2014

Tea Sales on the Rise

Stefanie Makagon

I spend a decent part of each day researching all things relating to the tea industry. One thing is certain: the challenge is not in finding information, but in converting an overload of information into useful strategy and staying current in an industry where growth and change seem to be occurring at warp speed!

Statistics on the growth of tea sales and rising consumption are everywhere, punctuating countless articles with forecasts predicting that the demand for tea will continue to grow, fueled by increased health awareness and new product offerings. In short, the call for businesses to take notice is getting progressively louder and louder.

In response, the specialty tea industry in North America has exploded. What we are seeing in the tea sector as the competition increases, is the bar being raised across the board in areas such as product innovation, quality, environmental awareness, and commitments to consumer health and wellness. Distinctions that were not so common a few years ago are rapidly becoming the new standard: loose leaf, specialty, organic, non-GMO, directly and ethically sourced.

It’s a wonderful thing to see consumers benefiting from this growing selection of ethical and quality products and new and existing tea companies are profiting from increased demand.

However, it is not only the tea businesses and consumers who are benefitting. For example, coffee roasters, natural health industries, and food service industries are also positioned to profit from tea’s rise in popularity as tea continues to be added to menus, food and drinks, and health and beauty products.

While facts and figures on growth and trends in 2014 are abundant and compelling, what is not as obvious is what real advice exists for businesses looking to participate in the growth of the tea industry in 2015 and beyond.

I asked the Principles at Garden to Cup Organics to offer additional insights on what the right tea partner can do for your business, as well as how to evaluate a tea company as a potential partner.

Dave Diogo, CEO, Garden to Cup Organics:
“Adding tea to your product mix while maintaining your core business becomes a differentiator to your customers and increases both loyalty and purchase size, when done without sacrificing quality and service. Bringing on a tea partner can be one the most effective ways of accomplishing this.”

“There is always a risk in bringing on new products into your portfolio. A true tea partner recognizes this and has a strong understanding that their own success is entirely predicated on the success of their clients.  As such, they will work with you to understand your business and your clients to ensure that the tea program they develop with you will be a success.”

“An excellent tea partner will understand how the market is evolving and how consumers, and most importantly, your customers, are choosing their teas. So, look for a tea partner that provides a commitment to collaboration and innovation to provide your customers the best selection of teas and accessories to compliment and enhance your overall brand.”

Raj Teja, President, Garden to Cup Organics
“IBISWorld identified four important key success factors in the tea industry. I would say this criteria is bang-on when evaluating a potential tea partner:
1. Product differentiation
Building your program from a wide selection of organic single origin teas, award-wining teas, exotic blends, wellness and functional teas, which are ethically and directly sourced, will allow you to differentiate yourself from your competition.
2. Ability to adapt to change
A tea partner should be able to anticipate and adapt to changes in the tea industry and consumer preferences in a timely manner to ensure that you can stay current to your customers.
3. Supply contracts in place for key inputs
Ensuring that your tea partner has reliable contracts with their suppliers will reduce risk and volatility.
4. Economics of scale and scope
From there, it comes down to supply chain. As competition increases, finding a tea partner with a reliable, sustainable and scalable supply will become increasingly important.”

Greg Lui, Tea Master/Tea Blender Garden to Cup Organics
“My passion is tea. I’m excited to see tea gaining popularity in North America. I will always advise those looking to add tea to their mix to cut through the crowded tea market by partnering with a supplier who is committed to uncompromising quality, technical sophistication and organic tea.”

“Organic should not be considered a buzz word. Organic agriculture promotes the sustainability of the environment and the health of everyone who farms and consumes the products.”

“Organic quality should start at the plantation level and a partner that offers plantation-direct organic teas will not only have better control over their supply, but also quality. It’s not good enough to simply purchase from a plantation-direct supplier. I would want to know that my supplier visits the plantation of every product that they purchase. When products arrive to their facility, each pallet should be inspected and every sample taste-tested and subjected to a full microbiology screening from a government accredited food laboratory when required.”

“There is an art and science to both sourcing and blending teas to deliver consistent quality, aroma, and taste for the new and astute tea consumers. A tea partner should commit to delivering all of these things, so that you can focus on your core business.”

World Tea News forecasts the emergence of 8,000 tea-specific retail outlets in America by 2018 (in 2003 there were only 1,000). Yet, much of the growth in sales is expected to come from coffee retailers and other business that are willing to expand their offerings to meet changing consumer demands.

For businesses looking to participate in this growth, industry experts advise seeking out a tea partner who will become an extension of your business and guide you towards profits.

Here’s to the year ahead!

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