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Napp Tea Newsletter 2019 NAPP TEA NEWSLETTER 2019 1 Dear Fairtrade Partners, We are pleased to share our Annual Tea Newsletter 2019- Network of Asia and Pacific Producers (NAPP)! This issue features the current market perspective on Fairtrade Tea from Amy Collis, Tea Supply Chain Manager at Fairtrade Foundation (FTUK). We also got an insight into the current market trends and expectations from consumer perspective, through an interview with Suranga Herath, CEO of English Tea Shop. This edition features two of our Fairtrade tea producers :- Ketan Kumar Patel, Director of Jalinga Tea Estate- FLO ID 29907 and R. Gnanasekaran, Project Manager of Idulgashina Bio Tea Garden, Sri Lanka; FLO ID 1550 Tea being a high risk commodity, no doubt continues to gain a lot of media speculation over the years. We, therefore also spoke to NAPP Program Manager – Subhra Prakash Tudu to understand the ground reality and the challenges therein, positive changes brought about by Fairtrade certification for tea plantation setup, and major activities being implemented by NAPP for risk mitigation and improvement of overall conditions in hired labour plantation set ups. Read on more to know about NAPP’s initiatives for building ‘Capacity building and Strengthening of Fairtrade Tea Producers’ for the past 12 months. We thank all the partners and truly grateful for your valuable contribution, time and effort! WE hope you enjoy reading this newsletter! UNTE; FLO ID 508 2 CONTENTS 4 Global Markets Trends and Forecast 6 Global Tea Market Segments 7 Top Ten Largest Tea Producing Countries in 2019 9 NFO Speak Fairtrade Foundation (FTUK) 12 Retailer Speak English Tea Shop, UK 15 Producers Speak Jalinga Tea Estates, FLO ID 29907 .Idulgashina Bio Tea Garden, Sri Lanka; FLO ID 155 20 NAPP Consultant Speak NAPP Program Manager, North East India 24 Strengthening of Producer Organizations Annual Training on Awareness of FT Standards, Principles & Certifications FT Consultation on Standards & Pricing Reviews 27 Deepening Impacts through Services & Programs Project on Improving the quality of green leaf in Fairtrade certified Tea Gardens in Sri Lanka Upcoming TRA Training for Fairtrade certified Tea Gardens of Assam on ‘Climate Adaptive Agricultural Practices, Water Harvesting and Adaptation of Mitigation Measures’ 29 Producer support in areas that go beyond standards compliance Supply Chain, Occupational Health & Safety Training for Management of Tea Plantations in Darjeeling, India Participatory Planning, Monitoring and Evaluation (PME) training for tea garden workers in Assam, India 30 Fairtrade Premium Story Coverage 3 GLOBAL MARKET TRENDS AND FORECAST PRODUCTION: World production of black tea is projected to rise annually by 2.2 percent over the next decade to reach 4.4 million tonnes in 2027, reflecting major output increases in China, Kenya and Sri Lanka - with this China would reach the output levels of Kenya, the largest black tea exporter in Tea is one of the most popular and the world. Global output of green tea is lowest cost beverages in the world foreseen to increase at an even faster rate of 7.5 percent annually to reach 3.6 and consumed by a large number million tonnes in 2027, largely driven by China, where the production of green of people. Owing to its increasing tea is expected to more than double from 1.5 million tonnes in 2015-2017 to demand, it is considered to be one 3.3 million tonnes in 2027. of the major components of world beverage market. Export: Global sales from tea exports by country Global tea consumption and totalled an estimated US$7.76 billion in production are projected to keep 2018. The value of worldwide tea exports rising over the next decade, driven fell by an average 0.5% for all exporting by robust demand in developing countries since 2014 when tea and emerging countries. shipments were valued at $7.8 billion. Year over year, global tea exports Global Tea Market was valued at depreciated -3.2% from 2017 to 2018. $46,392 million in 2016, and is projected to reach at $67,751 Among continents, Asian countries sold the highest dollar worth of exported million by 2023, growing at a tea during 2018 with shipments valued at $4.7 billion or three-fifths (60.1%) of CAGR of 5.5% from 2017 to 2023 the global total. In second place were African exporters at 23% while 13.2% of and at a CAGR of 4.5% in the overall tea shipments originated from Europe. Much smaller percentages of forecast period 2019-2024. exported tea came from North America (2.1%), Latin America (1.3%) excluding Mexico but including the Caribbean, then Oceania (0.2%) led by Australia, •Global tea market is characterized Papua New Guinea and New Zealand. by the black tea segment holding a prominent share. However, the Consumption maximum growth is estimated for green & herbal/ flavored tea, due to Fig 1.0 Annual Per Capita Tea Consumption, By Country the awareness about health benefits associated with them. •Consumption of carbonated tea drinks are a new trend in the tea industry, which is further fuelling the growth of the tea market. •Various tea manufacturing companies such as Bigelow, have introduced several flavours of tea, ranging from fruity to herbal flavours, creating a diversified portfolio of tea products for the The above figure indicates that Turkey, Ireland, the UK, Russia, and Morocco customers. are top five countries of the world with largest per capita tea consumption. Maximum of the top countries consuming tea belong to Europe and LAMEA regions, resulting in growth of the market. 