Need to Know

Tea Industry News for the Week of June 15

  • Retail is Rebounding
  • Breakfast: Deflated Daypart
  • Reopening: Millennials Lead the Way
  • E-commerce Sales of Specialty Tea Spike
  • India Extends Lockdown | Exports Declined in 2019
US retail sales rebounded sharply in May, according to preliminary figures released by the US Census Bureau. Total retail and food services sales amounted to $485.5 billion in May, up 17.7% from the previous month, but still 6.1% below last year’s May figure.

Retail Rebounds

Tea wholesalers report foodservice customers are once again placing orders. Iced tea, a seasonal favorite, is in demand. Online sales that spiked amid the lockdown remain at higher levels than the first of the year.

The sales slump that began in March is easing. Still, inventory packaged for foodservice customers remains high and, unlike pent up demand for fashion, household furnishings, and other non-essential products, the food and beverage category is regaining traction slowly, in fits and starts.

Food sales did not decline during the scariest months of the pandemic ― everyone must eat. Grocery sales grew 33% overall, leading all traditional channels in dollar sales growth, with the food and beverage category up 32.5% compared to the previous year, according to IRI, a Chicago based market research firm. The purchase of food online increased by 49.7%. The question now is how soon consumers will begin dining-in, re-inflating the $181 billion on-site beverage category that includes tea.

Market research shared by Datassential indicates millennials are leading the way back to dining-in at restaurants but the majority prefer drive-thru and curbside pickup, and contactless delivery.

Datassential managing director Jack Li told webinar participants that consumer fears are abating. “Coronavirus concern is way down from its peak, closer to early-pandemic levels,” he said. In April at the height of lockdowns, infections, and COVID-19 deaths, 67% of consumers said they were “very concerned,” about dining-in and 28% were “somewhat concerned.” By mid-June, the combined 95% who earlier said that they were concerned had declined to 86%, but with 44% still “very concerned.”

How this fear translates into behavior is critical to the tea industry. Beverages generate about 20% of restaurant sales but constitute far less of the transaction price when consumers place orders for curbside pickup, takeaway, or delivery. When ordering food to eat at home, consumers raid the fridge for their favorites. Beverages maintain their important slice of the transaction when customers order takeaway for office breaks and visit drive-thrus when food is consumed in the car.

Datassential found that avoidance of dining-in is inching down, but slowly. As restaurants began opening their dining rooms in May and early June only 22% of consumers said they have “no concerns whatsoever” about dining out. Almost half, 47% say they will “definitely avoid eating out,” a total that has increased 2% since June 5. Another 31% say they are “nervous but will still eat out.” Boomers, at 59%, are the most fearful. Those in the Gen Z cohort are the least fearful, with only 34% saying they will “definitely avoid” eating out. Datassential, in a survey conducted on June 9, found that 42% of Millennials will also “definitely avoid” eating out.

For now, health concerns remain the top priority, writes Li, “but economic worries have been rising” with 46% of the nation more concerned about the economic crisis (up 1% since June 3 and up 9% since April 7) compared to 54% of the 4,000 adults surveyed who say they are more concerned about the public-health crisis.

Breakfast: Deflated Daypart

Morning meals and snacks suffered the steepest transaction declines during the coronavirus crisis, according to The NPD Group. Millions of at-home workers agree on one thing: no one misses early-morning commutes enough to jump in the car and wait in line for breakfast.

The number of transactions at breakfast locations was down 18% the week of June 7 compared to the same period last year, according to Restaurant Dive. Lunch transactions declined by 11%, and customer transactions fell 12% at dinner during that same period, according to The NPD Group.

FSR Magazine reports that Revenue Management Solutions, using insights based on point-of-sale data, estimates total US breakfast traffic year-over-year slipped between negative 30–35%. Traffic has since leveled out around negative 15%. According to Datassential, customers’ trips to restaurants break down as follows:

Traffic by Daypart

Breakfast/Brunch6%
Lunch26%
Dinner64%
Snack3%
Late Night1%
Source: Datassential

The reversal is dramatic as breakfast is the only restaurant daypart that has experienced sustained growth in visits during the past few years. In January and February with the nation at full employment, hundreds of thousands of workers visited quick-service chains every day, accounting for a 5% category growth during the past five years.

In a January press release, NPD reported Americans consumed 102 billion breakfasts and another 50 billion morning snacks in 2019. “The future of breakfast looks rosy too with forecast growth of breakfast goods,” according to the market researcher firm which published its “Future of Morning” study prior to the pandemic.

Sending two-thirds of the nations’ workers home dimmed that optimism in record time. Breakfast was the easiest meal to convert at home and suffered the steepest transaction declines as McDonald’s, Taco Bell, Dunkin’, and Burger King saw comp sales slump during March, April, and May. Wendy’s, which spent significant marketing dollars promoting breakfast, reported same-store sales finally turned positive the last week of May.

Breakfast is an important hot tea occasion. Gallup has monitored employee preferences on working at home for several weeks, asking workers, “if your employer left it up to you, would you prefer to return to working at your office as much as you previously did, or, work remotely a much as possible.”

No one knows the full impact of stay-at-home orders on buying behavior, but it’s clear that if half of the office workers no longer commute daily to offices on a fixed schedule, the morning routine will be altered for the duration of the pandemic — and likely forever.

Millennials Lead the Way

A majority of Millennials (60%) reduced their spending during the early months of the pandemic, according to a survey by Clutch, a B2B ratings and review platform.

Recession-wary after 2009, they contributed to an unprecedented US savings rate of 33% in April. Only 5% of Millennials reported spending more money than the previous month during March and April.

Food was the exception. Groceries were the top expense for 40% of Millennials, reports Clutch. Half the Millennials surveyed reported spending less dining out, but 50% say they are still eating takeout and ordering delivery. Only 28% have not used food pickup and delivery options since the start of the pandemic reports Clutch.

E-Commerce Sales Surge

The most popular product category purchased online last month was restaurant delivery or takeaway, boosted by a surge in restaurants offering curbside service.

E-commerce sales of food or beverages by American adults increased from 27% in February to 36% in April, according to Bizrate Insights.

The number of customers ordering food online is even higher among frequent internet users (61.5%), according to a consumer survey by Red Points on the “Impact of COVID-19 on Ecommerce Sales.”

In April, 44% of Amazon Prime members ordered food or beverages.

Mo Sardella, marketing director at GS Haly, told Forbes that online sales of specialty tea and herbs spiked during the early days of the pandemic.

“We have seen a huge spike in home tea consumption via grocery and online outlets. Our customers with a well-established online presence are doing exceedingly well,” says Sardella, adding that “customers saw between a 100% to 300% increase in online sales in April alone.”

Lockdowns Wind Down

Sixty-nine percent of restaurant units are located in geographies that permit some level of on-premise dining, and the number should increase to 74% in the week ending June 14, according to The NPD Group. At the height of the pandemic, only 25% were operating. Transactions at full-service restaurants were down 14% the week of June 7 versus a year ago, a 29% gain since April 12.

Quick service restaurants fared better during the pandemic “and continue to do so,” according to NPD. QSR transactions are down 13% the week of June 7, compared to the same period in 2019.

Now that restrictions are easing Millennials and Gen Zers, are eager to eat out for the social benefits and convenience. Datassential reports that 82% of Americans say they know which precautions to take and how to stay safe from COVID exposure, and 60% say “COVID safety precautions have become second nature.”

“Diners are excited to eat in at restaurants again, understand the importance of new precautions, and are willing to make the necessary sacrifices. Yet they’ll also be the first to tell you that seeing servers in masks and needing to comply with social distancing measures do not exactly allow them a complete mental escape,” writes Datassential’s Jack Li.

Tea Yields and Exports Decline

Local shortages of Assam tea for auction has increased prices 15% compared to last year. Growers there lost three weeks of harvest beginning in late March. Plucking was to resume April 12, but by then tea plants required maintenance pruning. Gardens that opened were restricted in how many workers they employ. The combination of these events will result in at least 140 million fewer kilos of tea and may discourage exports.

