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Defining Specialty Tea.

What is specialty tea in 2001? High-quality tea is now more a factor in retail marketing of specialty product. A few trends in "specialty" do use average- to below-average tea. The good news is that high-quality tea is being cultivated and sold in larger volumes than in previous years, however, the media is largely ignoring this progress.

From a marketing or revenue perspective, at least in the U.S., the definition of "specialty" tea includes whatever is new and profitable. For example, the chai category is still expanding, with the tea quality spanning inferior to excellent. Tea quality in some chai is imperceptible to most U.S. consumers, with heavy ingredients like saturated animal fat, sugar, and strong spices. Tea products that retail-price higher if labeled "specialty" will be marketed as specialty. The latest youth-oriented novelty tea, sometimes called bubble or "boba" tea, can combine, for example, thick chocolatey tapioca, milk, sugar and spice. This really violates no labeling laws if called "specialty" tea. Connoisseurs cringe.

Green tea is a very different category, although its relationship to "specialty" status is also ambiguous. In the U.S., green tea is expanding shelf space in supermarkets. If specialty is defined as "new" or "special," green tea fits that designation in the U.S. Every day, consumers are making their first-time supermarket purchase of green tea, a certainly healthful and probably positive experience. But this favorable consumer choice is usually not within traditional definitions of "specialty" tea.

Yet another new category of specialty tea involves "functional" or nutraceutical tea. This burgeoning category is not the same as herbal tea or "tisanes," although the public is easily confused. For example, a pure-tea functional product routinely contains both tea-extract-derived antioxidants and tea. Whatever the taste, vitamin-added or antioxidant-added teas are a growing market niche that is bringing in new consumers.

Celestial Seasonings has a line of "functional" tea that the parent company, Hain Celestial Group, plans as a profit center. These enhanced tea products are probably a profitable long-term category, considering the aging middle-class. One Celestial brand states in bold yellow, "NEW!" and under the "NEW!" proclamation is the phrase, "50% MORE ANTIOXIDANTS than ordinary tea." The ingredient listing is simple, "Tea and tea extract." This is a tea product, not an herbal. The side label reads, "Guaranteed to give you 50% more antioxidant power than ordinary tea!" On this same package, the word "power" appears three times, "nurture your good health" twice, "good health" is labeled five times and the organ "heart" gets a total of three mentions.

The Hain Celestial Group is run by Irwin D. Simon, by triune title -- chairman, president and chief executive officer. The vice chairman is Mo Siegal, founder of Celestial Seasonings, who returned to active management at Celestial's historical base about 1,500 miles away from Hain headquarters. Last June, Celestial's president and c.e.o resigned, followed two weeks later by five other senior executives.

Celestial retains a valuable brand name, a strongly loyal customer base, and one of the most extensive packaging ranges in the tea trade. Celestial recently streamlined warehousing, inventory and distribution, under orders from Hain, as reported by Prudential Securities analyst John McMillan, who stated for Reuters, "They (Hain) knew they were buying a company that had some excess inventory levels, but no one thought they would be this high."

Stash is another large company with a new line of specialty tea, in an innovative resealable pouch format. The pouch label reads, "Stash Premium loose leaf Tea." Their English Breakfast contains China, India and Ceylon only -- an interesting blend. English Breakfast blends also traditionally contain African, but far too often low quality, used as cheap filler or to provide an "exotic" locale on a label. And, for anyone wanting more bergamot, Stash introduces Double Bergamot Earl Grey.

Continuing this "extra-strength" motif is Super Irish Breakfast, described as "the 'espresso' of tea" and as a "robust blend of rich Assams, Ceylons and other premium teas." Stash's descriptions help to educate the public on tea-growing regions. Such regional details on widely-sold tea help promote the specialty market niche, however one defines the niche. Following more traditional specialty styles, Stash's new Full Leaf line has a Darjeeling blend and a single-estate Assam from trademarked Kopili.

Stash sells a separate, older line called Energy Tea, which is serves as a good example of a product that spans traditional tea typology. The label reads, "Energy Tea with Mate and Guarana," and the ingredients listing is informative: "100% Green tea, black tea, ginseng, yerba mate, rooibos and guarana." This superior blend is a tea-and-tisane hybrid, with a high caffeine content. The product is a unique combination of healthful substances (green tea and rooibos) with naturally caffeinated species (guarana and mate).

Stash, prominently displaying its Oregon, U.S. base, skillfully keeps away from the public eye its lack of autonomy and American control. Stash is a subsidiary of a foreign entity, reportedly wholly owned by one elderly individual in Japan. Celestial Seasonings similarly benefits from perpetuating its image of a free-standing company, prominently mentioning their bucolic Boulder, Colorado, headquarters on their packaging. In fact, the company is now actually run out of Uniondale, New York. Celestial's image as a self-standing enterprise is enshrined in its street address, Sleepytime Drive, referring to its less-pressured previous days. Boulder is trendy (my daughter lives there), but Sleepytime Drive is awake and anxious over New York cost cutting.

