Tea Biz
Tea Biz

Episode · 10 months ago

Tea News and Biz Insight - March 19, 2021

ABOUT THIS EPISODE

HEAR THE HEADLINES

| US Restaurant Rescue Funds Total $28.6 Billion | EU Reviews Pesticide Rules | Tea Theaflavin Inhibits Coronavirus Replication | PLANT-AG is a $9 Billion Startup that Promises Field-to-Plate Traceability

| GUESTRudra Chatterjee, Managing Director of the Luxmi Group, which owns estates in West Bengal, Assam and Tripura in India and Rwanda in Africa producing collectively 20 million kilos of tea annually.

| FEATURES – This week Tea Biz continues its coverage of how Japan’s tea industry successfully met the challenges of marketing tea a decade after the disastrous earthquake, tsunami and meltdown of the nuclear power plant in Fukushima.…. and we travel to India to discuss a pandemic pivot with Rudra Chatterjee, managing director of the Luxmi Group.

Meltdown Led to Tea Industry Realignment in Japan

Radioactive fallout from the Fukushima Daiichi meltdown descended in plumes far north and east of Japan’s tea growing region. Losses were significant in Shizuoka due to factory closings where lightly contaminated tea was concentrated. Japan’s tea growing regions were not impacted and continued to evolve, initially foregoing exports in favor of the domestic market. That changed beginning in 2016 as exports increased from 4,000 to 5,100 metric tons. Valuation peaked in 2018 at 1.5 billion yen, largely because of the out-sized success of matcha, which accounted for 43% of exports, according to the Japanese Tea Export Production Council.

Will the Pandemic and Pivot Online be the Catalyst the Farm-to-cup Movement Needed?

2020 accelerated a shift to digital media, one that many tea producers embraced. Did this bring more customers? Did this increase sales? Is this the catalyst the farm-to-cup movement needed? We posed these questions to Rudra Chatterjee, Managing Director of century old Luxmi Group that auctions millions of kilos of tea annually to a small cadre of buyers purchasing 20,000 kilo container lots. Luxmi quickly adapted to selling 250 gram packets of tea directly to thousands of consumers a pivot that Chatterjee says brought significant benefit.

The Tea Biz podcast delivers tea newsthat you need to know, a recap of the week's major headlines, withcommentary and cultural trends. Hosted by Danhol it is the voice of origin fortea professionals enthusis the world by. Think of us as a digital caravan ofstorytellers, bringing authentic, authoritative, exotic and exclusive stories to you weekly fromthe tea lands. Each week, the tea bis podcast summarizes news with thegreatest impact on the tea industry. But Te requires far more nuanced coverage thanthe recitation of production volumes and commodity prices. That is why the tea Bi ispodcast is paired with the more inclusive teabe is blog and tea journey magazine. The podcast offers a weekly mix of news and features. It is innovativeand interactive, permitting listeners to conveniently contact reporters at origin to ask questions thatare answered via text messages that are delivered privately to their phone. Welcome.Here are the headlines. US Restaurant Rescue Funds Total Twenty eight point six billion. The EU reviews pesticide rules. TETHEA flavan inhibits coronavirus replication and plant ag nine billion dollars start up promises field to plate traceability. More at aminute. The first this important message. Avani empowers rural women practicing sustainable agriculture, including tea, and crafts such as weaving with natural fiber and plant baseddies. Up in the towering Hillalayas human is one of India's oldest tea regions. Today we raise our cups in the name of Avani Quman, a nonprofitdedicated to strengthening farming communities. Cheers to a brighter future for all. Todonate, visit Avani da Quman Dot Org. US Restaurant Rescue Funds. The onepoint nine trillion dollar American rescue plans signed into law last week includes twentyeight point six billion to rescue us restaurants. The funds provide debt free relief forsmall and midsize restaurants. Applications for tea themed restaurants, Small Cafe Chainsand tea rooms will be accepted by the small business administration beginning in April.Funding eligibility includes franchise ease with fewer than twenty locations, so long as they'renot publicly traded. The President of the National Restaurant Association said. The grants, quote, will inject a much needed stimulus along the supply chain to beginto balance the economic damage done. and quote. The rescue plan extends moratoriumsuntil September, allocating five billion to help business tenants struggling to pay rent.Government funded grants are capped at ten million per restaurant group and five million perlocation. Grants are calculated as the difference in average monthly revenue earned in twentynineteen minus average monthly revenue earned in twenty twenty, multiplied by twelve. Businessinsight market research firm I RIRI and Chicago...

