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Japan's black tea market.

Japan has been a traditional green tea drinking nation for over 800 years and green tea is still a dominant part of people's daily lives, with a total annual consumption of approximately 90,000 tons. In addition to that figure is the consumption of China semi-fermented 'oolongcha' which has become more popular since 1980 because of its advertised health and dietary benefits. Black tea consumption in Japan started to increase from 1970 with the acceptance of teabags, and more recently (from around 1985) with RTD (ready-to-drink) teas in cans. All in all, Japanese total consumption of green, oolong, and black teas per capita per year in 1996 was estimated at 1,100 gm.

Japanese green tea is unfermented and produced by a process of steaming, unlike China green tea which is pan fried.

THE HISTORY OF BLACK TEA IN JAPAN

Being a green tea producing country, in 1874 the Meiji Government planned first to learn from Chinese tea experts and then to manufacture black tea, expecting it to be a major export item for Japan, alongside silk. Having heard of the great success of black Empire tea from India, three representative technical officers, including tea pioneer and planter Motokichi Tada, were sent to China and India for intensive tea studies in 1875. However, despite all the efforts and struggles that challenged the thousands of people involved, this national venture was not a success and the teas were never competitive against the black teas manufactured in other countries such as India, Ceylon, and Java. The project came to an end in 1971.

According to the Japanese Customs House, the first invoice of foreign black tea imported in bulk into Japan in the 1870s and 1880s was for the amount of 100 kg., but no further information is available. The tea was intended for use at social events with Europeans who had settled in Tokyo/Yokohama during that highly diplomatic period. At that time, black tea was considered a fashionable luxury item only for people in high society. Cafes opened in Tokyo during this period, but for some time there was no black tea on their menus. Then, new cafes in Osaka, Kobe, and Yokohama gradually started to include black tea on the menu, but it never became a very popular beverage for Japanese people.

After the 1895 war with China, Japanese nationalism intervened against the import of such luxury items as coffee, black tea, etc. Militarism followed, and the war with Russia began in 1904.

This was the period when afternoon tea became Britain's national habit, both at home and throughout the Empire, and large multiple companies in Japan started to deal in tea (mostly black) on a large scale. This was the start of an era of 'English Tea Packers.' In 1906, the famous Lipton's Yellow Label tins were imported into Japan by Meidiya, and the history of overseas branded teas started. Consumers of Lipton's teas in those days were mainly the Imperial households, members of fashionable high society, bankers, overseas traders, scholars, diplomatic officials, and people in similar positions. The teas were very expensive, and supply and importation were very limited.

In 1927, the first Japanese local branded black tea was launched. Mitsui Kocha, as it was called (later the name was changed to Nittoh), contained Formosa (Taiwan) black tea that the company had manufactured in Taiwan - part of Japanese territory at that time. Then in the 1930s, the black teas that appeared on the market were those of Lipton, Brooke Bond, Nittoh, Nippon (later Hinomaru), Morinaga, etc. But with the outbreak of World War II, the importation of overseas black teas was banned for a long time.

Even after the war, the importation of foreign black teas continued to be banned for quite some time, and only a limited import license was issued to specially appointed dealers. On the other hand, the manufacture of local black tea was encouraged by the government in order to earn foreign currencies from exports. However, in line with Japanese economic growth and the upsurge in the standard of living of people in general, more import licenses were granted year by year. Finally, the manufacture of black tea was stopped (producers turned from black to green tea), and the importation of black tea from overseas was liberalized in 1971.

In 1973, the estimated volume of black tea consumed in Japan was 8,000 tons (of which 60% was teabags and 40% loose tea). The teabag boom had started in 1965 along with the so-called 'Instant Foods and Drinks Boom' that was led by instant coffee, etc.

After 1978, the Japanese economy was said to have already reached its maximum growth, but economic expansion continued further. Women tended to go out of the home (for further education and work) and the demand for convenience foods and drinks grew continually. Ready-to-drink coffee and sports drinks (refreshing, iso-tonic drinks that often have a citrus flavor), oolong-cha, and Kocha (black tea) started to appear. American-style fast food shops, family restaurants, and CVSs (convenience stores that have replaced traditional grocery shops, sake-shops, etc.) flourished and changed traditional Japanese lifestyles, especially those of the younger generations, to a more convenient and westernized pattern. Japanese economic development reached its peak in 1988, when 90% of the population considered themselves to be middle class, but the so-called 'bubble' of continuous prosperity suddenly burst in 1991.