Other roads in the U.S. are named after tea businesses, a little-known fact that is a charming testimonial to the power and positive community-image of the tea business. The Greensboro, North Carolina, division of the British Twining company resides on, yes, Twining Road. Twining is now redesigning both its tins and cardboard boxes, in order to create a more unified, consistent brand image. Lipton, too, will introduce redesigned tea packaging later this year, one of the most significant U.S. brand image renovations this decade.

Specialty tea often connotes a region, such as Darjeeling or Ceylon, or a national heritage, often British. Bad tea can be made anywhere, however exotic or rare the origin. The two worst teas I have ever experienced were premium-priced from Nepal. For marketing purposes, any tea can be labeled to consumers as "specialty." One method used to confuse the retail buyer is labeling that accurately states the tea's rarity, even though the tea is truly bad. Rarity is quantifiable, but after five graduate courses in statistics, I still know of no method to quantitatively define "specialty."

More damaging to the market image of "specialty" than bad rare tea is the trend for mediocre tea packaged in nation-of-origin to mimic high-class specialty tea. Often, the packaging is balsa, a porous wood that allows humidity transfer far more easily than hardwood. The packaging paradoxically accelerates the deterioration of the bad tea. Even worse, the internal environment inside the factory where the tea is packaged is generally humid and buggy, with workers not wearing hygienic gloves or facemasks. I have witnessed up-close tuberculosis, a disease common in tea-growing regions, including Multi-Drug-Resistant (MDR) cases actively virulent.

Very high-quality tea can be made in large quantities under modern conditions, proven by Bombay Burmah Trading Corporation, in India, and New Vithanakanda, in Sri Lanka. N.B.H. Pilapitiya owns New Vithanakanda, producing a remarkable 1,152 tons of specialty tea. Pilapitiya combines business leadership in export globalization of high-quality tea with civic leadership as chairman of the Private Tea Factory Owners' Association. Sri Lankan factories are generally the most modern and well-maintained, which can meet German and Swiss expectations, among the most demanding markets. Denzil Soza, chairman and managing director of Needwood Emmag Ltd (NEL), maintains a focus on Europe, where Needwood is a well-known upscale brand name.

In terms of diversity of specialty product from Ceylon, MJF Group always deserves mention, along with the famous family trio of Merrill, Dilhan and Malik Fernando. MJF ranked #1 in bags for export in 2000. Other companies with a good combination of packaging, tea quality and large volume include Mabroc, Standard Trading, Imperial Teas and Tea Tang. The company with probably the most specialty products under one brand name is Mlesna, which states 1,600 tea items. Anselm B. Perera is Chairman and Managing Director of Mlesna. Perera also controls Euro-Scan Exports Ltd, which owns the successful e-mail address:

Sri Lanka's famous Kenilworth has a branding advantage because of the Britishness of the name. Kenilworth is also a heavyweight, producing just over 981 tons last year. These amounts in the KT range far outsize the typical estate yield from the world's most prestigious region, Darjeeling. Annualized Ceylon figures are recently verified under the Tea Bureau directorship of A. Hasitha De Alwis, probably the most respected governmental senior tea official in the world. A review of the data shows other weighty Ceylon specialty estates: Courtlodge, 607.2 tons, Pettiagala, 504 tons, Labookella, 602.44 tons, and Tommangong, 471.84 tons. Looking to the future beyond today's statistics, a sign of success in Ceylon's export globalization is the increasing interest from Japanese buyers in Ceylon specialty tea, such as Koslanda organic and St. Clair.

The longest-term perspective on specialty marketing brings news from Bhutan, with reports of a government-sponsored pilot project for fine tea in the Gedu region. Profit for many generations is probably attainable after about five years. Bhutan's infrastructure is nonexistent in most of the nation, but this pioneering project appears supportable. Gedu is situated between the capital, Thimphu, and the nation's primary border city, Phuentsoling. This corridor is the location of the National Highway, providing the required export route to Calcutta, which would re-export the tea. Calcutta has long served as Bhutan's vital hub, even for airmail.

Bhutan's agriculture minister is Lyonpo Kinzang Dorji. Earning hard "foreign" currency is almost certain if they proceed, perhaps with Indian agricultural advisors and military-engineering advisors for road, factory and drainage construction. Reports indicate tea laborers will need training in basic cultivation skills. The more uncertain variables include soil drainage and timing of rain. Reportedly, the project has the backing of elements of the royal family's female side, who hold immense influence because they are related by marriage to the absolute ruler, King Jigme Singye Wangchuck.

Back in the corporate West, authority systems are structured differently, but hierarchy of control is equally real. Celestial answers to Hain, Stash answers to Yamamoto, and Tazo answers to Starbucks. Tazo, winner of well-deserved design awards, appears headed for greater attention and shelf space from Starbucks. Tazo will bring out later this year a precedent-setting Full Leaf Tea Kit with Infuser Canister. The Full Leaf Tea Kit is a genuine breakthrough, allowing a new point-of-consumption method of tea brewing. The Infuser Canister is patented, trademarked and copyrighted.

