STiR coffee and tea magazine

STiR coffee and tea 25 supplier to Russia in 2017 and 2018 but at the cost of small but continued price erosion. Russian imports in the first half of 2019 were buoyant but growth has been slipping, partly due to global trade and political uncertainties. As in the UK, the basic black tea that forms the core of the market and culture is shrinking and losing customers to other types of drink, including weight loss products. The main area of growth has been in tea bags, replacing plain loose tea. These com- mand a high price, often as much as three times for foreign brands such as Lipton and Sri Lanka's prestige label, Dilmah. Tea bag sales doubled between 1997 and 2002 but even today remain tiny in volume versus loose tea, which accounts for 85% of the $4 billion retail sales. Green tea is estimated to comprise under 10% and herbal teas 1%. The tea culture in Russia has included many unique innovations. It is intensely social and family- and home-centered. The samovar, for instance, was the center- piece in many households, brewing hot tea all day and providing a warm gathering place. Other innovations included iron cupholders, tea served with lemon and the addition of loose fruit, sweeteners, and greens to the heavy base tea. Overall, the Russian market is an attractive one because of its size, loyal customer base, and opportu- nity for innovation. Interna- tional joint ventures are growing fast. The tea bag market, a commodity segment in most high per capita tea consuming nations, com- mands decidedly non-com- modity price premiums and opens many branding oppor- tunities. Today, only 30% of imports are in packet form. UK Tea Premiumization Tea premiumization has become an overarching priority for sellers and producers across the globe. A Tetley Tea Report defines it in terms of consumer appeal: the willingness to trade up and pay more for a superior drink. As with many other analyses, it sees millennials as the key target and their preferences for variety, experimentation, health and ambience as key drivers of their choices, including coffee. The Tetley report admits that the very need for premiumization reflects a neglect of these factors. Commoditization has eroded several key markets: basic black tea sales in the UK and Russia have dropped substantially. Yields and quality of low-end farming have compounded financial losses and cutbacks in Assam, Kenya and Africa. Coffee shops greatly out- number tea service outlets in major urban centers. Premiumization is a very broad term that obscures the difference strategies Here are what appears to be the main thrusts: Leaf premiumization: This focuses on the grower, with Kenya's purple tea a noted instance of a new designer leaf. It includes the widespread efforts to move away from near-total reliance on com- modity green and black teas. Vietnam, Colombia, Kenya, and several African nations are adding premium crops: organic, clonals, and wild teas. While total sales may not be great, the margins are attrac- tive in an industry where cost pressures and price erosion are continuous. Wellness and lifestyle appeal: This lies behind the growth of green tea in expanding markets, where black tea remains over 80% of volumes. It extends to consumers' valuing the natural, organic and healthy, and their being open to supporting social issues of supplier relation- ships, authentication, and transparency, It has been simpler and faster for specialty tea brands like Bigelow, Numi, Harney & Sons, Tao of Tea, Mighty Leaf, and Republic of Tea to make this shift than for the mass market giants. That said, Lipton, Tetley, Dilmah, and Twinings are aggressively preimmunizing their range of products in this direction. Product innovation: Much of premiumization is aimed at attracting Asian millennials via variety, originality, and intersections with food and service. Bubble tea, cheese tea, matcha, kombucha, cold brew, and alcohol-infusions are not all new, but they are intend- edly different from the mainstream tea product inventory. Flavor innovation: The adoption of botanicals, improvements in blending technology, use of spices and fruits mark a true flavor revolution for tea, with turmeric, hibiscus, pea flower butterfly tea, Andean herbs, and fruits being infused into traditional green and black teas, rooibos, and even gin. Ambience-enhancement: Starbucks has become the dark force of the tea industry along with Britain's Costa Cof- fee. They offer a combination of varied and quality drinks served in an ambient setting. Tea has lagged badly, though it has a long tradition of fine individual tea houses and high tea services. Now, Chai Point and Chaayos in India, TWG in Singapore, and T2, based in Australia but now global, are setting new standards for tea salons, restaurants and bars. The customer, of course, decides what premiumization is and what it's worth. Unilever's Slave-Free Tea Unilever declared its tea supply chain to be slave-free following a vigorous public campaign by Traidcraft Exchange, a not-for-profit body promoting traceability. In September the con- glomerate identified its global tea suppliers, a list that spans 21 countries including China, India, Sri Lanka, and Bangla- desh. Unilever's executive v.p. for beverages, Mick Van Ettinger, was quoted as saying, "With transparency comes transformation." Globally manufacturers are seeking to eradicate slave-like working conditions. Modern slavery is defined as people "coerced into working through force or fraud at no pay beyond subsistence. All types of slavery – including sex trafficking, debt bondage, domestic servitude, and forced labor – rely on violence or the threat of violence." The UN estimates 25 million people to be "trapped in forced labor." The practice extends across manufacturing industries. The UN has set a goal to end modern-day slavery by 2030. The onus is on consumers to demand where the products they buy originate, by insisting produc- ers demonstrated their suppliers ensure acceptable working conditions.

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