Meanwhile lockdowns that were previously lifted will be extended in the West Bengal tea lands as the coronavirus continues to threaten India. Rajiv Lochan, the founder of Lochan Tea, shared a local newspaper clipping describing a surge in cases in Siliguri, a center of tea commerce at the foot of the Himalayas.

Tea exports dipped 5.6% in the financial year ending March 31, known as AY 2019-20. The new AY 2020-21 began April 1. Volume fell to 240 million kilos from the 245.5 million kilos exported in AY 2018-19. Russia and the surrounding CIS countries remain the most significant tea trading partners, importing 47 million kilos in 2019-20. Iran emerged as second due to a sharp decline from 15 million kilos to 3 million kilos exported to Pakistan due to hostilities between the two countries.

Exporters told The Economic Times they are concerned Iran will purchase much less tea than last year due to deteriorating economic conditions in that country. Iran bought 54 million kilos of tea from India in 2019. Exporters say that volume could decline to 45 million kilos. Russia is also experiencing a sustained economic decline.


Unpleasant truths

China will overtake the US as the largest retail market in 2020. Despite a 4% decline this year in retail sales, China’s retail market is expected to rise to over $5 trillion in sales, while the US is expected to reach $4.8 trillion by the end of the year.

Postponed Chinese New Year purchases will drive this latest rise in consumer spending. Luxury items have been selling well since China eased restrictions. China’s unemployment is much lower than the US, which saw 1.5 million workers file for benefits in June, bringing the total to 21.5 million out of work.

Source: CCInsight COVID-19 Commerce Summary (June 15)

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.

Need to Know

Tea industry news for the week of April 13
– Grocery Sales Spike
– Tea Production Declines
– Health Misinformation
– Skipping Port
– Edible Tea

Consumers emptied shelves stocking up on tea, but there is plenty more in warehouses.

Tea sales in grocery spiked as consumers rushed to stock up ahead of lockdowns in the US, Canada, and the UK. Sales in the UK the week of March 21 rose 55% compared to the previous year, according to Nielsen market research.

Grocery shoppers in the UK, on average, spent an additional $80 (£62.92) stocking up during March.

In the US, market information provider IRI in Chicago reports an 11% increase in year-to-date in sales of packaged tea in multi outlets (including grocery and convenience stores). Dollar sales of instant tea mixes rose 12%. Sales of refrigerated teas increased by 9.4%, and sales of refrigerated ready-to-drink coffee grew 23% year to date, compared to the same period in 2019. Coffee sales were up 8.2% to $2.6 billion through March 22.

Major brands, including Lipton, Tetley, Twinings, and PG Tips assured consumers confronting empty shelves that supplies were sufficient as grocery sales rose 20% to their highest level in a decade, according to Kantar Research. Herbals associated with improving immunity spiked as well with top sellers listing ingredients such as echinacea, ginger, ginseng, and lemon and honey.

Production Declines 

Plucking resumed Monday April 13 in Darjeeling on government orders limiting the workforce to 25% of normal. A large factory like Thurbo, one of the Goodricke Group, employs 400 but can operate with 100 staff by reducing the number of processing lines. Processing capacity makes it possible to resume plucking the valuable first flush leaves.

Financial analysts at ICRA estimate India’s tea industry will experience a decline of 90 million kilos in 2020. The estimate assumes 45-50 million fewer kilos of tea from plantations and 45 million fewer kilos from smallholders. Annual tea production will decline 6-7% in Assam and West Bengal and another 5-6% in South India. Bought-leaf factories remain closed.

ICRA estimates that the earliest tea estates could start production would be around the third week of April, given the present situation, according to The Economic Times. The government permitted plantations to resume harvesting this week, but mandates staffing at no more than half previous levels. Social distancing and health precautions are to be enforced. Since the lockdown, now in its third week, weeds are encroaching, pest counts are high, and a light pruning is needed before plucking resumes. These actions will add INRs15 per kilo to the cost of production, according to ICRA, noting: “Any decline in production in the second flush teas would result in a substantially higher cost per kilo.” In India, labor expense accounts for 65-70% of the cost of production.

Kenya saw exports decline by 4 million kilos in February to 40.5 million kilos compared to February 2019 totals, according to the Agriculture and Food Authority. Disruptions in the auction at Mombasa are to blame as the weather is excellent with moderate temperatures and favorable rainfall in the western and rift valleys. The harvest increased to 49.2 million kilos compared to 31.4 million kilos during the same period last year. Smallholders contributed 19 million kilos to the total. Prices at Mombasa were down, averaging $2.13 per kilo compared to an average price of $2.16 per kilo in February 2019.

Curfews in Sri Lanka temporarily stopped tea production in March. Plantations Minister Ramesh Pathirana said the nation’s tea plantations would be allowed to continue operations so long as they adhere to guidelines set by the Health Ministry. To facilitate transactions, the Ceylon Tea Traders Association has switched to online auctions after 137 years of outcry bidding. Banks and the government departments regulating food safety and trade that are essential to export are now open three days a week but operated by half their usual staff.

In Vietnam, first-quarter tea exports declined 2.4% in volume and lost 19% in value compared to the previous year. Shipments to China, Taiwan, and Russia, were virtually halted. The US is one of the top five destinations that together account for 75% of Vietnamese tea. Prices declined 13.5% to $37 million in February, averaging $1.48 per kilo, according to the Vietnam Tea Association. Trading partners are asking for lower prices, delayed delivery, and even canceling contracts, according to the association.

Health Misinformation

Physicians strongly disclaim a post stating that drinking tea is an effective cure for COVID-19, the disease caused by the newly discovered coronavirus. The World Health Organization (WHO) in March declared there is no known cure for COVID-19. “To date, there is no vaccine and no specific antiviral medicine to prevent or treat COVID-2019,” according to WHO. The post, incorrectly attributed to CNN, appeared on WhatsApp and Facebook and was widely shared. The report did not appear on CNN. “While tea may strengthen immunity, there is no “research” indicating benefits for COVID-19 patients,” according to Dr. Jayaruwan Bandara, director of the Sri Lanka Medical Research Institute, as reported by AFP in a Fact Check published March 26.

“News reports in China in February also picked up on the claim that tea could be used to stop the virus but said it was not true,” according to the BBC News Reality Check.

Related…

Sri Lanka is promoting black tea as an immunity booster, and India may soon follow.

Citing a study by the Tea Research Association (TRA) that Ceylon tea contains high levels of theaflavin, Sri Lanka initiated an advertising campaign claiming that ‘Ceylon Black Tea’ enhances COVID-19 immunity. TRA maintains that theaflavin, the main polyphenol in black tea, boosts immunity based on studies published in medical journals

A 2003 experiment involving 21 volunteers by Dr. Jack Bukowski at Harvard Medical School showed that immune system blood cells from tea drinkers responded five times faster to germs than did the blood cells of a control group. Bukowski explained that L-theanine is broken down in the liver to ethylamine, a molecule that primes the response of an immune system element called the gamma-delta T cell.

“We know from other studies that these gamma-delta T cells in the blood are the first line of defense against many types of bacteria, viral, fungal, and parasitic infections,” he said. In 2007 Bukowski demonstrated that drinking five cups of tea daily increased the body’s ability to ward off colds and flu. His work appeared in The Journal of the American College Of Nutrition

The United Planters Association of South India (UPASI) Tea Research Foundation is compiling a brief to convince the Tea Board of India to follow Sri Lanka’s lead in promoting tea as a wellness drink.

Tea Board Chairman PK Bezbaruah told the Hindu Businessline, “Indian teas, particularly Assam and the South Indian teas, have a very high proportion of the Theaflavin compound and hence should ideally be more effective.”

“I think this can help push exports, particularly at a time when the output is expected to be at least 15% lower this year,” Bezbaruah said.

Skipping Port

Shipping companies are bypassing Indian ports essential to the tea trade. Container ships generally stop at one or two local ports to load cargo before traveling between continents. When containers are delayed in reaching port, ship captains have no reason to stop.

