Emerging Markets Case Studies Handbook Emerging Markets Program Department of Applied Economics and Management Cornell University Ithaca, NY 14853, USA

Cape Natural Products and the U.S. Market: Rebels Ready to Raid Norbert L. W. Wilson

Cape Natural Tea Products was a young herbal products company based in . Rooibos tea was the strongest component of their product portfolio. In South Africa, rooibos was a commodity product and a direct competitor of coffee and tea. Antioxidants and other nutrients made rooibos a functional food. The American market developed interest in functional foods; however, the diverse opinions and knowledge of American consumers of functional foods made marketing difficult. Could the company benefit from the American market? With strong competition at home and marketing challenges abroad, what would be the best path of success for the company?

As the workshop facilitators sat in the small South African guesthouse, they were warmed by the fireplace on an unseasonably cool and wet spring morning; they awaited their guest, Dawie de Villiers. The purpose of Dawie’s visit was to discuss his presentation for Making Markets Matter, a workshop for agribusiness leaders of . Earlier that morning in the small university community of Stellenbosch, the facilitators had the deep red, aromatic rooibos (pronounced ROY boss) tea with their breakfast. They noticed that rooibos tea (or red bush, the English translation of the Afrikaans word) was positioned alongside the coffee and . At one point, the breakfast conversation drifted to the uniqueness of rooibos tea, the alleged health benefits, and the potential in the U.S. market. Having arrived on time, Dawie, the general manager of Cape Natural Tea Products, settled into an overstuffed couch near the fire, and recounted the tale of rooibos tea and Cape Natural Tea Products (CNTP).

Dawie told of the development of the commercial use of rooibos, the governmental involvement in the industry, and the rise of CNTP. While the entire story intrigued the facilitators, they were interested particularly in a couple issues that Dawie pointed out: the commodification of rooibos tea, the dominance of Rooibos Ltd., the innovations of other rivals, and the potential for developing export markets. All the

Norbert L. W. Wilson is an Assistant Professor in the Department of Agricultural Economics and Rural Sociology at Auburn University, Auburn, AL. Teaching notes are available from the author upon request. This case has been published in the Review of Agricultural Economics, Vol. 27, No. 1 (December 6th, 2005), pp. 1-10.

Copyright © 2005 Emerging Markets Program. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means without the permission of the Emerging Markets Program. To request permission to reproduce, please call 1-607-255-7531 for write to Emerging Market Program, Cornell University, 206 Warren Hall, Ithaca, NY 14853. Cape Natural Tea Products and The U.S. Market Emerging Markets Case Studies Handbook 4 ) is indigenous to the Cedarburg Mountain Range near , had economic value (SA-Tea). species, had economic , linearis is a legume and consists of over 200 species, which occur only in South linearis Aspalathus contains over forty compounds and flavonoids, which act as antioxidants (Noxon). Some reports suggested that rooibos has more and flavonoids than black tea and even (Nutraceuticalsworld.com). Rooibos also contains an assortment of minerals, zinc. and sodium, potassium, manganese, magnesium, iron, fluoride, copper, calcium, including and is low in (Noxon). Rooibos is naturally -free depression, and HIV infections. Many of these claims scientific evidence to support them. are unsubstantiated with little or no However, some of the health claims have some basis in scientific research. According to Dr. Daneel Ferreira and others at the University of Orange Free State in South Africa, the tea Medicinal Wonder While the Khoi-Khoi people might not have made extensive health claims about rooibos, Internet, the health magazines, and people involved in the rooibos tea everything industry good in it state from antioxidants to zinc. that The tea it purportedly mitigates infant colic, has mild Ginsberg’s tea was processed by harvesting the rooibos branches and leaves, bruising them by them bruising leaves, and branches rooibos the harvesting by processed was tea Ginsberg’s hammering and then fermenting them. The final stage consisted of sun-drying the product in an open area. Other than mechanization, the process has not changed much from the way the (de Villiers). Khoi-Khoi tribe processed the indigenous mountain bush. Initially, the tea was mostly a medicinal