Tea Biz
Tea Biz

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Tea News and Biz Insights - December 31, 2021

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HEAR THE HEADLINES – Omicron Cancels Restaurant Reservations | Tea Sales in Foodservice Continue to Decline, a TEAIN22 forecast | Sri Lanka Barters $5 Million a Month in Tea to Settle Iranian Oil Debt| GUEST – Research scientists Nigel Melican, founder Teacraft, and President of the European Speciality Tea Association | FEATURES – This week, Tea Biz travels to the Republic of Ireland to visit Teacraft founder and research scientist Nigel Melican. Melican explains the necessity of mechanical tea harvesting and describes an innovation in two-person harvesters that features a rotating head that simulates a “selective” pluck without shearing leaves. Tea Mechanization Must be Well Managed –Nigel Melican is a career research scientist, founder of Teacraft technology consultancy, and President of the European Speciality Tea Association. He has monitored advances in harvesting technology for more than 40 years, from crude shears and reciprocating blades to the next generation “selective” harvesters capable of discerning and plucking (not shearing) only those shoots consisting of two leaves and a bud. Virtually all crops are being mechanically harvested now, explains Melican. Given the cost and shortage of labor and the growing demand for tea, there’s no other way that you can make commodity tea commercially viable, says Melican.

The Tea Biz podcast delivers a recapof the week's major tea news headlines, with commentary and cultural trends. Hostedby Dan Bolton, Te Biz is the voice of origin for tea professionals andenthusiast's world. Plot think of us as a digital caravan of storytellers, bringingauthentic, authoritative and exclusive stories to you weekly from the tea lands. Helloeveryone. This week's headlines. Amicron cancels restaurant reservations, tea sales and foodservice continue to decline. The Tea in twenty two forecasts and Sri Lanka bardersfive million a month in tea to settle Iranian oil debt. More in aminute, but first this important message. What makes a Perfect Cup of Ceylontea? The Perfect Cup is from the tea businesses that ensure the protection ofall the children living within their tea estates. We Salute Kailani Valley, Tellawackie,Bogojan, Thalawa, Harana and Elyptia tea estates support Save the children aswe want the fierce onset of a. The cron closed restaurants, cafes andtea shops in the waning hours of the second year of disruption of the oncelucrative retail segment. Restaurant cancelations began rising in Europe, the US and Canadathe week before Christmas and continued through New Year's Eve and the Netherlands, barsand restaurants, stores and schools were ordered closed through January. Fourteen, France, Italy, Spain and Portugal report infection rates forty percent greater than previous highs. Germany closed its nightclubs and soccer games. The UK's open for business despite infectionsthat number a hundred thousand per day for several days last week, butresidents there are cautious open tables. State of the industry report tracks seated diners, both walk INS and reservations in fourteen countries. Data indicated a recent highof four percent growth year over year during Thanksgiving week, but that has sincedropped off a cliff globally to negative thirty percent. Year over two years,reservations and walk INS or down by sixty nine percent compared to two thousand andtwenty. In the US, Walkins and reservations decline sixty seven percent compared tothe same period last year. In the UK, Walk Ins and reservations declinedeighty three percent in Canada, eighty two percent in Germany, ninety six percentfor the week ending December twenty eight as cancelations grew to forty five percent inNew York and Washington DC. Hospitality closures due to staff illnesses sword even beforeAlmacron arrived, the survey of Threezero restaurant owners found that seventy seven percent didnot have enough workers to meet demand. According to the National Restaurant Association,US Labor Department Data reported forty four thousand restaurant jobs filled in November, downfrom an average monthly total of two hundred thousand for the first seven months ofthe year. Donning will not disappear,...

