea sales… Rabobank predicts slowing beverage growth in the middle class in BRIC nations… former Starbucks executive Alix Box has been named CEO of Canada’s Second Cup which has been bolstered with a large investment by Tailwind Capital.

WTN140210_KeurigColdSystem

Coca-Cola Teams with Keurig Green Mountain

The 10-year collaboration agreement announced by Coca-Cola and Green Mountain Coffee Roasters last week represents a significant endorsement of cold beverage dispensers for the home.

Coca-Cola purchased 10% of GMCR’s shares for $1.25 billion as part of the deal which calls for the introduction of a Keurig-made carbonated cold drink dispenser for the kitchen before September 2015.

TEABIZ_140210_HouseholdPotential_GMCR2013Public validation of the concept will lead to innovation and a race by brands to develop concentrates and instant beverages previously sold only in grocery or food service.

Last summer Green Mountain Coffee Roasters President & CEO Brian Kelley, a former Coke executive, unveiled plans for a drink dispenser designed to produce a range of cold beverages from tea to soda while diverting billions of plastic bottles from landfills.

Green Mountain will be Coke’s exclusive partner for production and sale of the Coca-Coca Co. branded single-serve, pod-based cold beverages.

Tea could benefit greatly from the move as concentrates gain favor. Coke owns several tea brands including FUZE, Gold Peak and Honest Tea. GMCR has licensed its K-Cups™ technology to several hot tea beverage partners including Twinings, Lipton, Celestial Seasonings and Snapple.

Keurig is a personal beverage system company with a mission to put a Keurig brewer on every counter and a beverage for every occasion, Kelley told investors. He estimates the U.S. beverage industry at $150 billion with 7.5 8 oz. servings per person per day. Total servings are approximately 768 billion (excluding alcoholic beverages). In this tally carbonated soft drinks tie with tap water at 1,885 servings per household.

TEABIZ_140210_HouseholdBeverageConsumption_GMCR2013He presented a chart showing 14 beverage occasions per household and estimated 90 million households own a coffee brewer. The company has sold 30 million hot beverage brewers expects to sell 4 million more per year. He projects a Keurig hot-cold combination in more than 50 million homes.

Sales of carbonated soda have been declining for a decade as consumers question the health consequence of drinking heavily sweetened beverages. Sales of regular soda declined 3.3% in the year ending November 2013. Diet soda declined 7.2% during that same period. Coke’s entire range of brands will be available, a line that includes juices, colas and tea.

In home dispensers return control over calories to those seeking a refreshing drink. Younger drinkers welcome the ability to customize beverages and innovative manufacturers are already demonstrating the ability to deliver on the possibility of a soda fountain in every home.

Consumers have been warming to the idea of homemade cold drinks for some time. SodaStream International Ltd. is an Israeli company founded in 1903 with a growing reputation globally.  Its in-home carbonation system is installed in 7million homes in 45 countries. Sales revenue has average 33% growth during the past five years but the company is relatively small with 2013 earnings of $562 million. Coca-Cola earned $47 billion last year and GMCR earned $4 billion. SodsStream spokesman Yohah Lloyd told the Wall Street Journal that the at-home carbonated beverage industry is worth $260 billion. SodaStream is currently sold in 15,000 U.S. stores.

The move will likely force SnappleDrPepper and PepsiCo to enter the category, perhaps as licensed partners with Keurig or allied with SodaStream. Last summer PepsiCo appeared ready to acquire SodaStream for $2 billion. An acquisition or big-soda partnership is more likely as it could quickly put big brand concentrates in homes. Currently SodaStream uses generic syrups consumers add themselves. To insure consistent results, the big bottlers like Coke want greater precision so that the drink delivered at home tastes the same as canned or bottled soda from the store.

Left to be seen is the ability of Keurig to produce a machine that makes 2 liters of soda for around $1. Coke will not mark down its concentrate and undercut its bottling business. (Coke recently purchased its network of bottling companies.)

Keurig is likely to sell its cold beverage dispenser for around $200. It will take a lot of soda servings to justify that price.

Sources: Seeking Alpha, GMCR, Wall Street Journal

Delicious chocolate and meringue cake on red plate with tea cup and teapotTea Treats for Valentine’s Day

Gift givers will spend $1.6 billion on candy for Valentine’s Day according to CNN, and that includes 58 million pounds of chocolate. Tea lovers prone to a love of these tasty treats are fortunate that they can double their pleasure with chocolate-infused teas and tea-infused chocolates.

Chocolate teas have become increasingly popular as an entire segment of “dessert teas,” has taken off. Harney & Sons has Chocolate Tea which was created as a commission from Chocolatier magazine. Mighty Leaf developed a Chocolate Truffle Tea Collection which includes    an herbal concoction of chilies and chocolate chips and another with masala spices; a rooibos with mint and cacao nibs; pu-erh with cocoa; and a black tea with cacao nibs and orange and another with pear, caramel and chocolate chips. Numi Tea also offers its own version of Chocolate Pu-erh with cocoa, vanilla, and orange peel. Tea Forte’s Dolce Vita Ribbon Box is not only beautiful, but packs a chocolate punch with a Belgian Mint and Coco Truffle. The Art of Tea blended the flavor of bananas with chocolate and peppercorns in their Chocolate Monkey treat. Simpson and Vail will keep that sweet tooth satisfied with Chocolate Caramel Black Dessert Tea,  Chocolate Chai and Cinnamon Chocolate Brownie Organic Black Dessert Tea.

