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