...but during the past year wholesalers andlocal t shops supply hotels, tour stops and restaurants suffered repeated setbacks. Now, food inflation weighs heavily on the segment, compounded by increased labor cost and risingdebt. Small businesses were forced to close, despite government funds to offsetlosses. Those still hanging on are raising menu prices thirty to fifty percent.As the almochron wave of infections crests at record highs this winter, the tillhas run dry. Tea Sales and food service continue to decline. This isthe second of a dozen tea forecasts of the New Year. Two years ofcovid reset tea consumption at restaurants and cafes, initially by reinforcing traditional expectations of comfortand warmth, but evolving to permanently disrupt menu choices. Tea, exceptfor bubble tea, largely missed out on the rapid growth of restaurant quality fooddelivery, herb side service and take out beverage service in downtown offices and innercity stands and food trucks selling teas and juice lost out to convenient, closerhome locations. US Tea imports overall or down in volume, up in value. herbals are up in volume and up in value. In the US.Sales of herbal supplements top ten million for the first time, growing twenty fivepercent in mass market outlets. According to the American Botanical Council. Events drivingtrends that appeared in trenched in two thousand and twenty, including lockdowns and thepivot online, evolved in two thousand and twenty one. The pandemic still exertsa heavy hand but adaptations are meeting. The challenge will follows are three offive market moving food service developments shaping two thousand and twenty two. visit thetea Biz blog to discover the rest lockdowns that, for a time, allbut eliminated twenty percent of the tea industries revenue continue to depress. Food Servicesales globally. Staff from Tri Walla stands and Mumbai to five star restaurants onthe river era shuttered their stores during the Alpha waves, shuttered in fear asDelta Ram paged, and now faced Nimble Almacron. As the third year ofthe pandemic begins, the National Restaurant Association estimated a hundred and Tenzero U aseating establishments closed in two thousand and twenty, eliminating two point five million jobs,as food service sales declined by two hundred and forty billion, below estimates, off twenty four percent your over year, making two thousand and twenty the worstyear for restaurants in history. Two Thousand and twenty one had to bebetter, and it was for a time. The vaccines built confidence and at midyear the Nur a forecast at nineteen percent in food service sales increases toseven hundred and eighty nine billion dollars, but that didn't happen. Diners areeager to return when infections ease, but they already thin margins in the foodservice secment will worsen. In Two thousand and twenty two business inside tea wholesalersserving hotels, restaurants, cafes and coffee shops, we're in disbelief. InTwo thousand and twenty is standing orders simply stopped. Packaged tea blenders meanwhile workedovertime to supply grocery outlets with stores strip...

...bear the top sellers plant based,functional beverages with a reputation for health and wellness, in other words, teaso date center, I'll tea overnight became the fastest moving of the fast movingconsumer goods and stores through much of two thousand and twenty. In Two thousandand twenty one, the spotlight shifted to botanicals. Plant based, functional botanicalbeverages are definitely eating into te sales. But if your first concern is consumerwell being, there is no gloom. Rishee tea is now Rishee tea andbotanicals, with products sitting on the shelf next to bigelow botannicles and yogi herbalteas. The botanicals market was valued at ninety three point six billion in twothousand and twenty and will achieve six point six percent growth from two thousand andtwenty one through two thousand and twenty six. According to modor intelligence, tea onlyvendors are at a disadvantage competing with broader plant based specialists like Martin Bauer, with a century of tea and botanicals expertise. In Two thousand and twenty. If you can't beat him, join them. botanicles drive innovation, additionaldrinking occasions and deliver health benefits. Relish the fact that virtually every botanical benefitswith tea as its base business. Inside Germans in two thousand and twenty consumedan additional two leaders of tea to average seventy liters per capita. Most ofthat increase for some drinking botanicals. Pivot to online. Online sales remain alifeline for t retailers, large and small. Confine consumers appreciate the convenience of doorstepdelivery. Selections are global and variety. Delivery costs a reasonable and specialty vendorsare driving tea discovery by educating consumers about producers and origin. Producers thatlaunch direct to consumer brands brought in their base and earn far more per kilothan at auction. In Two thousand and twenty every imaginable beverage competed online,forcing marketers to spend a fortune on advertising to generate incremental sales. The standoutproduct in two thousand and twenty one is curated subscription boxes that deliver seventy fiveto a thousand grams of tea, enough for fifteen to forty five cups,and sell for around twenty five to thirty five dollars per month. Exclusive teaclubs that offer rare and premium teas charge subscribers a hundred and fifty to threehundred dollars per year. Business inside course, sight research notes that growth of singlechannel online retailers, including market places, now trails their Omni Channel counterparts well. The e commerce boom should have been a heyday for digital first retailers, yet one of the most striking features of this trend has been the generalfailure of online only or online predominant retailers to seize the opportunity to outperform andthe only channel in which they compete. Rights course, sight CEO Deborah Winswigstore serve as an online billboard for a retailer's websites, while online only competitorsare forced to pour money into advertising. She explains, there were never enoughtea shops where US tea drinkers could taste...

