STiR coffee and tea magazine

STiR coffee and tea 27 Unlike the teas of Africa, India, Sri Lanka, Japan, and China, when Argentine tea cools, the brewed result is brightly colored and crystal clear. Argentina's No- vember through May subtropical grow- ing season is a competitive advantage as it ensures fresh tea at a time when tea plants across the northern hemisphere lay dormant. Declining Value Argentine tea volume and value peaked in 2017, fell precipitously in 2020 due to the pandemic, and continues to decline. Trade with buyers in some countries has declined 20%, 40%, and even 60% since 2019. Argentina is the most compelling ex- ample of how origins that conform to the demands of destination markets can shape their supply chains to prosper in every conceivable way—until the market does an about-face. Unfortunately, as health-conscious consumers shun sweetened, artificially flavored iced tea, the lucrative iced tea sector is transforming, and Argentina's tea growers are downscaling expectations and output for the first time in 70 years. According to IBIS World, revenue generated in 2024 from US manufac- turers blending and packaging tea for iced tea was $1.3 billion. However, rev- enue has declined at a combined average growth rate of negative 7% for the previ- ous five years. Refrigerated teas are bottled hot and contain no preservatives or added colors. These products are crucial to Argentina and depend on the rich taste of tea leaves, which retain their health benefits. Consumers today prefer colorful, flavorful, and lightly sweetened, healthful tea. Can Argentina meet the demands of the changing US market? Dependence on the US Argentina's dependence on the US for exports and price volatility are cause for great concern. The Argentine government banned all imported tea in 1951 and encouraged the largest yerba mate growers to begin planting tea in 1952 with the US market in mind. Commercial growers experiencing a volatile economy were eager to earn foreign currency by exporting bulk black tea. Supplier Roberto Swier writes "Our almost exclusivity with the US market makes us very vulnerable." Swier now supplies Martin Baer in Germany. The leaves he produces According to The Food Institute, iced tea is stealing the spotlight from soda. The Bev50 2024 survey indicates that iced tea—both sweetened and un- sweetened—has jumped from the seventh most popular drink to the third most popular. US consumers drink 3 billion gallons of iced tea annually. The Tea Associa- tion of the USA estimates that between 75% and 80% of tea consumed in the US is iced. Mordor Intelligence estimated the market at $55.2 billion in 2024 and projects revenue to reach $74.3 billion by 2029, growing at a CAGR (com- bined annual growth rate) of 4.83%. Mintel estimates the RTD segment alone at $10.25 billion. Mary Mathes, director of data insights at Alpha-Diver, told The Food Institute. "Our data suggest this could indeed threaten CSDs [carbonated soft drinks], which dropped to No. 6 in this year's ranking. We included five tea brands in our study this year, all of which rate in the top 25," she said. Major soft-drink makers like PepsiCo and Coca-Cola saw tea's potential long ago, introducing bottled versions that generate $1 billion in sales under the Lip- Iced Tea Surpasses Soda By Dan Bolton Argentina needs to diversify export destinations in order to survive fluctuating market demands. Argentina Tea Export Destinations 2023 $53,253,000 | 44,656 MT | Unit value $1.19 per kilo 60.000 40,000 20,000 0 Source: ITC Trade Map List of top ten tea importing countries by value and volume 2023. HSC 0902 Tea, whether flavored or not United States Poland Chile Germany Exported value, USD thousand $1,930,000 | 1,442 MT | Unit value $1.34 per kilo $1,089,000 | 1,413 MT | Unit value $0.77 per kilo $715,000 | 466 MT | Unit value $1.53 per kilo ton, Pure Leaf, and Gold Peak brands. Low alcohol Twisted Tea will sell 33.1 million cases in 2024, dominating the hard tea category and generating $452 million in sales.

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