...writes that consumer habits formed during thepandemic may be here to stay. One clear winner is retail loyalty points.Eighty percent of generations and Z subscribe to free grossery loyalty programs, and seventynine percent of generation x. A majority of millennials, however, at sixtyeight percent, prefer paid online loyalty programs. Overall, fifty one percent of respondencecited shopper loyalty programs as somewhat influential when deciding where to shop, withtwenty two percent indicating loyalty programs are extremely influential when deciding where to shop.Since pesticides can have harmful effects on the environment and human health, they arestrictly regulated by the European Union. In recent years, the EU adopted agreen deal directive that seeks to reduce the use and risk of chemical pesticides andherbicides. The E use subsequent use of pesticide rules, known as Sud,applied to both bagg professionals and to the public, but they are not legallybinding. In January, the European Commission identified, quote, significant shortcomings inthe implementation, application and in for Schment in quote of the Sud Directive byMember States and launched a period of public consultation to determine whether the rules shouldbe mandatory. The seud directive could result in a fifty percent reduction of chemicalpesticides, according to some estimates. Commissioners made it clear the Sud is notenforceable as law unless adopted by parliaments of the member states. The comment periodends April. Twelve business insight. In East Africa, growers are experiencing theworst locust outbreak in seventy years. Ambitious locals are capitalizing on the fact thatlocusts become lethargic after dark and easy prey. In February, the bogue picture,a Kenyon firm that processes insects into animal feed, but two point fourmetric tons of locusts. Teams of twenty five to thirty workers sustainably and organicallyeliminate up to four hundred kilos of the crop, killing pests between sunset andsunrise daily, earning five dollars for every ten kilos. No pesticide odds arerequired. Tee. Theoflavien inhibits coronavirus replication. A healthy diet and plenty of sleepare best at boosting immunity from the coronavirus, but those stricken with covidnineteen may benefit from also drinking tea. Researchers that took lie tr a branchof India's Tea Research Association, have demonstrated the quote virus inhibiting benefits of blacktea. End Quote rights joy deep for Con, who manages the research centerin Johat Assam, citing studies published in the Journal of biomelecular structure and Dynamicsand in the journal frontiers and immunology. Director Doctor AK Laura Rights that variantsof the bioactive compound, Theoflaben Act on...

...multiple targets of the coronavirus, affectingthe stability and blocking the binding sites of viral proteins. The formation of specialbonds inhibit replication of the virus. He said that harnessing the health properties oftea will pave the way for extensive use of bioactives that will immensely help topopularize black tea in India. Plant A G is a nine billion dollar startup that promises field to plate traceability. Investors confident that traceability is a bankableattribute, have invested eight billion in public private bonds, with an additional eighthundred million in cash to fund plant a G, a US based open sourceblock chain documented vertical farming infrastructure project. IBM's Food Trust software will manage gigabytesof logistics, cultivation and processing data on greehouse grown leaf, lettuce, strawberriesand tomatoes, Basle, Kale and blueberries. Half of the fruit and a thirdof the vegetable sold in grocery stores is imported, often traveling along amonth long supply chain. Plant A G intends to shorten the chain to threedays. Founder careerscomb is building greenhouses no further than eight hours from urban centers. Harvesting at four am means the company will eventually be able to provide athird of Americans fresh produced within seventy two hours business inside. CONSUMERS SCANNING PLANTAG product labels with their phones will be able to see where the food isgrown, making tracebacks in the event of contamination practical and quick and leading togreater accountability origin, addressing not just food safety but sustainable practices and labor conditions. Read a full account by cliff Rainey in this month's Fast Company magazine.Fair weather across Asia builds well for the early harvest. Here was this week'sTA price report. India price watch much seventeen. Sale ten ended with auctionsin Calcutta and the NOTT and Coimbato Coachin connote in the south there was nosignificant change in prices compared to the previous week. At this time it's thedusty that's being picked up by buyers. We should begin to see the upwardshift in prices as tea regions across the country receive rain chars. As washoped. Tea Producers were re lying heavily on this rain. Darjeeling has begunfirst flush, but lower elevation gardens already into Dj Markings, while those athigher elevations are producing X. all eyes on April for the full picture ofIndian first flush, but it appears that the season will meet expectations. Andnow a word from our sponsor. Q trade. Tea sporks with tea preveyorsat every scale, from promising startups to the world's largest multinational beverage brands inthe hot, iced and Barrow Tea Segments. With US based formulation, blending andpackaging services, q trade can help you innovate, scale up and growyour specialty tea brand. For more information, visit our website, que trade tea'scomthis week tea Biz continues as coverage...

