Tea Biz
Tea Biz

Episode · 4 months ago

Tea Biz News and Insight - February 4, 2022


HEAR THE HEADLINES – Finlays’ and Firmenich Partner in Tea and Coffee | Japan Tea Exports Rise to New Record | Nothing is Normal in Tea Logistics, a TEANIN22 Forecast | PLUS The IDH Roadmap to a Living Wage| NEWSMAKER – Judith Fraats, senior program manager IDH, the sustainable trade initiative| FEATURES – This week, Tea Biz travels to Amsterdam in the Netherlands where Judith Fraats, senior program manager at IDH, the sustainable trade initiative, discusses the IDH living wage roadmap and how tea companies can ensure a living wage for workers at every link of the supply chain.IDH Roadmap to a Living Wage –A sustainable future in tea depends on a shared responsibility among stakeholders to assure living wages (for workers) and a living income for smallholders. Last fall, Netherlands-based IDH, the sustainable trade initiative, introduced the Living Wages Roadmap, a platform, online wage matrix, and guide to help businesses assess potential wage gaps along their supply chain. Case studies show that companies that pay a living wage to achieve greater productivity, less turnover, and a competitive marketing advantage by improving the quality of life for workers.

The Tea Biz podcast delivers tea news that you need to know, a recap of the week's major headlines, with commentary and cultural trends. Hosted by Dan Bul. It is the voice of origin for tea professionals and enthusiasts worldwide. Think of us as a digital caravan of story tellers, bringing authentic, authoritative and exclusive stories to you weakly from the tea lands. Hello everyone here. This week's headlines. Finlay is and ferminate partner in tea and coffee. Nothing is normal in logistics a tea and twenty two forecast and Japan tea exports rise to a new record. More in a minute, but first this important message. What makes a Perfect Cup of Ceylon tea? The Perfect Cup is from the tea businesses that ensure the protection of all the children living within their tea estates. We Salute Kailani Valley, tellawackilee, Boga, Wantalawa, Harana and Elyptia tea estates support Save the Children Sri Lanka FROMINAC, the world's largest privately own fragrance and taste company, will mark at the full line of Finlay's European tea and coffee extracts portfold to go. In Europe. Finlays is a major supplier of tea, coffee and botanical solutions. Foremost among these holdings is a fast growing cold bruise segment. The partnership focuses exclusively on Finlay's range of tea and coffee extracts. The portfolio includes the well being collection of premium all natural, bioactive tea extracts processed by Finlay's at its tea gardens and Kenya. Rachel Jones, Finlay's group head of Business Development, said that quote, firm and x, strong market coverage, deep understanding of taste and application. No, how will enable Finlay's products to reach and broader audience in Europe. And quote from an egg headquartered in Geneva, Switzerland, dates to one thousand eight hundred and ninety five, with an annual turnover of four point three billion Swiss francs. Finlay's dates to seventeen fifty in as part of the multibillion dollar swire group. The pouches, tins and boxes of tea on the world's retail shelves travel along and Complex Journey in the best of times. These are not the best of time. Times the promised return to normal, delayed and delayed and delayed again, now appears unlikely. In Two thousand and twenty two, quote.