beverage until Benjamin Ginsberg, a Russian immigrant, realized the market potential of the “mountain tea.” In 1904, Ginsberg, a descendent of a tea-trading family in Europe, traded the tea from the people of the Rooibos Ltd., SA-Tea). African markets (Hoegler, South mountain and began selling it in genus the Africa. Only rooibos, The mountain-dwelling people of the Khoi-Khoi tribe were the first to use rooibos as a tea. Had it not been for these inhabitants in the Western Cape, rooibos would have remained simply an Rooibos ( Africa. South Rooibos has a Cape Town, main stem with a smooth bark which divides near the soil surface into several equal offshoots followed by flimsy branches leaves, which holding are about 0.39 in. (10mm) long. The the plant grows to 1.6-6.6 ft. (0.5-2 m) thin, tall. The sharp story unfolded, they discovered that Dawie’s CNTP was a small but strong player in challenging challenging in player strong but small a was CNTP Dawie’s that discovered they unfolded, story markets at home and abroad. job Dawie’s was to find a path to the success. U.S. market Was profit actually from this market? Could CNTP as suggested? as good History Plant and The Rooibos while, they were keenly aware of the growing U.S. interest in functional foods like rooibos. As the As rooibos. like foods functional in interest U.S. growing the of aware keenly were they while, Cape Natural Tea Products and The U.S. Market Emerging Markets Case Studies Handbook 5

3 From From 1

2 were three of the largest brands of rooibos tea in South Africa. Rooibos Ltd. owned and supplied and owned Ltd. Rooibos Africa. South in tea rooibos of brands largest the of three were Eleven O’clock and Fresh Pak, and was in a collaborative agreement with Five Roses for the export of Five Roses Rooibos. In the export, market Rooibos Ltd. supplied a number of firms with either bulk tea or the branded products. In 2001, Five Roses joined John Inc. Sommer, in tea in the United States (Rooibos Ltd.). to sell Rooibos Ltd.’s Novato CA Rooibos Ltd. Rooibos Africa. South in rooibos the all of mt) 4,000 (about two-thirds about handled Ltd. Rooibos Ltd. had a well-established marketing chain, and National Brands, a South African handling many food domestic firm brands, managed the brands of Rooibos Ltd. Eleven O’clock, Fresh Pak, and Five Roses Rooibos (in collaboration with Five Roses, a African South tea company) maintained the Rooibos Tea Board. In 1993, a major reform in policy privatized the industry. The industry. the privatized policy in reform major a 1993, In Board. Tea Rooibos the maintained away breaking began farmers Various Ltd. Rooibos firm, private the became Board Tea Rooibos their own firms. to form from Rooibos Ltd., still the major player in the industry, The Players growing, The especially U.S. organic rooibos tea. tea market was relatively new and small with only 22 mt (Wesgro 2000; Wesgro 2001). there However, was great potential for growth given United States. the rise of functional foods in the government African South the years, many For market. challenging a was market domestic The Africa’s exports (table 1). The Germans consumed 900 mt of rooibos compared with 22,000 mt. 22,000 with compared rooibos of mt 900 consumed Germans The 1). (table exports Africa’s of all . Japan was the second largest foreign consumer of rooibos tea, with 16.79 percent of exports. The Japanese consumed 310 mt of rooibos compared with 18,500 mt of all teas. was consumption Japan, in small were consumption tea total to rooibos of proportions the While Villiers, Wesgro 2000), rooibos tea was a basic commodity with little value-added in the domestic the in value-added little with commodity basic a was tea rooibos 2000), Wesgro Villiers, market. However, abroad, the tea earned a price (and subsequently . because it was consumed as an an earnings) premium South of percent 53.61 with tea, rooibos of consumer foreign largest the was Germany 1999, In production (Wesgro 2000). 2000). production (Wesgro marketed organization, marketing tea government the Board, Tea Rooibos the days, early the In African consumers identified rooibos rooibos as a substitute for Because tea South and coffee. as a substitute for tea and coffee and not as an herbal tea with nutritional/medicinal value (de 1999. The domestic market absorbed 70-75 percent of the total production in the 1990s. the in production total the of percent 70-75 absorbed market domestic The 1999. 