...of how Japan's tea industry successfully metthe challenges of marketing tea a decade after the disastrous earthquake, tsunami and meltdownof the noclear power plant and Fukashima, and we travel to India to discussa pandemic pivot with rude rush Chattergy, managing director of the Lousnik Group.Radioactive fall out from the Fukushima Diah she melt down descended in plumes far northand the east of Japan's tea growing region. Losses were significant, and Shizoka dueto factory closings where lightly contaminated tea was concentrated. Japan's tea growing regionswere not impacted and continued to evolve, initially for going exports in favor ofthe domestic market. That change begetting in two thousand and sixteen is exports increasefrom four thousand to five thousand one hundred metric tons. Valuation peaked in twothousand and eighteen, at one point five billion yen, largely because of theoutside success of Mancha, which accounted for forty three percent of exports last year. According to the Japanese Tea Export Production Council, production remains level at eightyzerometric tons, down about twenty percent from all time highs. Export levels havesince plateaued and t value declined during the pandemic. Here, testing continues asa precaution, but the tea from Japan is safe when accompanied by a foodsafety certificate. Jason Aing lives in Japan and works in Business Development for commontown et a green tea blender, custom roster and Mancha company that processes morethan a thousand metric tons annually for Japan's food and beverage companies. I rememberexactly why I was when it happened. My colleagues and I all felt itand many had a bad fitting as it lasted quite long, but never imaginedit would be an earthquake over a thousand kilometers away, and we turned ontome right away of a small pickup truck trying to escape, with the tsunamiginning on it and eventually washing the it away. It felt very helpless watchingthat life. To this day, I still think about it and hoping thedriver and, you have the passengers, are still with us. On average, there are a hundred fifty earthquakes country wide. What made this one differentwas the nuclear disaster that followed. Since we are based in western Japan,our company is quite fortunate as disaster didn't have any sign different impact on ourdaily operations. But before disaster door challenges in the industry, with the incliningof green tea farms, combined with the radioactive contamination and tea from eastern Japan, especially for exporting. It definitely did cause supply chain issues and health concernsjust did lead to an overall stricter testing requirements from Japanese and foreign government agenciesand even the brands themselves. Over time, the Japanese teaenistry got back on spreein a very big way and year by year, green tea and Matchaare one of the fastest growing tea segments, with its health benefits and its widerange of food applications. Yeah, really excited to see what the futureholds for green tea and for Japan. During the pandemic century, old looksMai grew, which auctions millions of kilos of tea annually to a small cadreyof buyers who purchase Twentyzero Kilo complain or large had to quickly adapt to showingfifty grand packets of tea direct two thousands of consumers, two thousand and twentyaccelerated a shift to digital media on that many tea producers embraced. Did thisbring more customers? This is increase sales?...

Is this a catalyst that the farmto Cup movement needed? We pose these questions to DRACHART G Managing Directorof the hundred plus Euro Luctiony group. With estates in West Bengal, Assamand Suppura in India, and Rwanda and Africa producing collectively twenty million kilos oftea annually. So how is two thousand and twenty been for you? Didyou also shift a selling online? This was the first time that we soldtea directly to consumers and the reaction is amazing because, after all, asgrowers of tea, it's great to hear from someone who's drinking that tea athome. Also for us to get feedback one week or two weeks after weproduced the tea, you know, because the tea growing is in some waysquite a remote occupation. You make the tea, it goes into the auction, you get a date which is a few weeks or usually a few monthsaway, and then you just see a price and a name of a customerand nothing more. But here you're getting emails, questions on how to dothe tea, pictures of how they're drinking the tea. So it's fascinating forus. We are getting more and more customers from around the world, butalso from customers within resting one who are reaching out to us and actually subscribingto a tease, not just buying teas, but you know, asking for deliveryonce a month or once every fifteen days, which we love. It'sbeen very energizing both for me and for my colleagues who are growing the teain the state. Do you think selling direct to customers online is here tostay? It is not still the dominant way we sell. The dominant waywe sell is the option and we depend on the options. We depend onthe large companies coming in buying teas from the options. If this is usvery small part, because you know, each sale online is for two hundredand fifty grams or five hundred grams. It's difficult or inconceivable at this pointfor us to imagine that we're going to sell a lot of tea like that. But you know, one thing I've learned through the pandemic is whatever Ithought was inconceivable happened, and so I don't know. You know what thefuture holds, but this is even if it doesn't become a major source ofrevenue for the company, it is certainly a major source of conversation. Youknow which tea blunters are always great at that. You know from WHO boughttheir tea from different parts and in actually going into googling the place where thet order came from and those kind of things. It's it's it's a it'sa great fun for us and I don't know whether it will be a majorpart, but I hope it is. People see that the tea's great andthey continue ordering, at least at the level that they're ordering now. Arethey any customer favorites from the various Lux Metis? So our most successful hasbeen Makai bordy the jealing, which is not a surprise because Makaibody has aname that people recognize, especially, you know, people who lived in thejelling at some point they might have been to Makai Bordy, and so thatis popular. We are seeing quite a bit of demand for green tea andalso within India, which I I am quite surprised by because I you know, green tea was never sold to domestic market. It was always sold toa richer and from there it was exported. But we but in general there's beeninterested in all our teams, whether it is the rundon teeth, andthe comments are actually very knowledgeable, like there was one comment about how theoneon teas are very bright in Connor, which is exactly the in the rightdescription for it, you know, and...