The other side of the menu reveals the decadent category of tea-infused chocolates. The Tea Room has a wide array of tea and herbal chocolate bars to tempt tea lovers: milk chocolate with mint tea, jasmine tea, chai, or honeybush; white chocolate with chamomile and honey; dark chocolate with earl grey, raspberry rooibos or Lapsang Souchong; or extra dark with green mate. Chocolatier Thomas Haas also has a line called “Tea” which offers bars of matcha with white tea, milk chocolate chai, and dark chocolate rooibos. If truffles hold more appeal, Arbor Teas offers a truffle 6-pack. Ogunquit, Maine’s Harbor Candy Shop offers molded chocolate infused with tea as well. The most striking in this category may be Charles Chocolates’ Tea Collection created in collaboration with Teance Fine Teas packaged in a stunning edible chocolate box.

The kitchen savvy could can take matters into their own hands and try making their own earl grey truffles at home.

Surge in Online Buying Decreased Holiday Foot Traffic

Howard Schultz voiced a warning last week that beverage retailers should heed.

During the company’s First Quarter earnings call the Starbucks CEO noted that in-store foot traffic at traditional mall and well-known department stores declined 15% in December.

He does not believe the reason was harsh winter weather or fewer shopping days. Instead he points to a surge in online sales that thinned crowds of holiday shoppers. Fewer shoppers meant fewer visits to coffee shops in malls and retail outlets this year.

Holiday spending increased to 10% on desktop devices with mobile purchases accounting for an additional 2% of holiday sales, according to comScore (SCOR), an internet data tracking service.  There were 10 days following Thanksgiving when online purchases exceeded $1 billion per day, according to comScore.

The U.S. Commerce Department estimates e-commerce accounts for about 6% of total U.S. retail sales. Three quarters of retail sales are still completed in-store. In fact, in-store retail sales increased 2.7% over the holidays, according to ShopperTrak. The bump was attributed to shoppers going online to research items and then visiting stores to complete the sale. Sales overall increased only 2.3% compared to 2012 according to data collected by MasterCard.

Of concern to beverage retailers are the number of mall anchors including Sears, J.C. Penny and Macy’s that announced hundreds of store closings in the aftermath, with Target eliminating jobs and even Wal-Mart reporting same-store sales declines at 100 stores in the U.S.  Amazon was the top rated vendor in mobile satisfaction and had the highest web satisfaction rating, according to analytics firm ForeSee. Keurig.com ranked third.

According ForSee’s survey of 67,600 shoppers, “the most satisfied shoppers this holiday season were the ones that interacted with a retailer across multiple channels.”

The smaller crowds were certainly still interested in sharing a cup of coffee, Schultz observed.

Revenue rose substantially for the coffee chain with same store growth of 5%; an increase in store visits and the fact that customers loaded $1.4 billion onto loyalty cards – a sum $230 million greater than last year. Starbucks revenue grew 8% in the Americas to $3.1 billion for the quarter with the opening of 142 new stores. Operating income grew to $732 million and margins improved to 23.8%.

“There’s no question that the month of December was an inflection point in the U.S. retail business,” said Schultz. He predicts declining in-store visits due to the so-called “Amazon effect” has permanently changed in-store shopping behavior regardless of season.

“What I mean by that specifically is the “Amazon effect” the power of e-commerce all over the country and the world is going to have a significant effect on pedestrian shopping, mall shopping just as it had in December,” Schultz later told CNBC.

“We are navigating through what I believe to be a significant sea change,” Schultz told CNBC. “We’re going to be talking about this for quite some time. I would not want to be a traditional brick-and-mortar retailer that did not have mobile payments and that did not have social and digital media. Those companies are going to find themselves significantly challenged in 2014 and beyond.”

Loyalty is low. ForeSee found that only 12% of consumers surveyed considered one company when making a purchase and that 49% viewed the company they visited as no better than the several other companies they considered when shopping.

“Since customer service is one of the primary drivers of in-store satisfaction, retailers that provide the best in-store service will reap the rewards,” according to ForeSee.

Retail experts recommend that brick-and-mortar ventures establish smaller networks of stores situated in highly visible locations with fewer square feet of space. These stores benefit from an extensive e-commerce business and less inventory in store rooms. Fulfillment centers carry additional stock which is delivered direct to customers or to stores for pickup.

Indoor malls are less appealing than outdoor malls and stand-alone stores. The last indoor mall to open in the U.S. was in 2006.

Global Beverages in BRIC Nations

Beverage sales expected to slow in BRIC nations.