1995 to 1999, the value of total domestic and export sales increased from 17 million to 65-70 million African South rands (R). In 1990, the total export market purchased 432 mt of rooibos. By 1999, the export market earned R20 million, which was about 30 percent of total sales, from 1,800 mt of rooibos. Of the R20 million from exports, about R3-4 million came from organic Production, Sales, and Exports Sales, and Production, Rooibos tea is the unofficial national beverage of South Africa (Hoegler). The market share of rooibos in the South African tea market grew from 12 percent in 1984 to 18 percent (domestic and in Total export) sales increased 1999. from 1,500 metric tons (mt) in 1997 to 6,150 mt in The Market for Rooibos Tea for Rooibos Market The Cape Natural Tea Products and The U.S. Market Emerging Markets Case Studies Handbook 6 illiers). process was rated the rated was process TM . . In the sector report by Western Cape Investment and Trade Promotion Agency, CNTP received CNTP Agency, In Promotion the sector report Cape by Trade Investment Western and ‘flavour its with itself for name a made has Products Tea Natural “Cape quality: its for recognition burst’ cutting process to maximise flavour extraction and increase FlavorBurst yield the with produced from tea rooibos 2000, 67% In p.1). to 2000, (Wesgro 82%…” for market the as sophisticated as not was rooibos for market The (Morien). industry the in best a product that de Villiers and CNTP believed many Africans South would prefer to rooibos (de Villiers). Diversifying their portfolio to other products had increased helping the and customers new CNTP’s attracting by term costs. long the in off pay They would diversification that hoped V the firm develop a reputation of broad product selection and quality (de no brand of its own CNTP intentionally stayed small and agile to avoid direct other developed competition CNTP in market. the rooibos the domestic in home market; at beat to large too simply was Ltd. Rooibos tea, bush honey of mt 100 processed and grew CNTP markets. export and local for teas herbal CNTP handled about seven percent (400 mt) of rooibos tea each year. Nearly 70 percent of the of percent 70 Nearly year. each tea rooibos of mt) (400 percent seven about handled CNTP HGB and Foods Whole consumer. biggest CNTP’s was Japan abroad. shipped was tea rooibos percent 85 sent CNTP market, local the For buyers. retail U.S. two CNTP’s were Market Central had CNTP contract. under was percent 15 remaining The brokers. and packers to product its of Through innovative technology and firm ownership, the firm was trying to become trusted and dynamic source of African quality “the continent” herbs (Morien, on p2). the Despite its most rooibos grass), lemon and hibiscus, bush, honey claw, (devil’s teas herbal of portfolio developing was the main business of CNTP underprivileged farming communities” (Coetzee & Coetzee, p1). Such efforts tended to attract fair trade movement. those consumers interested in the Products Cape Natural Tea In 1997, the South African media nicknamed CNTP the “Rooibos Rebels” (iafrica.com 2001). firms entered the market, reflecting the market opportunities still available for rooibos (de Villiers). Villiers). (de rooibos for available still opportunities market the reflecting market, the entered firms Each new firm had the flexibility and creativity to become David to the Coetzee Goliath, & Rooibos Coetzee Ltd. Distributors was one of the firms that broke away from Rooibos Ltd. and had real potential. The firm, headed up by a father and son team, handled about 10 percent of the total tea production. Coetzee & Coetzee was interested in “social upliftment projects in Unfermented rooibos tea was considered in this class of teas. was in the forefront of 2001). rooibos (Wesgro first exporter of the unfermented this market as the Coetzee & Coetzee Despite the size of Rooibos Ltd. several new rooibos tea firms developed. In 2001, nine new According According to Wesgro (2001), KhoiSan was Tea “leading the way as one of the most dynamic, innovative and successful role-players in the market” (p. 7). The German firm was the second largest exporter of rooibos and the only firm that produced, for processed, retail and all in-house. packed rooibos KhoiSan was one of the first firms to use and A market “green wave,” organic the rooibos. rise in the popularity of the green teas, was occurring in the tea industry. KhoiSan Tea Export/Import Tea KhoiSan Cape Natural Tea Products and The U.S. Market Emerging Markets Case Studies Handbook 7 “Let food be thy medicine and medicine be thy food.” world of functional foods was exploding with opportunities to exploit. For example, 93 percent of U.S. consumers believed that there were foods that provided benefits beyond basic nutrition and might lower the risk of disease (IFIC). The interest in functional foods