Need to Know

Tea industry news for the week of May 18.

  • Boba Tea Tops Beverage Delivery Lists
  • East Africa Update
  • Turkish Tea Harvest
  • Robotic Waitstaff Serves Tea
  • Nepal Asks India to Resume Tea Imports

Boba Tea Tops Unique Food Orders

In March YELP! marketers decided to find out what food and beverages people across the country were being delivered right now! Data scientists tracked how frequently a dish is ordered in each state relative to its popularity in other states.

“When we first looked at the results, pizza delivery reigned supreme, which is no surprise since it delivers well and it’s perfect for a family night in. However, we dug into the data to find the most uniquely popular delivery order in every state*, and that’s when things got interesting,” writes YELP!

Winners include a run on crayfish in Texas, poke bowls in Indiana, pad thai in Washington, sushi in South Carolina and naan in Wyoming but guess what topped the list of delivery orders in California last week? How about Michigan? and Hawaii?

Boba tea.

“What we found was a mix of delectable dishes and drinks that tell a story of how American taste buds differ from state to state and region to region,” according to the company.

Click here to see the full list.

*Samuel Hansen at Yelp! employed a natural language processing technique called term frequency-inverse document frequency (TF-IDF), which quantifies how frequently a dish is ordered in a state relative to its popularity in other states.

East Africa Update

Rwanda’s tea sector, largely spared from lockdowns, saw a marked increase in production during the first quarter. The harvest totaled 9,000 metric tons generating $27.6 million in revenue, which is up by 15% from the same period in 2019.

But there are still formidable challenges getting that tea to market.

East African tea growers truck tea destined for export to the auction at Mombasa. Kenya’s borders remain open during the coronavirus pandemic, but Tanzania and Kenya required each driver be tested before crossing.

The result offers a lesson in what can go wrong. A shortage of testing supplies and the sheer number of truckers led to delays that extended from hours, to days, to weeks. Few of those who were tested showed symptoms and none were quarantined while they awaited results. Unable to afford hotel rooms they slept in or under their trucks, cooked together and played sports to kill time. Some wore masks but many did not and very few practiced social distancing. During the two weeks ending last week 150 truckers crossing into Kenya at Namanga tested positive and were eventually ordered back across the border but by then they had infected hundreds of local merchants and fellow truck drivers.

The Washington Post reports that beginning this week, only drivers that have tested negative prior to arrival at the border will be permitted to cross. Uganda has since discovered dozens of infected truck drivers crossing from Kenya. Zambia closed its border to Tanzanian truckers. Kenya is the largest tea producer in the region at approximately 500 million kilograms followed by Uganda which harvests 60 million kilos annually; Tanzania at 35 million, Rwanda at 30 million and Burundi at 9 million kilos per year.

At the Mombasa auction Rwanda growers earned an average $2.68 per kilogram of tea last year, followed by Kenya growers who received an average $2.59, Burundi at $2.21 per kilo, Tanzania $1.36, and Uganda $1.21. The overall average price was $2 per kilo.

Kenya currently has 1,214 confirmed COVID-19 cases, according to Johns Hopkins Coronavirus Resource Center. There have been 51 deaths. Tanzania is reported to have 509 confirmed cases with 21 deaths. Rwanda has 327 confirmed cases with no deaths reported as of the second week of May.

Holiday Travel Restrictions Eased for Turkish Tea Growers

Climate dictates that Turkish tea be harvested in three flushes, unlike Africa, Sri Lanka, and Southern India where plucking continues year-round. Tea is grown there on sparsely populate hills facing the Black Sea where growers depend on seasonal labor.

This year’s spring flush was interrupted by a March 28 lockdown to prevent spread of the coronavirus. Fatma Genc, a researcher at Istanbul’s Marmara University, told The National, that 50,000 tea farmers were unable to prepare their fields for the harvest. Ramadan, which began April 23, complicated timing for Muslims.

“The failure to harvest this year will make it difficult to meet even domestic demand,” said Genc told the newspaper. “Tea prices, which have been hiked twice in a row this year, will increase even more if the producers cannot go to the field.”

