World Tea News asked beverage professionals from several segments to peer into the NewYear. Here is what they see:
TheTea market will continue to face four key issues in 2020.
Supply and Demand
Supply continuesto outstrip demand and history has proven that if tea prices rise, theproducers will manufacture more tea to take advantage of the higher prices. Producers,by skipping pruning cycles or plucking a little further down on the bush havean almost immediate ability to turn on a volume tap of 20% more tea. The resultof more availability and poorer quality: lower prices. Escaping the clutches ofthis boom/bust cycle will be one of the keys to the long-term survival of thebusiness. There are only two solutions: improve consumption or reduceproduction.
Free and Unencumbered Trade
International trade is becoming much more of a challenge to the entire supplychain.
- Lack of harmonization of crop chemical tolerances
- Political vs. Science-based reactions (see Glyphosate decisions)
- Country of origin labeling
- Tariffs
Economic growth and stability cannot be achievedlong term without free trade. The industry must work together to address theabove issues.
Sustainability
The Tea Association of the U.S.A., sees sustainability as a three-pronged:
Ecological Sustainability
Social Sustainability
Economic Sustainability
I submit that tea has demonstrated a strongcommitment to ecological sustainability, and it is the latter two that needaction. Economic sustainability is the biggest threat. Producers (generally)are not making money. The realized prices of tea have not moved since the1950’s, when taking inflation into account. This marginalizes workers at originand allows for unsustainable economic models, impacting the means for peoplemaintain the social fabric in the towns and villages where they live. Meanwhile,large retailers advertise and speak about sustainability, yet do nothing aboutallowing the price of the product in their stores to rise, disallowing theopportunity for the producers to realize a reasonable margin. The time is cometo put pressure on retailers to ensure that EVERY player in the supply chainreceives fair value for the work they do.
The Goodness of Tea
The number of positive attributes regarding teacontinues to be buttressed by research and demonstrates why this great productshould be consumed by EVERYONE! Yet, we continue to battle those negativearticles on tea which usually are based on false assumptions or purportedfacts. This “Click-bait Culture” serves only those who want to attractattention and encourage visitor to click on their linked or their particularweb page. Further we see recycled stories from YEARS ago, that have long beendisproven, continue to make their way into the news cycle. This attitude ofwhoever gets there first, or whoever publishes first, drives inaccuracies andturns the news reporter into newsmakers. This cannot continue. Tea needs to becelebrated for its healthful properties, not used as ammunition in some idioticarsenal.
So,while we continue to face these challenges, I remain wholly optimistic. The teasupply chain is resilient; producers generally want to produce good product andconsumers want to receive good value.
These are not conflicting goals. However, we need to set expectations with consumers, demand fair return for all in the supply chain and continue to shout from the rooftops about the goodness of tea, both for our world and our health.
— Peter Goggi, President
Tea Association of the USA
In 2020, functional teas get adaptogenic. We’ve allsurely heard of Turmeric herbal tea, as it’s become available in virtuallyevery natural grocery store and trendy cafe over the past five years. Butunless you’re a big herbal tea consumer, you may not have heard of Tulsi,Ashwaganda, Rhodiola and Maca.
What all these herbs and Turmeric have in common isthat they are in a class of plants called adaptogens, first classified in themid-20th century by a Soviet scientist researching ways to minimize the stressresponse in active combat aviators. Along with green tea and CBD (cannabidiol) whichare also adaptogens, they are helping to take functional teas to a new level,one which fits our lifestyles right now. Adaptogens help manage both stress andhormone balance. The balancing response of “adaptogens” is non-specific – thatis to say, they help bring the body back to center, regardless of whichdirection the source of the stressor came from. Both men and women arerealizing that emotional energy directly impacts physical energy andhealth. Solutions for stress relief and hormone balance are in high demandfor many demographics, from athletes and busy urban professionals, to theelderly.
We’ll also watch tea get “fancy” in foodservice in the New Year. Indeed, tea isa natural complement to the modern foodie dining experience. Tastematters. The premiumization of tea is driving innovation in cuisine andmixology. Many incarnations of tea are finding their way onto the menus of finerestaurants and trendy cocktail bars. This will change the face of specialtytea in the next decade. Creativity in mixology and specialty cafe drinks,as well as the pairing of premium teas with culinary delights, will bring manynew customers their first outstanding tea experience.
