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…

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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

Need to Know (Oct. 21, 2013)

What you need to know to start the week.

  • Canada Coffee & Tea Show
  • World Tea East

Retail News

VANCOUVER, British Columbia – Canadian consumer demand for coffee and tea continues to climb as evidenced by market research and the enthusiasm of attendees at the Canadian Coffee & Tea Show.

The show, managed by Fulcrum Media, attracted a big crowd Sunday to the Vancouver Convention Centre on the city’s spectacular waterfront. The venue shifts from Toronto to the West Coast annually. There were a dozen tea vendors among the 78 exhibitors on the show floor.

Sessions include “The Importance of Tea Training” and popular workshops like Le nez du thé (The Nose of Tea) and an advanced, hands-on tea blending class Sunday. The show continues today with a report on growth in the Canadian tea industry that Tea Biz will cover.

A session on making mixed drinks with tea drew a big crowd. Shabnam Weber with Tea Emporium, Toronto explains the basics.

Tea Emporium’s Shabnam Weber explains the basics of tea and spirits.

“Raise your Spirits” was a lively workshop and floor demonstration led by Shabnam Weber with Tea Emporium. The demonstration was sponsored by Spirits Canada. Shabnam taught the basics of mixology with samples for all in the crowd.

Specialty beverages in bars and restaurants made with tea are gaining popularity and are simple to make, she said.

Sandy McAlpine, president of the Canadian Coffee Association, said there are 8,500 coffee shops in the country of 34.8 million with 65 percent drinking coffee the previous day. Per capita consumption is among the highest in the world at 5.4 kilos (12 pounds) per year. About 50 percent of Canadians drink their coffee at home with 36.7 visiting retail shops for “mainstream coffee” and 6.3 percent drinking specialty coffee, with another 5 percent drinking their coffee at the office.

The food service mainstream coffee is critical to restaurant success and valued at $3.3 billion with specialty coffee exceeding $900 million in sales. Daily incidence of coffee drinking is 2 percent higher than tap water and well above the 36 percent who reported drinking tea the previous day.

McAlpine marveled at the rapid growth of single-serve coffee which had “virtually no role at home five years ago.” Single cup offerings now account for more than 40 percent of value and nearly 16 percent of volume with no sign of slowing, he said.

TEABIZ_TeaSparrow_MichaelMenashy_280px

Michael Menashy, Tea Sparrow.

Michael Menashy had already signed a dozen subscribers to his Tea Sparrow online tea club by mid-afternoon. The Vancouver-based service currently offers 59 crowd-sourced teas narrowed from more than 780 submitted. The program launched last November and is approaching 500 members. Club members receive in the mail branded tea in several categories: green, black, rooibos and single-estate which is re-packaged. Club selections are from well-known suppliers such as Rishi Tea and TeaSpot. www.teasparrow.com

Key Café presents an interesting option for ancillary revenue. Clayton Brown explained that house owners can safely leave their house keys with local cafes via a secure online verification system useful to AirBnb vacationers and by local property managers. Café owners get a flat fee for making the keys available and benefit from increased traffic as individuals retrieve their keys. “The conversion is about 25 percent,” Brown explained, but the sample size is small (five cafes). Subscribers control access to their keys from a computer or mobile device and can let somebody into their home remotely from work or the beach.www.keycafe.com

TEABIZ_BlackTusk_GregLiu_320px

Greg Lui, Black Tusk

Greg Lui with Black Tusk Trading in Vancouver displayed the company’s award-winning Majestic Earl Grey, an authentic Jasmine Pearl and his latest creation, “Cold Comfort” a blend of Echinacea and Japanese sensha, rosehip, lemon grass and hibiscus. www.blacktusk.biz

Coffee vendors predominate with all the major expresso equipment on display. Alfa Cappuccino, a distributor was demonstrating the Reneka R-80 Barissima 2-group multi-boiler espresso machine with with Aroma perfect and Micro Sieve and the latest in programmable features.