Canceling India’s tea auctions for two weeks to prevent the spread of the coronavirus set in motion a sequence leading to this unusual logistical snafu. Tea is exempt from transport restrictions, but shipments delayed at auction experienced further problems in transit as law enforcement agencies stopped trucks en route to ports. Exporters next experienced numerous cancellations of consignments following the collapse of retail demand in foodservice. New buyers are scarce, leading to acute cash flow problems that subsequently hampered exporter’s ability to meet contracted delivery dates.

NEW PRODUCTS

Edible Beetroot & Parsnip tea


Edible Tea

Nim’s, a UK-based fruit crisp brand, recently introduced the first edible teas. These can be brewed or eaten as a snack. Nim’s located in Sittingbourne, produces air-dried snacks using beetroot and pineapple, kiwi and pineapple, and beetroot and parsnip. The tea sells for $6.25 (£5) for 12 sachets. Once the tea is steeped, you can enjoy the rehydrated fruit and vegetables “Drink, Eat and be Healthier.”

Arizona Iced Tea introduces Hard Tea with vodka

Vodka Tea

Arizona Iced Tea launched a 5% ABV ginseng and honey-flavored green tea blended with vodka. The new line is named Arizona Hard. The initial rollout in Canada features 473ml single tall cans or 12-ounce (355ml) six-packs. The suggested retail price is CAD$3.49 for the individual can. In Canada, spiked tea can be delivered to your home by food delivery services such as SkipTheDishes.

World Tea Expo Opens – Need to Know

What tea professionals need to start the week of May 26, 2014 —

World Tea Expo opens in Long Beach this week with a very strong educational program and an exciting show floor with several new exhibitors… see all the finalists for the Best New Products Awards listed below… Teavana co-located its newest concept store with a landmark Starbucks in Beverly Hills… two lucky Scots lost at sea credit a lifesaving flask of tea and biscuits for their survival…

Teavana Opens in Beverly Hills

The fourth Teavana Fine Tea + Tea Bar that opened Beverly Hills last week revealed two significant innovations.

Tea_Bar_LA_4

Beverly Hills Teavana Fine Tea + Tea Bar

The store is co-located with a Starbucks Clover-reserve,  Teavana benefits greatly from the remodel where it has the more visible facade a the busy intersection of Santa Monica and Wilshire Boulevards.

The new store shares a courtyard with a landmark store that offers every imaginable service and coffee in the mermaid’s lineup. The remodeled store offers the La Boulange menu with oven-warmed food, features a Clover single-serve brewer, the Verismo System capsule coffees and the latest in mobile payment systems.

The latest Teavana introduces a range of tea-inspired food and beverage items including an apple Oolong chia fresca and a Genmaicha miso tea soup. A matcha avocado tea smoothie blended with Green yogurt and a fresh fruit Banana Chai are also new.

The fresca is a blend of oolong and Pu-erh tea shaken with cold-pressed apple juice and hydrated white chia seeds.

On the cold drink menu there is a Sparkling Kona Breeze Iced Tea: Pineapple Kona Pop and Peach Tranquility Tea blended and lightly carbonated with pineapple coconut water.

SBX20140317_23379.tif

Veggie Sandwich and Tea Soup at Teavana

The addition of snacks like the Butternut Squash Couscous Salad: Israeli couscous, red quinoa, butternut squash, yellow curry and currants in a citrus vinaigrette and the Mediterranean Veggie Sandwich: made with savory herb and garlic cheese, quartered artichoke hearts, fire-roasted red peppers, chopped kalamata olives, and fresh baby spinach warmed on a panini roll – signal a new level of sophistication.

These food and beverage innovations are expected to appear on menus in New York, Seattle and Chicago locations.

World Tea Expo

The World Tea Expo opens this week in Long Beach, a new locale for old friends in tea.

The show is at the Long Beach Convention Center this year, a move that will bring many new attendees from the health food and beverage industry. Southern California is dense with natural food stores, innovative beverage manufacturers and tea blenders.

LOGO-WorldTeaExpo

But no matter which city they choose to gather, the accumulation of a dozen years of first greetings and great meetings is apparent on opening day. World Tea Expo introduces tea retailers to producers, traders, scientists and experts in every aspect of the business. The education program is superb and the opportunity to see the latest equipment and build tasting skills with the help of some of the world’s most knowledgeable experts makes this a vital gathering in my view.

On Tuesday the Tea Business Boot Camp marks the official beginning of the week as tea retailers, from near and far, come together to refine their understanding of the business essentials.

This is a good time to be selling tea no matter where you set up shop which explains why so many attendees travel from Asia, South America and Europe to attend a day of lectures on best business practices followed on Wednesday by the World Origin Tasting Tour, a hands-on opportunity to taste exquisite teas, professional prepared. Attending graduation ceremonies is inspiring. During the past five years I have tracked many of these graduating entrepreneurs and can attest to the fact they enjoy a higher rate of success.

The conference, which begins Thursday, is overseen by Operations Manager Kaye Polivka. The Educational Program, overseen by Education Manager Monique Hatchett, offers five tracks: Tea Knowledge; Tea & Health; Sales & Marketing; Pioneering and Business Development.

There is much more to offer that I can cover here so be sure to click here for a view of the entire educational schedule. Click here for complete conference session descriptions.

My short list highlights three sessions each day:

Thursday, May 29

Current and Future Outlook for Tea
A must attend in my view for all as it brings into focus the global marketplace and the diverse factors catalyzing the industry by market segment.

Presenters include: David Sprinkle, Publisher, Packaged Facts; Lynn Dornblaser, Director of Innovation & Insights, Mintel International; Jonas Feliciano, Industry Analyst – Beverages, Euromonitor International.
The discussion is moderated by Brian Keating, Sage Group.

Success from the Front Lines
Investors have placed a billion dollar bet on tea retail in the past 18 months but success is far from guaranteed. These shop owners are succeeding with both single store and small chain formats because they have developed a sixth sense of what pleases customers and sweat the retail details to insure good service.

Presenters include: David Barenholtz, Owner, American Tea Room; Julee Rosanoff, Owner, Perennial Tea Room; Emeric Harney, Store Manager, Harney & Sons Fine Teas; Shabnam Weber, Owner, The Tea Emporium Inc.

Tea & Health
The revelation that tea “does a body good” underlies the remarkable growth of this segment. Understanding the relationship is complicated but essential when communicating with consumers. Dr. Jeffrey B. Blumberg is remarkably well versed in the health benefits and research describing tea’s impact on chronic conditions like cancer, diabetes, heart disease, neurodegenerative diseases, and obesity. Emerging research suggests tea may also play a positive role in cognitive performance, immune function, and bone health.

Presenter: Jeffrey B. Blumberg, PhD, FASN, FACN, CNS

Also: How to Source & Select Your Teas

Federal Trademark Registration: Are You Ready?

Cultivating the Next Generation of Tea Connoisseur

Friday, May 30

David & Goliath: Building Your Own Successful Tea Business Close to a Teavana
Learn how you can carve out niches in the specialty tea business that elevate customers’ tea experiences beyond that of shopping at a large chain store.

Presenter: Peter Martino

20 Marketing Angles You Might Be Missing or Afraid to Use
Consider 20 new or under-utilized marketing messages and learn to personalize your strongest possible tea message – the connection you want with your best customers.

Presenter: Babette Donaldson

Impactful Visual Merchandising for Retail & Online Stores!
Ever wonder how some stores like Pottery Barn, Crate & Barrel, or Williams-Sonoma create an instant buying reaction for their customers? Here you’ll learn how to create attractive, impactful displays for your store and you’re on line presence.

Presenter: Ellen Leaf-Moore

Also:
Current and Emerging Regulatory Issues in the Tea & Infusion Products Industry

A Social History of Tea in the UK and the USA

Tea Room Survival

Saturday, May 31

The New Face of Retail

Retail innovations from online marketplaces and in-store blending to popup retail and decisions about accepting digital currency like bitcoins are dividing lines in the world of retail. Which trends to adopt and which innovations to ignore is the challenge.