...the selection of good teas. Thereare many fewer now, making tea discovery online but top priority. In Twothousand and twenty two, trelag has agreed to barter five million a month intea with Iran to settle a long standing two hundred and fifty million oil debt. The barter circumventced, but does not violate US sanctions. The imposition ofsanctions in two thousand and twelve restricted Iranian back transfers and stifle the once livelytea trade between the two countries. At that time, she lanca shipped aboutforty million kilos of tea to Iran. Totals have declined every year since.In two thousand and sixteen, s alaca still supplied about half the tea consumedby URN, one of the world's most valued team markets. Sales of SriLankan tea had declined to eighty five million by two thousand and twenty, downfrom nearly two hundred million in two at two thousand and thirteen, according tothe UN contrade database. Business in sign the agreement did not sit well withtx borders, who will receive Sharlowkan rupees from their government instead of US dollars. But the decision conserves foreign currency during a fiscal crisis. For aloc isobligated to make six point nine billion in dead service payments. In Two thousandand twenty two, the country Central Bank has less than two billion in reservesand in sovereign credit rating was recently downgraded to CEC amid growing risk of default. Are Vinda and and thereman in Bengalururu reports on this week's tea auction prices. In yet deep price support for the week ending eighteen December twenty twenty onein markets this week. I'll get that continue to see good demand for alltea types. The Middle East was active Orthodox te when major blenders were activefor dusty Dagi links relied on exporters and local buyers. Gohati also saw gooddemand, with major blend as active for leaf and dusty grads compared to saleforty nine. This week's are marginally lower prices and more outlots in the south, which he saw good demand, especially for CTC leaf. Eighty one percentwas sold and up country buyers were active. Kun also low sale of Orthodox leafat fifty eight percent. Exporters were selective. Of the up country buyerswere active. The highlight of the week was the sale of one kilo ofManohuri gold from Assam at the Gohati auctions, selling for ninety nine thousand nine hundredninety nine rupees. This is the highest price in the auctions the seafor a specialty tea and although man hurry gold is a favorite, yet afteryear for their unbeatable prices, it appears that they have beat in their earlierrecords. And now a word from our sponsor. Que Trade understands that asuccessful tea blend goes beyond the creative fusion of appearance, a Roma and flavor. Our Multi Award winning product development team is passionate about converting natural ingredients intosensory experiences that customers crave. Every recipe is formulated with a commercial backbone ofdependable quality sourcing, with a pricing structure that supports us safe, regulated,profitable and scalable bland. Que Trade meets every brand's retail, food service ande commerce need. For more information, visit our website, que trade teascom. This week, Tea Biz travels to the Republic of Ireland to visit teacraftfounder and research scientists Nigel Mellikan. Nigel explains the necessity of mechanical tea harvestingand describes an innovation in two man harvesters...

...that features a rotating head that simulatesa selective pluck without sharing leaves. Nigel Mellikan as a career research scientists,founder of teacraft technology consultancy and president of the European Speciality Tea Association. Hehas monitored advances in harvesting technology for more than forty years, from crude shearsand reciprocating blades to the next generation selective harvesters capable of discerning and plucking,not shearing, only those shoots consisting of two leaves and Bud. Virtually allagricultural crops are being mechanically harvested now, explains Mellikan, given the cost andshortage of labor in the growing demand for tea, there's no other way thatyou can make commodity tea commercially biable conserves. Nigel, why is making Nice TeaHarvesting Hugh to stay? I've looked at tea harvesting, mechanical harvesting,for the last forty years I've been in tea, primarily because I was parachutedinto a mechanically harvest at the state in one thousand nine hundred and eighty,and it was mother one of the very few in the in the world,and I had knew nothing about tea at that time. I assumed that allthe tea was mechanically harvested. It have it. Having completed my work onthat on that assignment, they said stop off and shrank on the way home. This was out in pat new, the Guinny, where I was working. Initially they says stop and Trilanka and see some real te being harvested.Like I wonder. I couldn't really understand what they meant and then I realizedthat t was not and mechanically harvesting crop, like wheat, for instance. SoI think now that mechanical harvesting has come into tea, it's certainly hereto stay. There's no other way that that you can make it commercially viableanymore. And virtually all over called agriculture, cop crops are being mechanically harvested.Now, wheat, corn, cotton, even grapes being mechanically harvested machinery.It isn't brought into displace had labor. It's becoming in not because people,because the producers want to put people out of job. It's because oflabor shortage. Labor shortage is due to urban drift in the bag. pluckerswant their children to be doctors and teachers and accountants. They don't want themto go into be field labor, and rightly so. You know they they, as I have, for better for their children. There is a growinglack of labor and recognization is coming into plug that gap. Since two thousandand ten more than fifty percent of the world's population are city dwellers. Therewas a tipping point in two thousand and ten, and so rule dwelling isbecoming less. Team mechanizations recognized as all of those drivers. And the otherthing is I'm about the mechanization. Our annual global tea production is six pointthree million tons a year and that's doubled in twenty years. Twenty years agoit was three million tons and without mechanization you just can't get that sort ofscale of production of certainly of Promoditt so that the simple choice is mechanization orempty teacups. That is, in a nut shell, that's why the kindof a harvesting is here to stay does make a nice tea. Harvesting necessarilymean lower quality tea. With the machines...

