Australian Tea Culture is Growing and Changing
The Australian Tea Market is currently at a stage of transition, with younger consumers beginning to appreciate specialty tea options rather than the standard black tea which is popular due to our British background. With a growing focus on health and wellness, functional blends are becoming more popular, and, with the increasing level of tea education, cafes and restaurants are starting to offer a selection of high quality teas and tisane blends.
There is a clear emerging trend in the Australian market away from mainstream black tea to more specialist offerings. Australians’ choices show more discerning palates and product knowledge. This is being driven by marketing and education. Black tea consumption fell overall in the past 12 months, while specialty teas sales grew by 4%.
Green tea, fruit teas, herbal tisanes and black specialty teas are the fastest growing categories. The wellness /functional category of herbal teas increased at the highest rate, with an estimated CAGR of 7%.
British-style tea drinking.
Younger people love flavoured blends but in Australia our flavoured blends have a much lower flavour profile than other western countries and consumers prefer natural flavours. We are a very health focused country and therefore natural and wellness blends are very popular.
By world standards Australia ranks approximately 55 for tea consumption compared to the United States. Only small amounts of tea are produced compared to what Australian’s consume. Imports amount to 97% of consumption.
The tea producing areas are in South West Victoria, Northern New South Wales, Tasmania, and Western Australia. They lack the capacity to meet domestic demand and are lagging in specialty teas, since all tea harvested in Australia is machine cut in some form due to the high labor costs.
The total consumer market for 2018 was almost exactly $500 million. Growth is estimated to be just under 2% per annum. Sales in volumes have remained, with little variation; 2018 figures are exactly the same as for 2010: 14.2 million kilograms.
Almost all the tea consumed in Australia is imported. India is the largest supplier (230 metric tons), followed by Sri Lanka (171) and Indonesia (137). By comparison only a few minor specialty teas were imported from Japan. The sources of imports reflect the established historical preference of Australians for breakfast teas in the English style.
The older generation are most likely to purchase lower grade black teas from supermarkets and in tea bag form. The younger generation are increasing the interest in green teas and wellness teas. Coffee shops and coffee roasters see this as their own opportunity to increase the quality of tea and this is helping to expand the specialty market.
This year an Australian company received an Australian government grant for the establishment of a tea plantation aimed at bringing a new business model. The company Australian Green Tea Cooperative hopes that this new venture will provide a sustainable source of high quality green tea as well as job opportunities on the northern New South Wales central coast of Australia.
An insight into some of our tea farms:
- Nucifora plantation which produces over a million kilos of black tea per year is in the tropical area of far north Queensland and borders Nerada plantation.
- Nerada plantation is a well-established plantation and the largest tea producer in Australia. It covers more than 1000 acres of tea and delivers over six million kilos of fresh tea leaves for processing per year. These fresh leaves turn into approximately 1.5 million kilos of black tea.
- Arakai Estate is in Bellthorpe, Queensland. This award-winning estate uses Taiwanese methods to produce different flushes of green and black tea.
- In Northern New South Wales, Madura tea estate cultivates approximately 250,000 tea bushes and produces mainly black tea which is often blended with Sri Lankan and Indian black teas to produce Madura tea, a well-known label in supermarkets in Australia.
- In South West Victoria we find Two Rivers and the Alpine Tea Company both of which mainly produce green tea for ITOEN, a large Japanese tea company. The type of tea produced is a sencha style and most of this is exported to Japan.
- Daintree Tea Company is in the heart of Daintree wilderness and rainforest area in North Queensland and produces a rich full bodied, black tea.
- Dry Ideas is in Tasmania. It is the the most southern tea plantation in the world and the oldest commercial grower and processor of Japanese tea varietals in Australia. Dr Gordon Brown and his wife Jane have a wealth of knowledge in agriculture and are always trying new ideas. While production is very small, Dry Ideas is attracting positive press coverage and is seen as a high potential innovator. Due to the southerly location of this farm no pesticides are required or used.
Dr. Gordon Brown, his wife Jane, and their daughter Charlotte (the next generation tea farmer). This is the southern-most tea plantation in the world, Tassie-T
Overall, almost all tea produced in Australia is green tea. Most is exported to Japan and we import about 97% of our teas. Australia has a very strong specialty coffee industry which influences the younger generation but with the introduction of tea based RTD drinks and exciting tea blends the tea industry is gathering some positive momentum.
Due to the average way in Australia being AUD $25 per hour plus superannuation most tea is harvested with machines. Hand picking is just too expensive. In the case of the harvesters only the size is what changes. This high wage means that our teas would be very expensive if handpicked and hand processed.
You can see Australia is reliant on importing teas but there are great opportunities for Australian owned tea companies to develop a good local market.