People's demands have now diversified, but the majority demand is for convenience, ready-to-eat, RTD items, although there is also a limited demand for gourmet foods and beverages. The black tea boom of the late 1980s may have been influenced by the English culture boom that took place in Japan and led to an interest in afternoon tea parties, gardening, etc. Hard-working Japanese people now set their sights on a more comfortable life at home, in the same way that British people do.

The Japanese food and drinks market has now become a vast, matured, diversified, sophisticated, and health conscious market, and looking to the future, tea - and especially black tea - are sure to play an important role in Japanese daily life.

CURRENT CONSUMPTION TRENDS

The total volume of black tea imported into Japan reached an all - time record of 17,834 tons in 1995, with an estimated total consumption for that year of 17,000 - an annual per capita consumption of 136.4 gms.

Total black tea consumption for [TABULAR DATA FOR FIGURE 1 OMITTED] 1996 was estimated as 'static' or 'slightly decreased,' due mainly to a sudden boom in cocoa/chocolate drinks from December 1995, when an influential television station broadcast a surprising special program on the subject of 'A secret medicine for health - cocoa.' For a while, women tended to consume cocoa (a drink that had been almost forgotten) instead of black tea, but once that boom was over, everything returned to normal and since then, imports of black tea have increased (see Figure 1).

The key factor in the higher level of black tea consumption in Japan (figures have doubled over the last 20 years) is the appearance of RTD black tea in cans, PET (plastic or polyethylene) bottles, tetra packs of both hot and cold tea from numerous vending machines, CVSs, and supermarkets, etc. These products are life savers for anyone who feels thirsty and needs refreshment out of the home.

Initially, only lemon tea was available, but as a result of fierce competition and technical developments and innovations over the past 10 years, there are now many different varieties available, including Darjeeling, lemon tea, milk tea, straight tea, etc. And the current demand, since September 1995, is for healthier and higher-class Royal Milk Tea (a milk-rich tea with both a sweet and mellow taste), non-sugar tea, and non-calorie tea in various sizes of container (290 gm., 250 gm., 500 gm, 1,000 gm.).

The brand leader of this sector is Kirin-beverage (brewers). Following Kirin are the Cola-Japan Group, Lipton, Suntory (brewers), Asahi (brewers), Pokka, Ohtsuka, UCC Ueshima Coffee, and Daido-drinco. The major reasons for their widespread success are wider distribution and availability, heavy advertising supported by easily readable and fancy names, continued improvement and innovation in both quality and packaging that appeal strongly to the younger generation.

In the instant tea sector, a premix instant tea powder is available (normally called tea-mix) and contains a large amount of sugar or sweeteners and is packed in cans (270 gm., 420 gm., 800 gm., and 900 gm.) or in portion-sachets. Over the past 10 years, the most popular of the three available flavors (lemon, milk, and apple) has been lemon, although now milk is becoming very popular. The brand leader is MEITOH (Meitoh Sangyo), followed by Nittoh (Mitsui Norin), Lipton, and Hills (Nippon Hills).

Nikkan Keiazai Tsushin-sha newspaper estimates consumption as follows:

LITTLE CHANGE IN CONVENTIONAL TEAS

The total volume of loose tea imported for the manufacture of these products in 1995 was 8,700 tons (total 780,000 kiloliters, wholesale value [yen]16,000 million), and with final figures for 1996 expected to increase to 9,000 tons (825,000 kiloliters, wholesale value [yen]18,000 million). This means that 53% of the total volume of black tea imported would have been used for RTD black tea production.

The total consumption of conventional black tea in 1995 was 8,300 tons - an all-time record (up 12% from 1994), of which 6,300 tons was teabags and 2,000 tons loose tea (the total wholesale value was estimated at 35 billion Yen). This was achieved by buoyant sales of 100 teabag packs in the cut-throat competition between the leading brands.
Year Amount Value

1990 7,000 tons 700 million Yen
1993 5,800 tons 600 million Yen
1995 7,500 tons 8,500 million Yen
1996 A slight decline

There is no pure black instant tea available.




The estimated breakdown of this 8,300 tons is as follows: 6,500 tons for daily consumption; 800 tons for the gift market (mostly specialty teas in both tins and teabags); and 1,200 tons for the catering industry.

With the sudden boom in cocoa consumption in 1996, total tea consumption of conventional black tea is estimated at 8,000 tons, of which 6,000 tons was tea bags (down 5%) and 2,000 tons was loose tea (no big change).

The brand leader of this sector has been Lipton (combined with TJ Lipton's), followed by Nittoh (Mitsui Norin), Brooke Bond (Japan Black Tea), Twining (Kataoka Bussan).

