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The Role of
in the Tea Trade

By Randy Altman

The battle for stomach-share of beverage continues, and gains momentum. New non-tea products are promoted, such as carbonated fruit juice drinks, which seem directed at young people, the next generation the tea trade must encompass. Older beverages may also be gaining strength: with the renewed focus on weight-loss, anecdotal evidence indicates diet carbonated sodas are gaining. And, these sodas, or soft drinks, are aimed at females, who buy most of the tea.

An entire industry has recently sprung up around “functional” beverages, whether called energy drinks, nutraceuticals, sports drinks, or whatnot. These are heavily advertised, and may or may not contain anything useful, like vitamins. Again, the target is primarily the young. And, we have not yet brought up bottled water, which everyone knows is everywhere, and, like tea, devoid of calories.

Tea must take action against these competitors, especially as an entire generation of retail buyers is at stake. To reach the public, advertising is a necessity. Advertising takes two basic forms. The generic campaign promotes not a specific product, but tea-drinking in general. The other form is private advertising to promote the brand or brands of a company. These two forms perform very different tasks for the tea trade. A private company’s advertising may reach non-tea drinkers and thus bring in additional customers to the industry, but often the goal is to steer a tea imbiber away from another tea product to the advertised product. This latter transfer of customer loyalty is good only for the individual company.

Generic tea advertising campaigns have more impact than often realized. The most obvious goal is to increase the numbers of those who choose to drink tea (or, to have those who already drink tea spend more money on the product). Secondary goals include raising the status of the bodies and associations that sponsor the advertisements. These secondary goals are particularly important for the Tea Boards and Authorities, which exist in producing nations. Other secondary goals include increasing the power within the trade of the nation that sponsored the generic advertising.

Advertising is not to be confused with a passive educational forum, such as a web site that lists information about tea. These web sites, such as those sponsored by national tea associations, are certainly helpful, but anyone accessing such a forum is already apparently respectful of the sponsoring organization and is certainly already interested in tea. Countless web sites now exist that promote tea, often touting the health aspect. Organizations other than national associations with such web sites include private companies, notably Lipton, and regionals, notably Darjeeling.

Advertising is also not just a Western project. India is the world’s largest organized tea producer, and domestically, Tata was losing market share to rural smaller companies with little overhead. Tata responded with perhaps the largest advertising and promotional campaign in India’s tea history, to win back market share from the new competition. This campaign of Tata’s is entirely separate from its international Tetley line’s massive ad work, which has the memorable slogan, “tiny little tea leaves from Tetley.”

The biggest companies, like Lipton and Nestle, may spend millions of dollars advertising each of several tea products, from RTD’s to boxes of teabags. This includes the most expensive venue, television, which quickly can eat up a million dollars. For the generic tea campaign, we in the trade must rely on non-profits, and the budgets are far less. The non-profits come in two varieties, those paid for by dues of member corporations, large and small, and those paid out of government funds.

The producer-nations’ bodies have by far the largest budgets, but these entities also have the largest staffs. The tea executives within the producing nations pay for the Boards and Authorities by, in essence, being taxed, often per kilogram of tea. This revenue source explains the larger budgets of these organizations even though they are in poorer, non-Western, nations. The politics of Tea Boards/Authorities is one of the most complex behind-the-scenes factors in the global tea trade. Tea executives tend to regard these agencies as wastes of their company’s money, but bite their tongues in public, because these same agencies hold permit or regulatory power over the company.

Generic advertising campaigns in a global, cost-effective forum can not only move more of a nation’s tea, but raise the prestige of the sponsoring agency, such as Board or Authority. This results in more satisfied constituents (tea executives), as they see their revenue going for concrete programs, not just staff payroll. While budgets will not allow for television in the western arena or international arena, global print venue exists within the trade. The question arises what to say, and I think in such a pro-trade venue, the health perspective is largely redundant as an ad message.

While the healthfulness of tea can be productively mentioned in a generic ad in a tea periodical, I recommend focusing on what the sponsoring body has that no one else possesses. Basically, this is the claim for one’s own nation’s specialness, which certainly includes the tea growing regions within the nation. Like any good ad, this message has an audience. An increasing readership of the leading tea magazine is the small retail shop owner, who may not know the names of the tea-growing regions within a producing nation. I speak to officials of governmental tea bodies who think all the readers are veteran tea professionals, when more and more are new to the business, yet are still wholesale buyers of tea.

I hear from people who have started retail tea businesses because they wanted to enter an interesting business. This is great diversity for the trade, and they thirst for knowledge. Generic advertising can fill this need. Such an audience does exist. Of course, the typical entrepreneur who saves and/or borrows the money is more likely, but such a person still needs education about what tea is available to supply their shop.

I conceive a role as a bridge between East and West. The East are the producing nations, the West the importing nations. As small retail shops expand in the West, advertising in venues read by wholesale buyers performs a role more significant than ever. Only a globally circulating print venue can bridge this East-West divide.

A completely separate factor to the trade is over-production, to which the universal answer has been value-added tea. The first step indeed is value-addition to the tea, but a second step is announcing or publicizing that the value-addition has in fact taken place. This is not the usual function of advertising, because much of this value-addition is beyond the scope of individual companies, and hence in the domain of generic advertising. Value-added plans have been proposed, and to varying degrees carried out, by Boards, non-profits, and regional bodies, and these do need to be better publicized. All of this activity takes place in the East.

Market conditions are changing across the globe. Quality tea faces new non-tea products as well as over-production. And, modern messages need conveying, such as the health attributes of tea and the distinctiveness of the many, many regions that grow the wonderful stuff. It is actually good news that advertising has the power to perform so many functions for the tea trade. From concerns over loss of stomach-share to being swamped by poor quality tea, advertising can help. This range of functions goes beyond the usual abilities of advertising because of generic advertising. Amplifying the ability is the rise in tea shops utilizing global trade print venue.

None of this is to ignore the more usual role of advertising. New products often require advertising. The Republic of Tea now has seven types of white tea, and recently advertised this innovative line. An old standard is publicizing the winning of an award or prestige-magazine ranking. Honest Tea, whose very name is a pun involving the word “tea” (“honesty”), has probably won the most top-prestige national mentions. Honest Tea is a relatively young company, but still spends money on publicizing its kudos, such as recently in Inc. magazine and earlier in Fortune. Honest Tea is now fully organic, another reason for advertising, as organic has its own message to convey.

Advertising’s role is multi-faceted, with a real possibility of increasing the total volume of quality tea sold to the public. Advertising deserves greater consideration as a part of the solution to certain global problems. For example, government tea leaders sometimes tell me they want an International Tea Forum to deal with tea over-production. However, such an expensive new trade body would never have power over sovereign nations to dictate output. A Tea Board’s generic ad campaign touting one’s value-added tea is cheaper and more effective than perpetual dues to an international trade forum.

Advertising is certainly an art form, with much room for the creative mind as well as a knowledge of statistics. The tea trade is more tradition-bound than most businesses, and the good aspects of the tradition of tea need not be lost, even as modern business practice is required for tea to survive as an industry. An analysis of the role of advertising, from generic to private-company, shows so many positive benefits. This breadth of benefit from advertising is unusual, and will help the trade if sponsors take advantage of this powerful tool.

Tea & Coffee - April/May, 2004


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