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As mainstream America discovers the goodness of tea, a variety of Indian brews entice the market.

 

 
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 CURRENT ISSUE AUGUST 11, 2003

 

BUSINESS: TEA

Spreading Cheer

As mainstream America discovers the goodness of tea, a variety of Indian brews entice the market

By Anil Padmanabhan

When Hollywood actor Mel Gibson wanted to do something special on his birthday, he decided to throw a tea-party at his Long Island hideout in New York. He called T Salon to take care of it. That was two years ago. More recently, during the shooting of Matrix Reloaded in Australia, actor Lawrence Fishburne wanted tea. T Salon flew down some cartons of tea to be served on the sets. And a fortnight ago, Kate Hudson, in downtown Manhattan for the shoot of a new movie she is starring in, ordered a tray from T Salon to be delivered to her trailer.

HEALTHY BREW: Inviting interiors (left) and a variety of teas draw customers to T Salon in Manhattan

The refreshing brew has been on celebrity lips for a while, but now it is also weaving its aroma into corporate corridors. Last week, T Salon played host to the 850 most powerful women in America. The main beverage at their tete-a-tete was-you guessed it-tea. So when US Ambassador to India, Robert Blackwill, in his farewell address recently confessed to his allure for Indian chai, he was just one among a growing list of high-profile American personalities who have developed a taste for Camellia sinensis. As is typical of trends in the United States, the hoi polloi will soon be following suit.

The beneficiaries have undoubtedly been the host of tea rooms, such as T Salon, that have sprung up across the US. Every evening, scores of people flit through T Salon-located strategically in downtown Manhattan to tap upper-class clientele from East Manhattan and Wall Street. The patrons are predominantly female suspending the hectic rush of daily life for the half hour they spend over their cuppa. T Salon's energetic owner, Miriam Novalle, believes that Americans, especially in New York, are opening up to new ideas after the cataclysmic events of 9/11. "Americans have changed. When we got hit by 9/11, everybody did a fresh review of their lives. Like yoga has seeped in over the past few years, tea is taking over as a new chapter in healthy living," she says.

Currently, there are some 1,200 tea rooms in the country. Be it in Alabama in the south or New England in the northeast or Boulder, Colorado, the concept of tea rooms and afternoon tea is slowly becoming part of the cultural fabric of America. Sensing this change, the Tea Board of India has embarked on a mission to spread the good word as it were. Part of this process entails tea-tasting sessions in tea rooms throughout the country. On the last such outing in Denver, 60 people turned up even though the tea room proprietor had put a cover charge of $25 per head. "We have done 15 such sessions over the past year or so. In Denver, we did it with the first and second flush of Darjeeling tea," says Sanjay Krishna, the New York representative of the board.

At the same time, the Commerce Ministry has been fighting a battle to retain the rights to Darjeeling as a geographical indicator. It received a major shot in the arm when US authorities conceded this to India a few months ago. As a result, now any tea sold in the US with a Darjeeling brand will have to obtain prior certification from the Indian Government.

If tea rooms are host to the high-end quality teas, the mass markets are in the supermarkets and delis of America. In some instances, the variety on offer outstrips even the most popular American beverage, coffee, with the numbers up for all to see. Over the past 12 years, total sale of tea in the US has grown from $1.84 billion to $5.03 billion. Of this, the traditional retailers-supermarkets, drug stores and mass merchandise-accounted for about 40 per cent of the market share last year.

Commenting on these trends, Joseph Simrany, president of the Tea Association of USA, feels the tea industry is undergoing a dramatic change. "There is no escaping the fact that tea is gaining popularity. One has only to note the increasing availability of speciality teas in thousands of coffee shops (including national chain, Starbucks) across the country. Even for confirmed coffee lovers, tea has a new appeal in the form of chai-a blend of tea, spices and milk," he adds.

According to James Norwood Pratt, a recognised tea authority and educator in the country for the past 25 years, this trend has been in progress for the past decade and has picked up steam in the last two years. "It is driven by two things: pushing it from behind is health consciousness and pulling it from ahead is a growing respect and love for the romance of tea. That is, the discovery of the real diva of vegetation-a miracle plant that transforms you," says Pratt. The health aspect got a fresh fillip last year when the American Heart Association published a study in its journal showing that people who drank about 19 cups of tea in a week were less likely to die after a heart attack. The consumer survey too showed that a majority of Americans believe tea has a beneficial health impact, while 52 per cent said they would drink tea more often if they learned it was good for health.

IT appears then that the US market is growing both vertically and horizontally. While newer brands of high quality teas are finding takers, traditional mass markets are holding their own even while the overall market size is expanding. The Indian thrust is now expected to focus on the mass markets. "Assam and Darjeeling have had plenty of time to establish their well-deserved success (in the high-end segment)," says Pratt. "But Nilgiri is the orphan tea of India. I see a greater opportunity for it. It is perfect for American use as iced tea, flavour tea, etc."

At the moment, however, Indian exports to the US are not spectacular. In 2002-03, tea exports to the US accounted for 7.45 million kg-just 4 per cent of the total Indian tea exports. Though the annual increase in exports was 25 per cent over that of the previous year, the aggregates leave much to be desired. But there is a likelihood that all this might change as the outsourcing bug continues to do the rounds. There is a strong chance that Unilever may outsource to India the packaging of the Lipton brand, which accounts for a 45 per cent market share, say trade sources. When contacted for comment, Unilever did not respond. "At the moment, the company sources its teas from Argentina. When it shifts operations to India, it is only logical that it would source tea from the India region," says an industry source.

The enormous potential for Indian leaves in the burgeoning American tea market is clear. At the moment, India has more than a foot in the door. But now it is up to the Indian tea industry. Will it view this opportunity as a cup half full or as half empty?

 
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