The Tea Kit is a premium-priced item that provides convenience for the affluent and a novelty-item for the experimentally oriented. Steven Smith, founder of Tazo, retains influence over the tea world as creative director at Starbucks. Starbucks' senior vice president of New Ventures is Darren Huston, recently appointed to the board of NPower, which itself just announced a Microsoft partnership in its community charities.

The consequence of the past few years of mergers can improve premium tea marketing, because promotion money for specialty tea can come from the larger budgets of the mega-corporations.

The strategic benefit to the specialty trade occurs when big corporations decide their premium tea lines are profit centers and customer-loyalty creators. Tea is gaining greater exposure among the premium-beverage consuming public. The biggest player in the game, Unilever, just shot past 50-billion-dollars annual revenue (now $52 billion). Unilever, while devolving most of its brands, retains Lipton as a "core brand." The public will hear more from upscale Sir Thomas and the less prestigious mass-market Lipton teas, also made under superior quality-control. The big companies know advertising, and Unilever spends far over $100 million a year on tea publicity. The entire Darjeeling region has relatively very little money for consistent promotion.

In some of the world's largest markets, Lipton, is losing market-share, most notably among India's one-billion-plus consumers. Reuters reports at time of this writing that SSKI Securities continues to rank Hindustan Lever Ltd (HLL) as "under-perform." Depending on financial criteria for analysis, HLL is India's second or third largest corporation. The point is HLL can afford to, and they plan to, newly promote tea, necessary to keep other beverages from permanently winning stomach-share. Specialty tea's main competitor is not cheaper tea, but non-tea beverage, especially caffeinated, from colas to hot chocolate to coffee.

Tea earns a living for several million humans on planet earth, from Bhutan to Boston, from Bombay to Boulder. Specialty tea is the trade leader in pointing to the future. Value-added product will combine with precisely targeted promotional campaigns to keep tea the choice among the 21st century affluent. Individual specialty estates will become better publicized. This trend of branding more estates by name is visible today, but will proceed at a slow rate, hobbled by the producing regions' major economic problems.

Randy Altman, in addition to being a knowledgeable writer on the subject of tea, has advised the United Nations and other transnational organizations, and has held directorships and officerships at various non-profit corporations. He also holds several adjunct academic appointments.

Premium Teas from India & Beyond

Devan Shah started international Tea Importers/India Tea Importers in 1990. Shah started his career has a sampling boy with a teahouse in Nilgiris, India and has been involved in the industry for 17 years. He started by importing premium teas from India to the U.S. Today, they import teas from around the world and are know as International Tea Importers. Their growth can be attributed to the fact that they distribute as little as 2 lbs. to over 2,000 lbs. to their clients. They carry over 500 premium teas from all over the world with prices as low as US $1.00 a lb. to over US $250.00 a lb.

They also do their own flavoring and all of their flavored teas are done to order in the U.S. They use a variety of base teas from China STO 1265 to a fine Beverly Estate Ceylon OP. However, they do recommend using Nilgiri Teas for flavoring because they are neutral and have a strong cup character. Besides, these teas are high-grown and are of premium quality. Nilgiri Teas tend to have a higher price but many believe you get a better value when Nilgiris are used.

Korakundha/Chamraj Teas

The United Nilgiri Tea Estates Co. Ltd. is also known as the Chamraj Group and are owners of Chamraj, Korakundho, Welbeck and Kotada tea estates in the Nilgiris. These are some of the finest Nilgiri tea estates with some of the highest elevations. Chamraj group teas have been, for a long time, sought after in the European markets and are now available in the U.S. The Chamraj group as been appointed as the sole distributors far the U.S. market and they stock all of them at their facility in Montebello.

Korakundha tea estate is a feather in the cap for the Chamraj Group -- Korakundha is the first and the only organic Nilgiri tea estate, which is over 2,500 meters above sea level. It has the highest elevation of any of the Nilgiri tea estates. The flavor of Nilgiri teas is derived from their high elevation and is present throughout the year in varying degrees. Korakundha estate also has a water process decaf facility on the estate itself and hence is able to produce naturally decaffeinated black and green organic teas of all different grades.

Besides Korakundha, Burnside estate also has the same decaffeination facility and is able to provide decaffeinated black teas at a very competitive price.

The decaffeination facility at the estate makes them a leader in the area of decaffeination. There is no other organic or non-organic estate in the world that can claim to this leadership role in the tea industry.
COPYRIGHT 2001 Lockwood Trade Journal Co., Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Hain Celestial Group Inc., Universal Tea Co., Twining Crosfield and Company Ltd., Tazo Inc.
Publication:Tea & Coffee Trade Journal
Geographic Code:1USA
Date:Apr 20, 2001
Previous Article:The Wild Side of Organic & Fairtrade Teas.
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