Panelists: Austin Hodge, David Edwards, Christopher Coccagna and Naomi Rosen. Moderated by Elyse Petersen.

Keeping the Customer Engaged
Successful retailers, online and in brick-and-mortar locations, must learn to continually engage customers through promotions, events and educational programs.

Presenter: Anupa Mueller

Wellness Teas: Why Ignoring Herbs Could be Costing Your Business
Too often overlooked by Canellia sinensis devotees, herbal teas with wellness claims are central to the success of retailers.

Presenter: Toffler Niemuth

Also:

The Science Behind Health Claims on Tea Beverages: What are we really drinking?

The Crowdfunding Success Pattern

Building Communi-TEA with your Customers Online

Focused Tastings
The Evolution of Flavor
By Chris Johnston
A Taste of Hunan
By Hunan Tea Company
Teas that Depend on Nature’s Intervention
By Jane Pettigrew

The Chemical Mysteries of Puer Tea, the ‘Fat Burner’
By Kevin Gascoyne
Sensory Evaluation of Tea
By Victoria Bosogno & Jane Pettigrew
Discover the Artful Pairing of Japanese Teas & Wagashi Tea Sweets
By Rona Tison
Mixology 101: Using Tea Infused Cocktails to Grow Your Brand
By Abigail St. Clair
Detecting Defects in Tea Manufacture
By David Walker
The Keys to Matcha
By James Oliveira
Teas From Thailand
By David DeCandia
Pairing Teas with Chocolate & Cheese
By Robert Wemischner
Tea & Scotch – The Perfect Match of Two Worlds
By Shabnam Weber

Skill Building Workshops
Tisane, Herbal Tea & Herbal Infusion: An Exploration From Seed to Cup
By Scott Svihula
Tea Cupping 101
By Mo Sardella
Blending Award Winning Teas
By David DeCandia
Tea Processing – An Experiential Lab, Day 1
By Donna Fellman & Bill Waddington
Tea Cupping 201: The Next Level
By Mo Sardella
Blending Award Winning Teas
By David DeCandia
Tea Processing – An Experiential Lab, Day 2
By Donna Fellman & Bill Waddington
Bringing 3rd Wave Coffee Innovation & Excitement to Tea
By Joshua Russert
Tea Baking Basics
By Thomas Shu & Jerry Liu

Lost at Sea

Tea is well known for its health benefits but rarely under as dramatic circumstances as the North Sea rescue of fishermen who credit a flask of tea and biscuits for keeping them alive.

James Reid, 75, and his grandson David Irvine, 35, were rescued Thursday after their “miracle” discovery by another boat off the Aberdeenshire coast of Scotland, according to The Independent.

The two men were due in port Tuesday and feared lost. A large-scale search was launched that very day but called off Wednesday at dark. The following day a passing boat discovered their disabled craft about 46 miles off the coast of Scotland.

The two men from Inverbervie survived on a small flask of tea “enough for two and a half cups” and two biscuits, “that was it” they told rescuers in a lifeboat launched from the Sylvia Bowers around 8 a.m. The fishermen’s boat sunk shortly afterward.

“It’s times like these that really brings home how dangerous a job our fishermen do, day after day, to provide fresh fish for us all to enjoy and I am delighted that this incident has had a happy ending,” Environment Secretary Richard Lochhead told The Guardian.

Sources: The Independent and The Guardian.

World Tea Expo Best New Product Award Finalists

Winners will be announced during the show. Click here for a complete list of entries

“Best New Product – Tea as an Ingredient” Finalists:

  • Butterflies in the Tummy, Dethlefsen & Balk – A melange of exotic fruit paired with subtle vanilla, this tea makes a full-bodied, refreshing iced tea and delights in a hot cup, too.
  • Tea India: Chai Moments Cardomon Latte Mix, Harris Tea Company – This mix provides an authentic Chai experience that captivates taste buds, in a convenient on-the-go format.
  • Lumbini Ladalu Chakra, Lumbini Tea Factory Sri Lanka – A hand-made tea with a light and sweet taste, Lumbini Ladalu Chakra is part of the exclusive collection of Lumbini Tea Factory.
  • Jin Xuan Milk Oolong, Octavia Tea – From the mountains of Taiwan, this tea is unforgettable with the alluring taste of sweet cream and freesia with a tropical fruit finish.

“Best New Product – Innovation” Finalists:

  • Matcha to Go, Aiya America – A tea ceremony remade for modern speed; simply add to a water bottle and shake or stir into hot water.
  • Bonavita Porcelain Immersion Dripper, Bonavita – This porcelain dripper is the perfect single-cup (16 oz.) steeper for teas and tisanes.
  • Biotre, Pacific Bag, Inc. – Pacific Bag spent two years developing Biotre film, a biodegradable barrier material for packaging, which protects products and is ideal for the tea industry.
  • Teart Infuser, Teart  – This disposable paper infuser is inspired by the art of origami, designed to assure optimum leaf expansion.

TEABIZ-TAKEYA_DeluxeIcedTeaMaker_NewProduct

Takeya USA Deluxe Iced Tea Beverage System

“Best New Product – Tea Ware” Finalists:

  • FLOWTEA, EIGENart – Designed in Germany, this double-walled glass tea-maker for on-the-go tea lovers is available in five designs with filter, steel lid, neoprene cover and carrying loop.
  • Hospitality Tea Pot, FORLIFE – Designed for both commercial and home use, this un-chippable, stackable tea pot is perfect for the food service industry and tea enthusiasts.
  • Deluxe Iced Tea Beverage System, Takeya USA – Create and enjoy hand-crafted beverages in three simple steps with Takeya’s patented Flash Chill Iced Tea System.
  • Stainless Mug with Tea Leaf Filter, Zojirushi – This mug allows drinkers to steep fresh tea and drink without getting a mouth full of loose tea, while keeping the drink hot or cold for hours.

“Best New Product – Open Class” Finalists:

  • Asian Ginger Tea & Cookies, McCoy Ceylon Commodities – This combo is for those who appreciate a quality tea blend with a cookie, specially baked to complement the tea’s flavor.
  • Earl Grey Strong, teapigs – In need of a sophisticated boost? This strong black tea with delicate Darjeeling and fancy bergamot is an early grey but with wallop.
  • Everything Healthy Tea Book, Blue Gate Books – An introduction to teas and their healing qualities, this book covers buying and brewing the most healthful teas.
  • Tea Pee – Prostate Support Tea, Nuwati Herbals – The herbs in Tea Pee have been traditionally used to assist with discomfort and frequent urination, and to support healthy bladders.

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.

Austin Hodge’s Qingming Report 2014

Qing Ming 2014

By Austin Hodge, President of Seven Cups
Seven Cups is an importer of Chinese tea, located in Tucson, Arizona

Filed April 6, 2014. An abridged version appeared in World Tea News previously. Read our previous story about Qing Ming and its meaning from our April 7 Need to Know post.

I started writing this on the way up Xigui Mountain in Lincang Country to check out the condition of some ancient tea trees. We raced  along a one lane winding road for about 80 kilometers, starting in Lincang City, a thousand feet above the valley floor. Along the mountain roads there are hard working stone carvers making new facades for the ancestors of local tea growers, as well as plenty of colorful fake money to be burned so that they have some cash. There is plenty of incense also to celebrate Qing Ming, the tomb sweeping holiday, pivotal for both ancestor worship and tea. It was typical of my trip traveling through Lincang Country, visiting areas that are producing some of the most sought after puer. This puer is certainly some of the most expensive, ranging into the thousands of dollars per kilo.

My first question has been how’s the weather? How has it affected the tea? In this area of Yunnan the weather has not been problematic.  The old tea trees are producing excellently. The prices here have been doubling every year, and questions about a new bubble are met with exuberant denial even though the evidence is abundant that a crash is coming.

