Need to Know | Export Values Declined in 2019

Need to Know | Export Values Declined in 2019

Tea Industry News for the Week of May 11.

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

Tea Export Value Declined in 2019

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

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

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

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

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

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

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

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

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

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

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

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

Tea & Tariffs

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

Or maybe, not.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Reenergize Local Consumption

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

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

Learn more: Tea for Unity

Tea is Piling Up

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

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

U.S. Consumers Remain Wary of Reopening

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

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

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

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

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

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

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

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

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

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

Next episode: “What Consumers Want Right Now.”

EVENTS

Attend the SofaSummit on International Tea Day

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

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

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

Click to learn more: International Tea Day.

UK Tea & Infusions Association

Raising Our Cup to All Tea Drinkers

The

Participants (in order of appearance) include:

Yu Lu, China Chamber of Commerce CCFNA

Rajah Banerjee, Makaibari

Arun Singh, Tea Vision

Ketan Patel, Jalinga Tea

Stephen Twining, Twinings

Alfred Njage, KTDA

Cindi Bigelow, Bigelow Tea

Gabriella Lombardi, Cha Tea Atelier

Joyce Maina, Cambridge Tea Academy

Will Battle, Fine Tea Merchants

Joe Panter, Camellia PLC

Ramaz Chanturiya, Tea Masters Cup (Russia)

Carolina Okulovich, Don Basilio

Rona Tison, ItoEn

James Norwood Pratt, Author

Jane Pettigrew, UK Tea Academy

Kevin Gascoyne, Camellia Sinensis

Jeff Fuchs, Tea Horse Road

Tania Stacey & David Lyons, Cuppa Cha & AUSTCS

Cecilia Corral, Tian Té Mexico

Fred Yoo, Myung Wong Cultural Foundation

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

Virtual Tea Tasting

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

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

Meeting ID: 999 784 9844

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

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


Enhance your well-being with tea. Tea Journey is a bridge connecting those who craft handmade teas in 35 countries with the growing number of premium tea consumers globally. Tea Journey educates readers not only in the selection and preparation of healthy whole leaf tea but also in the manufacture of authentic teaware and utensils designed to enhance the tea experience.

Curious about tea? Subscribe free to Tea Journey Magazine

Coronavirus Presents Logistical Challenges for China's Tea Harvest

Coronavirus Presents Logistical Challenges for China's Tea Harvest

The coronavirus outbreak is causing logistical havoc in advance of the world’s most valuable tea harvest.

“All parts of the country (except Hubei Province) are gradually returning to work and production under the guidance of the tea district government,” writes Tea Weekly.

Hubei Province, an important producing region, remains under lockdown with 2,500 (2,467) deaths, and 80,000 (78,914) confirmed cases of the fast-spreading epidemic centered in the city of Wuhan.

“China is reeling from the outbreak of novel coronavirus-caused pneumonia,” according to Cai Jun, secretary general of tea with the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal By-Products (CFNA). CFNA is an influential trade association that operates under the supervision of China’s Ministry of Commerce.

Setbacks are not due to illness or deaths of tea garden workers; it is the result of a national effort to limit travel, close factories, ban public gatherings and shutdown bus, train, air, and subways to prevent the virus from spreading.

“As far as I know, Chinese tea people are all safe and sound, which indicates that drinking tea helps to strengthen immunity,” writes Mr. Cai.

China’s tea industry saw this coming, according to tea retailer Austin Hodge, founder of Seven Cups Fine Chinese Tea in Tucson, Ariz. Hodge, who imports tea direct from China, recalls the SARS epidemic in 2003. The Chinese learned valuable lessons from that outbreak, which killed 774 globally.

“No tea is going to waste. They are not plucking if they cannot process,” explains Hodge, who praised the Chinese for “making all the necessary adjustments.”

“In rural tea country, the real issue isn’t the virus; it’s the lockdown and logistics. Everybody is local. They don’t have to travel anywhere,” he said.

He expects his first tea of the year to arrive on schedule in a week or two.

Procedures at China’s largest tea company factory in Erhai are typical. The plant resumed operations Feb. 13 as 700 workers were screened for fever, completed and signed a personal health commitment promising to wear masks, disinfect their hands and periodically visit one of six health test points. Upon entering the factory, they scanned the “Yunnan Epidemic Prevention” QR code with their cell phones, activating a cell phone (WeChat mini app) that tracks their movement and warns employers if they have encountered someone who has come down with the virus.

