Retail Impact of COVID-19 is Devastating for Tea and Coffee Shops in China and Italy

Survey finds 75% of Chinese tea and coffee shops closed at the height of the coronavirus epidemic.

Statistics compiled from a survey of retailers following China’s unprecedented lockdown of 700 million people reveal that while international chains like Starbucks and Costa and big national chains, including Ten Ren and Luckin, experienced severe financial setbacks, independent tea and coffee shops suffered mortal blows.

Now that the contagion has spread to Italy, shop owners are taking a hit comparable to their Chinese counterparts.

“Being in the “orange” zone we’ve seen the downtown area of Milan losing its fabric, most people (not all, fortunately) are just not going out and are avoiding close contacts with others (i.e., any crowded area) We’re currently recording a drop of 40% to 50% both in the store and the tearoom. We’ve adopted the sanitary ordinances that set a “safety perimeter” of one-meter minimum distance from others and have had to cancel all planned events and tea seminars,” writes a veteran shop owner who established his specialty tea business in 2008.

In China, a Kamen survey of 2,000 shop owners, those with ten shops or less, revealed that 75% of the stores closed during the epidemic. Closures were due to policy prohibitions (primarily in Hubei Province) and concerns about personnel safety as well as the absence of foot traffic.

Globally there were 98,000 confirmed cases and 3,347 deaths, including 148 in Italy. The death count in Hubei Province is 3,000, with 23,972 of the 67,466 confirmed cases still in the hospital.

Revenue, compared to the same period in the previous year, declined to zero at 65.9% of the shops surveyed. Business declined 50% to 80% at 19% of the shops. Asked to evaluate the loss, 65.93% of shop operators said the event was devastating, with 30.97% saying the impact is controllable. Only 3.1% reported minimal impact. The Chinese government has announced subsidies, low-interest loans, and relief from taxes for retailers in the vicinity of Wuhan.

Starbucks announced this week that 85% of its shops in China have reopened. In a letter to the U.S. Securities and Exchange Commission, Starbucks estimated losses of $430 million from the closure of half of its Chinese shops.

Morocco Hoards Chinese Tea

Fearful of the impact on shipments of green tea imports, Morocco is hoarding tea. The president of the Moroccan association of tea and coffee manufacturers (AMITC), Mohamed Astaib, announced that Morocco had imported enough tea to last six months as a preventive measure. Logistics is partly to blame as hundreds of thousands of containers stacked up at China’s 34 ports.

In an article published by the China Media Times Tea Weekly Yu Lu, vice president of the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal By-Products (CFNA) said that Morocco, China’s largest trading partner, implemented stringent standards for pesticide residue for 60 chemicals. As a result, sales decreased by 4.2%.

Moroccans consume 70,000 metric tons of tea annually, making it the 9th largest tea importer in the world.

London’s Fortnum & Mason Markets Children’s Herbals

The tea floor at Fortnum & Mason in London’s high street is stocked exclusively with tea sourced globally. In first for the company, it will now sell a non-caffeinated children’s tea in four flavors.

The Small & Wild brand, blended by two millennial-aged mothers, launched two years ago. The teas are ethically sourced, sugar-free blends of natural herbs and fruit.

The decision follows a U.K. consumer shift to tisanes, which are growing in popularity. Hardly stodgy, the fabled tea company reaped a windfall last year on sales of a bottled sparkling tea.

Teatime for Rampaging Vikings

Fans of the widely acclaimed television series Vikings gave a nod of understanding with word that researchers attribute the Viking’s barbarian behavior to a hallucinogenic herbal tea. Warriors high on a brew of stinking henbane amd alcohol experienced less pain, according to Karsten Fatur, an ethnobotanist at the University of Ljbuljana in Slovenia. Fatur speculates that ingesting this tea before battle led 9th century Norse Berserkergang “berserkers” to howl like beasts as they rushed wildly into battle wearing animal skins and little armor. Unchecked aggression, unpredictability, and dissociative effects, such as losing touch with reality, might have allowed them to kill indiscriminately without moral qualms, writes Fatur.

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.