The last decade has seen a boom in what the industry calls ‘Specialty Tea’, but if you ask for a definition you will come away confused. What is so special about ‘Specialty Tea’? Not much. A close examination reveals that it is merely commodity tea that has been adulterated in some way, typically by blending ingredients such as pieces of fruit, exotic herbs or flower petals. Since the ingredients are dried, tea blenders spray (yes, spray) on lots of flavor.
I’m using the word commodity here to include any large-scale tea producing where the production goal is quantity over quality. There is plenty of the type of tea being grown in every tea producing country, including green tea, puer tea, wulong tea, white tea well as black tea There are also an endless variety of herbals that are incorrectly called tea.
Why set standards for ‘Specialty Tea’? Without standards, the future of the market faces chaos. Where would France be if it had not established standards for wine almost 500 years ago? Italy followed suit and prospered. Stop and think, would the debate over which is better– Italian or French wine – have turned out differently if the Italians had set standards first? Now, it’s important to understand that standards not only define products, they establish markets, and whoever defines a market, controls it. It is undebatable that the French have created admirable markets for their wine, as have, more recently, specialty coffee retailers.The chaos in the ‘specialty’ tea market comes from the fact that no one, from buyer to seller, actually knows the value of the tea they are buying or selling, or how to clearly establish its value. Price is derived mostly from marketing — certainly not the quality of the tea. In a practical sense, words like “quality,” “value,” and “excellence” have become as watered-down into obscurity as “specialty.” Nowadays, tea is whatever the merchant says it is, which obviously opens a lot of ground for dubious interpretation. In contrast, standards are consistent and are independently verified. The specialty coffee industry has done an excellent job of establishing standards, which has lead to levels of excellence and profitability enjoyed by the entire coffee industry.
Coffee and tea each began as rarities for the rich, evolved into commodities for the masses and are gradually becoming artisanal offerings – the choice of connoisseurs. Everyone my age remembers that back in the day, coffee was either the Red Can (Folger’s) or the Blue Can (Maxwell House). There were neighborhood diners and corner cafes where a cup of coffee cost a quarter. This was coffee’s “First Wave.” Americans annually drank an average of 10 lbs. of coffee per person. Per capita consumption was measured by the gallon because the efficiencies of the commodity model made it cheap. The turning point was 1974 when independent coffee shop owners defined standards that defined “Specialty Coffee.” This movement launched the “Second Wave.” Pioneers such as Peet’s Coffee & Tea, Starbucks, and Coffee Bean & Tea Leaf would not exist without these standards. Innovations in growing, sourcing, roasting, packaging, and coffee brewing followed.The market for specialty coffee was more sophisticated, resembling its European counterparts. Coffee of this quality could also command a higher price; it no longer had to be cheap. Thus “quality” coffee became easily distinguishable from commodity coffee.
The term “Third Wave” was coined around 2002 when small coffee businessmen traveled to coffee farms to do their own sourcing and became experts in every aspect from growing to roasting to brewing. This took the small retail coffee businesses to a new profitable level that could differentiate itself from the likes of Starbucks and company. With control of the entire supply chain, not only did it raise retail margins, it also opened the door for a respectable wholesale business selling to other quality businesses whose business models did not include working the complete supply chain. The “Third Wave” aspires to an even higher level of coffee experience. It begins with direct sourcing. Only direct sourcing can insure quality and answer questions about fair trade and farming methodology with confidence. Third wave coffee also places high value on production and preparation: the goal is to get the best possible cup. Third wave coffee owes its existence to Starbucks for building the market for better coffee, and for providing the competition that needed to be surpassed to take advantage of the market that Starbucks had created. Third wave roasters realized they needed to get a whole lot better to beat Starbucks, and to do so they needed to know their coffee supply chain from source to consumer on an expert level.
On a similar note, Starbucks changed the tea market dramatically for small independent tea businesses when they bought Teavana. From here on out, every small tea business is going to be defined in relationship to Teavana, like it or not. What is different between coffee and tea is that there are no standards that give tea business the tools to beat Teavana. Starbucks redefined the market for coffee on almost every level. They will do the same for tea. Small tea businesses and even major tea corporations are going to feel the heat. Without standards, Teavana, with its extraordinary marketing muscle, can define tea quality any way they want. If standards for specialty tea mirrored the standards for specialty coffee, the only tea that could quality as “specialty” is tea judged to be within the top 20%. Most of the tea sold as specialty tea in the West would thus be disqualified. Just as there is with coffee, few multi-million dollar companies are going to support standards for quality in the tea industry. Why would they?
Part 2 of this post, “Third Wave,” will publish Thursday, December 11.
Austin Hodge is the founder of Seven Cups.
LOADING IMAGE caption: PIcking Standard: Lao Cong Shuixian 4 leaves from top
All images courtesy of Austin Hodge.