Effective Feb. 11, all Yunnan residents must scan a QR code to enter and exit public places, including residential complexes, markets, malls, hospitals, and public transit hubs. “No name, ID or other content is stored,” and Yunnan promises to destroy the tracking data once the virus is contained.

A factory manager estimated the increased security reduced productivity by 10%.

In the southern-most tea gardens where the harvest is just beginning, those who prune and pluck tea are required to wear masks and are not permitted to form groups. They must keep a minimum distance of 10 feet apart while working.

The China Tea Circulation Association reports that specialty harvests began Feb. 10 in Gaoxian in Sichuan and on Feb. 20 in southern Zhejiang (Wenzhou and Lishui).

“Under the epidemic situation, while doing a good job of prevention and control, multiple tea-producing areas and companies across the country have also organized tea farmers to start the first batch of 2020 spring tea picking,” according to the association.

“We’re not in picking season yet, so the virus hasn’t had much effect on the tea production and international trade. Although it does affect the sales, it’s overall manageable,” writes Mr. Cai.

Retail Impact

Grocery stores and supermarkets remain open, and food and beverage delivery are permitted, but the lockdown has cut foot traffic at China’s premier tea malls to a fraction of normal.

“When most tea markets are not open, companies are encouraged to sell online and micro-businesses,” advises the Agriculture and Rural Bureau of Yuzhou District as reported on the Sichuan News Network. Production of Chuancha in Yuzhou is projected at 1,800 metric tons valued at more than $42.5 million (RMB300 million).

More than 500 million Chinese drink approximately 1.9 million metric tons of tea annually, according to the China Tea Marketing Association. The domestic tea market is valued at $18 billion.

During the crisis, overall retail sales are being stripped of $144 billion a week, according to China’s Evergrande Think Tank (as reported by Forbes).

The impact thus far is most significant in congested urban areas. Every province, including Tibet, has reported cases of Covid-19, but tea regions were spared the initial brunt of the epidemic. Hubei reported 64,084 cases and 2,346 deaths.

Enshi tea producers are the closest hot spot, about 500 kilometers west of Wuhan. Plucking generally commences March 15 on Wufeng Mountain. Enshi is a green tea region, one of the few that specializes in steamed green teas. Train and bus service was suspended in January, all 70,000 cinemas in the province were closed, and public gatherings were forbidden. Only grocery stores, gas stations, drug stores, and hospitals are operating.

Here is a sample of the impact in China’s tea producing regions as of February 25: Henan, 1,271 cases, 19 deaths; Guangdong 1,347 cases, 7 deaths; Hainan 168 cases, 5 deaths; Anhui 989 cases and 6 deaths; Zhejiang reported 1,205 cases with 1 death; Jiangxi 934 cases, 1 death, Fujian reported 294 cases with 1 death, Guangxi has 252 cases with 2 deaths, Yunnan reported 174 cases with 2 deaths. (Image credit: Johns Hopkins University)

Johns Hopkins is tracking cases globally.

Generally speaking, the spread of Covid-19 in tea growing areas is slow, and infections in neighborhoods and local outbreaks are comparatively rare. Covid-19 cases in other places such as Enshi and Shennongjia are still attributed to imported cases, and the risk of spread is relatively low,” according to Epidemiologist Dr. Liang Wannian, Beijing’s health chief. His responses to questions from reporters were posted by the State Council of Information Office in Beijing.

How Bad Could It Get?

In addition to tea and coffee, Yunnan is one of the most important growing regions for cut flowers. Harvesting flowers is time-sensitive, and Valentine’s Day represents a significant but fleeting business opportunity.

Fresh-cut flowers from Yunnan are exported to 46 countries and makeup 70% of domestic market share in China’s major cities. Growers earn $64,000 (RMB450,000) per hectare on average selling flowers for $0.20 (RMB1.43) per bloom.

This year the timing could not have been worse, resulting in big losses due to a critical break in the supply chain as trucks, trains, and flights were suspended.

The magnitude of the problem became evident in early February at the Dounan Flower Market in Kunming. Dounan is the largest fresh-cut flower market in Asia. During the period Jan 27 to Feb 5, trade volume in the market slumped 95% to $61,355 (RMB431,500). Sales were 4.78% percent compared to the same period in 2019. Dounan sold 6.53 billion cut flowers valued at RMB5.4 billion last year.