This week farm owners and laborers from across the country were finally able to travel to northern Turkey on trips extending through the three-day Eid al-Fitr festival that follows the Muslim holy month of Ramadan. Seasonal labor from neighboring Georgia and Azerbaijan continue to face border restrictions leading to some creative solutions. The city of Findikli in Rize hired locals to harvest around half of the 30,000 metric tons produced nearby in an agreement that spans six months. Workers harvest for 10 days and while the leaves for the next flush are growing they complete municipal projects.

In Rize Province, the heart of the growing region, 16,000 laborers were given permission to travel between fields and home. The Provincial General Hygiene Council required testing at least one member of each family, about 6,000 in all. Screenings continue.

The provinces of Rize, Trabzon, Artvin and Giresun produce around 260,000 metric tons of tea annually, most of it sold domestically. Turks consume an average 3.5 kilos of tea a year, more than any other country. While much of the tea is imported, a significant shortfall is expected due to rising costs and the fact that much of the domestic tea went unpicked. Caykur, the state-owned producer that supplies 60% of the country’s tea is running a deficit and facing additional costs due to the pandemic. Caykur purchases tea from 200,000 independent farmers.

Turkey has 157,814 confirmed COVID-19 cases with 4,369 deaths, making it ninth on the list of countries most impacted by the pandemic, according to the Johns Hopkins Coronavirus Resource Center.

Tea garden in Turkey’s Rize Province, along the Black Sea.

Robotic Waitstaff Serves Tea

Tearoom Robot Reduces Contact with Waitstaff Easing Customer Concerns

The Tea Terrace, a small London-based chain of tea rooms that was forced to close during the March outbreak intends to open this July with the assistance of family-friendly robots.

Forbes magazine reports that managing director Ehab Shouly found while surveying customers that fear of crowding and contamination by waitstaff were their greatest concerns. Spacing tables was a relatively simple adjustment but a previous experiment with automated service at the company’s Surrey tearoom proved prescient. Last July The Tea Terrace became the first restaurant in the UK and Europe to introduce a robotic waitress, named Theresa.

Theresa is summoned by guests using controls at the table. The robot responds to voice commands. Shouly has also introduced functional assistants such as Captain Tom, a bot that delivers up to four trays each with teapot, teaware, and food.

Modifications are underway to expand robotic services to all four tearooms which serve 200 to 300 guests per day on weekends.

Nepal Asks India to Resume Imports

Tea growers in Nepal are seeking the resumption of exports to India, according to Nepal’s Ministry of Commerce and Supplies.

India stopped importing tea the week of May 6 and has not responded to Nepali officials. Periodically India has shown its displeasure with Nepal by refusing entry of tea and other exports such as palm oil.

Purna Kumar Karki, president of Jhapa Tea Entrepreneurs Association, told My Republica that Indian authorities impose non-tariff barriers on Nepali products from time to time “for no reason.”

Sanjay Bansal, chairman of the Darjeeling Tea Association (DTA), recently appealed to West Bengal Chief Secretary Rajiva Sinha to regulate the sale of Nepal tea to save the Darjeeling Tea Industry. Darjeeling growers maintain that Nepal undercuts their unique tea which is protected with a global Geographical Indication certifying its authenticity.

Bansal told The Statesman Nepal did not impose a lockdown and growers there have been producing at a high rate since February. “These teas are ready and are in the process of being shipped to India through the Indo-Nepal land borders in West Bengal to be sold in the local markets by taking advantage of the absence of Darjeeling Tea in the market due to the lockdown restrictions,” said Bansal.

In a related matter, Federation of Chambers of Commerce & Industry, North Bengal (FOCIN), has requested Chief Minister Mamata Banerjee to allow small wholesale and retail shop owners to open their establishments.

Need to Know (Sept. 9, 2013)

What you need to know to start the week.

  • Unilever buys T2, Australia’s $50 million market leading tea retailer.

Retail News

T2 Logo

T2 Logo

COLLINGWOOD, Victoria – Unilever kicked off their retail shop game with a Lipton store 15 years ago but later fumbled the ball in Belgium and stumbled with Bru World Cafes in India. Last week’s surprise acquisition of T2, Australia’s top specialty tea retailer, puts Unilever’s retail team back in the game.