Although the volume of specialty teas is still small, demand is evident, and they are expected to continue to draw attention and interest from those people who are always hunting for something better and/or unusual. Current growth in department stores and tea boutiques is steadily increasing and there is an increase in the number of well-to-do people who are key supporters of such products as organic teas and other specialty products.

The brand leader of this specialty tea sector is Twining (Kataoka Bussan), followed by other British brands such as Lipton, Brooke Bond, Melrose, (Miyako Shokuhin), Ridgways (Osaka Hamaya Coffee), and newcomers such as Wedgwood (Nisshoku) and Royal Doulton/Minton (Kyoei Seicha) are doing well.

Among what we call boutique brands, Fortnum and Mason (Kataoka Bussan) is the leader, followed by Harrods, Fauchon, Royal Copenhagen, Hediard, Mariage Freres, and some 25 other overseas names. The Japanese local boutique brands (such as Afternoon Tea Room, Teej, Indian Tea, Musica, Takano, L'Epicier and some other 10 brands) are also doing better each year.

(Figures and estimates are based on the trade newspapers Nikkan Keizai Tsushin-sha and Shokuryou Jyokai Shimbun-sha.)
Females:

12-14 85.4% (a remarkable increase from 1994 to 1996)
15-17 89.8% (almost saturated)
18-24 89.3% (sharply increased since 1990)
25-39 85.4% (steadily increasing since 1990)
40-50 76.3% (steadily increasing since 1987)
60+ 54.8% (increasing since 1990)

Males:

12-14 60.3% (decreasing since 1987 [greater than] sport-drinks, etc.)
15-17 74.1% (no remarkable change since 1980)
18-24 82.5% (steadily increasing since 1983)
25-39 70.8% (no remarkable change since 1985)
40-59 58.8% (no remarkable changes)
60+ 49.7% (no remarkable changes)




THE POSITIONING OF BLACK TEA IN JAPAN

According to the regular national research recently conducted by the All Japan Coffee Association (July 1997), black tea is ranked sixth in a list of 11 soft beverages. The preferred soft beverage for the 93% of those questioned is "tea excluding oolong-cha" - which means green tea in the main, and includes barley tea (mugi-cha, a roasted barley drink for both hot and cold consumption, and an economical substitute for green tea, especially in the hot summer season) and some oriental herbal drinks.

Coffee (both roast and ground and instant) comes second on the list, with 78.4%, followed by milk (74.3%), Chinese oolong-cha (71.4%), fruit juices (70.8%), and black tea (Kocha) of all sorts (69.8%). Other items included in the research were sport-drinks (55.9%), carbonated drinks other than Cola (54.2%), RTD-coffee in cans (53.5%), Cola (47.5%), and functional beverages, another category of vitamin and/or mineral enriched drinks, (37%).

As a whole, the consumption of oolong-cha (mainly RTD-oolong), black tea, sport-drinks, carbonated drinks other than cola is increasing. The research results show that the core of consumers of black tea are females aged between 15 and 24 years, and the percentage of "those who like black tea, divided by sex and age" is as follows:

The research also shows that females between the ages of 12 and 17 (junior and senior high school girls) prefer tea (green tea and barley tea), excluding oolong-cha and black tea. Of these, consumption of black tea is increasing fastest - in 1992, the figure was 25.9%, in 1994, it had risen to 35.6%, and in 1996, it had almost doubled in five years to 44.5%.

Females aged between 18 and 24 years prefer "teas of all kinds," with oolong-cha, green tea, and barley tea at the top of the list, and black tea in third place showing remarkable, constant growth since 1983, putting it ahead of milk, coffee, fruit juices, and others. In 1987, black tea consumption for this group was 23.9% of all beverages; in 1996, it had risen to 41.6% - thus almost doubling in 10 years.

Females aged between 25-39 years prefer green tea and barley tea, coffee, milk, and oolong-cha, However, from 1983 to 1996, black tea consumption by this group has increased - from 12.8% in 1983 to 27.7% in 1996.

Penetration of black tea into the market is increasing for all occasions - breakfast, lunch, supper, the entertainment of guests, breaks and family gatherings, at work, and during study. However, females are taking tea on more occasions, such as entertaining guests, breaks, and family gatherings.

The research also shows that the overall image of black tea is that it "has a good flavor/aroma," "can relax you," "has an acceptable taste," is "pleasant to drink," and "can feel great." All these elements contribute to the success of popular feminine drinks.

JAPANESE ATTITUDES TO TEA AND HEALTH

There is, so far, no useful data available on consumers' awareness and attitudes on the subject of tea and health. However, it may safely be said that the majority of Japanese consumers now know of the health benefits and medicinal effects of green tea that have been reported over the past 10 years, and they also recognize that those benefits can also be associated with other teas, including black tea.