and beverages in related ultimately which health, toward attitudes changing the from developed States United the back to demographic changes that promoted these shifts. The advent and growth of functional foods and beverages (nutraceuticals, enhanced products, foods Functional adage. Hippocrates’ of realization the was etc.) foods, designer foods, pharma The 20) p. (Gilbert, nutrition.” basic beyond reach that benefits “health provided beverages and Exporting to the U.S. Market: The Case of Functional Foods Attitudes toward Health Changing The Western Cape Investment and Trade Promotion Agency value-added innovative, with reported, together benefits health “An of proof scientific integrated on based drive global marketing products could spell a bright future.” (Wesgro 2000, p2). How would this strategy work for the United States? successfully grown outside of Southern Africa; the international competitors were interested in establishing contracts with farmers in the region and joint ventures firms. with other South African Despite all of its success, CNTP was facing some challenges. The local market was challenging challenging was market local The challenges. some facing was CNTP success, its of all Despite because of the big leader, new entrants, and the low returns to also bulk competitive in sales. the export The market. firms In were addition, several non-South African firms that were well established in the tea industry entered the rooibos tea industry. Rooibos had not been CNTP CNTP had another important source of supply and Research innovation Agricultural African through South a the and (USAID) partnership Development International for with Agency the U.S. Council (ARC). The collaborative effort was supporting rural/community development projects through research in and marketing of rooibos from region the and Wupperthal honey bush from Lang Kloof region. firm. The ownership ensured supply because producers were under contract to supply CNTP first, and these producers had a financial was contracting, through stake supply, in ensuring thus, variable; the highly was production firm Rooibos market. so CNTP was naturally their first with buyers. to maintaining good relations extremely important become become important in the rooibos market, CNTP would be a trendsetter in the industry because of its processing innovation. CNTP was the first rooibos company to follow HACCP to ensure Products). Tea Natural all organic (Cape was CNTP and food safety, Private individuals and producers jointly owned each CNTP, group owning 50 percent of the coffee coffee or black tea, in terms of complex taste profiles and grading. If similar standards were to Cape Natural Tea Products and The U.S. Market Emerging Markets Case Studies Handbook 8 ). Beverage Industry The functional beverage market is divided into four categories: Magazine and the American Pharmaceutical Association, 70 percent percent 70 Association, Pharmaceutical American the and Magazine Prevention Prevention 4 Demographic Issues Billy Bishop, vice president of marketing for South Beach Beverages stated “‘the demographic way. that it try will and package the dig to tend folks younger the of lot wide…A pretty actually is In 1997, U.S. tea sales were about $320 million, with functional teas comprising The $80 United States million. imported over 5,000 mt of plant and plant parts for use in herbal teas at an estimated value of over $22 million in 1997. Imports increased in value 156 percent from 1994 2001) (figure 1). to 1998 and 78 percent in volume (Wesgro in the imports of herbs (and plant parts) used in many of these functional beverages (figure 1). John Bello, co-founder of South Beach Beverages, maker of SoBe, predicted that by 2005 the through wellness toward shift cultural a to due billion $2 reach would market beverage functional the use of herbs and other supplements. (herbs, vitamins, minerals, etc.). and/ (fruit- beverages lifestyle/wellness mixes); diet and (nutritional beverages replacement meal rooibos); and tea (green teas medicinal nutrients); and/or herbs infused with drinks milk-based or billion $1.05 from grew market beverage functional The drinks). (sports beverages isotonic and in May 1999 to $1.17 billion in May 2000 (Madley). The growth was reflected in the increase The increased expectations that foods be high convenient, quality, nutritious, and inexpensive (Wellner). 