In 2020, expect more tea festivals coming your way! This past year was the first time in my 15+ years in the tea industry that I finally went to a consumer-directed tea event outside my home state. The Rocky Mountain Tea Festival, which we’ve so enjoyed attending and participating here in Boulder, Colo., didn’t take place this year, so I opted to speak at the Los Angeles Tea Festival (founded by Devan Shah a decade ago), in addition to the Paris Coffee Show and the Chicago Tea Festival (both of which premiered this year). I was absolutely blown away by the wildly diverse and upbeat tea energies these regional events created! Over 1,000 tea devotees as well as folks just curious about tea, or tagging along with friends, attended each show. The range of talks included industry stalwarts and producers from origin, but also many local vendors and practitioners of tea, including mixologists and chefs, authors, artists and ceramicists. North American customers have now enjoyed more than a decade of premium tea availability in upscale grocery stores and cafes. Their palates are becoming trained to differentiate quality whole leaf teas from low-end dust and fannings, as evidenced by healthy growth in the premium tea sector and a shrinkage in low-end mass-market teas. Alongside the development of increasingly sophisticated consumer palates comes a growing interest in everything tea related. The regional shows work to satisfy this growing appreciation and thirst for information and new ideas surrounding tea. The local and regional shows are growing in attendance and number, and sometime soon there’s likely to be one coming your way. I highly recommend taking a few hours to go check one or more out. There’s bound to be something new and unexpected there, even if you’ve spent a lifetime in the tea industry! You might also find The Tea Spot and some of these shows in 2020.
—Maria Uspenski
Founder and CEO of The Tea Spot, author of Cancer Hates Tea
2020will be another year of growth as more national and international news sourcesand influencers will continue to build buzz around the tea lifestyle. This buzzis not around new technologies or innovations of tea, although there will be noshortage of entrepreneurs attempting to innovate tea. Instead, whatattracts new people to tea is the social, cultural, andeducational experience. Every community across the country has at leastone tea shop or enthusiast that is exposing these experiences and creating teacommunity.
Mostconcerning for me going into this new year with such a newfound love for tea byconsumers is impending limitations on importing specialty tea by the FDA. Inthe final months of 2019 many small-scale tea importers have experienced returnedshipments and prolonged FDA holds at customs due to newly enforced rules of theFood Safety Modernization Act (FSMA). Small scale tea business and start-upsnot only have to deal with complex and costly importing standards but alsolocal food safety standards for legally serving a simple cup of tea.
Thesilver lining of these new importing standards is that it will require teabusinesses to increase their engagement with tea producers in order to bringthem up to compliance. In this process, not only will the food safety standardincrease, but overall quality control will increase which means greaterconsistency in quality of supply. A level of professionalism among teaproducers in rural communities around the world will increase their sustainabilityin the global market and build confidence among tea vendors.
Oneinnovation that I don't believe will be develop in 2020 is the use ofblockchain for transparency in the supply chain. Of course, blockchain can beused to hold, share, and verify data, but the data must first exist. There ismuch more work to be done at the point of cultivation and production to createthis data from seed to cup. Additionally, blockchains are not efficient. Thestorage, sharing, and verifying of data can be done much more efficiently witha conventional digital database. My business has been managing a digitaldatabase at minimal costs for the past seven years that is providingtransparency in supply chain. The most powerful aspect is the fact that all theteas within the supply chain are grown and produced by a single person orfamily versus a siloed network of growers, workers, factories, brokers,traders, and wholesalers. I hope in 2020 tea professionals will ask moredetailed questions to their colleagues in the industry to make this data moreaccessible before assuming blockchain will solve the issues.
— Elyse Petersen
Founder, Tealet
At Firsd Tea, we see 3 words coming together in ways they never have before: China + Tea + Sustainability.
In the past, buyers have (sometimes rightfully) questioned the environmental conditions and quality of a selection of Chinese goods. But China has made great strides in sustainability, including setting goals for electric vehicle sales (25% by 2025) and increased environmental protection enforcement.
For years, the Chinese tea industry has been ahead of this curve. From 2014 to 2016, China grew from delivering 34% to 52% of total volume of U.S. imports of Fair Trade tea. In 2018, China's production of Rainforest Alliance certified tea increased 32% compared to the previous year. Firsd Tea has seen requests for Fair Trade tea increase exponentially the last two years. What may be more surprising is the fact these initiatives are being coordinated across a network of mostly (80%) smallholder tea farms and villages. Private label tea brands are seeing sustainable Chinese tea in a new light.