A few weeks ago I was in Hangzhou in Zhejiang, and then I traveled to Anhui and Fujian. The harvest had just begun in Zhejiang, coming a few days before I got the in Xinchang, guaranteeing a very robust pre-Qingming harvest. In all of those places I could not find any evidence that the hot, dry summer last year would have any effect on this years crop. There has never been any time in history, that I know of, where the was no pre-Qingming tea produced, so I can only see those dire predictions coming out of the Chinese press last year, as an attempt to imitate American cable news journalism. I was a little bit early for the harvest to begin in Huangshan but there was no indication that there would not be a great crop this year. The same was true in the Wuyishan area where twice I was caught in the rain searching for shelter while up in the mountains.

On our way to Xishuanbana in Southern Yunnan, just out side of Jingmai, we were caught in a violent thunderstorm while having dinner. According to one of the peasants that owned the place, the government had been seeding the clouds to create some badly needed rain. The ferocious storm tried to blow his little corrugated metal Chinese greasy spoon away while we ate. Just down the road we passed a massive metal billboard sign that had been blown off of a roof blocking most of the road. This last winter brought record low temperatures to the south of Yunnan; snow fell for the first time in some places, damaging some of the forests.

The day before Qing Ming, yesterday, I got a much more reliable report from an old friend in Youle, on top of one of the ‘Six Famous Mountains’ of Xishaunbana. Yang Guanqi is one of my favorite producers in the area  and my go-to guy when it comes to any question about Xishuanbana.  The rumor about the cloud seeding was probably not true, because the rain had been going on for days, and it rained while we were looking over his ancient tree garden in the afternoon. Still the drought that has been going on for years in Southern Yunnan will not be countered by a few days rain. It has drastically affected the old trees and overall production is way down and will be this year also. The trees will not be harmed, but their new growth will be small and has been decreasing every year. This year will be the no different. The younger bushes are going to produce more quality in contrast. Tea consumers should be very skeptical when buying any cakes being advertised as coming from old trees. The price of all puer will go up this year.

Teavana Update

Hard numbers are hard to find but a year after it was sold to Starbucks Teavana appears to be on a roll.

At the company’s annual meeting in March CEO Howard Schultz introduced Oprah Chai Tea in a surprise announcement that brought the celebrity on stage to discuss her love for tea.

TEABIZ_OprahChaiTeaThe audience was treated to samples and Schultz said $1 from every 2 ounce package would support Oprah’s favorite charities. He announced the construction of 20 new Teavana tea bars in 2014 with major cities including Chicago and Los Angeles. The tea goes on sale Apr. 29.

Schultz reasserted that “a year after the acquisition of Teavana, we are more convinced than ever that we have the opportunities to transform the tea category in the way we have transformed coffee all around the world.”

Earlier in the year, during the company’s quarterly earnings report, Shultz said that Teavana’s two flagship stores in New York and Seattle are demonstrating that Starbucks’ single largest investment to date is beginning to pay off.

TEABIZ-TeavanaFineTeas+TeaBar_Howard_Schultz_340px“Recent research confirms that Teavana now enjoys the highest level of awareness of any super premium tea brand and like Starbucks, Teavana had a solid Q1,” Schultz told analysts.

Starbucks reported a record $4.2 billion in revenue during the quarter including $159.2 million in the segment that includes Teavana. Overall the company grew revenues 12% with comparable store sales rising 5% in the Americas where store traffic increased 4%.

Financial record footnotes* state that an increase of 174% over Q1 FY13, “is primarily due to the addition of Teavana retail store revenues beginning in Q2 of FY13.” The $159.2 million combines revenue from Seattle’s Best, Evolution Fresh, Digital Ventures and Teavana. The first quarter includes holiday spending and is always strong but revenue in the segment is on track to post $630 in combined sales, most than half of which will be from Teavana.

TEABIZ-TeavanaFinancials2013_Consolidated RevenueIn the company’s annual report, released in September, the financial segment that includes Teavana grossed $393.7 million for the year which was up 88.7% compared to the previous year largely due to the contribution from Teavana, but the exact amount Teavana contributed was not stated. Net revenue for the segment increased $185 million during the year, “driven by incremental revenues from the acquisition of Teavana in the second quarter of fiscal 2013 (approximately $156 million),” according to the financial filings.

Prior to the Starbucks acquisition Teavana reported quarterly earnings of $43 million and estimated annual sales of approximately $250 million. The company operated 284 stores at that time so a useful guesstimate is annual sales of at least $350 million. The final number will depend on how many stores are built. Teavana’s mall venues typically gross $850,000 to $1 million in sales. Going forward analysts will be able to compare year-over-year results.

Schultz said that “one year into the integration of Teavana, we are poised to begin the roll out of additional stores on the heels of the successful opening of our first two Teavana tea bars in New York City and Seattle.” The company, which currently operates 366 stores, intends to open 1000 more in the next five years. This averages 4 to 5 stores per week, a threshold easily met by a company that currently opens 1,500 coffee shops a year.

TEABIZ-TeavanaTeaBar_Exterior_320pxAs it did with coffee, Starbucks is building gorgeous Tea Bars to showcase the brand in highly visible locations like New York City’s Central Park and Seattle. It will then roll out smaller venues in major cities around the country. These stores are cost-efficient and designed to drive profitability.

“These two beautiful new stores are already providing us the key insights that will help us achieve our goal of combining and leveraging Teavana’s strength and authority around loose-leaf tea and tea merchandising,” according to Schultz.  Starbucks understands consumers and what it takes to profit from innovative, handcrafted beverages and a retail store development to create a new retail platform and a unique international premium tea house experience.

Reading consumer response online offers a glimpse of these insights:

On Yelp! Jackie F. from Miami writes: I had heard about this store opening and made sure that I visited on my weekend trip to NYC… love the environment, service and choices that were available.  I have purchased my first three loose teas and sugar and looking forward to buying more in the future.  Emily was extremely attentive and helpful during my selection process… she wasn’t pushy or overbearing.  Can’t wait to get home and make it on my own.”

Nathali Z. from Brooklyn writes: I came here led by my cousin who is a Teavana aficionado. I was excited to be in this new space and have my first Teavana Tea. The place was busy with people being helped by sales associates. When we ordered our tea the staff was very friendly, cheerful and attentive. There is an area to sit down and have our “bites”. My cousin got a chocolate brioche and I had a croissant. They were yummy but not spectacular. The tea on the other hand delicious! It was very calm and my cousin and I were excited to be one of the first people here. Definitely coming back!”

Katie R. in New York writes: I LOVE THIS PLACE! I’m so glad that Starbucks has finally opened up its first tea location… Long overdue… I’d visit this over a Starbucks coffee shop any day. I’m tea obsessed and Teavana has the best teas, hands down. The chai latte was incredible. The food selection looked great, too! I just hope they expand to other locations in Manhattan, so I don’t have to make the trek to the Upper East Side.”

This is Yelp! after all, so there were also complaints: “Plenty of cash registers, not enough tables and chairs… “NO where to sit…. and “I really wanted to like this place, but my gut is that it is a concept that won’t work… and “Because there is no coffee, it is not a place to be patronized by groups of people together, because some will inevitably prefer coffee…” comments overall were were positive or benign: “Pretty spot! I got the coco caramel sea salt latte, which ended up being too sugary and sweet for me, even after they remade it without putting any syrup in it!! The jasmine silver needle in a pot was good, though!”

Marketing is much stronger under mighty Starbucks and the public relations team that handles the account at Edelman is first-rate. In January the timely introduction of a limited edition Golden Dragon Yellow tea drew media attention and the Chinese New Year loyalty card and teaware are further evidence of integration of the brand. Customers loaded $1.4 billion onto Starbucks cards last quarter, up $260 million from the previous year. Teavana branded cards are interchangeable with the familiar mermaid which means that 40 million cardholders can conveniently charge a drink. Customers activated more than 2 million new cards a day in the week before Christmas.

Premium single cup is the fastest growing segment in at home coffee and Starbucks has grown its share to 18% of the segment over the last two years, said Schultz. The company has now sold 2 billion K-Cups. Last spring the company introduced Teavana flavors in K-Cups™ and this fall Teavana chai launched in Starbucks’ Verismo single-cup format.

