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Organic tea represents the best and the worst of our business. The organic segment of the global tea trade has great potential for profit and planetary progress, but remains confusing. Tea deceptively marketed as "organic" competes for public attention with authentic organic product. Genuine organic tea deserves a substantial premium. Yet, the organic tea sector exhibits a unique problem: confusion about basic product identity. The organic market is experiencing a boom, pushing more tea executives to finally seek an understanding of organic tea.

The tea trade is accustomed to competing companies questioning the quality of others' tea. In any competitive business, companies will tout their own superiority. But with organic marketing, questions arise beyond quality, to basic truth in labeling. This is more complex than the infamous false claims of certain coffee origins, like Hawaii. With tea, labeling a product "organic" defines an entire cultivation and manufacturing process, not merely location of origin.

Organically grown tea involves hundreds of special factors; its complexity can lead the average tea executive to be suspicious of the organic market segment. A frequent complaint concerns the proliferation of "certifying" agencies that attempt to document authenticity of organic labeling claims. Most organic companies hire at least one certifying agency, which serves as both lab technician and umpire, attesting to chemical composition and cultivation procedure.

One limitation of certification, which few in the industry realize, is that organically grown tea can become non-organic after manufacture. The most value-added packaging can cause post-manufacture problems. Tea Promoters Private Ltd, a pioneer in organic tea and high-class packaging, surmounts this problem by re-engineering their premium chestlets to retain the tea's organic attributes.

Tea Promoters' quality control system highlights the importance of attention to every detail when working with organic tea. After completion of growing, harvesting, manufacturing and packaging, Tea Promoters remains vigilant, running expensive lab tests of the packaged product. Tea Promoters discovered that the glue first used to attach chestlets' wood sides could leach a slightly unwanted chemical into the tea inside, This painstaking effort shows that a valid "organic" label on a retail package is truly value-added.

Up until now, defining "organic" in the trades tends to be a subjective process. Do not confuse "organic" with "natural," which merely refers to a tea bush's existence as a plant, a living botanical species. "Organic" involves scientific and legal definitions too technical for non-experts. Technical issues include numerous scary-sounding chemical compounds and arcane, mind-numbing regulations of various nations, a few states (like California), and countless organizations, ranging in size from the European Union to small non-profit associations.

"Organic" is most often (and too simplistically) defined in the negative, as a list of chemicals NOT used, with this such as pesticide. One problem approach is the blossoming bug population. Insects will munch tea leaves to death without some form of prevention. I have held injured tea bushes in my hands, leaves sickened by green flies and tea mosquitoes. Organically compatible insect predator prevention is required, which in real-life tea pest control includes one very humorous secret substance. The unpublicized organic pest repellent: cow urine. Yep, cow pee (diluted with water). Allegedly, the cowurine-water mixture evaporates after a while. Organic tea drinkers are generally well-educated, affluent, and health-conscious. This demographic boasts about knowing what they put into their bodies. However, virtually no organic tea company advertises just how they actually keep the bugs away! Various plant oils, like neem, are also used for pest control, but spraying diluted cow urine is far from rare.

Two non-insect factors of concern are fertilization and weeds. Rather harsh chemicals are usually used in non-organic fertilizing and weeding (the term for the latter is "herbicide"). Once again, our bovine friend comes in handy, as cow manure is the fertilizer of choice. Cows on organic estates, I imagine, enjoy high self-esteem. No "body image" problem for these hefty gals, even their poop and pee is deemed worthy.

Hundreds of bio-environmental factors pertain to organic production. A tea label can state, "no insecticide & herbicide residue," but may still contain fungicide, miticide, rodenticide, genetic engineering, and even radioactive contamination (a continuing problem downwind of Chernobyl, former Soviet Union). The technical distinctions get very nit-picky, very quickly. The global tea trade needs the answer to the much broader question: what is organic's future in the marketplace?

