Tea Biz
Tea Biz

Episode · 1 year 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 news that you need to know, a recap of the week's major headlines, with commentary and cultural trends. Hosted by Danhol it is the voice of origin for tea professionals enthusis the world by. Think of us as a digital caravan of storytellers, bringing authentic, authoritative, exotic and exclusive stories to you weekly from the tea lands. Each week, the tea bis podcast summarizes news with the greatest impact on the tea industry. But Te requires far more nuanced coverage than the recitation of production volumes and commodity prices. That is why the tea Bi is podcast 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 innovative and interactive, permitting listeners to conveniently contact reporters at origin to ask questions that are 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 a g nine billion dollars start up promises field to plate traceability. More at a minute. The first this important message. Avani empowers rural women practicing sustainable agriculture, including tea, and crafts such as weaving with natural fiber and plant based dies. 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 nonprofit dedicated to strengthening farming communities. Cheers to a brighter future for all. To donate, visit Avani da Quman Dot Org. US Restaurant Rescue Funds. The one point nine trillion dollar American rescue plans signed into law last week includes twenty eight point six billion to rescue us restaurants. The funds provide debt free relief for small and midsize restaurants. Applications for tea themed restaurants, Small Cafe Chains and 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're not publicly traded. The President of the National Restaurant Association said. The grants, quote, will inject a much needed stimulus along the supply chain to begin to balance the economic damage done. and quote. The rescue plan extends moratoriums until 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 per location. Grants are calculated as the difference in average monthly revenue earned in twenty nineteen minus average monthly revenue earned in twenty twenty, multiplied by twelve. Business insight market research firm I RIRI and Chicago...

...writes that consumer habits formed during the pandemic 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 seventy nine percent of generation x. A majority of millennials, however, at sixty eight percent, prefer paid online loyalty programs. Overall, fifty one percent of respondence cited shopper loyalty programs as somewhat influential when deciding where to shop, with twenty 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 are strictly regulated by the European Union. In recent years, the EU adopted a green deal directive that seeks to reduce the use and risk of chemical pesticides and herbicides. The E use subsequent use of pesticide rules, known as Sud, applied to both bagg professionals and to the public, but they are not legally binding. In January, the European Commission identified, quote, significant shortcomings in the implementation, application and in for Schment in quote of the Sud Directive by Member States and launched a period of public consultation to determine whether the rules should be mandatory. The seud directive could result in a fifty percent reduction of chemical pesticides, according to some estimates. Commissioners made it clear the Sud is not enforceable as law unless adopted by parliaments of the member states. The comment period ends April. Twelve business insight. In East Africa, growers are experiencing the worst locust outbreak in seventy years. Ambitious locals are capitalizing on the fact that locusts become lethargic after dark and easy prey. In February, the bogue picture, a Kenyon firm that processes insects into animal feed, but two point four metric tons of locusts. Teams of twenty five to thirty workers sustainably and organically eliminate up to four hundred kilos of the crop, killing pests between sunset and sunrise daily, earning five dollars for every ten kilos. No pesticide odds are required. Tee. Theoflavien inhibits coronavirus replication. A healthy diet and plenty of sleep are best at boosting immunity from the coronavirus, but those stricken with covid nineteen may benefit from also drinking tea. Researchers that took lie tr a branch of India's Tea Research Association, have demonstrated the quote virus inhibiting benefits of black tea. End Quote rights joy deep for Con, who manages the research center in Johat Assam, citing studies published in the Journal of biomelecular structure and Dynamics and in the journal frontiers and immunology. Director Doctor AK Laura Rights that variants of the bioactive compound, Theoflaben Act on...