This was compounded by the fact that 50 million consumers were confined to their homes in the Wuhan region and that offices nationwide were closed for as long as two weeks beyond the traditional spring festival travel holiday. The auction was shut down for several days, re-opening Feb. 10.

One-third of Yunnan’s annual cut-flower revenue is earned in February, according to Wang Jihua, deputy director of the Yunnan Provincial Academy of Agricultural Sciences. Mr. Wang estimates that the loss of Yunnan’s flower industry, including supporting industries such as logistics, during the special period will reach RMB3 to RMB5 billion ($425,000 to $715,000).”

Transport options were cut by 90% during the height of the lockdown and are only now being restored. Roadblocks prevented entire villages from access to larger cities and towns. Tea faces a less critical timeline―processing must begin within four hours once leaves are plucked―but the logistics of transportation are the same.

Phil Orlando, Chief Equity Market Strategist and Head of Client Portfolio Management at Federated Investors, told Bloomberg Newsweek the world’s stock markets had not indicated the true impact on trade. “In my humble opinion, it will be bigger than people think,” he said.

Orlando was proved correct Feb. 25 when stock markets globally suffered steep declines.

Looking Ahead

The last three weeks of February were the first in which the number of patients cured of the disease outnumbers those who contracted Covid-19. It is too soon to declare an end to the crisis, but progress is evident.

“The epidemic is under effective control due to the Chinese government’s prevention and control measures,” writes Mr. Cai. During the lockdown, “most people work from home except those who work in the sectors responsible for the supply of the necessities. We have full confidence and capability to win this fight against the epidemic,” he said.

Mr. Cai said that China’s major tea companies “have shown a dedication to fighting this virus by donating money and necessary supplies to those affected areas.” CFNA was forced to postpone three tea conferences scheduled for March, and several tea fairs, including the spring edition of the Global Tea Fair, are being rescheduled.

Sources: Bloomberg Newsweek, China State Council of Information Office, Xinhua, Tea Weekly

Tea Growing Regions in China

China’s Four Tea Growing Regions

China’s 80 million rural tea laborers annually produce 2.56 million metric tonnes of mainly green tea on 3 million hectares of land. Their effort results in half of the world’s annual tea production of 5.2 million metric tons.

Domestic sales by volume are mainly of green tea, but many localities, including Quimen, Fuzhou, Wuyi, and Fuding (in Fujian province) and Pu’er in Yunnan Province, specialize in the production of high-value oolong, white, jasmine, black, and post-fermented teas.

The China Tea Marketing Association estimates 63.1% of domestic sales are from green tea; Pu’er teas represent 14% of sales; oolong represents 11.1%; black tea accounts for 9.9% of sales and white tea for 1.5% with yellow tea estimated at 0.4% in 2018. The Chinese will drink 670,000 metric tonnes of tea in 2020, for which they will spend $18 billion.

Tea plantation acreage has grown substantially since 2006 with most new plantings south of the Yangtze River valley in Guizhou, Yunnan, Sichuan, and Hubei provinces—the four best-known tea growing regions.

Jiangnan

Tea grown south of the Yangtze river spans several provinces.  It is called Jiangnan and includes Zhejiang, Jiangxi, portions of Anhui, and Hunan provinces. It is the largest tea producing region by volume. Hubei province is split with Wuhan north of the Yangtze and Enshi, south of the river near the Wufeng Mountains. Wuhan is 850 kilometers inland from Shanghai, which is at the mouth of the Yangtze.

Jiangbei

Tea grown north of the Yangtze (Jiangbei) spans Henan, Shandong and northern Anhui. Jiangbei is China’s smallest tea growing region.

Huanan

South China is known as the Huanan growing region. This superior tea growing region spans coastal Fujian, Guangxi, and Hainan island. Fujian is the most important tea producing province by value.

Xinan

Tea in Southwestern China within the Xinan region is grown in Guizhou, Yunnan, and Sichuan provinces. The earliest teas are plucked in late February in the semi-tropical portions of this zone bordering Vietnam, Laos, and Myanmar.

Specialty Tea Visionary Brian Keating Passes

Specialty Tea Visionary Brian Keating Passes

SEATTLE, Wash.