The clearest trend is the increasing acreage devoted to organic tea. This new allocation of farmland involves financial risk. Converting an active non-organic tea plantation to organic takes a minimum of three years. The conversion requires years of costly expenditures without offsetting income. Three years is needed for the field to "grow out" the impurities of previous artificial spraying and cultivation. Faced with this time-frame, organic growers handle challenging long-term planning variables, involving labor-intensive, complex cultivation. Even the cheapest non-organic mass-mechanized agriculture is an uncertain, uncontrollable art. Organic tea producers are among the most courageous, far-seeing planners in the tea industry.

Adherence to the three-year waiting period is a good sign that any tea product labeled organic is truly organic. A prime example of such strict adherence is Watawala Plantations Ltd, which plans to meet increasing demand by converting three Ceylon estates, Lonach, Lippakelle and Wigton, to organic growth. Watawala expects these plantations to reach market in the year 2001. SKS Exports and Tata, two powerful holding companies, are allied with Watawala, providing extra capability for global expansion. Another pair of formidable corporations, John Keells Holdings and Richard Pieris Ltd, strengthens Koslanda Organic Tea Garden, a Maskeliya Plantations Group estate in Sri Lanka. RPK Management Services handles Koslanda, known by the slogan "Healthy Goodness."

Lanka Organics Ltd attains remarkable diversification within the organic specialty. LOL exports globally, with products ranging from tea, to cashew nuts, to spices, including tea-friendly cinnamon. LOL owns three organic tea estates, encompassing the well-known GreenField tea factory. KARDOZ, a North American tea distributor and marketing consultant based in Connecticut, recently announced a Lanka Organics packaging redesign, which will further attract public attention to organic tea. Kuma Palani, KARDOZ president, says that he offers organic tea with a price advantage, by linking high-quantity direct orders with internet systems, circumventing auction house costs.

Organic tea is big business. Bombay Burmah Trading Corporation Ltd states their status is "world's largest single producer of organic tea." BBTC's Oothu estate in South India is probably the only organic field with annual yield reaching 1,000,000 KG. Befitting the role of titanic producer, BBTC employs an impressively large publicity brochure (11" by 11"), with a well-focused, succinct seven-word cover label, "Tea, naturally!" & "Organic tea from Bombay Burmah." BBTC is a multi-national corporation, producing a total of 8,000,000 KG annually. Nusli N. Wadia's Wadia Group controls BBTC and the dynastic giant, Bombay Dyeing & Manufacturing Co., a multi-national entity founded in 1879.

Oothu estate is part of BBTC's subsidiary Singampatti Group. The executive director, in charge of all plantations, is M. C. Muthanna, with D. J. Daravala the second-in-command as general manager, and C. K. Jayaram the group manager. Additional key executives, planning now for market expansion, are Indrajit Chatterjee, export advisor, and Jashwant Purohit, marketing manager. BBTC owns 17 Indian estates, plus more in Tanzania and Indonesia. The managing director is K. R. V. Parameshwar, under chairman Wadia.

Oothu estate operates a modern factory exclusively for organic manufacture, built relatively recently, in 1992. Publicity material describes the estate as "surrounded by vast untouched forests...virtually untouched by contamination." One of Oothu's distributors is Manik Jayakumar, head of Qtrade International Corp., in California. Qtrade's slogan is, "Tea Professionals & Organic Tea Specialists." Jayakumar, a 35-year veteran with experience in India, Indonesia, Sri Lanka and the U.S., is developing the Pilot Cattle Project, along with Lanka Organics and other insightful companies. The Pilot Cattle Project first teaches tea laborers basic planning skills and cow husbandry, then gradually bestows upon them ownership of the animal for whom they care.

The largest corporations, like Bombay Burmah, gain advantage from a precisely multi-tiered hierarchical corporate structure, allowing for specialized senior staff. Specialized positions can include export, technology, strategic planning and global marketing. Wadia himself holds a position rare in any nation, that of media celebrity "tycoon." He is a scion of 18th-century shipbuilders and the grandson of Pakistan's founder, but resides in India, successfully bridging the Muslim and Hindu business and political establishments.