...multiple targets of the coronavirus, affecting the stability and blocking the binding sites of viral proteins. The formation of special bonds inhibit replication of the virus. He said that harnessing the health properties of tea will pave the way for extensive use of bioactives that will immensely help to popularize black tea in India. Plant A G is a nine billion dollar start up that promises field to plate traceability. Investors confident that traceability is a bankable attribute, have invested eight billion in public private bonds, with an additional eight hundred million in cash to fund plant a G, a US based open source block chain documented vertical farming infrastructure project. IBM's Food Trust software will manage gigabytes of logistics, cultivation and processing data on greehouse grown leaf, lettuce, strawberries and tomatoes, Basle, Kale and blueberries. Half of the fruit and a third of the vegetable sold in grocery stores is imported, often traveling along a month long supply chain. Plant A G intends to shorten the chain to three days. 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 a third of Americans fresh produced within seventy two hours business inside. CONSUMERS SCANNING PLANT AG product labels with their phones will be able to see where the food is grown, making tracebacks in the event of contamination practical and quick and leading to greater 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's TA price report. India price watch much seventeen. Sale ten ended with auctions in Calcutta and the NOTT and Coimbato Coachin connote in the south there was no significant change in prices compared to the previous week. At this time it's the dusty that's being picked up by buyers. We should begin to see the upward shift in prices as tea regions across the country receive rain chars. As was hoped. Tea Producers were re lying heavily on this rain. Darjeeling has begun first flush, but lower elevation gardens already into Dj Markings, while those at higher elevations are producing X. all eyes on April for the full picture of Indian first flush, but it appears that the season will meet expectations. And now a word from our sponsor. Q trade. Tea sporks with tea preveyors at every scale, from promising startups to the world's largest multinational beverage brands in the hot, iced and Barrow Tea Segments. With US based formulation, blending and packaging services, q trade can help you innovate, scale up and grow your specialty tea brand. For more information, visit our website, que trade tea'scom this week tea Biz continues as 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 noclear power plant and Fukashima, and we travel to India to discuss a 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 north and the east of Japan's tea growing region. Losses were significant, and Shizoka due to factory closings where lightly contaminated tea was concentrated. Japan's tea growing regions were not impacted and continued to evolve, initially for going exports in favor of the domestic market. That change begetting in two thousand and sixteen is exports increase from four thousand to five thousand one hundred metric tons. Valuation peaked in two thousand and eighteen, at one point five billion yen, largely because of the outside 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 eightyzero metric tons, down about twenty percent from all time highs. Export levels have since plateaued and t value declined during the pandemic. Here, testing continues as a precaution, but the tea from Japan is safe when accompanied by a food safety certificate. Jason Aing lives in Japan and works in Business Development for common town et a green tea blender, custom roster and Mancha company that processes more than a thousand metric tons annually for Japan's food and beverage companies. I remember exactly why I was when it happened. My colleagues and I all felt it and many had a bad fitting as it lasted quite long, but never imagined it would be an earthquake over a thousand kilometers away, and we turned onto me right away of a small pickup truck trying to escape, with the tsunami ginning on it and eventually washing the it away. It felt very helpless watching that life. To this day, I still think about it and hoping the driver and, you have the passengers, are still with us. On average, there are a hundred fifty earthquakes country wide. What made this one different was 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 our daily operations. But before disaster door challenges in the industry, with the inclining of 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 concerns just did lead to an overall stricter testing requirements from Japanese and foreign government agencies and even the brands themselves. Over time, the Japanese teaenistry got back on spree in a very big way and year by year, green tea and Matcha are one of the fastest growing tea segments, with its health benefits and its wide range of food applications. Yeah, really excited to see what the future holds for green tea and for Japan. During the pandemic century, old looks Mai grew, which auctions millions of kilos of tea annually to a small cadrey of buyers who purchase Twentyzero Kilo complain or large had to quickly adapt to showing fifty grand packets of tea direct two thousands of consumers, two thousand and twenty accelerated a shift to digital media on that many tea producers embraced. Did this bring more customers? This is increase sales?...

