With the recent announcement of the closing of the majority of Starbucks’ Teavana Tea Bars, some may be saying the “tea trend” is dying, but this is far from the truth. There are new tea shops popping up around the world, and still more tea companies are starting up. And every year there are new trends that both established tea shops and these tea startups embrace, or as people in the industry say, “buzz words”. 2015 was about specialty tea. 2016 is all about transparency. There are no certifications or quick definitions to clarify what transparency means, but looking at the current situation of the tea industry and market trends can help understand how to make tea merchants accountable for transparency.
The term transparency is not a new one. But transparency, specifically in agriculture supply chains, is an extremely new term in our globalized food system. The trend that has popularized farmer’s markets across the nation is the same trend that has consumers questioning the ethics of their tea and the agriculture practices used. The recent exposes on major retail brands and their sources of tea from places like India and Sri Lanka involving low wages and human trafficking has gotten the public demanding more transparency. Some governments such as [the state of California have already implemented some laws (but with little enforcement) on transparency reporting for large ($100M+ global annual revenue) companies in order to verify there is no human trafficking or unfair treatment in their supply chains. This regulation was passed in 2010 and requires that these companies present this transparency reporting on the front page of their websites. Not all companies are in compliance (only 31% of mandated tea companies are in compliance) but it will only be a matter of time before transparency becomes the mainstream in tea retail.
In 2016, transparency is much more difficult to achieve on the large, commodity scale, but is quite feasible for small tea companies that are purchasing a carefully-curated catalog of teas. Tea wholesalers and producers have found an opportunity in this market niche and have started to offer transparency through “single-origin”, “single-estate”, and “farm-direct teas”. These labels can be quite expansive and can also be used to describe very large tea producing operations, that use the support of thousands of workers and/or the raw materials from thousands of small holder tea growers. A responsible consumer and retailer that wants to be accountable for true transparency will not accept these labels at face value and will ask the detailed questions to know the full story. Transparency does not end at the tea shop, tea wholesaler, tea factory, or tea farm, but must also extend into the work and life of the workers on the farm and the condition of the soil and seeds of the plants.
If you want to support honesty and true transparency in tea, get in the habit of asking questions about not only where the tea is grown but also about the agricultural practices and workers behind the tea. Merchants that are doing true direct trade and can provide transparency will be able to answer even the most detailed of questions. Don’t be surprised to see the terms direct trade and transparency in the marketing of your favorite tea brands, but don’t accept it at face value. True transparency requires much risk and sacrifice compared to the commodity business model that was the major trend of the past where the buyer was just looking for the lowest price.
I hadn’t really thought about my role, as a tea consumer, having responsibility to request additional information from the tea shop to insure true transparency. I think if we all take our portion of responsibility, we can have an impact on tea culture harvesting around the globe. Thanks for the valuable advice Elyse.
It is disconcerting that Teavana failed at Starbucks and I suspect it will be some time before the true explanation is fully understood.
Thank you for taking on the responsibility.
In a sense, Starbucks did a lot of marketing for the rest of the tea retail industry. If they couldn’t get a tea bar to be profitable to their standards in locations most of us couldn’t even hope to get, what can we learn from that? As well, have we thought about the ancillary products that are sold with tea, like the sugars, or the chocolate in the pastries, etc. There are issues with so many products in each industry’s treatment of workers. And then the ‘floating’ standards and rules in the associations in the food industry. All things to think about. Most shops don’t just serve tea. Who made those teapots; where and how were they made? It’s a complicated and conscience-laden world of choices we all face in business (of any kind).
You are right. We have to question everything. For this reason I have chosen to only focus on bringing transparency to the tea leaves. We are taking baby steps, but my ultimate goal with this business is to bring transparency to all agriculture products. Essentially we want to be like an Alibaba for Agriculture.
I have tried to do teawares before and found much resistance because you can find transparent and ethical art but it has to be retailed at $400. The market is just not ready for that. In time the value will be there and in my vision it is going to be satisfied with local production rather than imports.
I completely agree with the transparency trend and I think this is because consumers are getting more knowledgeable about tea, and are more and more able to ask those detailed questions.
As customers become more sophisticated drinkers, they demand better tea, and are more willing to pay a bit more for it. Related to this, in China, I can see that tea pickers that are involved in the production of more premium teas are paid a more decent wage compared to those that are working in the bulk tea industry. The problem with the premium tea industry is that the workers demand is very seasonal, so you can’t have a stable full year job.
The other thing is that farmers are now able to sell their teas through e-commerce directly, and they’re starting to discover that they could actually make a better margin then when they sell it to local purchasers who buy up all the teas. There’s just more negotiation power now. As farm owners are less in financial stress, tea pickers and other workers can also get a bit more pay.
I do doubt if transparency will become mainstream in 2016. The ‘health’ trend will remain the mainstream topic in the tea industry, and that will stay for now I believe. You can see that Teavana is mainly targeting the wellness topic. Nevertheless, it’s really good that there is such a trend! And it’s responsibility of us all to keep reminding other drinkers. @Elyse, thank you so much for your contribution to this :)
@Diane, I think Teavana is doing financially very well. As they’ve opened many shops it’s natural for them that they have to close a few. And with more and more tea lovers caring about transparency there’s a good business opportunity for startups as Elyse mentioned in the article. The scale might not become as huge as Teavana’s, but it doesn’t have to. Maybe ‘transparency’ and ‘scale’ are just not be meant to be together in this world.
@Sam, I agree with you 100%..sorry if that didn’t come across. I think Teavana serves as a source of information to other tea businesses on what does and doesn’t work. There’s a good article in World Tea News today about the difference in numbers needed for Teavana tea bars to have hit Starbucks ‘floor space/sq. ft’ requirement to keep them viable (tea bars…not mall stores)
Elyse, I’m so happy to hear you are thinking in that direction (ethical sourcing over a wide playing field). To you and Sam both, as he pointed out about workers in the premium tea realm opposed to mass/bulk, I think ultimately the mass chains of coffee/tea cannot afford to offer the same high quality in all areas as specialty retailers, and I think their customer bases/demographic customer bases may get wider and wider and that may serve as a great differentiation point if utilized wisely.
This industry is just overwhelmingly full of opportunity and excitement for those who really do their homework and have or can find the resources to execute/implement. Forgive me if I ramble; I tend to obsess on thinking about this entire subject/industry.
Woops…I meant to say the customer bases between the mass coffee/tea chains/retailers and artisan tea retailers will see a wider and wider separation, especially if artisan tea retailers can find (and afford) the right locations. Just opening a shop, no matter how amazing, cannot make up for great locations, and differences can be up to $7/sf difference. If you are paying $7000 a month leasing space for a 1000 sf. tea cafe (yes, some really go that high or higher) in an A location, you figure out the gross sales requirement! On the other hand, if you’re paying $1.50/sf for the same amount of space but have absolutely no foot traffic or horrific access and visibility..that can be even more expensive.
Great article! It finally becomes a trend what the Tea Campaign “Teekampagne” in Germany introduced 30 years ago by providing detailed information to their customers on the package as well as on their website to track the tea back to the Darjeeling Tea Garden…
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