Brian R. Keating, 62, a specialty tea visionary, well-respected tea blender, formulator, market researcher and consultant died Sunday, Sept. 2.

WTN180904_DeathNotice_BrianKeating

Brian Keating

Keating was visiting long-time friend Mary Greengo at her Queen Mary Tea Room in Seattle when he collapsed in the Tea Emporium. Paramedics responded. He was later pronounced dead at the University of Washington Medical Center.

Keating worked in the tea industry for more than 30 years. His marketing reports, first published in 1993, foretold the growth of specialty tea industry. Sage Group published 10 “Specialty Tea is Hot” reports on every facet of the industry, co-authored several culinary works and “How to Make Tea” (2016) a consumer title distributed globally.

Keating was the first tea buyer and blend-master at Whole Foods Market (via its subsidiary Allegro Coffee) where he was responsible for creating 40 new tea products in a lab of his design. He previously owned one of America’s most successful specialty tea shops and cafés.

Keating pioneered may innovative tea beverages including the first tea-based energy drink, SPORTea. His role with World Tea Expo dates to the inception of the event.

Plans for a celebration of his life are underway.

Services are pending.

A User’s Guide to Tea That You Will Use

A User’s Guide to Tea That You Will Use

Tea: A User’s Guide
Purchase at World of Tea
Eggs and Toast Media

If you are one of those who load the software and ignore the user’s guide then regret never fully utilizing its features, you need to read this book. Tea is as complex as you make it—many dunk and run, but if you savor the nuances of specialty tea and want to really immerse yourself, this book contains the most thoughtful and detailed insights of any Western author. Eggs and Toast Media, 250 pages, $20 (PDF Download at World of Tea). Also available on Kindle and in print at Amazon.com. LEARN MORE

wtn161206_teausergguide_coverA User’s Guide to Tea You will Use

Reviewed by Dan Bolton

Start with a bountiful quantity of leaf, and a second steep reveals nuances that delight. And so it is with a second reading of Tony Gebely’s remarkable new book, Tea: A User’s Guide.

As Gebely, 33, explains it: “Multiple steeps allow us to achieve snapshots of the tea as dissolution begins, runs its course, and slowly putters out…. These snapshots accentuate nuances in the tea that may become muffled during longer infusions.”

His brilliant 250-page work distills and organizes hundreds of posts from the award-winning World of Tea blog that established Gebely’s reputation for clarity on a complex topic. The blog has twice been named best blog in the annual World Tea Awards.

Tea contains an estimated 30,000 polyphenolic compounds, writes Gebely in an opening chapter on tea chemistry that introduces the pigments, enzymes, amino acids, carbs, volatiles, and mineral building blocks that make tea such a remarkable beverage.

The body of the book describes 130 classic specialty teas with the precision of a high-level computer scientist. Gebely works as a chief technology and integration officer and has assisted several tea retailers configure web and in-store software. He applies rigorous conformity throughout the book; every tea is photographed (leaves and liquor) in a cup that holds precisely 20 cubic centimeters of water from Clairvic Spring in Volvic, France. The pH-neutral water contains 130 parts per million of total dissolved solids with a mineral content in mg/l of calcium (12), sulfates (9), potassium (6), silica (32), and chlorides (15).

Tony Gebeley

Tony Gebely

A second read prompted a dozen margin notes underscoring the points he makes about preparation and the insights he offers in the chapter on processing. In his introduction, he establishes that “this book isn’t about all tea. It’s about specialty tea. The goal of this book is to celebrate the diversity of fresh, complex loose-leaf specialty teas.”

Gebely provides the knowledge needed to develop a personal style of tea appreciation, particularly salient in the West, where brewing tea is mainly “dunk and run.” There are few mentions of tea culture in this reference: “Early on while writing this manuscript, I realized that by separating tea culture from objective tea study, we are left with a much better framework for tea education,” he writes.

What Western tea drinkers need is to hone their skills in selecting and preparing fine tea. Gebely’s simple steeping chart is a starting point. Instead of the typical manufacturer’s temp and timer icons, Gebely introduces a grid.

 

WTN161206_TeaUserGuide_GreenTea

Blocks represent a safe zone of both time and temperature given the recommended dosage.

“Your ideal parameters may vary, especially the steeping time,” he writes, explaining the relationship between dosages, time, and temperature.

