In the spring of 2014, Jesse Jacobs of Samovar Tea, wearing a cream-colored canvas apron over a fashionable t-shirt, announced the coming of the tea industry’s Third Wave. Can the tea industry really be on the verge of entering into a movement equivalent to that of the coffee industry? Even though both tea and coffee have the Starbucks Corporation in common, it is going to take the tea industry a very long time to catch up to the sophistication of the coffee industry. The discussion about standards for ‘Specialty Tea’ has not even begun.
Establishing standards brought extraordinary advantages to coffee growers including unimaginable financial success. A small Brazilian coffee grower this month won the Alliance for Coffee Excellence’s 100th Cup of Excellence (COE) competition to earn $50.20 per pound at auction, the highest price ever paid per pound for COE coffee. He took home $106,000 in a country where the per capita income is less than $1000 per month. What is noteworthy is that Brazil is the largest commodity coffee producer in the world. Think what standards for quality would mean for small holders in India and Africa, areas still economically strangled by the colonial commodity system. Establishing an objectively evaluated standard establishes value that can be communicated through the supply chain to the customer. Excellence is the reward.
Looking forward, a profitable market for small tea businesses will require standards. These need to be objective, understandable, and replicable. Standards provide growers with a definable goal for crops and harvesting, and provide tea makers with products that can be clearly identified by buyers, which give the producers incentive to get better. Direct sourcing would become increasingly important for the tea businessman, which would lead the consumer to actually knowing what they are paying for and where it came from.
Think what standards for quality would mean for small holders in India and Africa, areas still economically strangled by the colonial commodity system. Establishing an objectively evaluated standard establishes value that can be communicated through the supply chain to the customer. Excellence is the reward. China is realizing the benefits of standards in its domestic market for tea right now. Their tea industry was destroyed through a hundred and fifty years of war and internal strife. As it started to recover after the Second World War and the Mao era, tea was mediocre at best across the country. More than a decade ago China set standards for quality and freed tea makers to create and profit from their own businesses. Since then, China has been experiencing a renaissance in tea making: tea being produced for the domestic market is the best it has ever been in history; China has become the largest tea producing country in the world, gets the highest prices for it’s tea, and has the highest average price for tea; it has the best teas in the broadest categories; it has defined standards, and grows the largest percentage of tea using traditional, chemical free growing practices.
The coming of standards is inevitable. Small businesses that are dedicated to quality in real terms, not just in the marketing of their products, will benefit. It took years for standards to impact coffee, but things will move along quicker with tea due to the benefits of the information age.
The tea industry is ready for professionals to lay the groundwork for “Third Wave” tea. Let’s leave it to Teavana to push the second wave along in building the market, like their parent company did. What is great about getting the ball rolling towards standards for quality and, eventually, excellence, small businesses that are struggling to establish new business models need not worry, for the best practices for quality in the tea industry go beyond the reach of corporations, economies of scale, and deep pockets of marketing departments. Standards are a necessary tool for the tea entrepreneur.
So become a pro, take some Chinese classes, and get your passport up to date. By all means study the Specialty Coffee Industry. They have become experts in coffee on every level. You might want to remember that this year Peet’s hired a woman who is fluent in Chinese and has a masters degree in tea from Zhejiang University.
Standards, direct sourcing, transparency, expert level knowledge about tea and its culture, logistical mastery, inventory management expertise, and tea preparation skills are all requirements for ushering in tea’s third wave. Herein lies opportunity, challenge, and the promise of excellence. Let’s hope tea entrepreneurs’ passion for tea is strong enough to take them where they’ll have to go.
Part One of this post, “A Call for Standards,” published on December 9, 2014.
Austin Hodge is the founder of Seven Cups.
All images courtesy of Austin Hodge.