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Tea Biz News and Insight - September 23, 2022

ABOUT THIS EPISODE

HEAR THE HEADLINES – FAO Reports that Progress Toward Sustainable Agriculture has Stalled in Many Regions | Sustainability remains a priority and trending, but the implementation of the UN FAO’s Agriculture goals was hampered by war, COVID-19, and climate change | Tea Relief for Pakistan | Outsider Offers $157 Million to Buy McLeod Russel India

| NEWSMAKER – Jami Lewchik, Head of TAZO and Portfolio Sustainability, eketerra Americas

| FEATURE INTRO – This week, Tea Biz travels to Connecticut to discuss with Jami Lewchik the ambitious task of certifying TAZO Regenerative’s entire line of teas and ingredients.

TAZO Adopts a Regenerative Business Approach – TAZO reformulated and relaunched four of its leading blends this summer. TAZO’s long-term ambition is to transform its products and the brand’s entire business operations into a regenerative approach that challenges what the tea industry can do and gives back to people and the planet. In renaming the brand TAZO Regenerative, parent tea company ekaterra committed a sizeable long-term investment in its tea supply chain. The focus is on support for farmers that implement practices to increase soil health and assure fairness to farm workers. Third-party certifier Regenerative Organic Alliance (ROA) praises the company for “aligning with our mission: to heal a broken system, repair a damaged planet, and empower farmers and eaters to create a better future through regenerative organic agriculture.”

The T 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 Bolton. It is the voice of origin for t professionals and enthusiasts worldwide. Weekly, the t Biz podcast and t Biz blog offer business insights on the news that most impacts the tea industry. Paired with Tea Journey magazine for tea enthusiasts, the t Biz portal is a global resource providing nuanced coverage for everyone who loves tea. Hello everyone here. This week's headlines. F A oh reports that progress towards sustainable agriculture has stalled in many regions. There's tea relief for Pakistan and an outsider offers a hundred and fifty seven million for mcloyd Russ India. Plus. Jamie Lucik, head of Pozo's Sustainability Initiatives in the US, discusses the ambitious task of obtaining regenerative organic certification for the brand's entire line of teas and ingredients. 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, Tele Awaki, Lee Boga, Wanthal Awa, Harana and Eliptia tea estates support Save the Children Sri Lanka, the Food and Agricultural Organization reports that seven years after the United Nations committed to seventeen sustainable development goals, known as S D G S, the trend line show a slight improvement, but measures of current status indicate, quote, progress towards sustainable agriculture seems to have stalled in many regions. End, quote, Western Asia and Northern Africa, Latin America and the Caribbean, North America, Europe and Oceania, excluding Australia and New Zealand, have registered no improvement since twifteen according to F A O's annual report. The report titled Tracking Progress on Food and agricultural related SDG indicators was issued this week at the United Nations General Assembly. Progress is reported on a scale of one to five. Goals are aspirational targets are measurable. The UN's two hundred and thirty indicators show the specific measurement by which targets can be judged as successful or unsuccessful. According to F a O quote, most regions, as well as the world as a whole, can be described as close to achieving productive and sustainable agriculture. Several regions achieve an even better level, coming very close to the target of achieving productive and sustainable agriculture. These regions include Central Asia, s I D S and acronym for Small Island Developing States, Oceanica and Europe. The world's least developed countries and landlocked developed countries match the global progress score at three. Australia and New Zealand...