Vladimir Martinov demonstrates the latest Reneka Espresso machine from Alpha Cappuccino.

Vladimir Martinov demonstrates the latest Reneka Espresso machine from Alpha Cappuccino.

Models of the French-made machine sell for $19,000 to $24,000, according to sales representative Vladimir Martinov.

The Metropolitan Tea Company in Toronto is one of the largest tea suppliers in North America servicing 7,000 specialty retailers with a vast selection of teas and tea utensils and tea ware, according to Chris Clark. www.metrotea.com

Sara Kadowaki of Sara's Caddies describes her favorite tea with Sameer Pruthee of Tea Affair, Calgary. Sameer likes Japanese Sencha, he says, Sara likes Chai.

Sara Kadowaki of Sara’s Caddies describes her favorite tea with Sameer Pruthee of Tea Affair, Calgary. Sameer likes Japanese Sencha, he says, Sara likes Chai.

Tea fans gathered for an evening cocktail party where one topic is always style and flavor favorites. Sameer Pruthee of Tea Affair noted his desire for daily Sensha and Sara Kadowaki of Sara’s Caddies, a supplier of fine Japanese tea, admitted a fondness for Indian chai.

Learn more at www.coffeeteashow.ca

World Tea East

ATLANTA, Ga. – The tea retail community is gathered at the Georgia Convention Center for the third World Tea East. The event, which continues through Tuesday, attracted several hundred attendees from as far as Brazil and South Africa, but most were regional retailers. There were 35 exhibitors.

George Jage, Group Director of F+W Media’s The Beverage Group, said that “World Tea East got off to a strong start despite the challenge of a NFL football game being held next door. With only 25% of the registered buyers braving the traffic and parking complications, exhibitors were pleased with the first day results,” he said.

Leading tea retailer, Teavana, had several people on the floor and engaging with many of the top suppliers, reports Jage.

The event is known for a quality educational program that includes a two-day New Business Boot Camp. Popular activities include tastings of the prize-winning tea from the North American Tea Championship.

Presenter Jane Pettigrew said academic and training sessions were well attended. Her class had 17. She reports vendors commented on “good interest and sales” and said that 30 attended the boot camp “some of whom have a great deal of knowledge and have travelled quite a bit to origins.”

Highlights include:

  • A workshop by Jonas Feliciano and Elizabeth Friend, analysts at Euromonitor International, on global tea branding revealed over-saturation in the tea industry has led manufacturers to change the context in which tea is being consumed, rather than driving incremental tea demand. The trend means packaged tea sold in modern retail shops is growing at the expense of unpackaged tea sold in traditional markets. To differentiate premium tea from commodity, manufacturers stress functionality and convenience. They predicted growth of tea-themed shops as the next wave in modern chained cafés, using the third-place benefit to draw tea-drinkers out of their homes. The U.S. is now the world’s fourth in value at $2.1 billion, trailing China $9.5 billion; Japan $4.7 billion and Russia $3.7 billion.
  • “Vino Teano & Tea Lagers” a session featuring wine- and beer-enhancing tea sachets led by Capital Teas founder Peter Martino and his colleague Nkaiso Akpabio, vice president of retail operations.
  • Japanese matcha supplier AOI announced the company was awarded a Food Safety Certification (FSSC) 22000, a new global food safety standard for food manufacturing from the Global Food Safety Initiative (GFSI), recognized by the Confederation of the Food and Drink Industries of the European Union (CIAA). Learn more: http://www.aoimatcha.com

This year’s event was co-located with the Atlanta Foodservice Expo, a tradeshow that features kitchen equipment, technology systems, restaurant services and foodservice tools. The impact of the co-location with the Atlanta Foodservice Expo was highly apparent with a lot of chef coats in the aisles at World Tea East and in the NATC Winners Tasting Circle tasting the best teas of 2013,” according to Jage.

Tea Biz incorrectly reported that during the show Devan Shah, founder of International Tea Importers was awarded the Cha Jing Award for Lifetime Achievement. The Award ceremony was postponed until May 2014 where it will be held a World Tea Expo, Long Beach, Calif.