This user’s guide is just that, explaining tea chemistry and processing and presenting historical background (without mythology) covering a most intriguing collection of teas. He offers a very useful explanation for establishing “altered tea” as the seventh main category.

The majority of teas sold in the United States are altered in some way, observes Gebely. Some of the most exquisite specialty teas (think jasmine scented) are altered. The category embraces flavored and scented teas, blends that feature inclusions such as fruit, nuts, and florals along with breakfast blends of pure teas that deliver consistency in flavor despite the annual variance of the harvest. Herein lies masala chai and Japanese genmaicha, a mix of sencha and roasted rice and beloved Earl Grey, a tea flavored with oil of bergamot that accounts for a quarter of U.S. tea consumed by volume.

Gebely’s diverse tea descriptions demonstrate the 35 nations that grow tea and offer a style for every taste. However, more critical, in his view, is giving readers the confidence to brew any tea they might want to try.

In The Kinetics of Steeping section, some 182 pages in, Gebely announces “the most important part… the entire reason for your tea journey.

“Steeping is the final step in the lives of tea leaves. And in their final act, they slowly unfold and unravel, creating a beverage that tells the story of where they came from. Every time we drink liquor from the steeped leaves, it tell us what the weather was like before they were plucked and how they were handled, processed, and stored before they reached your cup,” writes Gebely.

It is these chapters on preparation, including tea evaluation, and storage that the margin notes in your edition will likely equal or even exceed the margin notes in mine.

wulong-tea-chart WTN161206_white-tea-chart WTN161206_TeaUsersGuide_YellowTea

Tea subscriptions (A-M) – Mother’s Day Tea Gift Solution

Mother’s Day is just a few days away and it is reasonable to assume that a fair number of people have not yet gotten around to figuring out the perfect gift. Instead of running to stores or getting a last minute something that she might not need, check out these “tea of the month” clubs and tea subscription programs that might offer a special gift that she will enjoy long after Sunday.

Tea of the Month Clubs – A-M

Adagio Tea – Tea of the Month Club
Join for the 6 month or 12 month option. Select your favorite tea type: flavored, decaf, herbal, black or green/oolong. Adagio will send two teas every other month. You can see the list of teas in the lineup here. The 6 month club costs $39-49. The 12 month club is $74-$94.

Art of Tea – Tea of the Month Club
Subscribers can choose a monthly option of $18/month, a 6 month subscription of $16.20/month, or a 12 month subscription of $12/month. Choices include caffeine-free, iced tea, premium single origin, pyramid teabags, signature tea and wellness tea.

Imperial Tea Court – Tea Club
The Four Season Club offers a tea selection every three months ($121). There is also a 6 month membership (3 shipments over the 6 month period for $176) and a 12 month (monthly delivery for $291). The tea types included are outlined on their page.

The Devotea USA – Tea of the Month Club
Each month subscribers receive a packaged assortment of four teas: The Devotea blends, single estate teas and some “club only” offerings. The club is a 12 month club with three different tiers available. “Taster’s Delight” provides an assortment of four teas that equal approximately 30 cups for $13.99/month. “Drinker’s Essentials” yields 100 cups for $27.99/month. “Addict’s Nirvana,” $40.99/month, yields 200 cups. Three-month gift subscriptions are available for $48. The May assortment included Champagne & Berries (a green tea blend from Teas Etc.), Mokabari East Assam (Lochan Teas), White Teas Concoction Liquorice (Devotea blend), and Spearmint Tisane (Devotea USA). Click here to see the March and April offerings.

Jing Tea – Tea of the Month
Each month you receive a shipment of two 50gram bags of tea. You can choose three month (£75 for U.S.), 6 month (£135) and 12 month (£260). May was a very jasmine month with jasmine pearls and jasmine silver needle. June will bring Iron Buddha and Yellow Gold.

Republic of Tea – Tea of the Month
The program offers four different monthly options ($90-$99 for 6 months) focused on their teabag selections: Citizens’ Favorites, green, caffeine-free/decaf, and wellness. There is also a loose tea option ($120 for 6 months). Six and twelve month options are available.

Tealet – Global Tea Tasters
Tealet is a company focused on linking customers directly to farmers. In this program you’ll receive four teas every two months (60 grams each shipment). An annual subscription of six shipments is $215.70. A six month subscription is $128.85 for 3 shipments. Along with the tea will come information about the growers as well as information to help you better understand tea.