...that's the tasters description. It's abrisk and write tea. And the discussion of the first flush was the secondflush in the actually how the first flush is mellow. Also, I thinkpeople being at home, they probably had more time to brew the team inthe right way. People are much more curious when they're buying from their state. You know, how is it being grown and what what kind of foolsto use during this time of the year. So those kind of conversations are veryencouraging. What would you say are the advantages of selling director customers?One of the really interesting outcomes of being able to sell the team is thatthere is a better margin for producers when they buy, when they sell directly. You know, they can be much more fair trade and what percentage ofthe revenue of these tea packets can go to the people who are working andthose discussions, because we don't see the front end of the business as producesand the front end of the business who are retailers, they don't see theissues that we are dealing with either. So even if we do a verylittle of you know, the whole gavernment, even if it's a five percent ofour business. We understand the whole issue and the challenges of challenges whichare very difficult to solve the the the worker, as their wages, theireducation, their health, in an environment where there is no margin in thebusiness as a producer, yet there's significant prices that the final consumer ps youknow. You know how much of that is going into packaging, on advertising, on other things, and how much of it should come to developing healthierenvironment at the production site. So all these conversations, I think, arethings that will become more relevant and more discussed. As you know, werun the whole gamut, even for a small part of our business. Hasit been challenging to get online and adopt to this new way of business?It hasn't been challenging at all. T states are designed for sending samples andwe are sending samples to buy us around the world regularly. It just happensto be be to be by us. So and we do have a couriersystem that works and someone who knows how to make that work. So doinga BTC sale. I guess the volumes are so small that it's okay.I think of the volumes were to get bigger, then we need to trainsome people who are in the state, which would be a fantastic, fantasticthing for the people in a train workers to become, you know, logisticsguys that will that will be a great opportunity for the workers as well.So I think I'm I'm very excited overall. We I actually have set up analarm every time there's a sale. So it happens for five times,but every time it happens, you know, I just watch that it to themanager who's produced the team and and any email is immediately answer at becausepeople are very excited and it is just the the the knowledge of what thecustomers says about the product, what they think about, you know, thebrewing and you know, there was one comment of someone saying that I knowthat you're not supposed to have largeating with milk, but I love my dodgeeating with milk, and the manager said that if you want it with milk, maybe I'll make a little stronger grew and send to something. And itwas it was something that is, you know, as a consumer, andI'm very excited as well, you know, to actually be able to be anindividual customer asking for your own, you know, processed product. Ina product like T it's like, you know, for many consumers teas likesugar or milk. You never thought that it would get it changed based onyour preference, but you can. It's it's cooking right. So if youwant you your team with milk, you have to just make sure that theyou have a stronger leaf which you know...

...holds that mink, and so allof these things are I think it's a it's a good move and you know, combined with the fact that I've also seen, because I was a hotelin one of her states, that can start a few months ago I've actuallyseen people visit the t states. So that a combination of hearing from customersand seeing customers in the TSTATE is plus time for more than Hundred Years Historyof duction met that this has happened. So it's quite amazing. Intrigued bywhat you heard in today's podcast, would you like to learn more from ourglobal network of Tbiz journalists and t experts? Contact them direct through subtext, privatemessage based platform. Avoid the chaos of social media and start a conversationthat matters. Subtext, message based platform let's you privately ask meaningful questions ofthe Texperts, academics t Biz journalists reporting from the teams. You see theirresponses via SMS text which are sent to wrect your phone. visit our websitesubscribe to subtext. That instantly connected the most connected people in tea. Rememberto visit the t Biz website for more comprehensive coverage. That's wwwft Biz bizcom. Thanks for listening. Farewell, till next week.

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