...scored four out of five, as did North America and Western Europe. This year report also includes, for the first time, additional indicators for agricultural losses due to disasters, the distribution of land tenure rights and the impact of International Trade Policies and regulations on agricultural trade. The full report is available for download at f a o Dot Org. Business insight. Eliminating poverty is the U N's number one goal. The number of people in poverty increase from eight point three of the world's population in to nine point two. This year's report also found a significant increase to two hundred and ten million under nourished people globally, a setback that subverted all of the progress of the previous decade. Eight of the seventeen goals associated with food supply and well being, quote, suffered devastating setbacks due to adverse socioeconomic impacts of conflict and war, the COVID nineteen pandemic and climate change. According to F A L chief statistician, Petro Jennari, said that, quote. While the world was already not on track to achieve the sustainable development goals before, the past two years have seen a series of reversals in several dimensions, including food security and cultural productivity. End Quote. There's tea relief on the way for Pakistan. The fate of sixteen million Pakistani children followed extensive flooding is beyond the bleak, as outbreaks of water borne disease have killed fifteen hundred people, including five hundred and twenty eight children and districts. According to UNISHEF, floodwater submerged one third of the world's fifth most populous country and will take up to six months to recede. According to UNISF, unprecedented monsoon flooding destroyed and estimated one million homes. Continuous rainfall washed out roads, swept away bridges, destroyed crops and has since overwhelmed medical services. Losses are estimated at thirty billion. Food and shelter are the immediate concern as the world rushes to aid at the urging of the World Health Organization, which warned of the potential for a wave of disease and death following a catastrophe. PAGISTAN's prime minister says, quote, millions of people are still living under the open sky. End, quote. Water is giving rise to water borne diseases, including malaria, gastrow enteritis, diarrhea and skin diseases. UNISF estimates the three point four million children need immediate relief. To donate, visit the International Development and Relief Foundation website at I D R F dot c. A business inside in September, Netherlands, based at cattery t donated a hundred tons of tea to Pakistan, saying, quote, tea is not only a part of the...

...staple diet in Pakistan, but also an essential item that helps people get a sense of community. Through the donation, Attara hopes to give Pakistani's a feeling that everyone is in this together. Pakistan is the world's largest tea importer by volume and has the seventh highest consumption per capita. Tea Drinkers there consume an average of three thousand cups per second. Carbon Resources, of private company that makes battery electrodes, acquired five percent of troubled mcloyd Russell India last week, announcing a takeover offer. Quote that is fair and lucrative. End Quote. COLCATA based mcloyd is one of India's largest tea growers, producing seventy three million kilos of tea annually. Insolvency for seatings forced the venerable ty venture to consider an acquisition. To repay several banks and other lenders, carbon resources sent a letter of intent to creditors as a non binding offer to settle all secured debt in full and pay fifty five of what they are owed two unsecured lenders. The offer caused mcloyd shares to soar, gaining almost seventy during the past week. A director for carbon resources told Bloomberg News that the takeover would help it diversify and add scale. The intent, he said, is a clean, one shot resolution for mcloyd Russell, and that is what we have offered mcloyd owes SEV hundred Karri in Indian rupees, more than two D ten million in US dollars, or band and and paramount in Bengaluru reports on this week's to auction prices in the A T price report for the week ending Seventeen September twenty twenty two. Indian media has been a buzz with reports for significant chunk of Duchy links tea gardens being up for sale. As a plantation business has become increasingly unviable, there has been a build up towards what could be a tipping point. Multiple factors have contributed to it, including decreased yield, increased cost of production, the loss of markets in twenty seventeen following the Gorka agitation, climate change and now the increasing volume of cheap and inferior quality tea that comes from Nepal at a euro percent and for duty, thanks to her into friendship Indo Nepal Friendship Treaty. What this has done is really bought prices down, as Nepalty is being blended or sold as and sold with dueling tea in the markets and producers are unable to recover even the cost production from bulk of their teas. Remains to be seen how things will unfold over the next few months. In auction, silk that eight so good demand for orthodox black teas across all auction centers. Exporters were active. In Kolkatta, Orthodox sleeve sold for two forty four piece Polkilo, and got the Orthodox sleeve sold for two rupees pokilo. There was a strong demand for Orthodox tea here and data consumer products and in the stand unilver were active. In the south, average auction prices were hundred forty two piece Po kilo. In Cochin, ninety seven piece fifteen and hundred fourteen piece forty two in claimator. And now a word from our sponsor. Hello, I'm Bogdon, a passionate tea drinker and the inventor of the ultimate tea machine, the brewmaker. One preparation is key to making fine teeth. Sequential steepings delivered the best taste possible and unlock the rule value of...