TEABIZ-TeavanaTeawaresUpgrade

Upgraded Teaware

The website has not undergone a lot of visible changes, but a close look shows an upgrade in teaware including an expanded number of exclusives. Porcelain and bone china are featured along with a packaging refresh with a QR Code and new graphics. The Teavana smartphone app has been updated to make it easier to locate stores. Teavana has 328,000 Facebook likes (Starbucks has 36 million and 5.6 million Twitter followers).

Mall-based stores as a whole were hard hit by a 15% slowdown in retail foot traffic and since the majority of Teavana stores are located in malls that had to hurt. Most of Teavana’s 366 stores in the U.S. and 62 shops in Canada are company owned. It also has 28 franchised stores in Mexico.

The tea market is a huge opportunity for the company. Globally tea is estimated at $90 billion with only a fraction of the tea sold as “value-added.” In fact, the majority is not even packaged. The success of the flagship stores means the company will expand more quickly now.

Two developments hint at the future for Teavana. During a major reorganization of the senior management last week it was announced Schultz “will expand his focus on innovation in coffee, tea and the Starbucks Experience as well as next generation retailing and payments initiatives in the areas of digital, mobile, card, loyalty and e-commerce.”

In his remarks Schultz promisedto bring breakthrough innovation to the tea category in the U.S. and Canada this spring and summer and to the international markets in the years ahead.”

A second clue is that Teavana founder Andrew Mack has retired from Starbucks. Teavana named Starbucks Vice President Annie Young-Scrivner the new President of Teavana and placed Teavana under the direction of Cliff Burrows, who is group president, U.S., Americas and Teavana. Young-Scrivner previously led the Tazo Tea division and was in charge of Starbucks Canada. Burrows, 54, joined the company in 2001 and previously worked as managing director of the U.K. division where franchising is common.

Look for Teavana to expand overseas via traditional franchising. The EMEA region now has 2,033 stores of which 1,177 are franchised. Starbucks has very strong franchise relationships in both Europe and the Middle East. Sales growth in the region was 11% last quarter with revenues of $339 million. A turn-around in the EMEA results, which were previously slack, suggests an opportunity for expansion that would include Teavana.

TEABIZ-TeavanaFinancials2013_ValuationFinancial Footnotes:
The Teavana sale closed Dec. 31, 2012. The final accounting states that Starbucks paid $615.8 million in cash. At closing the company repaid $35.2 million in long term debt. Intangible assets such as the Teavana name were valued at $105.5 million. Teavana’s proprietary tea blends were valued at $13 million. An astounding $467.5 million of goodwill represents the intangible assets that do not qualify for separate recognition, such as established global store presence in high traffic malls and high-sales-volume retail venues, Teavana’s global customer base, and Teavana’s “Heaven of tea” retail experience in which store employees engage and educate customers about the ritual and enjoyment of tea.

Oprah Chai Tea

SLIDES-INNO-Oprah-Schultz
By Peggy Watt

Starbucks has underscored Teavana’s role in the company by teaming with chai-loving icon Oprah Winfrey, who arrived to cheers at Starbucks’ annual shareholders meeting in Seattle March 19 to introduce Teavana Oprah Chai, a custom blend arriving in Teavana and Starbucks stores next month.

A year and a half after Starbucks bought Teavana, Starbucks CEO Howard Schultz is still touting the company’s commitment to tea – “the $90 billion global tea market,” as he told the shareholders several times.

“We’re going to do in the long term for tea what we have done for coffee,” Schultz said, noting that he sought a like-minded partner to promote Starbucks’ refocus on tea.

Starbucks StageThe introduction of Oprah Chai is not only promoting a love of tea, but also reinforces Starbucks’ charitable efforts. (At its annual meeting Schultz emphasized its recent support for veterans’ groups and hiring veterans and veterans’ families.) Because Winfrey is also known for her charitable work, sales of Teavana Oprah Chai will benefit the Oprah Winfrey Leadership Academy Foundation, which supports education programs for youth. For every two ounces sold, $1 goes to the charity.

The blend goes on sale April 29 in Teavana and Starbucks stores in the U.S. and Canada. It is described as an infusion of cinnamon, ginger, cardamom and cloves, blended with loose-leaf black tea and rooibos. Winfrey developed the blend with Teavana teaologist Naoko Tsunoda.

Baristas at the meeting offered samples of sweetened and unsweetened varieties to good reception, even for this generally coffee-focused crowd. (Starbucks annual meetings are appreciated for their generous spread of coffees and bakery items – which this year were all from La Boulange, which Starbucks acquired a year ago).
Winfrey and Schultz settled into overstuffed chairs on stage to discuss their deal.

Schultz related that he had observed Winfrey drinking tea at a wedding they both attended. “You didn’t think much of the brand,” she reminded him wryly. He didn’t, and so he sent a sampling of Teavana Chai to her hotel room, which began a conversation that led to her designing Teavana Oprah Chai with the Teavana development team.

“Starbucks is not just a coffee company. It’s about nurturing the human spirit,” Winfrey said. “And that has been my goal in life. This felt like something I really loved and I really cared about and that would be fun to do.” She said she is a longtime chai drinker and welcomed the opportunity to develop her own blend. Teavana Oprah Chai will be served to guests on “Steep your Soul,” a new segment on the OWN Super Soul Sunday show, when guests share their recharge rituals. “I offer them my chai, and they take it whether they like it or not,” Winfrey declared.

Schultz referenced both the common ground of commitments to social causes and having gone through difficult times as businesses. Headlines flashed on the display at the shareholders meeting referenced both lucrative times for Starbucks and the rocky start of the OWN cable network. He said he sought a partner who “loves tea” and “is committed to giving back.”

Oprah ChaiThe packaging is distinctive, too: the canister is an attractive light olive tone with copper lid. The clever box design has an orange base but that same olive-green lid, short enough to show the orange base.

Teavana Oprah Chai will also be featured in a new store design, Teavana Fine Tea + Tea Bars, open now in Seattle and New York and scheduled to open 20 additional locations in the coming year including Chicago, Los Angeles, and New York City.

View the Starbucks product release press announcement here.

For past Tea Biz reports on Teavana/Starbucks, see Oct. 2013 First Look at Teavana Fine Tea Bar (Oct. 2013), Teavana Update (Feb. 2014), and Teavana Founder Andy Mack Leaves Starbucks (Feb. 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.

Patent Persuasion – Need to Know

What tea professionals need to start the week —

Single-serve lawsuits draw a line in the sand… growers of Honeybush in South Africa voice concern over rising demand… AriZona retains its position as the market leader in ready-to-drink tea in convenience stores… Numi introduces single serve tea in RealCups.

Patent Persuasion

Numi Organic Tea announced its new single-cup line last week, about the same time Harney & Sons Fine Teas launched their selection of single-cup teas.

Neither company chose to partner with Keurig Green Mountain which licenses its K-Cup technology to major tea blenders including Lipton, Snapple, Bigelow, Teavana, Twinings, Tetley, Celestial Seasonings and Tazo.

LOGO_KeurigGreenMountain_replacesGMCRTheir decision is based on economics in part. The largest brands produce K-Cups in huge quantities paying less per cup and can therefore better afford to pay Keurig Green Mountain a royalty of 6.2 cents per cup.

There is also a principal involved, a line in the sand with KGM on one side facing a growing number of private label manufacturers including California-based Rogers Family Coffee and Toronto-based Mother Parkers Tea & Coffee. Each of these firms packages their own lines in Keurig-compatible non-licensed capsules and packs tea for companies like Republic of Tea (Rogers).

Since its patents expired in September 2012, Green Mountain has watched its market share erode. Last year unlicensed packs grew from 7% to 14% share of the $3.1 billion single-serve market, according to data from Mintel International. Green Mountain, which once controlled 80% of the market by value, now controls 20% (with another 13% held by Keurig  manufactured Caribou, Newman’s Own and Eight O’Clock coffee).