1996 in billion $76 at estimated market, foods functional U.S. the of size the explained Within the functional foods market, the beverages segment was well the convenience and the fact positioned that beverages could serve as because excellent carriers for supplements of market as living in the “Age of Entitlement” because it was “driven by [Baby] Boomers who feel they have earned and ‘it’ the [Generation] X’ers who feel they were born deserving ‘it’” (Gilbert, p.22). Functional Beverages The desire for self-maintenance of health possibly had a more fundamental origin, entitlement. Gilbert assessed that U.S. consumers, especially the middle class, had a sense of entitlement. This prompted U.S. consumers to want food that tasted good but filled a nutritional need, was Additionally the food had convenient to but be high affordable. quality. She described the U.S. of adults treated themselves with over-the-counter (OTC) drugs for a variety of minor ailments such as headaches, hay fever, etc. (Wellner). Self-medication was not limited to OTC drugs. form some took consumers U.S. all of percent 70 nearly that reported Media Natural Hope New $22.6 spent Americans International, Business Nutrition by estimated As supplement. dietary of supplements ( billion on nutritional toward toward HMOs [health maintenance organizations] means that consumers don’t have much the close, as getting not are did…Consumers once they as physicians their with relationship long-term personal care and satisfaction, and that’s leading them to do their own care and prevention.’” a to According facts: of couple a by supported was this like evidence Anecdotal 57) p. (Wellner, by survey 1997 Lisa Lisa Katic, with the International Food Information Council (IFIC), stated that “‘The movement Cape Natural Tea Products and The U.S. Market Emerging Markets Case Studies Handbook 9 (emphasis added).’” ). proven

not Beverage Industry ). Some of the interest of the younger generations in generations younger the of interest the of Some ). Beverage Industry Beverage ). that “while consumers scientific are detailed presented products seeking early The functional 1). p. (Leighton, nutrition, Hippocrates medicine”—despite they perceive food as that was foods functional food, marketing to key the that argued not Leighton package. the on information as herbal or medicinal teas. Dr. Dave Ringer of the American Cancer Society stated, “‘While the various mixtures of herbs and teas may be beneficial, they are (Moran, p. 1). And the message had to be Early clear. entrants into the functional food world failed to realize Not only was it important to get the marketing message correct, it reported had that the to dietary supplements be business true. reached $15 billion in Leighton a few short years. The market soon imploded because of increased worries over drug interactions, ingredient efficacy, news about fraudulent claims, etc. These problems could spread Research existed on to the pure tea products (green, black or oolong teas), but there was the little on herbal tea market. versus 60 percent of college graduates. Fifty-three percent of woman reported knowledge of the antioxidant and cancer linkage as compared with 42 percent of men (IFIC). The diversity of opinions and knowledge of functional foods presented a substantial challenge in terms of the message. targeted segment and the correct to the IFIC study, 65 percent of people 55 and older used functional foods to target specific health specific target to foods functional used older and 55 people of percent 65 study, IFIC the to concerns, compared with 49 percent of the 18-34 year-olds. Other demographic differences occurred along gender and educational lines. Thirty-nine percent of people with a high school education or less reported to have knowledge of the link between antioxidants and cancer that the functional food that they were consuming would lead to their long-term health. However, However, health. long-term their to lead would consuming were they that food functional the that this was exactly the wrong message to send the younger instant health benefits to support their lifestyles. generations, who were interested The weight of the interest in functional foods fell more According heavily on the Baby Boomers: Marketing Problems While the confluence of interests for functional foods by the three generations a larger granted market, firms the messages to which these generations would respond were different and attract the sometimes older conflicting. To Baby Boomers, the message needed to connect the functional food to traditional foods, not something new or high-tech. Boomers wanted to know these products was influenced by a current or desired active lifestyle. However, Abigail Rodgers, Abigail However, lifestyle. active desired or current a by influenced was products these Vice President of Innovation at Minute Maid example, stated for Boomers, “‘aging Baby