Additionally, Firsd Tea's parent company is furthering these efforts. Zhejiang Tea Group partnered with tea villages in donating 15 million tea seedlings to poverty-stricken villages. This economic + environmental sustainability initiative, one of the largest undertaken in the global tea industry, is projected to lift thousands of village households out of poverty while protecting the surrounding rural environment. Look to China tea to further deliver on its sustainability promises to the global market.
— Jason Walker
Marketing Director, FirsdTea North America
Increasing Weather-RelatedConcerns
Weatherpatterns are changing faster than forecasters anticipated. Consequently, annualsuper storms will continue to disrupt tea production and impact productavailability, quality and pricing. As a result of these volatilities, it’simportant that companies continue expanding their resource options for teas,spices and botanicals to avoid disruptions in production at their ownfacilities. Adding to this, we’ll continue to experience global politicalinstability which may cause additional price fluctuations of many rawmaterials. These factors may create some additional challenges for smallerretail tea shops who are already struggling with rising expenses. With anincrease in these consequential price uncertainties, companies would be wise tobuild a financial buffer in to their 2020 business plan to offset unreliableCOGS forecasts.
Consumer PurchasingDrivers
Consumersare becoming savvy when it comes to initiatives such as B-Corp. Companies that are eco-friendly, driven bysocial consciousness and ethical treatment of workers, sustainability, andsupport ideals that resonate with consumers will continue to see a fasteruptick in growth. Simply put, more consumers are supporting impactful brandsthat are committed to making the world a better place. And they like tellingthe world via their social media about the brands they are proud to support andwhy. This presents some great opportunities for tea companies already committedto many of these ideals. Stash Tea is one such company and joined the ranks ofother global like-minded companies over two years ago to become B-Corpcertified. Emerging tea companies should take note and keep an insightful eyeon consumer purchasing behaviors.
Tea Aficionados WantBetter Teas Served
Patronsof restaurants, coffee shops and cafes are not just wishing for better qualityteas and tea service — some insist on it. Theyknow quality, and when they go out, they are no longer satisfied with the sameho-hum selection of blasé tea bags or even pyramid tea bags. They want the sameattention given to tea service that establishments give to their food, dessertsand coffee, painstakingly made craft cocktails, and carefully chosen beer andwine selections. The good news for tea industry professionals is that thisprovides new opportunities for companies and smaller tea shops to supplyquality loose leaf teas and accoutrements to food service partners. In a worldwhere health and well-being are becoming a priority for many consumers, seekingfoods and beverages that carry perceived health halos and functional benefitshas taken precedence. That said, indulging in a celebratory beverage may bedefined as ordering a sophisticated loose tea or kombucha over the traditionalcraft cocktail or expensive wine of yesteryear. Loose leaf tea also supportsthe environmentally friendly goals of many food service establishments becauseit represents less wasteful packaging. This is a winning strategy for foodservice entities who aim to improve their tea service, and in doing so not onlybenefit from loose teas’ high profit margins, but also score points for makingeco-conscious choices.
Tea is Trending in RTDBeverages
Tea continues to be a big player in the RTD beverage sector. RTD products will continue to emerge this year with tea being the star ingredient highlighted for its association with functional wellness. This means that we’re seeing a steady growth in products not only made with black tea – which continues to hold dominate market share – but also with green and white teas that are considered even more antioxidant rich and healthy. Numerous tea companies, Stash Tea included, are test marketing or selling their own RTD teas. Many of these beverages are sugar-free and those that do contain sugar aim for significantly less than consumers see in traditional soft drinks. Also, tea is taking the craft cocktail market by storm. In RTD this has prompted a number of releases of low-alcohol canned tea-based cocktails with low to no sugar. Taste still rules, but the photogenic appeal of an RTD can or bottle is equally important for consumers engaged in social media personas. And brands should take heed of the power of these personas to push a brand upward when your products are perceived as “hitting the mark.”
— Jhanne Jasmine
R&D Specialist & Tea Program Educator, Stash Tea Company
Specialty tea consumption will continue to rise and with thisincreased exposure to a variety of fine teas, there will be an increasedawareness and demand for high quality teas by consumers. Companies will beexpected to focus on the safety and sustainability of their packaging to ensureno plastics or other contaminates interfere with each cup of tea. In additionto safe packaging practices, the quality of tea will be judged by safe fluoridecontent levels.