The chaos at ports, warehouses and retailers will probably persist through the year and perhaps even longer. In quote. According to The New York Times, congestion at ports is getting worse around the world and prices continue to rise, leading experts to predict that cheap and reliable shipping may disappear for the foreseeable future. The pandemic revealed the shortcomings of just in time delivery, leading manufacturers to shorten supply chains. Blending and packaging at origin is to be encouraged, as it increases tea value for producers, but that assumes in expensive shipping. Tea Supply chain requires the annual transport of billions of kilos, forty percent of which travels long distances. China, for example, supplies virtually all of the world's Green Tea, exporting significant quantities to sixty seven countries. India, can yeah and Sri Lanka supply the world with its black tea, and a thousands of kilometers separate equatorial tea producers from the industrial northern countries, where consumption is high. Developed Countries in North America and Europe, along with Pakistan and Russia, are competitive commodity markets where low prices prevail. At one point last fall, the cost of shipping a container from India to Europe exceeded the value of the lower grade tea within shipping a container of tea ten thousand eight hundred nautical miles from China to Europe last May exceeded ten thousand dollars, more than a dollar a mile. Tea is seasonal but thrives in both hemispheres, lending in natural rhythm to the supply chains packers and distributors that was badly disrupted the past two years due to the shortage of containers and in late arriving ships. Shipping by sea or rail are the only practical methods of transport, giving the cost of log hall, trucking and air. Freight, whether packed and palloted for retail, which requires a greater number of containers, or dense and heavy and sold in bulk sacks ranging from sixty kilos to a container of supersacks from ours Argentina, weighing twentyzero kilos. A shift to larger orders and stockpiling will significantly increase costs. The Times reports that resolving the great supply chain disruption will require investment technology and the refashioning of incentives. Quote. It will take more ships, additional...

...warehouses and an influx of truck drivers, none of which can be conjured quickly or cheaply. Many months, and perhaps years are likely to transpire before the chaos subsides. and quote. visit the TEB has blogged for an in depth look at why nothing is normal and tea logistics part eight of the tea in twenty two forecast Japanese tea exports, led by Macha, grow both in value and volume. In Two thousand and twenty one, the Ministry of Finance reports a twenty six point one percent increase in value to twenty point four billion yen, about a hundred and seventy eight point two million US, a record high for sales that easily surpass the sixteen point two billion yen exported in two thousand and twenty. Revenue from green tea exports has doubled from ten billions billion yen in two thousand and fifteen, mainly on sales of high value green teas. Macha accounted for sixty five point three percent of total exports by volume. Export volume increased by seventeen point one percent to six thousand one hundred and seventy eight metric tons. Japan is the second largest green tea exporter, but export totals are far behind China, which generates almost two billion annually in sales of green tea. Domestic demand for leaf tea has declined as consumer switched to ready to drink tea in bottles and cans. Our TDT is quite popular in Japan, accounting for thirty percent of Non Alcoholic Beverages, double the share held by Soda and ten percent greater than our td coffee. According to the Asahi Fact Book Two Thousand and twenty, the US is Japan's top loose leaf tea and match a tea trading partner, accounting for ten point three billion in sales and growing twenty two point one percent year over year. Germany purchased two billion yen, an increase of seventy three point nine percent in sales, and Taiwan sales were up nine point nine percent to one point seven billion. Consolidation is evident as growers expand operations in Kagashima and contract in traditional tea growing prefectures, including Shizuzolka. The top three prefectures now produced seventy percent of Japanese tea. Total hectors under tea declined from forty four thousand and twenty fifteen to thirty nine thousand hectors. According to math statistics on farmland and crop acreage. Commercial tea farms and...

Kagashima now average three point three hectors, about eight acres, more than double a one point five hectors average in two thousand. The National Association of Tea Production Organizations reports that the first flesh, Kayakura, now earns the highest price at about four thousand nine hundred yen per kilo, followed by Tensha at three thousand yen per kilo. Bancha sells for six hundred ninety three yen per kilo, and the average price for Sensia, which is Japan's most popular tea, was eighteen hundred and seventy two yen per kilo in two thousand nineteen, about sixteen dollars and thirty five cents U s production volumes exceeded a hundred SIS hundred thousand metric tons in two thousand and four, but have since fallen to eightyzero metric tons, of which sixty nine thousand eight hundred is green tea. As a result, in two thousand and twenty Japan imported about four thousand metric tons of tea and exported only about fivezero metric tons, according to math. And Acute problem is aging growers most for over sixty five years. The two thousand and fifteen census showed fifty six percent with fewer family households also producing tea. Rootstock is aging as well, with forty percent of tea trees now thirty years and older. In memorium Charleston Tea Garden Founder Bill Hall Seventy three past this week, ending a long career in tea. He was trained as a tea taster in England but spent most of his years in South Carolina operating the largest commercial tea garden in the United States of venture owned by bigelow. Tea Tarvendo is away this week. This is Dan Bolton with the India Tea Price Watch for twenty nine January sale number four. Outgoing I tea chairman Vivit Gwenca announced that consultants earnst and young and K Tanant company retained last year to study India's tea auctions. Will report within four weeks on how to establish a floor price at auction, as well as determining a benchmark price to be paid growers for raw leaf at the factory door. This is not a minimum Sur prior price for tea. It is a floor price determined by the cost of production and quality parameters such as the condition of the leaf, which varies by season. All producers, large and small, a, most adhere to quality standards to...