baby 34). p. boomers…are driving (Madley, beauty…’” trends and health for desires specific have and ( healthy and active lifestyles were looking to maintain there.’” (Howell, p. 29 (Howell, there.’” The differences between generations were more fundamental than packaging: Generation X and Echo Boom were interested in many of the functional foods because they wanted to be the ( product new a try to first The more educated, older consumer will pick up the product because of the herbs that are in Emerging Markets Case Studies Handbook Cape Natural Tea Products and The U.S. Market 10 Another problem developed for the rooibos industry. A U.S. company received the trademark for Afrikaans word “rooibos.” While the industry was outraged, the South domestic African in and years government five next the in markets export in name the of use the out phase to agreed markets in the next 12 years (iafrica.com, 2002). In light of the challenges and opportunities, what would be the best strategy for CNTP? offered opportunities. If the market for green tea was any example, rooibos had the potential for potential the had rooibos example, any was tea green for market the If opportunities. offered the enter could that firm only the not was CNTP However, States. United the in growth significant U.S. market. While the U.S. opportunities looked good, there were some significant challenges functional foods. and risks associated with marketing The Challenge What were Dawie and CNTP to do? The domestic market was difficult, but the U.S. market shot through the roof.” 2001, (Wesgro p. 18) From 1995 to 2000 the market value of green tea increased from $0.8 million to $5 million (Pearl). The growth of green tea was also associated blended or loose) or bags tea (in alone available was tea Green use. of terms in flexibility its with forms. for the RTD/shelf-stable with other products and prepared The green tea market had shown tremendous growth in the ago, green United tea had States. not been a significant Until commodity on a the tea/herbal decade tea market, “but when anecdotal evidence of traditional use Asia in led to scientific studies in the West, and research heralding the healing powers of green tea was published, sales began to increase and finally beverage market. According to an ACNeilson/SPIN survey, the medicinal tea and lifestyle/wellness replacement, Meal market. beverage functional the of percent nine about segment was In (Madley). market beverage functional the of percent 0.5 and 14, 77, were beverages isotonic terms of innovation, the hot beverage (medical tea) segment had the largest number of product and 1999 (Staab). introductions in 1998 medicine cabinets (p. 1)” (p. cabinets medicine Example Tea The Green A great deal of the buzz for functional products. beverages was for The ready-to-drink (RTD)/shelf-stable medicinal tea market, however, was a growing segment of the functional they they “should be positioned not as therapeutics since consumers don’t want to eat from their Emerging Markets Case Studies Handbook Cape Natural Tea Products and The U.S. Market 11 Percentage of Total Exports of Total Percentage 53.61 16.79 10.80 5.18 2.93 2.17 1.85 1.19 0.69 0.65 Volumes (kg) Volumes 199,061 95,482 54,120 40,060 34,000 22,016 12,792 11,960 987,560 309,285 Country China Malaysia South Korea Poland United States Colombia Germany Japan Netherlands United Kingdom Figure 1. U.S. imports of and plant parts for use in herbal teas of plants and plant parts Figure 1. U.S. imports 2001 Source: Wesgro Table 1. Top 10 Countries Importing Rooibos Tea in 1999 in 1999 Tea Rooibos Importing Countries 10 1. Top Table Emerging Markets Case Studies Handbook Cape Natural Tea Products and The U.S. Market 12 . . m , , 1 . l , June June , . 3 (2000): (2000): 3 . . 1 (October (October 1 . http://ific.org/ . . l . August 13, 2002. 13, August . ASNAPP Update ASNAPP m AgBioForum . May 8, 2000, pp. 32. 32. pp. 2000, 8, May . Conscious Choice Conscious , July 2000, pp. 29. pp. 2000, July , . l . September 21, 2001. 21, September . . September 2000, pp. 34. 34. pp. 2000, September . m ASNAPP Update ASNAPP www.nutraceuticalsworld.co , June 4, 2001. 2001. 4, June , , March 1988, pp.55-59. 