Tea industry leaders, like Wadia, gain clout inside governments, pushing for regulatory reform, such as tariff, export and subsidy. Organic growers attract influence as well-capitalized employers who generate foreign currency. The organic tea sector is learning to organize and lobby, and now has a strengthening trade organization, the Indian Bio Organic Tea Association, founded and fueled by Sanjay Bansal. Bansal recently received a prestigious independent three-year appointment to the federal Tea Board of India.

IBOTA can provide institutional leadership to the organic tea business. At the time of this writing, the chairmanship of IBOTA is rotating, possibly to Goodricke director J. C. Pande. Goodricke is another multi-national corporation with many tea estates. Ajay Jain, general manager & vice president, reports that Goodricke's organic estate managers are not given the authority to buy artificial chemicals that violate standards. This specialized internal oversight, at the senior-management level, fosters good quality control. Goodricke further benefits from large size by favorable economy-of-scale processing, with multiple estates manufacturing at the Monteviot factory, which is under Goodricke subsidiary Tiru Tea Ltd.

Goodricke bought three estates in 1985, during the tumultuous "Darjeeling Agitation" (a typically Indian uphemism). These estates, abandoned since the 1970s, were considered de facto organic because of the long fallow period. In 1998, yet another Goodricke subsidiary, Dooteriah & Kalej Valley T. E. Ltd, began organic production. Today, looking to expand both market territory and vertical integration, Goodricke is considering a new organic sales zone outside Germany and Japan. The potential expansion zone, according to one plan, would establish the first Goodricke branded organic line in North America.

Tea companies that own organic plantations in more than a single region, but within one nation, are the next size down from the multi-national corporations. The Lohia Group and Tea Promoters Ltd are within this intermediate size/diversity level, both owning organic estates in Assam and Darjeeling. The Lohia Group controls Chamong, which holds an export company, a flagship tea factory and various estates. The Lohia family is now training its sixth generation for the tea business, a long stable line of leadership in a nation with frequent radical political transitions. Chamong, too, is expanding organic production, currently converting one additional estate, Tumsong, to organic method.

"Tumsong" refers to a Hindu Goddess, who is honored with a temple on the estate. Temples on tea estates serve many important functions, all unknown to the tea-drinking Western consumers. For tea laborers, temples provide solace, pride and a sense of community identity. A few tea companies spend fortunes on their estate-based temples, constructing significant ethno-religious landmarks. The Birla conglomerate, whose Jay Shree & Industries subsidiary owns 19 estates in 5 regions, is probably the most notable temple builder, earning respect, gratitude and prestige. Chamong's family leader, Ashok K. Lohia, is a profoundly genuine spiritual visionary, a rare trait anywhere, especially among top executives in a fiercely competitive business arena.

Tea Promoters markets about 70 different packaging styles, probably the most diverse of any organic grower. Their Connoisseur's Cup, labeled "Special Selection Darjeeling Green Tea," is an assortment with six wood chestlets fitted inside a larger wood box.

Connoisseur's Cup epitomizes high-class value-added packaging, wonderful for the gift market. Tea Promoters also sells a smaller organic assortment, Tea Bouquet, with the slogan, "A Variety of Indian Tea." Mammothly impressive is their 1,000 gram Tiger Hill wood box, containing "first and second flush blend" from their Seeyok estate. Binod K. Mohan, director of Tea Promoters, reports another success with a newly reformulated trans-regional single-nation organic blend, now mixed as 70% Assam, and 30% Darjeeling.

Blending can promote additional consumer use for organic tea. Tea Promoters claims they are "the largest exporter out of India for packaged organic teas." Tea Promoters U.S. representative states that the Indian Ministry of Commerce subsidizes some export-oriented promotional costs of the company, earned in recognition of corporate achievement. In general, the Sri Lankan government seems the most determined to support organic expansion, with close involvement at the ministerial level.

