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Northern Tea offers private label services.

Northern Tea offers private label services

When Northern Tea Company Limited's founders, Jim Belford and Jim Mountain, selected a logo for their company two years ago they wanted to depart from the traditional image that many tea companies typically portray. Their choice? A beaver enjoying a cup of tea on a tree stump.

"You couldn't get much more Canadian than that," said Mountain, vice-president of what has become, in two short years, one of Canada's largest private label producer of herbal, flavored and specialty teas.

At first it was planned that the distinctive trademark would grace the company's own line of teas. "Instead, we made the decision to blend and pack solely for the trade," said company president Belford, adding, "We will never have a retail product on the shelves competing with our customers, and that makes us unique in the Canadian tea industry."

The company currently operates out of two facilities. Head office, which specializes in co-packing black tea, is in the Toronto suburb of Mississauga, Ontario. A branch operation in Longeuil, Quebec, just outside of Montreal, produces exclusively herbal and flavored herbal teas, as well as flavored black teas.

When Mountain, a 30-year veteran of the tea business teamed up with businessman Belford, they literally started from the ground up. "I rebuilt and installed several D&W Rotodex top loading tea bagging machines myself," said Mountain.

These D & Ws, which have a capacity of 500 tea bags per minute, turn out quantities of 30, 60, 72, 144 and 250-bag packages for more than 50 retail and foodservice customers in Canada, western New York state, Trinidad and several other West Indian islands. "We have full tagging capability," said Mountain, "Although it seems that tags are still more popular in the U.S. than in Canada."

Northern Tea's Mississauga operation also manufactures institutional-size teabags in quarter gallon, half gallon, one gallon and two gallon sizes. "We use a Rovema machine, which is really a coffee packager which we have adapted to this specialized use," said Mountain.

Mountain, who started in the tea business in 1959 with the Canadian subsidiary of the Scottish firm of James Finlay & Company, personally oversees the blending of all black teas to meet customers' needs. "We have a lab in our Mississauga plant, as well as two 1,000 lb. blenders," Mountain noted.

Belford has also had extensive experience in the foodservice industry with Rose & LaFlamme and McNair Foods, two established Canadian firms. But, he is the first to admit, his primary responsibility at Northern Tea is ensuring the sound fiscal management of the company. "Putting together the deals, arranging financing, opening up markets and installing proper systems and procedures are a major part of any commodities business," said Belford, "I'm also learning the tea business at the feet of the experts. We're extremely fortunate to have great depth and expertise in people like Jim Mountain and Mike Berridge, our Quebec-based vice president operations."

Berridge's experience as a tea taster and blender closely parallels that of Mountain's. He has been in the tea business in Canada for over 25 years, and has traveled extensively throughout all the tea-producing nations.

Although many industry analysts maintain that the black tea market is flat, Mountain disputes that claim. "There is an awful lot of offshore product coming into the country," he observed, adding, "As a co-packer, we believe that there is still vast potential for the market. Our ability to be flexible, innovative and to provide unparalleled services to our customers has helped our Mississauga plant to grow from shipping 40,000 lbs. every six months, to well over seven digits in the space of just two years.

"We have also found," he continued, "a growing market in supplying private label tea for coffee producers, who have begun to recognize that tea not only rounds out their lines, but is a high margin product for their customers."

Northern Tea Company's fortuitous acquisition of Quebec-based specialty tea packer Cominso Inc. earlier this year gave the company a window on the second large market in Canada, as well as an entree into the fast-growing flavored tea and herbal tea markets.

"Cominso had completed a deal in principle with Celestial Seasonings in late 1989 to sell them its entire operations," said Belford. "Unfortunately for Celestial Seasonings, but fortunately for us, the deal fell through."

"Cominso's operations have been smoothly integrated into Northern Tea," said Berridge, "And their addition has made the whole company stronger. It is truly a case of the whole now being much stronger than the sum of its parts.

"We really have four market segments now at Northern Tea: traditional black tea, traditional herbal teas and flavored black and herbal teas," he continued. "Black tea still leads over classic herbal teas, but there is slower growth. Herbal teas are number two, followed by the fast-growing flavored teas and flavored herbal teas. There is tremendous growth potential in the last three categories."

Berridge observed, "There is a particular challenge in maintaining consistency in the blending of herbal teas, because of the problems associated with stabilizing the tastes and densities of ingredients."

That challenge has been largely met, he noted, through technology. "Northern Tea has invested heavily in state-of-the-art equipment," said Belford, "The company currently employs IMA tea bagging machines in Longeuil. They are the industry standard, and, with some slight modifications, are particularly suited for packaging herbal teas. We're planning to add the next generation of IMA machines, which have a capacity of 2,000 bags per minute, to our Mississauga facility shortly."

Berridge noted that the herbal teas are usually packaged in 20-bag boxes. "Consumption patterns are slightly different for herbal teas," he said, "When people try herbal teas, they prefer slightly smaller quantities. That's simply because they do not wish to maintain a large stock of a herbal tea until they are confident as to what types they prefer."

Berridge likens the blending process to painting, with flavors and aromas as the materials instead of colors. "We use only the crystal/agglomerated flavors in our teas, as opposed to the sprays or oils favored by many European producers," said Berridge, "The costs are greater - up to $600 per kilogram for some flavors - but we feel the results speak for themself. Sprays and oils are more aromatic, but their flavors dissipate over time."

Although Cominso's name and operations have been absorbed by Northern Tea, the company brought a strong heritage and a solid customer-base to the table. "The company was founded by my father when he came to Canada from Belgium in 1948," said Jean Hrab, Northern Tea's Montreal-based director of sales. "At the time of its purchase by Northern Tea, Cominso was, and remains, the largest herb importer in Canada."

"Northern Tea's Longeuil plant now does 90% of the custom herbal tea manufacturing in Canada," said Berridge, adding, "We move over 300 metric tons of herbs annually, and have developed more than 150 original recipes."

Berridge noted that the general trend towards fitness and health has helped produce 20% annual growth in the herbal tea market in North America. "In Europe," he noted, "the growth is even more marked. In Germany alone, they drink more herbal tea than black tea. A prime objective is to help our customers compete with the European imports, and we feel we are well-positioned to do so."

Belford, Mountain and Berridge are proud of the fact that Northern Tea has achieved such rapid growth and industry acceptance in a relatively short time. "I would credit most of our success to Jim's and Mike's knowledge, contracts and stature in the tea industry," said Belford, "Combined with our desire to provide the best quality products and the highest degree of service in the business."

PHOTO : Northern Tea is the largest importer of herbs in Canada and has developed over 150 recipes for herbal teas. Here, Mike Berridge, vice-president operations, blends some samples in the company's Quebec lab.

PHOTO : Jim Belford, president (left), and Jim Mountain, vice-president of Northern Tea Co. Ltd. in front of the company's Mississauga, Ontario head office.

PHOTO : At right, IMA tea bagging machines have been modified to package herbal teas in the Quebec facility. Jim Belford, president (left) and Jean Hrab, director of sales, examine various flavors at Northern Tea's Quebec lab. The company uses crystal/agglomerated flavors in its flavored teas. Crystals retain flavor better than sprays or oils.
COPYRIGHT 1990 Lockwood Trade Journal Co., Inc.
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Publication:Tea & Coffee Trade Journal
Date:Aug 1, 1990
Previous Article:UK tea trade holds first-ever convention.
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