Wellness will continue to be a leading factor for increasedtea consumption, resulting in wider herbal and tisane offerings and awarenessof the difference in quality between specialty fine teas, organic teas andmass-produced teas. There will be a decreased consumption of mass-produced teasand an increased consumption of specialty fine teas, as the educated consumer’svalue is on quality and wellness.
There will be decreased consumer confidence in certifiedorganic teas. Some organic teas contain up to 4 to 5 times the amount offluoride over non-organic specialty fine teas, like Newby.
As seen in previous years, sustainable packaging solutionswill remain a constant challenge for the future as companies seek to balancethe optimum requirement for preserving the quality of the leaf while remainingsustainable in its delivery. In addition to sustainable packaging, companieswill be more transparent in their sourcing, contribution to tea growers andpractice more charitable giving. This rise in consumer demand for quality,safe, sustainable and ethical teas will challenge the hospitality and healthservices industry to put more emphasis on quality, health, safety andsustainability when making their tea selection.
Globally, tea has played a rich role throughout time. In 2020, we expect not only the increased standard for quality of teas, but an enrichment and revival of the heritage, history, art and culture. This will be the time where the tea industry will revolutionize the traditional gifting marketing by providing contemporary tea gift solutions as a healthy alternative to alcohol and confectionary to fulfil a new consumer demand.
— Aneta Aslakhanova
Global Marketing Director, Newby Teas London
As the Kombucha segment continues to grab market share from the floundering soda sector, expect new entrants to continue to flood the category, including in the over-21 category. Many of our consultation clients are also asking to learn how to brew hard (alcoholic) Kombucha and Kombucha beer. Following the trend of consumers seeking “better for you” products, the perceived benefit coupled with the unique flavor profile of hard or higher ABV Kombuchas present a unique offering which is also piquing the interest of larger commercial beer brewers like Sam Adams and Sierra Nevada.
With trends like Dry January and Sober October gaining traction amongst millennials, the range of complex flavors offered by Kombucha brands provides consumers a wealth of choices. Plus there is no shortage of creativity as forward thinking mixologists are whipping up mocktails that infuse flavor with benefits. Several Kombucha Kocktail recipes (with and without alcohol) abound on the internet and in The Big Book of Kombucha. Adios Gin, Hello Ginger Kombucha!
Speaking of flavors, non-traditional ingredients like activated charcoal, hops, CBD (or hemp) and functional mushrooms (chaga, cordyceps, reishi) grow in popularity. Many are inspired by Ayurveda & TCM (traditional Chinese medicine) such as ashwaganda, schisandra and turmeric or head south of the border for jalapeno, habanero and cayenne. “Flavornauts” and culinary thrill seekers will have loads of options to make their tongues happy in the new decade!
— Hannah Crum
Founder, Kombucha Kamp Consulting
Transparencyhas been a buzz word in the tea industry for some time now. 2020 is theyear for us to figure out exactly what that means. Consumers are moreknowledgeable than ever. They look for detailed information about where theirtea comes from and how it was produced before making a purchase. Social mediaallows customers to connect directly to producers. Retailers will need to puttheir cards on the table to remain competitive. Transparently and ethicallysourced specialty tea is the way forward.
Teahas historically been marketed as a coffee alternative, but this is goingto change as we head into the next decade. Innovators will work to incorporatetea into fine dining and mixology menus. Brick and mortar tea houses withevening operating hours will also attract customers looking for a socialalternative to alcohol. I think we'll also see a boom for powdered teas beyondmatcha, particularly in cafe environments. Versatile hojicha is going to garnera good portion of that spotlight.
—Nicole Wilson
Tea Writer and Consultant, Tea for Me Please
I am always optimistic about the teaindustry. We are so well aligned with the values that are taking over our day-to-dayculture – health,wellness, calm, authenticity, and more. I think that we’ll see more functionaltea products –speaking directly to consumers seeking healthy beverage alternatives. I alsothink that specialty will continue to grow – in particular the botanical category. People’s language ischanging when it comes to their lives. We’re speaking in terms of overallhealth –addressing our mind body and soul – tea happens to check all those boxes. If we focus on that,with an emphasis on lifestyle, integrating tea into your lifestyle as opposedto treating it like medicine, I think that tea will be well on its way to muchbigger success.
—Shabnam Weber
President, Tea and Herbal Association of Canada