Unilever has much to learn from T2, a premium tea retailer founded in 1996 by Maryanne Shearer in Fitzroy, Australia. The company currently operates 40 stores, mainly in Melbourne. T2 reported 12-month sales of $52.5 million through June of this year. The tea company offers a range of blended teas found in specialty grocery as well as many leading cafes, restaurants and hotels in Australia and nearby Asian countries. The company, which employs 300, opened 11 retail stores in the past year including its first in New Zealand and “has been growing double-digit and has significant potential,” according to the Unilever press release announcing the deal Friday, Sept. 6. The purchase price was not disclosed.

T2's Chappel Street Shop

T2’s Chapel Street Shop

The acquisition “will allow us to bring the benefits of scale and access to new markets to the T2 business and for both businesses to share tea category expertise,” said Unilever’s President of Refreshment Kevin Havelock.

“We also like the fit with T2, bringing a fast-growing, premium tea business to complement our portfolio that we can leverage like we have done with other acquisitions in other categories (e.g. TRESemme that came with the Alberto Culver acquisition and which we have quickly launched in new countries like Brazil and Indonesia),” added Trevor Gorin, Unilever Head of Global Media Relations.

“We are delighted that we have found a home for T2 that has such a depth of knowledge of tea and has pioneered sustainability in the industry,” said T2 Managing Director Shearer. “Both I and the T2 team are looking forward to working alongside new colleagues in Unilever’s tea business to realize the full potential of the business we have spent the last 17 years building.”

Dynamic Business reported that “Shearer’s teas enjoy cult-status amongst connoisseurs and modern drinkers alike, and she’s built a booming retail business at a time when many are folding… using her product development and visual merchandising skills (Shearer) created a retail experience Australians hadn’t seen before.”

TEABIZ-T2MaryanneShearer_Tasting3_200px

CEO Maryanne Shearer

Shearer, 50, who has twin boys and a 12-year-old daughter, is recognized as one of Australia’s top entrepreneurs. She operated a homeware company prior to founding T2 and worked in the fashion and interior design industry early in her career.

“Maryanne Shearer has created a whole new retail category and built a powerful brand in her T2 business,” said Janet Holmes à Court, chair of the Australian judging panel that awarded Shearer the 2012 Veuve Clicquot Business Woman Award.

“What was the hardest part about establishing T2?” Dynamic Business asked her in 2012.

“In the beginning it was convincing everyone that a retail tea concept was a viable business idea, then once we were trading and the idea took off, it was understanding the importance of a healthy business and finding the balance between left and right brain priorities,” she answered.

T2 Retail Store

T2 Retail Store

Shearer clearly gets it. T2’s teaware selection is functional with vibrant eye-catching design. Her first shop featured daily in-store tastings, open canisters displayed on tables and staff trained to encourage customers to smell, touch and compare teas. The shops are a model of what is unfolding in the United States and a tested platform for Lipton to expand globally.

While the company is smaller than either the 100-store DAVIDsTEA headquartered in Montreal, Canada or the 300-store Teavana, T2 similarly pioneered the winning retail concept in its home market and is now Australia’s leader in specialty tea.

Blends like Strawberries and Cream (which retails for $31 for 250 grams) and Citrus Punch ($12.80/100 g), Organic Chai ($12.40/100 g) and orthodox teas like Iron Goddess of Mercy ($45/100 g) are marketed at prices familiar to Teavana or DAVIDsTEA customers. Stores feature a tea wall, offer samples and tastings as well as more formal personalized training for their best customers.

The hip three-tiered loyalty program rewards 25 credits after $500 in purchases. Points are worth $1 each and redeemable in-store and online. T2 customers are invited to the Secret Tea Society after buying $2,500 in goods, a threshold that earns private tea training and “a multitude of niceties.”

T2 Tea

Selection of T2 Teas

Last November Starbucks paid $620 million for Teavana, a publicly traded company with margins superior to the coffee giant. Acquiring T2 (regardless of price) is a potential game-changer for Unilever which is not known for its loose leaf offerings and must expand its range to include premium tea brands. The T2 brand will add retail dollars to an already lucrative Australian portfolio that includes 125-year-old Bushells, a national brand founded in Queensland.

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

According to Euromonitor International, the Lipton and Bushells brands led Australia’s tea market in 2012 with 31% off-trade value share.

T2 Bottled Teas

T2 Bottled Teas

“Despite gaining in actual sales terms, Unilever’s value share slipped one percentage point from 2011, as the instant tea category expanded beyond Lipton Chai Latte and Bushells, resulting in the company’s off-trade value share dropping from 66% in 2011 to 58% in 2012 within instant tea despite gains in actual sales terms.