Starbucks has sold 2 billion K-Cups in a successful partnership with Keurig dating to 2011 and currently has a 12% share. Folgers (JM Smucker) has 12% share, according to IRI data (which counts grocery, drug store and mass market sales). Last week Starbucks renegotiated its deal with Keurig, striking terms that had prevented Keurig from partnering with other super-premium brands but gaining access to the lower end of the market for brands like Seattle’s Best. Almost immediately Peets Coffee & Tea announced it would partner with Keurig Green Mountain. Peets had previously offered its coffee only in RealCup™ Even though it now faces competition in the premium segment, Starbucks is quite confident it will be rewarded for expanding its offerings. Single-cups are the fastest growing coffee segment and many more homes are going to dump their Mr. Coffee for a pod machine.

Keurig believes that by developing superior equipment and partnering with companies like Starbucks to insure a large assortment of licensed brands it will win back market share.

REALCUP(TM) LOGOIn choosing to contract with Mother Parkers Tea & Coffee, Numi joins a growing number of grocery chains including Kroger and Safeway, large manufacturers such as Kraft and Mondelez International, and independent coffee roasters who believe that open competition leads to product innovation, improved quality and greater consumer value.

On Feb. 12,  TreeHouse Foods, a multibillion-dollar private label manufacturer, filed suit against Keurig, Inc., and Green Mountain Coffee Roasters (collectively known as Keurig Green Mountain) alleging they engaged in anti-competitive acts to unlawfully maintain their monopoly over the cups used in single-serve brewers. A month later The Rogers Family Co. also filed suit alleging Keurig used its monopoly power in the single-serve coffee brewer and coffee pod markets to require its distribution partners to enter into “exclusive anti-competitive agreements designed to maintain Keurig’s monopoly power by excluding competition.”

In a release announcing the suit, TreeHouse writes that “Green Mountain has announced plans to eliminate the current lineup of K-cup brewers, which function with competitive cups, to exclude competition and force consumers to purchase higher-priced Green Mountain cups. TreeHouse’s lawsuit maintains that any supposed consumer benefits from the new technology are more than outweighed by the harm to competition and consumers by eliminating their choice and forcing them to pay higher prices for Green Mountain cups.”

“Such an anti-competitive product redesign would force consumers to pay at least 15 percent to 25 percent more for K-Cups, would block consumers from their preferred beverages and would restrain competition,” Oak Brook, Illinois-based TreeHouse said in its complaint.

Keurig Green Mountain Spokeswoman Suzanne DuLong responded that “We believe these claims are totally without merit, and we intend to defend these lawsuits vigorously.”

Coffee industry leader Mother Parkers agrees with TreeHouse Foods actions to stop a Keurig® monopoly, according to the company.

“The patents have expired; consumers have declared that they want choice,” said Bill VandenBygaart, Vice President of Business Development at Mother Parkers. “In our opinion, this action by Keurig as well as the pattern of anti-competitive activities described in the Complaint will continue to hurt the category.”

Tea and coffee drinkers “should decide which coffee they will brew, not Keurig® or Green Mountain Coffee Roasters®,” said VandenBygaart. “We support efforts to keep the single-serve business open to competition and believe that competition will deliver a better cup of coffee or tea.”

Numi Co-founder Ahmed Rahim was eager to enter the single-serve business, but it was paramount that the taste he so carefully crafted was present in each cup brewed from a single-serve capsule, according to a press release announcing the decision.

“I was impressed by the taste delivered by a RealCup™ capsule,” said Rahim. “It was clear to me that the superior taste from the carefully chosen real ingredients used in Numi® Organic Tea’s blends would be found in the teacup and not left behind in the capsule.” In choosing he placed Numi on the “one for all, all for one” side of the line.

No one wants to lose their monopoly. Keurig Green Mountain aggressively responded to the suit but the company’s decision to erect an even more formidable patent barricade is ultimately going to dampen innovation. In February KGM CEO Brian Kelley unveiled a new Keurig 2.0 brewer that will not work with non-licensed K-Cups. The patent for “intelligent extraction” which depends on a bar-code and radio-frequency ID means that owners will once again be forced to purchase Keurig coffee. It will also thwart the use of refill capsules.

The reality is that Keurig will find it hard to convince coffee drinkers they must pay for the new brewers through a premium of as much as three times the actual cost of coffee contained in the capsule.  Kelley has promised the technology will produce a better cup of coffee, leading existing Keurig owners to upgrade. Keurig has sold 16 million brewers to date. Installing RFID technology in existing models is not practical. Adding this feature to new less expensive models drives up their cost.

Keurig may abandon its first-generation brewers but private label capsules are here to stay, as evidenced by the rapid growth of the Hamilton Beach FlexBrew. This non-licensed $49.95 Keurig-compatible brewer in five months is already found in 11,000 outlets. It is outselling Keurig’s comparable K-10 because it not only accepts K-Cups, it accepts refillable cups, has a wire mesh basket for your own freshly ground coffee and will brew European-style filter pad coffee as well as tea pods.

Keurig 2.0 will certainly offer more features; and with its partners likely make a better cup of coffee. It may well triumph in its niche — but not by unfairly stifling competitive innovation.

CASE: TreeHouse Foods Inc. v. Green Mountain Coffee Roasters Inc., 14-cv-00905, U.S. District Court, Southern District of New York (Manhattan).

Source: TreeHouse Foods

Fast Growth RTD Tea

While carbonated drinks remain the most widely consumed beverage in America the U.S. Beverage industry reported another year-to-year drop in volume, this time down 1.42% in convenience outlets compared to 2012. In contrast RTD tea is the fastest growing segment of the beverage category.

SLIDES-RTD_AriZonaTea_greenteaginsengAriZona Tea was the top-selling brand in convenience last year with almost $270 million in sales. Lipton Brisk ($153 million) and Lipton PureLeaf ($125 million) trailed according to data from IRI.

The biggest growth was Coca-Cola’s FUZE juice fortified with vitamins. Sales increased 250% to $33 million. The bottled tea category generated $1.23 billion sales in convenience outlets in 2013.

Bottled water showed big gains as soda consumption continues to decline but ready-to-drink tea may be the ultimate victor now that the world’s major bottlers are give it a boost.

Coca-Cola reported last month that its tea volume grew by 11% last quarter. Sales of Honest Tea are up 25% compared to 2012 and it is now a $100 million brand. FUZE tea and juice blends and Gold Peak shows solid growth as well.

Market research firm Canadean released its Global Iced/RTD Tea Drinks Report last week noting North America had net volume growth of 74 million gallons (280 million liters). The $5.1 billion U.S. market for RTD tea is expected to increase to $5.3 billion in 2014 with projected growth rate of 6% through 2018.

 “The refreshing taste and perceived natural, healthy image of iced/RTD tea drinks will continue to generate growth and place the category in a good position to take advantage of the slowing carbonates market,” according to Canadean.

RTD tea is not just gaining customers in the United States.

Of the impressive 18.7 billion liters forecast to join the market between 2013 and 2018, over 15 billion liters is projected to come from Asia, with a massive contribution from China (as it overcomes its temporary setback) and Indonesia, according to Canadean. “Soft drink categories have continued with healthy double-digit growth, primarily owing to the key categories such as iced/RTD tea drinks and packaged water. The company reports that in Europe most carbonated consumption continued to occur in West Europe (primarily Benelux) in 2012. The region consumes 55% of global volumes but has lost considerable ground to Asia.

Excessive Demand Depletes Honeybush

Demand is depleting stocks of Honeybush, a largely wild-harvested South African bush used to make a popular herbal drink.

SLIDES-INNO_RTD_HoneybushTeaIt has become a popular because of its sweet flavor and it is often praised for its potential health benefits. There are 23 species of Honeybush; several are used to make an herbal beverage. In 1997 the harvest was 27 metric tons but when companies like Tazo, Twinings and Stash offering Honeybush blends in their lineup demand rose to 200 metric tons.

The challenge is supply.