A number of studies and experiments centering on the health benefits of green tea are continuing, and the results are reported and publicized from time to time. Being a green tea drinking nation, Japanese consumers now take some form of green tea or another in their daily life (the annual per capita green tea consumption is about 650 gm.). As this subject has been so scientific and technical, the majority of Japanese consumers obviously cannot understand all the implications. However, the rediscovery of the health benefits of teas is such an important subject at the moment that the Japanese are surprised to hear so much about, for example, the prevention of cancer and stroke, the promotion of oral health, etc., and so are becoming more and more confident in drinking more tea. Although there are no figures to prove this at the moment, consumption of all sorts of teas is sure to go on increasing.

BLACK TEA RELATED ACTIVITIES

To increase awareness and interest in black tea and its consumption, the Japan Tea Association offers opportunities for interested women to attend regular training programs in Tokyo in order to become 'Tea Instructors' - a fashionable and unique title. Since 1990, the total number of qualified tea instructors has grown to 302 (junior 290, senior 12). These instructors go out to consumer groups to give classes in the following: basic knowledge about tea; practical lessons in how to make a good cup of tea; practical lessons in how to devise and enjoy tea menu variations; and practical lessons in how to arrange and enjoy tea parties.

To become a senior tea instructor, an instructor must have given at least 100 seminars or classes over the five year period after becoming a junior instructor and passing the examination.

Numerous tea seminars are being held throughout Japan by the Japan Tea Association and other bodies such as NHK, Asahi, Yomiuri, Mainichi, Sankei-Culture Centers, Visa Members Club, Diners Club, and various cooking schools or similar, and these are attended by the tea instructors and or other 'me-too' lecturers.

Tea packers, tea boutiques, tea shops, hotels, department stores, and supermarkets also sponsor fashionable and female-oriented tea seminars. Amongst them are the unique activities of Japan Black Tea Co. in Tokyo. They established their own antenna shop, Brooke Bond House, at Aoyama in 1994, and opened their second shop at Ginza in February 1997. These shops are equipped with a tea room, tea boutique, tea culture school, and tea gallery (only at Aoyama). So far, classes have been run for a total of about 10,000 ladies who now enjoy the added benefit of receiving regular tea news, discount cards, etc.

In a link-up with the mass media, including NHK-TV, the Japan Tea Association has been promoting publications and general publicity material on black tea.

PROMOTIONAL ACTIVITIES

Younger people today are always looking for something new, and at the moment this includes black tea - especially for young women. Black tea has become fashionable and interesting, and many young ladies have found out about tea and its cultural and historical attractions from fashionable friends, by receiving tea-related gifts or by reading fashion magazines. The next step is to find and visit specialized tea shops where they can experience something new (unusual RTD black teas, etc.), then they start buying books on tea, and finally, they go shopping to buy tea for themselves.

For the past 10 years, the Japan Tea Association has been recommending selected specialist tea shops which the Association recognizes as the best and to whom they have awarded special shields and stickers. As of June this year, there are a total of 157 'Best Recommended Tea Shops' throughout Japan. However, some of these are chains, and the estimated total is actually more than 400.

A unique promotional campaign has recently been undertaken by Kataoka Bussan in Tokyo. This is a 'must buy' type of promotion, and winning consumers will take part in a tea seminar at 11 famous hotels around Japan. To enter they have to send in the barcodes from packages of Twinings loose tea and tea bags. First prize will be a Tea Seminar for 500 couples, second prize will be an original tea party cake-stand, and third prize will be an original teapot with a tea cozy.

Another unique promotion, activity was carried out by Mitsui Norin in Tokyo. The company linked with the Savoy Hotel in London through Hotel Okura in Tokyo and invited consumers of Nittoh Kocha (black tea) to the Savoy London Afternoon Tea.

As with the above, each tea packer organizes promotional campaigns from time to time. However, it is the trend for taking 'English Afternoon Tea' in which Japanese consumers are most interested.

David Araki worked for 37 years in the marketing of tea for Brooke Bond and Lipton. He is now a freelance tea consultant, and is adviser to the Japan Tea Association. He travels abroad extensively and has published a number of books and magazine articles on black tea in Japan.
COPYRIGHT 1997 Lockwood Trade Journal Co., Inc.
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Copyright 1997 Gale, Cengage Learning. All rights reserved.

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Author:Araki, David
Publication:Tea & Coffee Trade Journal
Date:Nov 1, 1997
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