How much of a premium does it take to make premium tea special?

What is the threshold price for premium tea?

From a retailer’s perspective it is tea that grosses at least $300 per kilo.

A 50-gram pouch of specialty tea that sells for $15 puts 30-cents a gram into the retailer’s till compared to between 2.5- and 5-cents per gram for commodity tea.*

Specialty Tea Pricing Benchmark

Price

Qty

Grams

Ounces

Pounds

$300

1

1000 grams (kilo)

36 ounces

2.25 pounds

$150

2

500-gram pouches

18 ounces

1.125 pounds

$15

20

50-gram pouches

1.8 ounces

 

$7.50

40

25-gram pouches

.90 ounces

 

$3.75

80

12.5-gram sample

.45 ounces

 

* 200 grams of Lipton Yellow Label sells for $9.50 or 5-cents per gram in grocery and the same 100-count box sells for $5.09 or 2.5 cents per gram at Costco (9-8-2013)

The tea contained in a $15 packet may or may not be premium quality. I could be an exquisitely handmade, artisanal Orthodox or more likely a mid-grade green or black blended with fruit and flowers and flavor enhanced. It may even be a tisane and contain little or no camellia sinensis and still be labeled special. Customers view premium through the prism of price.

To put this price in perspective, consider that growers in Africa and India produce 1.5 billion kilos of black CTC that sells for an average $3 per kilo with another 1.5 billion kilos of green tea from Asia exported at a similar average. The balance of the world’s annual 4 billion kilos of tea sells for $10 a kilo, with very small quantities of high value tea selling for up to $100 per kilo, according to Rajiv Lochan, founder of Doke Tea and a student of statistics. “So a very rough average of $5 per kilo for bulk teas can be a safe estimate,” he writes. Tea at retail, packets, tea bags and specialty teas have extreme ranges and are difficult to estimate, according to Lochan.

Regardless of what is inside the pouch I believe that $15 for 50 grams is a useful retail benchmark in North America. If customers willingly pay $300 per kilo it must be special.

This is a six-time multiple over the retail price of commodity tea. I borrowed this valuation ratio from the coffee industry which prices specialty grades of Arabica at a premium over “C” or commodity grade green coffee. A six-times multiple is common in negotiations for the highest “specialty grade” coffees.

Below is a technical description of top quality coffee by the Specialty Coffee Association of America.

EMBED: www.scaa.org

Grade 1: Specialty Grade Coffee Beans: no primary defects, 0-3 full defects, sorted with a maximum of 5% above and 5% below specified screen size or range of screen size, and exhibiting a distinct attribute in one or more of the following areas: taste, acidity, body, or aroma. Moisture content must be between 9-13% and when prepared the coffee must be free of cup faults and taints. Coffee that scores 80 points or above on the SCAA’s 100-point scale is graded “specialty.” Only 5- to 10-percent of the world’s annual production qualifies.

Since the large premiums attached to specialty are based on the cup quality as agreed upon by a buyer and seller if the pre-ship sample does not match the arrival coffee, the container can be rejected. This results in a huge loss to the exporter.

Descriptions of tea lack this level of precision. There is no exchange or futures market and no standard cupping criteria for tea. Prices for large quantities (or specialty micro-lots) are negotiated directly with the grower and the rest is sold at auction houses in the tea producing regions of the world.

Should the tea industry devise a standard description of premium teas worthy of a premium price?

Friday Roundtable: The flavors of fall

While there are a few more weeks until the calendar officially turns its page to fall (in the northern hemisphere), many of us are already feeling the cooler breezes and the sounds of school buses. A change of seasons, approaching holidays, and new schedules also affect our customers’ tea drinking habits.

In today’s Friday Roundtable, let’s talk about the flavors of fall. What are you expecting to be hot this season? What teas have traditionally been popular this time of year? Have you seen any new trends approaching?