Teance – Tea Subscriptions
Teance has two different tea subscription programs available. The 3 month or 6 month Tea Subscription ($73.95/$144) and the 3 month or 6 month Connoisseur Subscription ($145/$260). The Connoisseur Subscription offers teas they do not usually sell online.

Teavana – Tea of the Month Club

Teavana offers a 12 month subscription program for $250. Recipients receive two 2-oz. tins of tea each month. The idea is that the teas can be consumed individually or blended together for a unique taste. The 6 month club is $130. The May offerings were a Monkey Picked Oolong and a Citrus Lavender Sage. The tea list can be found by clicking the link in the Description section of the 12 month program.

 

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)

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Where the world’s biggest tea drinkers are

Nifty chart from Quartz showing per capita tea consumption by country. The U.S. at half a pound is well down the list but much of the tea sold here is blended with heavy ingredients, making the actual volume much higher.

Bitcoin Update

Tea Biz

Last week trading was halted on three crypto currency exchanges after it was revealed hackers stole 4,474 Bitcoins from the Silk Road 2.0 website.  Silk Road is a drug-selling black market whose technical staff blamed the loss on a “transaction malleability” bug in the Bitcoin software. The loss was valued at $2.6 million, according to an article in  Forbes.

Bitcoin developer Greg Maxell responded to concerns about Bitcoin security in a Q&A with Coin Desk News. He said coding done by the exchange is to blame. He admitted there is a known bug in early versions of the Bitcoin software, first identified in 2011. The bug has been fixed and old versions previously installed on servers are gradually being replaced but “this wouldn’t make the top ten list of dangers in the Bitcoin technology.”

Experts advise against keeping digital coins in an exchange or other online wallet services…

View original post 1,132 more words

Immerset

Immerset Kickstarter Image

Brewing methods continue to evolve at both extremes.

Last month I wrote about semi-automated $6,000 brewers ideally suited to coffee shop drive-thrus that can make multiple cups of tea in less than 90 seconds.

TEABIZ-Immerset_CupImmerset is at the other extreme, a simple invention that combines the gentle immersion of a French press with the control of pour over.

Inventor Chic Kelty enjoys both coffee and tea. He has several award-winning designs for products from portafilters and espresso machines to tampers. I still use his nifty magnetized silicone basket to catch the coffee grounds in my French press.

“Instead of specialized brewers for each beverage, why not a single brewer with maximum versatility?” he asked.

The quantity of water and immersion time for brewing ground coffee and tea leaves are similar but hardly the same. The secret to the Immerset is a valve Kelty built into the base to properly control the flow of liquid for either beverage.

Kelty told me that the patented helical valve design allows for intuitive and simple refinement of cold brew coffee and consistency in pour-over technique. Kelty’s design is also perfect for loose-leaf tea as it allows the water to drain completely between cups to avoid bitterness.

The Immerset debuted on Kickstarter last week and is already partly funded by more than 205 enthusiasts and $10,000 in funding with a month until the funding deadline. The first production run is this spring with delivery beginning in May 2014.

Unlike many coffee brewing devices, hidden surfaces and niches have been eliminated to ensure the most hygienic function possible, said Kelty. “The entire water chamber and passage is sheathed in food-grade stainless steel so there is no hot-water-on-plastic contamination,” he said.

When brewing coffee controlling the grind density, flow rate and immersion time can be difficult and all three are essential to a great cup.

As Kelty explains, “with French press brewing, the barista is able to control the steeping duration but the system is intolerant of variability in grind density which limits the brew options and results in less dynamic flavor. “ In addition, prolonged immersion of the coffee between cups can result in bitterness and degradation of flavor.

“In contrast, pour-overs and cold brew methods allow for finer grind which can achieve a more refined taste however it can be a complicated and time consuming task to finely tune the immersion time and consistently produce the desired outcome,” he said.

Other features include:

  • Integrated insulating design that keeps the brew hot between servings
  • Food-safe, impact resistant ABS for strength and insulation
  • Tool-free assembly
  • Silicon seals for leak-proof assembly

Click to view a break-away diagram.

In short, the Immerset is intuitive to use, offers maximum versatility and consistency in brewing by addressing several variables collectively with one device.

Learn more: Immerset or visit Kickstarter