SFCVB photo by Kerrick James

WTN continues Contributing Editor Lindsey Goodwin’s roundtable discussion with leaders in the San Francisco-area tea business, begun Dec. 2 (for Part One, click here). In this installment, participants ruminate on the global economy’s effect on the tea trade and Americans' taste and education level relative to the rest of the world.

Participating in the discussion are Roy Fong, co-founder of Imperial Tea Court, Jesse Jacobs, owner of Samovar Tea Lounge, Jill Portman, co-founder of Mighty Leaf Tea, Winnie Yu, founder of Teance, and Chongbin Zheng, co-founder of Red & Green Company.

World Tea News: What are the national trends in tea?

Chongbin Zheng, Red & Green Company

Zheng: I think that all areas (of the U.S.) are really accepting tea. Lower-end supermarkets to specialty stores from the Midwest down to Florida are all upgrading their teas. Companies like Mighty Leaf are competing for The Republic of Tea accounts in locations where the standard used to be Celestial Seasonings. It’s definitely upgrading. Likewise, it was really hard to introduce high-end teas into restaurants, but now there is a certain percentage that are willing to pick teas that are $40 or $50 a pound. Western restaurants – French, Italian – are getting much more serious about tea.

Portman: I think demand is coastal, but it’s spreading into the rest of the United States. Trends in tea and food tend to begin on the coasts, which is why we moved from Chicago to San Francisco to start our tea business. There’s more of a discerning, highly-educated consumer relative to tea products, and inquisitive, demanding palates lead to a thirst for better quality.

Fong: Tea consumption in the U.S. is still nothing. I think tea will probably be as important as olive oil, but it’s hard to imagine tea ever replacing coffee. Tea is the most popular beverage in the world, but Americans have such short attention spans. I don’t expect it to be the dominant power, but I do expect it to grow.

Yu: I’m encouraged by the fact that we’re reaching into markets where you wouldn’t think you’d have access, like the Midwest and Deep South, where people are very excited about tea and the tea lifestyle.

WTN: How have national and international sales changed since the economic downturn began?

Jill Portman, Mighty Leaf Tea

Portman: We were growing strong through February and March. Our clients (for the ML premium tea line) are restaurants, cruise ships and hotels throughout the world, so we’re seeing reduced volume in our current clients, but we’re picking up more clients. Our retail growth has been very strong nationally and internationally because people are looking for sensory ways to enjoy themselves at home instead of going out. We are striving for strong two-digit growth this year. Tea is going to continue to have higher demand to counter all this tremendous fear and stress over the next year, plus as a result of what’s around us.

Zheng: I don’t feel a major impact. Some customers have reduced orders somewhat compared to last year, not because they’re selling less, but because they are reducing their inventory to have more cash on hand. I think the tea industry will only see moderate downturn.

Fong: My order numbers are up, but the order sizes are smaller. Things aren’t so bad that people are ready to go back to lower grades of tea. We have this very exceptional Dragonwell once a year. We sold 14 pounds at $600 a pound. We still sold out in three weeks and have a waiting list. If you do your job right, people will look for the easy comfort of tea.

WTN: Do you see any macro trends with the tea industry and the economy?

Winnie Yu, Teance

Yu: The macro trend I see is global. I just came back from Asia, and a couple of things are going on there. The cost of tea has gone up tremendously because of higher labor costs, but also because a higher standard of living has increased local demand for quality teas. It makes it much more difficult to buy these teas, especially since the dollar has declined. Meanwhile, Americans are tightening their belts and not buying as much. It’s kind of a double whammy.

Fong: That’s definitely true, but it has happened before, and it will probably happen again. I can sell Dragonwell for more in China than I could ever sell it for here. Whatever the price is, there’s somebody willing to pay it. You don’t see that here. This is why you have to be long-term partners with the people who produce the tea for you. Sometimes you make more. Sometimes they make more.

Portman: It’s costing us more to access high quality teas in India, Sri Lanka and China, but it is such a relatively inexpensive product that we haven’t had much trouble. It’s more that the dollar has gone down, not that we can’t get what we want.

Fong: Last year, you couldn’t buy green puer, and now you can’t give it away. I’m buying more puer than I ever did now. Economic situations come and go. All the pressure will just force everybody to do a better job.

WTN: Do you think tea culture in the Bay Area will influence the rest of the world?

Roy Fong, Imperial Tea Court

Portman: I don’t think so. Some of the countries that are becoming dominant in the world – Russia, India, China – have tea imbedded in their cultures. They’ve been enjoying it more and longer than we have. We’ve created unique blends with characteristics that we enjoy. We can impart an American sensibility on them, but at the core, tea is such an everyday part of their lives.

Zheng: The tea markets are changing around the world. In China, there are divided regions. In Shanghai, Hangzhou and Suzhou, they only drink local teas like Dragonwell and Pi Lo Chun. In Fujian they drink oolong. In Beijing they only drink jasmine teas. Now they are more open to puer because of marketing, but there are pockets, like the Yellow Mountain area, where there’s Yellow Mountain Maofeng, but there are people who have their own backyard tea, and that’s all they drink. They don’t even know Maofeng exists! Here, people ask a lot of questions that are more professional than what people ask there. I can see that interest spreading indirectly from San Francisco through tea suppliers to other international cities, like Dubai. Already, buyers in Dubai know all the Chinese teas. They ask very specific questions about years and plantations. They’re very professional. It’s amazing.

Jesse Jacobs, Samovar Tea Lounge

Fong: On the West Coast, sometimes you can get the real thing better than at the source. I wouldn’t be surprised if people from China started to come here to learn tea. Here, tea is seen with an outsider perspective. It’s like a blank piece of paper, so you don’t have a preconceived idea of tea, and it allows you to think further outside the box. I hope that maybe, eventually, the torch of the tea tradition can spread here. I am looking for someplace to grow tea nearby. 

Jacobs: I would love to see high-quality American tea on the market. They’re growing tea in South Carolina and Hawaii.

Fong: I’d love to grow it in the Bay Area. Maybe with the economy the way it is, I can afford the real estate.