4 Global Tea Market Drivers: A rise in the disposable incomes of consumers has enabled tea manufacturers to introduce premium and health-oriented products. They have started adding several healthy ingredients to their organic tea formulations to target some of the common health conditions. Therefore, a shift towards the consumption of organic tea acts as an emerging trend which is having a positive impact on the growth of the tea market. - Another major factor driving the growth of tea is its strong consumer acceptance. Currently, it represents the world’s most consumed beverage Global Tea Market, By Geography after water. It has very high penetration levels in Asia & Europe with people consuming tea on a daily North America witnessed the second highest growth rate basis. owing to rise in demand of tea. The Canada tea market was valued at $606 million in 2016, and is expected to -Tea represents an inexpensive beverage and is reach $838 million by 2023, registering a CAGR of 4.7% consumed across all socio-economic consumer during the period from 2016-2023 groups. A major catalyst which has supported the popularity of tea across various developing markets, Key leading players operating in tea industry are Tata such as India and China, is the fact that it is Global Beverages, Unilever, Associated British Foods affordable by the mass population, a majority of Plc., TAETEA, Nestle, Barry's Tea, Apeejay Surrendra whom belong to low income groups. Group, Bettys & Taylors Group Ltd., McLeod Russel, and ITO EN Inc. Over the past few years, out-of-home market for tea The other players in the value chain include Mighty Leaf has been expanding where various tea lounges Tea Company, Numi Organic Tea, The Republic of Tea, have been opening across the globe. These lounges Tazo Tea Company, Teavana, Celestial Seasonings, offer different benefits to the consumers such as the Inc., Fukujuen, Harney and Sons, Kazi Tea, M. M. availability of a variety of handpicked teas from Ispahani Limited, DavidsTea, Tim Hortons, and Godrej different regions. Such places have provided the Group. consumers with hang out spaces where they can indulge in conversations which has contributed Fig 1.1 Leading destinations for Indian tea exports in FY 2019, based on volume (in towards an augmenting demand for tea. 1,000 kilograms) The global tea market is majorly driven by the health benefits associated with consuming tea and increase in awareness related to carbonated drinks among people. Moreover, increase in cafe culture, rise in disposable income, change in tastes of people, and introduction of additional healthy ingredients in tea by different market players are the other factors that fuel the market growth. However, increase in cost of raw materials due to unpredictable weather, rise in cost of agricultural inputs, and increase in trend of out-of-home coffee consumption are expected to limit growth of the tea market. The introduction of new flavors & variety in tea and growth in demand from health-concerned young population are anticipated to provide lucrative opportunities for the market. 5 Global Tea Market Segments Type Insights Regional Insights: The tea market has been On a geographical front, China segmented on the basis of type enjoys the leading position in which include black tea, green the global tea market while tea, oolong tea and fruit/herbal holding the majority of the tea. Amongst these, black tea market share. This can be is the most popular type of tea accredited to tea being an as it is anti-allergic, anti-viral important part of the Chinese and anti-spasmodic. culture where it is consumed on both casual and formal Packaging Insights: instances. China is followed by India, Kenya, Sri Lanka, Turkey On the basis of packaging, the and Vietnam. market has been categorised Distribution Channel Competitive Landscape: into paper boards, plastic Insights containers, loose tea, aluminium tin and tea bags. The market is concentrated in There are several means Currently, paper boards nature with the presence of through which the consumers represent the largest segment. large and small manufacturers can obtain their desired tea who compete in terms of quality including supermarkets/ Application Insights: and prices. Some of the leading hypermarkets, specialty stores, players operating in the market convenience stores and online.
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