...established by the tea research association and you, Posse South, India's Association of Growers. Guenca told the hundred and Thirty Eighth Assembly of the India Tea Association that half of the tea sold is now at prices below the cost of production. The Real, not apparent, price of tea has been falling for thirty years. He said. In the past ten years, tea prices have increased by four percent, while the cost of vital inputs increase between nine percent and twelve percent. Quote. Without a price increase, neither can the tea produce or sustain nor make quality teas. and quote, he told the group, which meant virtually again this year due to covid concerns in prices. Volume was eight hundred and forty four metric tons of leaf and dust at conor, eight hundred and twenty one metric tongues that couch in, and two hundred and sixty five metric tons of coombatore in south India, where the average price per kilo was a hundred and twenty one rupeas in north India, volumes were about double that of the south, with Siliguri reporting three thousand, three hundred and nine metric tons of leaf and dust, sold in an average price of a hundred and forty rupees. COUHATI reported one thousand eight hundred and thirteen metric tons, averaging a hundred and forty seven rupees per kilo. Total sales volume was five thousand two hundred and two metric tons. There was no sale this week in Kolcutta. And now a word from our sponsor. You. Trade understands at a successful tea blend goes beyond the creative fusion of appearance, a Roma and flavor. Are Multi Award winning product. Development team is passionate about converting natural ingredients. It's it's sensory experiences that customers crave. Every recipe is formulated with a commercial backbone of dependable quality sourcing, with a pricing structure that supports a safe, regulated, profitable and scalable plant. Que Trade meets every brand's retail, food service and ECOMMERCE need. For more information, visit our website, que trade t'scom. This week, tabs travels to Amsterdam in the Netherlands, where Judith Frad, senior program manager at idhe, the sustainable t initiative, discusses the living wage road map and how tea companies can ensure a living wage for workers at every link of the supply chain. A sustainable future and tea...

...depends on a shared responsibility among stakeholders to assure living wages for workers and are living income for smallholders. Last fall, Netherlands based idage that the sustainable trade initiative introduce the living wages road map, a platform, online wage matrix and God to help businesses assess potential wage gaps along their supply chain. Hey study show their companies that pay a living wage achieve greater protuctivity, lower turnover and a competitive marketing advantage by improving the quality of life for workers. This week we welcome Judah Phrase, Senior Program Manager at ID age in Amsterdam. Judah, thank you so much for joining us on the t BIS podcast. Thanks for your invitation, then, it's a player to be here today. Why is achieving a living wage for tea workers that Orgin a priority? Inequality is a big tread that we're facing globally at the moment, and moving towards living wages enables structural change to break the cycle of poverty, but it also helps us to move towards a more inclusive society and reduce some of these inequalities. Let's not forget that an adequate standard of living is a fundamental human right and I think, second to that, we see a growing amount of consumers, mostly in developed countries, that are asking these questions right to to their retailers and the brands that they consume. Can you prove to us that the workers and the farmers you have been engaged in making this product that they are able to earn a decent living right? Do they earn enough with what you're paying them? My final point on that one is that, next to reducing inequalities, there's also a positive business impact by starting to work or proactively on addressing living wages right, it can improve your business. It can potentially create market opportunities by lowering reputational risks or reducing employee turnover. That's things that we have seen that can actually also benefit your business in the long term right. So I think those three elements for us are really key to work on living wages, but definitely foremost the fact that it's a fundamental human right and that we should all strife for that. In Te Labor issues and wages attract consumer scrutiny and debate. Will you share adags experience in the t sector? I think maybe some of the listeners that are familiar with the program that we've run on living wages in Malawi called Malawi Two Thousand and twenty, which was a supply...