...whole leaf teas and botanicals. Brew automates that process without using any pots or capsules. The simple to operate smart from control device stores steeping profiles to consistently make great tea. At the push of the bottom. Brew also reduces time, waste and energy. That's because I engineered the brew to Remember Control Settings for temperature, brewing time and quantity. Using my patented process lets you stack steep simply and conveniently. This Week tbias travels to Connecticut to discuss with Jamie Luci the ambitious task of certifying towns over generatives entire line of teas and ingredients. Jamie is head of Tonso and portfolio sustainability at actor America's Tazo were formulated and relaunched full of its leading blends this summer. Tauzo's long term ambition is to transform its products and the brand's entire business operations and to a regenerative approach that challenges what the tea industry can do and gives back to people and the planet. In renaming the brand Tazzo, regenerative parent tea company, Acta, committed a sizable long term investment in its tea supply chain. The focus is on support for farmers that implement practices to increase soil health and a sure fairness to farm workers. Third Party certifier Regenerative Organic Alliance, R O A, praises the company for quote, aligning with our mission to heal a broken system, repair damage planet and empower farmers and eaters to create a better future through regenerative organic agriculture and quote. Thank you so much, Jamie, for joining me on this week's podcast. Well, thank you so much for having me, Dan. It's my pleasure. Jamie, will you describe how Touso's decision to adopt a regenerative business approach expands on the basic concepts of fair trade and sourcing from sustainable suppliers? Fair trade and sustainability, of course, are two critical pillars to what we're trying to do and we're looking from the lens of regenerative to say, how can we start there and then go further to get to a place where we're actually giving back to people and planet? What else will it take to even the way that he has grown and that that's where we layered in the regenerative practices and principles? So fundamentally, from the perspective of the agricultural peace, looking at things along the lines of pollinator pathways, of protecting bio diversity, of looking into Um, you know, waterways that maybe on the land or adjacent to the land, and ensuring that those are cared for. So many people, I think, are used to organic practices and principles and are now interested in and learning more about regenerative but for us it also goes beyond the land. We're trying to focus on some key levels to deliver this regenerative ambition. We're looking at procurement, we're looking at partnership and we're looking at innovation from a procurement Lens. This is where it becomes very interesting and I think has real implications across the industry potentially. So with...

...with procurement, we are looking at our packaging materials as one example. So we have a commitment that bye we'll ensure our priority materials like tree fiber, sugar t are sourced from suppliers that have eliminated any deforestation from their supply chains and hoping that of our packaging will be reusable, recyclable or composed of all. Building resilient communities as one of the first principles and really to address on the ground challenges with these experts and partnerships that already exist, but are looking for more support from corporate partners like us. The reformulations begin a long process of achieving third party certification by the regenerative organic a law for the full range of Tosot. Will you describe the process and milestones? It's been over two years working towards this. So first and foremost, we started by partnering with Pure Strategies, which is our environmental Um consulting firm, and they helped us do an audit of our existing footprint, first from a product Lens but also from a business and Social Lens. So we knew where we were and then we said we were looking towards where we wanted to go. We we're hoping to find a third party, an independent certification that would show, that would reassure people that there was transparency in this, that we weren't greeting our own homework m the ambition that we were setting for ourselves. That's when we first learned of the regenerative organic alliance. We are proud our of the regeneraive organic alliance. We are not yet certified by them, I do want to make that clear, but we are working towards their standards and so we understood their framework and that's where we brought in the elements of regenerative practices and principles at the Farms, the fair trade certification through fair trade USA and then the organic certification as well. Marketing should simplify decision making and while third party certifications are powerful endorsements that build trust, labels crowded with too many certification emblems and seals are confusing and delute a significance of individual claims. In contrast, tells those remanding prominently, incorporates regenerative in the name and displays only two seals on the front of the package. Messaging emphasizes three tea growing principles, organic, comes ration and fair trade. Well, describe your strategy. It's a great point. It's it really is. There's such a world of information out there and misinformation out there, unfortunately, right and so with the certification, and again I'll use fair trade USA as one example. You know that when you see that there is work that's being done to ensure responsible farming practices and safe, healthy working conditions on the farms, things like gender equity and community development funds to address local needs, and that the farmers and the workers themselves are voting on what those funds are going to be used for. I think there are there. There are such rich informational educational materials at each of the partners websites, on their social pages they're linked in. I think that that, whether...