A champion of the early development of organic tea is Makaibari, a widely-known brand name. Makaibari helped pioneer the organically related cultivation method called biodynamic. Biodynamic is, remarkably, more labor-intensive than organic. Biodynamic is as much a lifestyle as a farming method. The Ambootia Group, a global marketing innovator in biodynamic/organic tea, recently won government approval for a hydroelectric system upgrade. Ambootia shows peerless commitment to long-term development of the systems and methods best designed for sustainable growth in both the profit and bio-environmental realms. Such long-term infra-structural investment by tea companies is crucial for success in the modern era of export globalization, with some nations' tea industries showing signs of falling behind.

Tea Tang, in Sri Lanka, retails organic tea domestically to the affluent market, including Colombo Airport's Duty Free shop, a fine venue for the premium gift buyer. Tea Tang ships most of its organic tea in bulk to the U.K. and Japan. The big growers often prefer selling to bulk buyers, especially when this relegates packaging costs to the next stage in the distribution chain. HVA Lanka, another influential Ceylon tea grower, has an organic policy that buffers the high costs. HVA Lanka arranges to produce this expensive tea type after receipt of a suitable special wholesale order, linking production to purchase.

Production of organic tea is certainly increasing. Demand is rising, too. The aging middle class loves indulging its twin obsessions: good health and prestige consumption. Organic tea appeals to both these desires. The middle-class demand is further pushed by sophisticated premium retailers moving more organic product. Twinings expects profit from its program to begin re-exporting organic blend out of the U.K. Twinings' strategic planning and marketing capabilities are among the best in the business, and their push for broader organic market territory involves teabags in new packaging. And Tazo, owned by Starbucks, is introducing a line of organic tea. Tazo's latest organic blends explore new expressions for the tea type, including a green/black mixture called "Om" and a Makaibari/Selimbong mixture called "Darjeeling."

Celestial Seasonings boosts public awareness of organic with two brochures, skillfully titled, "8 Great Reasons to 'Go Organic'" and "Good for you. Good for the planet." Bombay Burmah is launching in Europe their own branded organic packets, from Oothu. The Republic of Tea, this August, hired for a full-time slot Stuart Gold, previously the consultant who helped start their organic line. Tea Promoters recently developed new manufacturing styles, a rare accomplishment. Tea Promoters also markets flavored organic, including an assortment, "Flavoured Tea Bouquet." Tea labeled organic is now, for the first time ever, spanning the entire stylistic spectrum of our industry.

Various trends are converging. Deceptive marketing (with or without certification) of non-organic as organic will continue. The real stuff's profit-making potential will also continue. Tea industry executives have a right to ask questions. While organic tea is not necessarily better quality tea, the product attains a unique nobility and is usually an excellent beverage. Consistently, organic does produce environmental and economic benefits.

The financial significance is great. Organic tea is inherently a value-added type of tea, targeted to the most powerful buying demographic in world history, the well-educated middle class. Most of this permanent middle class lives outside the producing nations, a crucial opportunity for tea growers to prevail in the modern condition of export globalization. Saeed M. Kidwai, managing director of Tata Tea Ltd, sees good export potential in organic tea. Surjeet S. Ahuja, the most influential civil-service officer in the world of tea officialdom, also anticipates organic tea improving the trade's export sector. Organic tea is the most export-oriented tea type on earth, and will become an increasing source of profoundly needed hard "foreign" currency for the plantation nations.

The entire tea trade receives a boost from organic, by promoting public awareness of tea's versatility as a fine drink. For the wiser executives, the long-term trend looks bright. The careful planners, the well-capitalized and the innate leaders, these are the executives who will realize organic tea's profitability.

Randy Altman has advised the United Nations and other transnational organizations, and has held directorships and offerships at various non-profit corporations. He also holds several adjunct academic appointments.
COPYRIGHT 1999 Lockwood Trade Journal Co., Inc.
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Author:ALTMAN, RANDY
Publication:Tea & Coffee Trade Journal
Geographic Code:1USA
Date:Dec 1, 1999
Words:2748
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