...chain wide commitment of living wages, with the objective really to ensure that the Mallowian tea industry remain competitive whilst working towards a living wage for its workers and also living income for small holders. The predominant focus of this program was on living wages. That program is that, together with a really why set of partners, we can Ben Thirty six organizations with living weight at its core, but also looking at holistically a number of other areas which needed to be incorporated in order to address living wages. We one of the things that was really at the center of this is we can't work on wages if there is no tea industry in the future in Malawi. Right. So this competitiveness was a really important aspect, looking at how can we enhance the productivity and the quality, but also looking at how can we further improve social dialog one of the things that we manage to achieve through the program was the the development of the first collective bargaining agreement. For example, over a five year period we've been able to reduce the living wage gap from to thirds two to one third, which means that there is still a gap right, but we've come quite a long way. The gap was quite massive to start off with. As IDH were here to continue working with the tea industry to help them on their journey and living wages and and to make progress to close living wage gaps together. But you explain the difference between a living wage and a living income? The term of living income is coming up more and more and when we talk about small rulers, we are actually not talking about living wage, but that's when we start talking about the living in income. So concept is similar. We were. We're both the focuses around achieving a decent standard of living for households. However, living wages applies to hired worker setting, whiles living income focuses on a self employed farmer. For example, last fall ID age introduced the road map on living wages, a platform that helps company secure living wages along their supply chain. Will you explain this new program to listeners? The Road Map is really been built on Best Practices that we've gained throughout the years as idage, working within a t sector, but also flowers, apparel and fruit and vegetables, for example, and it exists out of five steps that we've identified in order to start working on living wages within your supply chain, where the first step is actually to identify what's the living wage benchmark for the region that you're you're sourcing from. You have a benchmark tool available on the idea website where you're able to identify which benchmarks are available for your sourcing regions.

And once you know the benchmark, you obviously would like to know whether there's a difference between the actual wages that are being paid by the suppliers within your supply chain. And in order to help companies in that process, we have developed the salary matrix tool, which is a self assessment tool for producers to calculate current Rumuneration, including bonuses and in kind benefits, and this is comparing against the living wage benchmark. This tool helps you to understand what is the size of the gap, if there's a gap at all, but it also helps you, over years, to monitor progress and support work with, for example, certification programs who have and to are continuously improving their living wage requirements. A step three, we recommend to find a trustworthy way of verifying those calculations right, because it's in principle of self assessment and our ultimate goal, as IDH is that these gaps are being verified by audits through certification schemes. We are not there yet completely, but that's a process that's very much ongoing. And then, I think the most tricky step of all is that for and actually closing the gap that you'll find and and once the size of the gap is clear, you need creative and inofferative approaches to remove these barriers and actually make probos towards closing this gap, which we believe is a shared responsibility and should be done very much in close connect with local stakeholders, and then, as a fifth step, in order to move towards action, although we do see that sin is sector specific and also context dependent, but you can learn so much across from all these different experiences. That's sharing in size, learnings, best practices, what has worked well what hasn't, is really key to further advanced the living wage journey that many of us and companies that were working with our own. So those are the the five steps of the Road Map. In a nutshell, we are also working on a living income road map which actually mirrors those five steps. They're the same, although the actual process and implementation is obviously a tailor to the small, older setting. Intrigued by what you heard in today's podcast, would you like to learn more from our global network of TB is journalists and t experts? Remember to visit the t Biz website for more comprehensive coverage. That's wwwt Biz Bi zlcom. Thanks for listening. Farewell. Till next week.

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