Tea producers told to warm up their global image

COLOMBO: Faced with falling prices and competition from coffee growers, global tea producers are being stirred into action to boost their image in order to regain consumers in the cut-throat beverage market.

Tea, the world’s most consumed drink behind water, is seen as an “old ladies’ drink” and is being abandoned by youngsters who pay top dollar for trendy coffees such as mochas and frothy cappuccinos, industry officials say.

“Producing countries need to make tea more fashionable, by highlighting its health benefits, put out products like tea-laced biscuits, cakes, (also) perhaps a line of merchandise,” said US Tea Association president Joe Simrany.

Big producers such as Sri Lanka, Kenya and India have failed to add more value to the brew, leaving tea trailing behind coffee in the 70-billion-dollar global hot drinks market, according to a recent industry meeting here. Simrany said 85 percent of the tea annually sold in America is consumed as iced tea.

“Iced tea drinks are bringing vitality to the drink, showing youngsters the world over that tea isn’t your grandma’s beverage anymore,” said Pearl Dexter, editor of the US-based Tea A Magazine.

Americans still prefer coffee, but attitudes are changing with convenience stores stocking up on a range of ready-to-drink and premium gourmet teas.

But more needs to be done in terms of branding and raising quality standards, Simrany said.

Tea barons in India, the world’s second biggest producer behind China, have begun to replace their ageing tea gardens with high-yielding clones to boost production and improve quality.

“As producers, we need to take control of our destiny and take value addition more seriously,” said Chirinjib Singh Bedi, vice chairman of India’s Tea Research Institute.

In Sri Lanka and Kenya, the cost of tea production sometimes is more than the market price.

“Energy costs are soaring and wages of pluckers are also rising, which makes it expensive to produce tea,” said Peter Mbadi, the Kenyan Tea Development Authority’s deputy manager, during the international tea meeting last month.

Kenya, the world’s largest tea exporter, has seen the average auction price fall by about 22 percent in the past year, Mbadi said.

“Over the last two decades auction prices have moved between 1.50 dollars and 2.50 dollars per kilo (2.2 pounds). Prices we get have not kept pace with production costs, leaving very little to share with workers,” he said.

Unilever, which buys 300,000 tonnes of tea annually, believes a glut of tea in the world market has depressed prices.

“We would be very happy if tea is sold at four dollars for a kilo. But the reality is that 60 per cent of our consumers want tea at a lower price,” said David Smyth, Unilever’s operations director.

Despite concerns over the image of tea, more than a billion cups are drunk around the world daily and the humble cuppa is getting a facelift in some quarters.

Exotic varieties of teas ranging from delicate white tea made from young buds to gyokuro, a rare green tea from Japan, have elevated the commodity, with prices starting from five dollars upwards per kilo.

Some tea promoters have taken the health benefits to a different level, with a US store, Elaine’s Tea Shoppe, doing brisk business selling a line of white tea that claims to have anti-skin-ageing properties.

Sri Lanka, which began growing tea in 1860s, has been trying to make the drink fashionable, with local firms such as Dilmah, Stassens, Akbar Brothers and Mlesna selling speciality teas in Europe, Australia and the Gulf.

Tea in Sri Lanka grows from lush green mountain tops to lands closer to the seashore. The leaf’s flavour, colour and strength changes according to the elevation, climate and soil.

“The variety we offer helps us get a better price, especially with the longer-leaf teas grown in lower elevations,” said Anil Cooke, senior vice president of Sri Lanka’s Asia Siyaka Commodities.

Dilmah, one of the world’s top tea brands, has positioned the humble black tea in a class similar to wine. An average tea bag has blends from several countries, but Dilmah says its teas are from a single source.

The vintage sales pitch plus a string of 65 “tea cafes,” aptly named “T Bar,” dotted throughout Europe and as far afield as Kazakhstan and the United Arab Emirates, have earned the family-owned company big bucks.

And the most important factor in the perfect cuppa? Water, said Dilmah’s marketing director Dilhan Fernando.

“Water makes a big difference. The same tea could taste differently if the water comes from the tap or a flowing river,” Fernando said.

AFP