Rabobank Predicts Beverage Growth to Slow

NEW YORK, NY – Slower expansion of the middle class in four fast-developing countries means the “tailwind is moderating, leaving global beverage companies with the task of finding new market opportunities and growth strategies,” according to Rabobank Food & Agribusiness Research.

“Back in 2001, when the world was first introduced to the term BRIC, an acronym for the four fastest growing emerging markets of Brazil, Russia, India and China, few beverage industry executives could envisage just how profound an impact these countries would have on the global beverage industry’s growth in the decade ahead,” according to the eight analysts who compiled the just released report: Beyond the Yellow BRIC Road: Finding Growth in Global Beverages.

The largest economic transformation in modern history established an entirely new middle class, according to the report. The outlook suggests beverage manufacturers consider smaller markets and accept that in North America and Western Europe soft drink sales will remain stagnant, providing an opportunity for water and ready-to-drink tea.

“Bottled water is the clear leader in global soft drinks volume growth, with over 242 billion liters which was 38% of total soft drinks volume in 2012,”according to the report. Growth of 5% per year is expected through 2017. Water will deliver 55% of projected volume growth in soft drinks.

Due to the negative health image of CSDs (Carbonated Soft Drinks), volume of carbonated beverages will continue to slide and value is projected to decline 1% in North America through 2017 with less than 1% growth in China, according to Euromonitor.

“Both Coca-Cola and PepsiCo are struggling to find any growth in CSDs as consumers shift to healthier alternatives, such as bottle water and ready-to-drink (RTD) teas,” according to the report.

“Growth of soft drinks will continue to move to lower priced, emerging markets meaning volume growth will continue to exceed value growth,” according to the report.

Fruit juice volume is expected to grow by 3% in 2014. This growth is dominated by BRICs, which together account for almost 60% of the total increase in liters.

“The global tea marketplace remains highly fragmented and therefore provides ample room for large tea companies to expand across international markets in 2014. This is especially so for China, which is forecast to account for half of global tea growth through 2017, according to the report.

There has been limited merger-and-acquisition activity and industry consolidation in the tea segment has been slow, according to Rabobank analyst Ross Colbert. The top ten global tea brands account for 30% of the total tea market, estimated at $40.7 billion. Unilever (Lipton) holds an 11.7% share of retail value with Tata Global Beverages (Tetley) with a 3.1% share and American British Foods (Twinings) with a 2.5% share.

“These three are the only truly global competitors in tea, and while they remain strong in mature markets across western Europe and North America, their challenge is to continue growing organically and penetrate the important tea markets of China, Russia and Japan,” according to the report.

LOGO_RabobankChina, which is the world’s largest tea producer has a low per capita consumption outside the tea growing regions. The country is forecast to account for half of global tea growth through 2017. Unilever’s market share in China is 1.6% “and neither Tata nor Twinings have any presence there today.” These companies will have to acquire or establish partnerships with local players and develop new lines to meet the demand for products like Strong Milk Tea (black tea sweetened with condensed milk) and Xiang Piao Piao (instant milk tea).

“Beverage companies must now adapt to slower growth in BRIC markets by implementing new strategies to reach consumers more efficiently,” writes Colbert.

“Strategic initiatives such as direct-to-consumer selling, co-manufacturing and developing more efficient distribution platforms can help mitigate the impact of softer volumes in BRIC markets,” he said. Learn more: Rabobank Food & Agribusiness

Source: Rabobank

Alix Box Named Second Cup CEO

MISSISSAUGA, ON – Alix Box has been appointed President and Chief Executive Officer of Second Cup Inc., Canada’s largest independent chain of coffee shops.

Ms. Box, who will also serve on the board of directors, succeeds Stacey Mowbray, who will leave the company to pursue other opportunities. Box is a former Starbucks Coffee Co. executive responsible for managing 675 stores across Canada. Second Cup operates in every province and has more than 350 stores in Canada.

Tailwind Capital purchased 500,000 shares or about 5% of Second Cup’s shares after the announcement, paying $3.60 a share to Pheland Parties, the second largest investor in the chain at 28%.

TEABIZ_140210_AlixBox_SecondCupCEODuring the past six years, Box has been a member of the senior leadership team at Holt Renfrew, most recently as senior vice president of retail at the luxury goods firm.  During this period, she helped lead a strong resurgence of service and sales growth, according to a company press release.

Ms. Box worked at Starbucks for 10 years and was vice president of operations of both licensed and company stores.

“Alix possesses the ideal combination of related retail experience and leadership attributes to lead Second Cup into a new era of success,” said Second Cup Chairman Michael Bregman. “She has an extraordinary track record and is driven to deliver sustainable, long-term value for Second Cup shareholders and franchise partners,” he said.

“I am very excited to join Second Cup.  Second Cup has an iconic Canadian history and I believe together we can build an even brighter future.  I am eager to work with our loyal franchise partners to improve café performance while providing Canadian coffee lovers with an upgraded, modernized vision for the future,” said Box.  She assumes her responsibilities Feb. 24. Learn more: www.secondcup.com

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