In 2016 I forecasted that the major trend of the year would be “transparency” for the tea industry. This time in 2017 I was writing a series on Sustainability in the tea industry as I believed Sustainability was the major trend for the year. These trends gave way for the focus and development of direct trade in the industry as well as in the marketing of tea. By the end of 2017, the term “Direct Trade” can be seen on most newly launched tea business’ packaging and even established tea business’ marketing. The term “Direct Trade” originated in the specialty coffee industry. The term is not defined, unregulated, and has become too diluted not only in the coffee industry but also the tea industry.
According to Sustainability journal study titled “Problems with Firm-Led Voluntary Sustainability Schemes: The Case of Direct Trade Coffee,” it was found that between 2015-2016 Direct Trade became a dominate marketing term in the coffee industry. The foundations of the direct trade coffee movement brought high quality and ethics to coffee, but the co-opting of the term by mainstream brands that are loosely using the term to describe their business has diluted the value of the term and practice. For this reason leaders of the original direct trade coffee movement have started to turn away from using the term direct trade and focus more on the transparency of their products.
My company was one of the first to look to the specialty coffee industry for inspiration and describe the way we imported and sold tea as Direct Trade in 2013. Within a year I was seeing new tea businesses launching with the same marketing. By 2017 I was seeing the term used everywhere. At one tea festival, I noticed one wall of vendor booths all having Direct Trade printed in big letters across their booth backdrops. These were all large commodity tea retailers that have their products on grocery shelves across the country.
Direct Trade has become a major marketing term, yet it is still not defined. Obviously, there is value if even the largest commodity tea companies are using it to connect with consumers. For some tea business owners, direct trade means that they must purchase 100% of their tea from the farmer, traveling to visit the farms, arranging the payments, and coordinating the legal compliance of importing the product. Even this definition is unclear as there will always be some middleman in the supply chain to get the tea to their business. Small-scale tea imports require the high price help of FedEx or other carrier shipping and international money wires require the help of banks and services like Paypal. What is direct trade?
Direct trade is also difficult and inefficient. As described in a recent article on World Tea News the new trend for independent tea businesses to use the internet to connect with and buy tea directly from producers at the origin is challenging. There is a high cost to travel to do business with tea producers, logistics costs are high, and there is little accountability of quality control. As with what has happened in coffee, I believe in 2018 tea business owners will realize this struggle and dilution of the value of the term direct trade and focus on building their customer bases on providing quality tea and information versus chasing the Direct Trade Dream.