OAKLAND, Calif.
U.S. Fair Trade Certified tea rebounded with strong 38 percent growth in 2010 driven by a combination of increased commitments by early adopters such as Honest Tea and newcomers that included 300-year-old Twinings.
“To date, 7.3 million pounds of Fair Trade Certified tea has been traded into the United States since 2001, the majority of which is also certified organic,” according to Stacy Geagan Wagner, director of marketing and public relations for Oakland, Calif.-based Fair Trade USA.
“Both organic and conventional Fair Trade teas had great years in 2010, and organic teas represented approximately 80 percent of imports,” says Wagner on the release of the Fair Trade certifier’s annual almanac. Fair Trade USA is the third-party certifier of more than 9,500 products in the United States offered by more than 700 industry partners at more than 60,000 retail locations.
The Organic Trade Association’s 2011 Organic Industry Survey showed sales of organic tea grew 8 percent to reach a value of $307 million, according to spokesperson Barbara Haumann. The Brattleboro, Ver.-based trade association lists 15 organic tea companies on its roster.
Twinings introduced a full line of Fair Trade and Certified Organic teas last year. The dozen new SKUs include a 100 percent organic chai, green tea with jasmine, traditional black teas, rooibos and flavored teas with organic cinnamon, mint, citrus, peppermint and chamomile. This is a departure for the largest manufacturers since all Fair Trade certified spices are from relatively small grower co-operatives.
Fair Trade USA’s Nora Feeney Pittenger, who manages business development for consumer packaged goods, says momentum continues to build with additional growth of tea imports in the past few months.
Growth was from a combination of new gardens and existing gardens, with individual volume growth and total volume as well as a big increase in the premium dollars that are returned to growers, she explains. “In 2002 there were only 16 tea producers, now there are 46,” says Pittenger.
Ultimately that growth is the result of consumer demand.
"Coffee initially spurred the growth of Fair Trade teas," Anupa Mueller explains. Mueller is an importer and wholesaler with retail operations in Elmsford, New York. She is the founder of Eco-Prima Tea and in 1993 was possibly the first to begin trading Fair Trade teas. She introduced Fair Trade teas in her retail operation in 1999.
"Organic is good for the air, good for the planet and Fair Trade is good for people," says Mueller. She attributes Fair Trade's growth to the fact customers quickly grasp and support the idea of directly supporting workers.
Empowering coffee growers with financial incentives to band together introduced the concept but tea does not follow that business model, says Mueller. Tea is grown on large estates and processed on-site. It requires significant capital investment in manufacturing facilities and equipment.
The organization’s tea standard applies to both laborers on large estates and tea co-operatives, together representing tens of thousands of smallholders, says Pittenger.
The organic connection
Fair Trade tea sells for $1.10 per kilo or about 50 cents per pound more than conventional loose-leaf tea. Growers supplying fannings and tea bag cuts trade about 25 cents higher. Retailers selling this tea might purchase it for $10 per pound and package it for re-sale at $10 for 4 ounces. Last year the social premium for Fair Trade teas was valued at $631,000 raising the total contribution to $2.5 million since 2001.
It is quite remarkable that despite their investment, estate owners do not get a penny of this social premium. Estate owners bear the cost of Fair Trade certification, improvements in safety and working conditions while the premium goes direct from the importer to the collective workers' bank account, says Mueller.
The only way to recover these costs is to get a much higher price for the tea. That is why organic certification is so closely tied to Fair Trade, she explains. Manufacturers like Honest Tea (which deals only in Fair Trade tea) compensate growers for the much greater investment needed to produce tea that can be certified organic.
"Customers come looking for organic, adding the Fair Trade label is a very small leap," she says. "I have never sold a pound of Fair Trade tea that was not organic."
African tea exports climbing
India remains the largest exporter of Fair Trade tea accounting for 32 percent of the 2010 total with Rwanda holding 25 percent of the market and China with 20 percent, says Pittenger. The U.S. imported 57 percent of its Fair Trade teas from Asia and 43 percent from African nations last year. South Africa now accounts for 10 percent and Egypt 7 percent of tea imports.
Teas originated in nine regions of the world with Vietnam and Sri Lanka and Tanzania showing two and three-fold increases. Rwanda is nearing 450,000 tons and grew 46 percent compared to 2009.
Fair Trade tracks organic tea sales which amounted to 1.42 million of the 1.89 million pounds or 79 percent of the Fair Trade certified tea imported in 2010.
Blends are appearing in the mix and rooibos is showing strong growth along with the spices used in teas such as cinnamon, nutmeg and chamomile.
The growth is exciting but not a surprise, says Pittenger who observed that imported teas are finding uses as a culinary ingredient, in bottled beverages and in body care products. “There is so much more than just straight tea and so much more to do,” she says.
“Certifying products like tea and cocoa make it easy for people to find Fair Trade in all aisles of the supermarket,” adds Public Relations Manager Katie Barrow. “We really are at the tipping point with companies like Twinings. They do so much to create awareness and drive sales.”
In recent years the Fair Trade industry has broadened from whole products like tea and coffee to composite products like bottled teas, lotions and baking mixes, adds Public Relations Manager Katie Barrow. "With more than 9,100 certified products, shoppers can find Fair Trade in all aisles of the supermarket," she says.
"We really are at the tipping point as market leaders like Twinings, Honest Tea and Numi Tea embrace Fair Trade in a big way. Their market presence and volume has done so much to create awareness and drive sales for the entire Fair Trade industry," says Barrow.
To download the complete 2010 Fair Trade Almanac report click here.