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When Coffee Speaks
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Tea & Coffee's Business Classifieds!
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When Coffee Speaks
Teepack


Tea & Coffee's Business Classifieds!

U.S.
Specialty
Tea
Report

Shashank Goel, chairman of the Specialty Tea Institute presented the following important data on the state of the specialty tea industry at the World Tea Forum, October 2003 in New York City.

The past year has been very exciting for our industry. Specialty tea has been growing by leaps and bounds through the efforts of all the visionaries and entrepreneurs who have helped create this segment. From the husband and wife team who gave up their lucrative corporate careers to open a tea house in Alabama to the multi million dollar companies who have embraced specialty tea business as a major growth segment to advance sales.

What is remarkable is that our industry has been innovative in providing offerings that appeal to the likes of consumers within all segments - from the hip younger trendy consumer to the sophisticated tea drinker all of whom can find a tea offering whether hot or cold to satisfy their tastes and lifestyles. It seems that the widest ranges of unique and specialty teas can only be found here in America.

This growth is not hype or a fad. I say this with conviction because the growth is steady and consistent and people are incorporating tea as a beverage in their daily routine and it is becoming a part of their natural way of living. The strong favorable publicity that is being received highlighting the health benefits of tea has been very helpful in the growth of this segment. The education that is being provided to the consumers has played a big role in them demanding a higher quality product so that they can enjoy the finer qualities of the leaf.

The fifth edition of the “Tea is Hot” report *, to be published this fall by Sage Group Intl. in Seattle, Washington, will show that specialty tea sales are poised to reach $1 billion this year. Overall growth is approximately 11% but within the natural food channels growth is as high as 20%.

Within the specialty tea universe in this country, green teas are growing at 20 to 30%, black at 12% and chai at 50%. Organic teas are hot and are growing at 30%, the drivers for this category being the implementation of the National Organic Program, and awareness of the LOHAS** consumer.

Also, more and more whole leaf tea is being consumed, as is evident in the market growth. The consumer is becoming more discerning and is ready and willing to venture into the world of high quality and whole leaf teas. An analogy is the growth of the organic food and beverage industry in this country. With retail sales of organic foods and beverages amounting to $9.5 billion in 2001, the U.S. is the world’s largest market for this product group. Retail sale of organic products has grown steadily at 25%. In comparison, the conventional food category grew by 3-5%. Sales of organic products will top $20 billion annually by 2005. Just as in tea, Europe was once the leading consumer of these products, but now the U.S. has overtaken the continent- we can similarly hope that the same thing happens within the entire specialty tea industry.

The target consumers for the specialty tea industry are the 50 to 60 million in strength LOHAS consumer categorized as the “culturally creative.” These consumers believe in creating a longer, healthier, more natural way of living. Their concern for personal health, health of their families, sustainability of the planet and their personal development significantly affect their attitudes, behaviors and usage of goods and services. This LOHAS market for products that are environmentally friendly and produced in a sustainable manner is approximately $230 billion in the US.

This growth of the specialty tea industry is also attributed to the massive amounts of credible information that is being released on a daily basis on the health benefits of tea. The media has done a fantastic job of communicating this message. We as the leaders within the industry must ensure that this message remains credible and is not diluted by marginal and “seeming” information for short-term gains.

Multi billion dollar companies such as Estee Lauder, Kellogg’s and others are introducing tea-based products in a wide range of delivery systems. Teas are being promoted within cosmetics, foods, beverages and nutraceuticals. Newer, convenient and more efficient tea delivery systems including the introduction of higher quality whole leaf teabags and brewers are emerging which are all helping drive this segment.

The Specialty Tea Institute is committed to discussion, research, and greater educational efforts in order to support and sustain the growth and consumption of premium and specialty quality tea here in the U.S. The entrepreneurs and visionaries who have led us to the specialty and premium tea segment will lead the way as the industry continues to evolve.