Stir It Up: Exploring Cocktail Infusions

TWEET: What tea-based cocktails make their way into your martini glasses or champagne flutes?

Looking for a new cocktail for your summer parties? As tea lovers we’re usually happy to add another tea element to our events. Fortunately for us, New York-based company The Teaologist is the latest entrant into the specialty tea cocktail arena with their Owl’s Brew line.

Tea Forté was one of the early arrivals into that market more than four years ago. Tea Forté Cocktail Infusions are pyramid sachets containing tea and herbs designed to infuse in alcohol. Customers have been encouraged to develop new recipes for the Lavender Citrus, Silkroad Chai, and Lemongrass Mint pyramids and an online archive now includes gems like Chai White Russians, Lavender Pear Martinis, and Violet Lavender Gin Sours. It was a unique concept and introduced many to the idea of tea in our highball glasses.

Owl’s Brew takes a different approach, offering their teas as liquid mixers. They wanted the convenience of freshly brewed whole leaf tea and spices that were ready-to-pour.  There are three flavors currently: the chai and coconut-based Coco-Lada, a blend of Darjeeling, lemon, and strawberry called Pink & Black, and the Naked Arnold which combines English Breakfast tea and lemon zest. There are no artificial flavors and the mixers are sweetened with agave or stevia. They can be mixed with spirits including vodka, tequila, rum, or gin, or consumed on their own for mocktails.

Teaologist founder Jennie Ripps and co-owner Maria Littlefield both come from the marketing world. The cocktails evolved from drinks they made to serve at events they were producing. The tea cocktails made their debut at the NYC premiere of “Twilight: Breaking Dawn” and the response was immediate. The drinks were being requested by restaurants and nightclubs and for other events.

Ripps and Littlefield felt that there was a need for a lighter, healthier mixer and saw an opportunity to create new blends and flavor profiles designed specifically to pair with spirits. While Ripps and Littlefield believe that Owl’s Brew will be fun for people to use at home, they are also finding that many mixologists in restaurants and bars are coming up with creative uses for Owl’s Brew as an ingredient in cocktail creations.

Don’t worry if cocktail recipes don’t come naturally to you. The Owl’s Brew team supplies you with ideas on the bottles and more recipes will soon be available on their website.

Interested in giving Owl’s Brew a try? It goes on sale this month through their website, www.theowlsbrew.com, and in a variety of retail, restaurant, and club locations primarily in NYC.

LINKED IN: Are we taking the tea-infused product concept too far? Should we be placing more emphasis on encouraging appreciation for specialty tea on its own or are these products bringing new audiences to tea?

— Katrina Ávila Munichiello | ©Mystic Media 2013

Anti-spam Legislation

TWEET: Canada soon to adopt anti-spam legislation with stiff penalties.

OTTAWA, Canada

Canada is getting tough on restricting unsolicited spam with new legislation that can result in $1 million fines for individuals and $10 million fine per violation for corporations.

The CASL (Canadian Anti-Spam Legislation) is likely to take effect this fall. As it stands a U.S. firm can send electronic marketing messages to anyone, including Canadian residents, without permission, unless and until the recipient opts out by expressly notifying the sender that they do not want to receive such messages, explains Lani Barnes, an attorney specializing in intellectual property and technology law.

“Once CASL goes into effect, companies will not be allowed to send any commercial electronic message (CEM) to any person or business in Canada without the prior express or implied consent of the recipient, unless the CEM falls within one of the limited exceptions to the new law,” said Barnes who works for Robinson, Bradshaw & Hinson, a Charlotte North Carolina law firm.

As a result, companies and individuals that use electronic marketing to reach customers or potential customers in Canada should start preparing for the new legislation now by developing and implementing compliance programs in order to ensure that they have the appropriate consent from each recipient, she advises.

“Penalties for violating CASL can be severe and directors and officers may be held personally liable for their company’s violation,” said Barnes.

LinkedIN: Assess the impact of Canadian anti-spam legislation on your retail operation.