...that we have nowadays, it's difficultto get a level of harvest that you can get from the skilled pluck up. Having said that, the overall quality of tea being plucked is going downand there's been going down for the last forty years. The iconic too,leaves in the bud. You know, a hundred percent to leaf in thebud is a dream that some planters still have at the back of their mind, or I've sometimes in the trunk of their might. A hundred percent twoleaves in the bud. Plucking is possible, but it's slow. It's slow andwhen you are paying only a dollar a day it was achievable. Nowpluckers are still pretty poorly paid, but sal Anka, you're on of atfive dollars a day. So you have to pluck faster harder, which meanscoarser. So hand plucking now is not achieving a hundred percent two leaves inthe bud. It's achieving at best about eight percent two leaves in the bud. Typically it's achieving sixty percent. So most of the commodity t is beingplucked to the about sixty percent two leaves in a bud and well managed inmechanical reciprocating blade. Mechanical harvesting machine can do about the same as a onlyand moderately skilled plucker. The chandical harvesting when it is properly managed and canachieve what what is expected of a plucker. Nowadays, mass production of commodity T, sort of tea bag tea, is predicated on the volume production.When you are volume producing you have fat corners and one of the corners ofthis cut is quality. Virtually all the commodity t goes the supermarkets. Thesupermarkets have a six price policy. They don't like to see prices of theirloss leading commodity ranges going up. So Black Tea is the pricing is prettyinelastic. So when you have your as producers do, steadily increasing cost ofproduction and no ability, or very little ability, to get an increased pricetheir tea. Something has to give and they may trim the margin. Theygo for volume and volume means less quality. So that's what's happening out there withmechanical harvesting at the moment. Now you should be send saying, well, is it possible to achieve quality with a machine? It's possible to dobetter. Manufacturers have been innovating and refining to harvesters for a hundred years.Going forward. What additional improvements can we expect? Its first innovation in mechanicalharvesting which has occurred in that in the lifetime with kindical harvesting, and thatis the Australian machine, the Selective Mechanical Harvester, which is a machine whichdiscriminates between the bud and the immature shoot and the mature shut and only cutsby. It doesn't cut, it plucks. It plucks the mature shoot and ignoresthe immature shoots. It's a totally new way of looking at to harvestingand it's it can do as well as a skilled plucker. What's a capitalinvestment required to put that machine in the field? Until it gets into realproduction. It's will be expensive, but currently I think there's selling at roundabout for fifteen fifteen thousand US dollars for...

...one and a half feet a widemachine. Compared with the two men harvester that you're being used in India orin Africa, it's going to be about ten of fifteen times more expensive.By this machine it can the harvest of the quality which exceeds the average handplucker. Yeah, and it can do it almost five times as fast andwe're about one sixth of the Labor Post. Feel so even though it's an expensiveinvestment, it works for speciality. Now I don't think it's going towork as well yet for commodity ty. A supermarket t blend doesn't justify thatsort of level of plucking. Anyway, when I was a child I rememberwheep being for foot high and now it's eighteen inches high. Right because theplant breeders got in on the act. The combine harvester manufacturer said a lotof this wheat is lodging. It's we can't get their cutter under it.So the breeders went on and did the short store. Not only was easierto harvest, but the short store meant that more of the plant's energy wentinto the ear rather than into the stalk. So it was a win win thereand I think that the t Bush can be completely restructured the architecture ofthe Tea Bush. They going to bite the agnomist, all the plant husbandrymen took a tall tree, twenty foot tree, and brought it down toa three foot Bush and got it to yield more because it's not it's wastingless energy on the wood of the tree and, of course, the deeproots as well. So yes, there will be improvements in the machines,there would be improvements in the Bush architecture and they will be improvements in themanagement. Intrigued by what you've heard in today's podcast, would you like tolearn more from our global network of Tebas journalists and t experts? Remember tovisit the t Biz website for more comprehensive coverage. That's wwwt Biz Biz dolcom. Thanks for listening for a well till next week.

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