Since STI was created about a year ago through the merger of STAR and APTI, we have been successful in completing all necessary merger formalities. The 5th Annual STI Symposium in Boston organized in conjunction with SCAA was a tremendous success and far exceeded our expectations. Our support of the Take Me 2 Tea Expo in Las Vegas also proved very helpful to all and I was amazed in a positive sense at the attendance at this event - the event attracted a whole new breed of tea-preneurs who were very enthusiastic and committed to the leaf.

Another program that was a very big success was the Tea of the Year Program and the Ceylon Tea Tour. The Tea Board of Sri Lanka really stepped up to the plate and created an opportunity for 20 members of the our American specialty tea industry to witness first hand the tea culture of Ceylon, a memory that will linger on forever for the travelers.

STI has been formed through the efforts of volunteers- business owners who have taken time out of their otherwise very busy schedules to donate their energy to the growth of the industry. We encourage all members to play an active role in the future of this industry and are looking for support from the various tea boards and regional associations to follow the example set by the Sri Lanka in helping promote and sponsor the growth of this industry. Although STI is primarily an educational organization and cannot guarantee sales of products from various regions, we can provide a platform for interaction and increased awareness of the various nuances related to this specialty tea segment. The end result will be that the industry will grow by leaps and bounds and all will benefit in the process through increased sales within the segment.

The success of the Boston Tea Symposium (Tea Party) has initiated a stronger dialogue with the organizers of the SCAA. In addition to holding our 6th Tea Symposium in Atlanta in April 2004 (the chairman of this event is Bill Waddington of Tea Source), we will also be offering several tea educational sessions as part of the SCAA Educational forum. In addition our STI board has also decided that we will be conducting educational seminars in conjunction with the Fancy Food show in San Francisco in January 2004 and New York in July 2004.

To further strengthen our position and credibility as the source for accurate and up to date tea information, I also take pleasure in announcing the STI Tea Certification Program. Many members have approached us and requested that we present such a program, which provides them with an authentic and credible formalized certification that will help them achieve greater success at their jobs and within the industry. Details of such a program are being finalized and this will be launched in 2004. Highlights of this curriculum will be a 3 step certification program; levels 1, 2 and 3 and students will be led over the course of time (at their pace) through a series of educational sessions encompassing tea types, regions, processing, tasting, health benefits and how to communicate their message to the consumer, among other pertinent topics. Upon the satisfactory completion of each level, attendees will be awarded a certificate of completion, which they can use to advance their businesses and/or careers. These certification sessions will be held in conjunction with the annual STI symposium, Fancy Foods Show and Take Me 2 Tea.

We want to make sure that the information that is dispersed is accurate and the same message is being communicated at all levels within the specialty tea industry. Hence we will be calling upon specialists within the various fields to conduct the training within established guidelines and formats.

We’re witnessing a massive swing or paradigm shift for millions of Americans looking for beverage alternatives. Driven by a relentless barrage of positive media, the American consumer is getting lobbied daily to start drinking tea. With each new wave of positive tea media there is an ideal opportunity to solidify a new tea consumer. The specialty tea industry is at a vital crossroads in its history whereby it can capture a massive new share of beverage consumption, but it must act quickly and effectively. The key words: educate (brochures, the web, videos, classes, articles and more), motivate (responsible communication regarding scientific findings on tea and health), and solidify (new ways to brew, enjoy and purchase tea).

*For more information on the “Tea is Hot” report, go to www.teareport.com.

**LOHAS stands for Lifestyle of Health & Sustainability. The market for products within these categories is approximately $230 Billion and the target consumer is one that bust products that are environmentally friedly and manufactured in a sustainable manner.

Shashank Goel is co-owner of Ambootia, a certified-organic and biodynamic tea garden in Darjeeling that is registered with Fair Trade, and the Kopili Tea Estate, a certified organic tea estate located in Assam, India. Born and raised on a tea estate, Goel manages the international marketing for his families seven estates. He is also Chairman of the Specialty Tea Institute and a member of the U.S. Organic Trade Association’s International Committee.

For more information, contact: Shashank Goel, chairman, Specialty Tea Institute, Tel: (312)-661-1550, E-mail: goels@att.net.


Tea & Coffee - February/March, 2004
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