Is this a catalyst that the farm to Cup movement needed? We pose these questions to DRACHART G Managing Director of the hundred plus Euro Luctiony group. With estates in West Bengal, Assam and Suppura in India, and Rwanda and Africa producing collectively twenty million kilos of tea annually. So how is two thousand and twenty been for you? Did you also shift a selling online? This was the first time that we sold tea directly to consumers and the reaction is amazing because, after all, as growers of tea, it's great to hear from someone who's drinking that tea at home. Also for us to get feedback one week or two weeks after we produced the tea, you know, because the tea growing is in some ways quite 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 months away, and then you just see a price and a name of a customer and nothing more. But here you're getting emails, questions on how to do the tea, pictures of how they're drinking the tea. So it's fascinating for us. We are getting more and more customers from around the world, but also from customers within resting one who are reaching out to us and actually subscribing to a tease, not just buying teas, but you know, asking for delivery once a month or once every fifteen days, which we love. It's been very energizing both for me and for my colleagues who are growing the tea in the state. Do you think selling direct to customers online is here to stay? It is not still the dominant way we sell. The dominant way we sell is the option and we depend on the options. We depend on the large companies coming in buying teas from the options. If this is us very small part, because you know, each sale online is for two hundred and fifty grams or five hundred grams. It's difficult or inconceivable at this point for 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 I thought was inconceivable happened, and so I don't know. You know what the future holds, but this is even if it doesn't become a major source of revenue for the company, it is certainly a major source of conversation. You know which tea blunters are always great at that. You know from WHO bought their tea from different parts and in actually going into googling the place where the t order came from and those kind of things. It's it's it's a it's a great fun for us and I don't know whether it will be a major part, but I hope it is. People see that the tea's great and they continue ordering, at least at the level that they're ordering now. Are they any customer favorites from the various Lux Metis? So our most successful has been Makai bordy the jealing, which is not a surprise because Makaibody has a name that people recognize, especially, you know, people who lived in the jelling at some point they might have been to Makai Bordy, and so that is popular. We are seeing quite a bit of demand for green tea and also 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 to a richer and from there it was exported. But we but in general there's been interested in all our teams, whether it is the rundon teeth, and the comments are actually very knowledgeable, like there was one comment about how the oneon teas are very bright in Connor, which is exactly the in the right description for it, you know, and...

...that's the tasters description. It's a brisk and write tea. And the discussion of the first flush was the second flush in the actually how the first flush is mellow. Also, I think people being at home, they probably had more time to brew the team in the 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 fools to use during this time of the year. So those kind of conversations are very encouraging. 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 that there 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 of the revenue of these tea packets can go to the people who are working and those discussions, because we don't see the front end of the business as produces and the front end of the business who are retailers, they don't see the issues that we are dealing with either. So even if we do a very little of you know, the whole gavernment, even if it's a five percent of our business. We understand the whole issue and the challenges of challenges which are very difficult to solve the the the worker, as their wages, their education, their health, in an environment where there is no margin in the business as a producer, yet there's significant prices that the final consumer ps you know. You know how much of that is going into packaging, on advertising, on other things, and how much of it should come to developing healthier environment at the production site. So all these conversations, I think, are things that will become more relevant and more discussed. As you know, we run the whole gamut, even for a small part of our business. Has it 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 and we are sending samples to buy us around the world regularly. It just happens to be be to be by us. So and we do have a courier system that works and someone who knows how to make that work. So doing a 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 train some people who are in the state, which would be a fantastic, fantastic thing for the people in a train workers to become, you know, logistics guys 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 an alarm 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 the manager who's produced the team and and any email is immediately answer at because people are very excited and it is just the the the knowledge of what the customers says about the product, what they think about, you know, the brewing and you know, there was one comment of someone saying that I know that you're not supposed to have largeating with milk, but I love my dodge eating 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 it was it was something that is, you know, as a consumer, and I'm very excited as well, you know, to actually be able to be an individual customer asking for your own, you know, processed product. In a product like T it's like, you know, for many consumers teas like sugar or milk. You never thought that it would get it changed based on your preference, but you can. It's it's cooking right. So if you want you your team with milk, you have to just make sure that the you have a stronger leaf which you know...

...holds that mink, and so all of 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 hotel in one of her states, that can start a few months ago I've actually seen people visit the t states. So that a combination of hearing from customers and seeing customers in the TSTATE is plus time for more than Hundred Years History of duction met that this has happened. So it's quite amazing. Intrigued by what you heard in today's podcast, would you like to learn more from our global network of Tbiz journalists and t experts? Contact them direct through subtext, private message based platform. Avoid the chaos of social media and start a conversation that matters. Subtext, message based platform let's you privately ask meaningful questions of the Texperts, academics t Biz journalists reporting from the teams. You see their responses via SMS text which are sent to wrect your phone. visit our website subscribe to subtext. That instantly connected the most connected people in tea. Remember to 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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