1988, March , m Brandweek , October 4, 1999, pp. 29. pp. 1999, 4, October , . www.business.iafrica.co a Nutraceuticals World Nutraceuticals , August 2000. August , 1 www.WebMD.co www.business.iafrica.co . . a International Food Ingredients Food International / References American Demographics American , April 2000, pp. 63. pp. 2000, April , . a Discount Store News Store Discount http://sa-tea.virtualave.net/thestory.htm http://www.herbs.org/africa/nesletter/7September20000/index.htm http://www.rooibostea.co.z Prepared Foods Prepared . “Making a Splash in the Beverage Market.” October 2001. October Market.” Beverage the in Splash a “Making . m http://www.coetzeeltd.co.z http://www.herbs.org/africa/newsletter/24Ocotobr2002/index.htm . “Alternative Beverages Tap Hip and Health.” July 1999, pp. 24,26. pp. 1999, July Health.” and Hip Tap Beverages “Alternative . http://www.consciouschoice.com http://www.rooibosltd.co.z (September 7, 2000). 2000). 7, (September 2001, November 2002. November proactive/newsroom/release.vtml?id=1834 20-38. 2000). 24, Wesgro. “The Rooibos Industry in the Western Cape.” Cape Sector Factsheet. 2000. Factsheet. Sector Cape Cape.” 2001. Western April the in Updated Industry Report. Rooibos Background “The Wesgro Wesgro. Cape.” Western the in Industry Rooibos “The ___. Pearl, A. “Cup of Tea? Functionality of Herbs.” Herbs.” of Functionality Tea? of “Cup A. Pearl, Ltd. Rooibos Tea.” Rooibos of Story “The SA-Tea. Party.” “Tea M. D. Staab, Healed.” Be and Drink, “Eat, S. A. Wellner, Noxon, B. “Worlds Collide Pleasantly: Origins and Benefits of Rooibos Tea.” Tea.” Rooibos of Benefits and Origins Pleasantly: Collide “Worlds B. Noxon, Nutraceuticalsworld.co Leighton, P. “The Bright Future of Functional Foods & Beverages.” Foods & of “The Future P. Bright Functional Beverages.” Leighton, Market.” Beverage Nutraceuticals “The H. R. Teapot.” a Madley, in Tempest Tea: of Tao “The M. Moran, (Pty) Ltd.” Products Tea Cape Natural Profile: K. Business Morien, “African Howell, D. “Herbal Drinks Pour It On.” On.” It Pour Drinks “Herbal D. Howell, Roots.” Down Put Rebels’ “‘Rooibos iafrica.com. Trademark.” Rooibos over Brewing “Storm iafrica.com. Research.” Attitudinal Foods Functional Council: Food Information “International IFIC. de Villiers, D., 2001. Personal Interview, Stellenbosch, South Africa. September 9. September Africa. South Stellenbosch, Interview, Audience.” Personal Target 2001. D., your Reach Villiers, to de How Foods: Functional “Marketing L. Gilbert, Market.” World the to Drink Favorite Africa’s South “Bringing N. Hoegler, Bello, J. “Top of Mind: We Have Seen Bev’s Future, and It is Us.” Us.” is It and Future, Bev’s Seen Have We Mind: of “Top J. Bello, Industry Beverage Products. Tea Natural Cape Coetzee. & Coetzee Emerging Markets Case Studies Handbook Cape Natural Tea Products and The U.S. Market 13 m. Endnotes he author acknowledges Dawie de Villiers and Dave Weatherspoon for their assistance But who are these consumers? Demographers divide the U.S. population into five generations, five into population U.S. the divide Demographers consumers? these are who But

A A movement was underfoot to add value to rooibos in the local market by blending rooibos Nearly 80 percent of rooibos exported to Japan was used as medicinal soap. Rooibos was Rooibos in tea bags accounted for 80-85 percent of sales. The remaining tea was sold loose Advanced Agribusiness Management at Auburn University for the opportunity to develop to opportunity the for University Auburn at Management Agribusiness Advanced the classroo and fashion the case study for with the case. The author thanks Jacky Goliath, the participants of the Maple Leaf Case Writing Conference, Scott Swinton and two anonymous reviewers for their comments. Making the of participants the Karaan, Mohammad Christy, Ralph thanks also author The Markets Matter workshop at Stellenbosch University, South Africa, and students in is Generation X or Baby Bust, born between 1965 and 1976. While a small generation, they are they generation, small a While 1976. and 1965 between born Bust, Baby or X Generation is present the to 1977 from born were Generation Millennial or Boom Echo The aware. nutritionally and almost as large as the Boomers (Gilbert). and are the children of the Boomers T believed to have ingredients that promote healthy skin. ingredients that promote healthy believed to have 4 children the are Boomers Baby here. interest particular of are generations youngest three the but of the post-war era, born from 1946 through 1964. The Boomers are the largest and the most generation following The retirement. approaching also is generation This generation. influential form. 2 tea with other flavors. The flavored teas contributed to the growth of the rooibos tea market; large at that point. the contributions did not appear however, 3 1 with an unknown, but presumably small proportion sold in a ready-to-drink form, (RTD) popular among youths (Wesgro 2000). de Villiers argued that the technology for the RTD product had some difficulty with crystallized settlements, therefore, reducing the desirability in the RTD