Details on the market can be found in the April 2013 report: Tea in Australia.

The purchase brings to mind Lipton’s two-year experiment in tea retail in Old Town Pasadena, Calif. The Lipton Tea House opened in 1997 with 52 kinds of loose leaf teas unavailable in other channels. The storefront’s light wood and chrome interior resembled Starbucks coffee houses. Patrons could order scones and a tea latte − made from tea, milk, cinnamon and other spices.

“The idea is to show consumers how interesting and diverse tea can be,” Gasper Ferraro, then-director of finance for Lipton’s food service division, told London-based Design Week in February 1999.

The venture could not meet revenue targets and was closed in 1999. Unilever’s Bru World Café a small chain of coffee shops that opened in July 2011 in Mumbai, now with three locations, continues to struggle. These attempts at store front retail and a European retail concept that failed in Belgium take on new relevance as Starbucks tweaks the already-successful Teavana model, with plans to expand into urban and suburban lounges in America as well as overseas.

Rumors this time last year predicted Unilever would open retail tea shops in Britain in 2013. Will Unilever instead supercharge T2’s already ambitious expansion plans?

Tea is a strategically important category for Unilever Australia, said Unilever Australasia chairman, Clive Stiff, “Our Lipton and Bushells brands are two of Australia’s oldest and best loved tea brands … We know tea drinkers are increasingly looking for new and diverse tea flavors, so we are delighted to be bringing T2’s premium and exciting range into the fold. T2 is a great Australian success story – a story that we now intend to continue with Unilever.”

T2 Tea Wall

T2 Tea Wall

The company website notes: “T2 has unfurled and blossomed over the last 17 years, and now sells enough tea per month to make 8 million cups!”

Australia has a population of 22.7 million who share a British tea habit that once rivaled the motherland. Per capita tea consumption was 2.67 kilos in 1964 but dropped by half to 1.3 kilos in 1985 as coffee became popular and soda sales rose to 73.10 liters per person. Consumption at half a kilo still lags the 1.9 kilos per capita consumed in the U.K., according to statistics compiled by the Food and Agriculture Organization of the UN.

Tea is making a strong showing in the market with a health and wellness message that resonates with young people, according to Shearer who credits travel for inspiring her creativity.

“Creating a wonderful taste experience with teas from all over the world gives T2 the opportunity to educate, excite and surprise T2’s customers,” she writes. “The customer experience is always our priority and that’s why we love what we do.”

Online the company states that: “Tea lies at the very heart of the T2 philosophy. Sourced from all over the globe, there are over 200 teas in our ever-expanding range, embracing all varieties. From the fanciful flavors and scents of herbal and fruit tisanes, to the revered tender white teas, the herbaceous greens, to the strong and heady popular blacks, the T2 tea range is multifaceted and full of adventure.”

The acquisition is subject to customary closing conditions, according to the release. Learn more.

Export News

HAMILTON, New Zealand – Zealong Tea Company continues in business despite reports of its demise, according to its owners.

The miscommunication stems from the arrival of bulldozers at the estate’s original farm on the northern edge of Hamilton. The 27-acre parcel was sold to residential developers following complaints from neighbors that the company used noisy helicopters to combat frost on the fragile leaves of its oolong stock.

Spokeswoman Gigi Crawford told NZ Farmer that the Gordonton house and Discover Tea experience remain in operation. Ten years ago when planted the farm was well removed from housing. It was subsequently zoned for residential use. Neighbors in the vicinity complained at the use of helicopters to circulate air and prevent frost damage.

The company which exports premium organic oolong and other teas to Asia and Europe will focus its attention on developing lands near Gordonton, investing up to $5 million in a new visitor center and leaf drying plant, according to Crawford.

Health

HOBART, Tasmania – A doctoral student at the Menzies Research Institute has demonstrated green tea prevents rats from getting diabetes.

Helena Ng, a doctoral candidate at the Institute, told The Daily Telegraph that her discovery in rats was made possible by a new test that detects early signs of diabetes. Her work adds to studies that suggest components in green tea may prevent, but not cure diabetes.

Rats fed an unhealthy diet that normally led to the early stages of diabetes avoided the condition when the diet included concentrated green tea, the equivalent of 200 cups a day.

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