Honeybush (Cyclopia sp.) is a legume that grows only in the mountains north of South Africa’s Cape of Good Hope. Honeybush is part of the fynbos biome a habitat that is under pressure similar to that experienced by Rooibos which experienced a three-fold increase in demand. The result was widespread cultivation on land farmed at the expense of other native plant species.

Richard Cowling, of the Department of Botany at the Nelson Mandela Metropolitan University, cautioned that steps should be taken to prevent mistakes by the Rooibos tea industry.

“What is required is the mainstreaming of biodiversity and sustainability into the policies and practices of the Honeybush industry at this early stage of its development,” Cowling told the Flower Valley Conservation Trust. This could be done through certification championed by the local industry. Certification could ensure that sustainable veld harvesting guidelines are followed, that cultivation only takes place on old lands and that fair labor practices are met, he said.

There is very limited commercial cultivation of Honeybush so supply has relied heavily on wild bushes. The small plantations that currently exist are only able to supply 25% of the need. Honeybush traders travel into the mountains and harvest what is to be sold. Concerns have been raised that improper harvesting has damaged the existing supply. Wildfires, droughts, and over-harvesting have now raised serious questions about the plants’ long-term survival. Beginning in the mid-2000s, supply began to drop significantly, just at a time when global demand was increasing. The supply problems pose significant challenges to blending for consistent flavor and appearance and prices have now doubled.

Currently 15% of the Honeybush produced stays in South Africa. The rest is exported, with 85% of those exports going to the United States and Germany. Honeybush producers worry that the plant simply will not survive and work is now being done to establish nurseries and plantations to grow more Honeybush for commercial use.

These supply concerns are coinciding with efforts by the European Union and South Africa to assist one another with protecting geographic trademarks for products including Honeybush.

Neill Coetzee at Cape Town South Africa’s Coetzee & Coetzee (Pty) Ltd. is one such exporter. He identified five species that are commercially utilized. Two are slow growing and mainly wild harvested, he writes.

One species, Cyclopia longifolia, is “a new kid on the block and showing big commercialization prospects,” according to Coetzee. “This tea is very similar to Cyclopia intermedia (the original honeybush) but grows well in cultivation,” writes Coetzee whose firm trades in natural and organic ingredients, medicinal plants, herbal teas, Rooibos and Honeybush.

Small quantities of Honeybush are grown on lands from Mosselbay to Oudsthoorn (the eastern sides of the Western Cape province) and on the western side of the Eastern Cape province (Joubertina to Kareedouw). There are two Rooibos plantations situated near Honeybush producers but most Rooibos is grown 200 miles away in the Cederberg Mountains near Clanwilliam, considered the heart of Rooibos cultivation.

Learn more: South African Broadcasting Corporation

— — —

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 10, 2014)

What tea professionals need to start the week —

CBC reports pesticide residues greater than legal threshold… China tightens food safety rules leading tea gardens to reduce reliance on pesticides… “Be More Tea” generates plenty of social buzz… Harney & Sons introduce tea in K-Cup compatible capsules… Coffee Bean & Tea Leaf introduces tea granitas.

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.

TEABIZ-KTN_140303_KermitLipton“Be More Tea” Generates Great Buzz

Lipton’s $40 million global campaign promoting a relaxed lifestyle message is riding high on social buzz following the debut of Kermit the Frog as the brand’s new icon of calm.

The TV audience of 43 million watching the Academy Awards and a well prepared social team capitalizing on the Oscar presentations generated 3.85 million views of the ad on YouTube in the past week. The commercial depicts a horde of “Animal” puppets driving cabs, shouting and racing about New York City set the scene for the thoughtful frog who is captured placidly walking amid the mayhem doing good turns and going with the flow as he is bumped and jostled about.

“Be More Tea” is Unilever’s first global campaign to elevate its Yellow Label brand and Kermit is the epitome of mindfulness as he sips his way through the antics of Miss Piggy and pals. The promotion is tied to a Disney movie starring the Muppets.

Kermit will be the face of Lipton in North America and Europe where the puppets are well known but “Be More Tea” is a slogan that will be translated into many languages in advertisements designed to create single global positioning for the world’s leading brand of tea.

“We live in a busy world.  It’s easy to slip into a routine with our heads down, moving from one place or obligation to the next.  Lipton wants to inspire consumers to ‘look up’, take in all that life has to offer and enjoy what you may have otherwise missed,” said Alfie Vivian, vice president of refreshments for Unilever. “This is what ‘Be More Tea’ means to Lipton and the philosophy we will bring to life in our new national ad campaign starring the Muppets.”

Alessandra Bellini, VP-brand development for Unilever Refreshments, told Ad Age that Unilever is doubling Lipton marketing spending to more than $40 million this year compared to last. The campaign will run four weeks.

“The campaign backs both Lipton hot tea and iced tea. While Lipton has had global campaigns in the past for ready-to-drink tea, this is the first global effort behind the entire brand lineup,” Ms. Bellini told Ad Age. “Lipton — in both cold and hot forms — trails only Coke in sales among global beverage brands,” she added.

The Muppets“Making movies and dating Miss Piggy can be stressful – especially the dating part. But I always try to stay cool and look on the bright side,” said Kermit the Frog. “That’s what this Lipton campaign is all about.  In a world filled with high-stress wild-in-the-street types like Animal, you have to take time to enjoy life and ‘Be More Tea.'”

Click here to see the ad.

Click here to see a 90-second behind the scenes video with Kermit back stage preparing for his role in the new Disney Movie “Muppets Most Wanted” scheduled for release March 21.

Harney & Sons Tea Capsules

Harney & Sons Fine Teas introduced a line of Keurig-compatible single-serve teas this week.

TEABIZ-ART_Harney&SonsCapsules_GroupTea drinkers can now enjoy Harney & Son’s teas with the convenience of the individual tea capsules that are 98% recyclable. Four blends from the company’s classics collection are available in 24-count boxes: Paris, Egyptian, Chamomile, Hot Cinnamon Spice and Tropical Green, as well as four blends from their HT Collection in 16-count boxes: Green Tea with Coconut, Earl Grey, Peppermint Herbal and Hot Cinnamon Sunset.

The Keurig® compatible capsules deliver the same great flavor and aroma customers have come to expect, according to the company which is now celebrating its 30th Anniversary. The Cool, Peel and Recycle technology allows tea drinkers to easily peel off the capsule after cooling, and recycle the capsule filter and spent tea. Harney & Sons continues to provide new and innovative ways to enjoy their classic tea, said founder John Harney.

Three generations of the Harney family oversee a venture that still sources, blends and packages their own products from start to finish. Harney’s small home-run business in Salisbury, Conn., has grown into a global operation with more than 170 employees at its headquarters in Millerton, New York. The company fills 90,000 square feet of warehouse space and has a new bottling plant under construction.

Capsules are available for purchase at www.harney.com.

CBTL Introduces Tea Granita

Cold tea beverages, fruit and tea fusion drinks and chilled herbals are doing well in the marketplace.

TEABIZ_CBTL_TeaGranitas_pairedLast week The Coffee Bean & Tea Leaf® introduced Tea Granitas to the lineup, a new concept in the beverage category.

“Borrowing inspiration from the Italian granita dessert – made of fruit and ice – the Tea Granitas are a light, refreshing balance of premium iced teas and trending fruit flavors, and are blended with ice,” according to the company.

The Passion Fruit Tea Granita blends Assam Black Tea and the bright, bold flavors of passion fruit, yielding a slightly tart finish. The Pear Berry Tea Granita combines the company’s popular Swedish Berries fruit infusion with notes of pear, creating a delicious caffeine-free beverage.

“The Tea Granita is a truly unique beverage that’s perfect to launch in the spring,” says CBTL President and CEO, John Dawson. “It brings a delicious twist to iced tea refreshment and is the latest in a long line of tea beverage innovations from The Coffee Bean & Tea Leaf®. Our customers know us for our signature tea beverages, such as the Chai Tea Latte and Matcha Green Tea Ice Blended® drink, and we believe the Tea Granita is another delicious beverage our customers will love sip after sip.”

Source: Coffee Bean & Tea Leaf

— — —

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.

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.