...it's the Rodale Institute or the Regenerative Organic Alliance or Fair Trade USA, these entities are doing a great job of collecting the important bits of information for consumers. I think it's my job as a brand owner to then say here is that information, here's why this is important that when we're putting it all together in a box, literal box, for you to enjoy in our tasot and so we feature some of their stories on our website or in our social conversations on instagram for example, or Tiktok, trying to meet our consumers where they are, where they might be looking for information, and then make that available to them. Earlier this year the new Climate Institute issued a report critical of companies trumpeting, quote, ambitious sounding Carbon Golf and, quote, Neft, Lee and New Labor offered rebuttals. Last month, the UK's Advertising Standards Authority banned advertising one of your Labor's popular detergents for unsupported claims about its sustainability. Listeners will find it helpful in your role as head of portfolio sustainability, if you share insights about consumers expectations? It's a very important question and I I think the answers might be something that the consumer has never thought of. But essentially what, in my opinion, what the consumers are looking for, what I'm looking for as a consumer, is transparency and some sort of reliability and and reassurance that what the company is promising me is is true. I will say for us, we see that businesses must play a role in addressing climate change because we played such a large role in creating it, and so for US companies, especially throughout but throughout the tea industry, we all need to step up and reduce our contributions to Greenhousek you're to address the full climate impact that that we've that we've created to make sure that this is done in in a way that is impactful and measurable and authentic and transparent. We think setting science based targets for greenhouse gas emissions and using validation by the science based targets initiative is critical. At Tazzo, our goal is to achieve carbon neutral operations by and to be on the path to science based net zero emissions, including at absolute reduction of scopes one, two and three greenhouse gas emissions by and our base here is in that calculation. So that's first and foremost. I I believe that S P T I, so the science based targets initiative, has built a program of a framework essentially, that that industry could enshould leverage in order to reassure consumers and in order to actually make measurable change. We are also its has a working on our full climate impact by completely overhauling our means of production and transitioning to regenerative organic, as we talked about at the top of the call. So this is encompassing everything from soil health to worker fairness. You know, we are a proud ally of the regenerative organic alliance and the Roadale Institute in this space. So when you look for where do we put our put our money where our mouth is? The farmers are making real of life choices every day on how to address the impacts of climate change...

...on their land. So right now we are raising funds towards the Rodale Institute, up to two dollars, to give to them to support farmers who are looking to transition to organic farming, and we are doing that in a hopefully a cheeky and fun way with a Tiktok ad that we have out there. We didn't spend a lot of money to buy media. We didn't buy a TV, we didn't buy printed we put this out there without paid media, hoping that people would talk about it and generate views. And then we're saying for each of you it's a dollar, because in that talking and in that conversation, people start to discuss, well, what is regenerative agriculture? Why is it important? What are what are regenerative business practices? Why is fair trade important? And we don't simply want we we want the momentum, we want the conversation to keep going and for consumers to learn more about it, to ask from more of it, to drive that sort of Flywheel, that virtuous cycle of growth where the demands increases, where more people want fair trade certification, so more farmers and communities are earning fair trade and earning fair trade money. And this, for us, is why we're going to transition our entire range to be regenerative organic. We're sending stringent ambitions about that as well. We're looking for at least eight percent of our ingredient volume to meet regenerative organic standards by sile being there's still that and things like set your gacid and you know, things that aren't necessarily covered by those standards at this moment in time. Finally, and most importantly, we are working with our sustainability consulting firm pure strategies to measure this progress step by step and we will be keeping our community updated on milestones through our website and through our social pages. So we know we owe those answers to consumers. Intrigued by what you've heard in today's podcast, would you like to learn more from our global network of t BZ journalists and t experts? Remember to visit the TV is website from more comprehensive coverage. That's W W W T hyphen Biz B I Z alcohol. Thanks for listening. Farewell until next week.

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