2010 Teabits Vol 17 Issue 1

Volume 17, Issue 1 Newsletter of the Tea Association of the USA®, the Tea Council of the USA® & the Specialty Tea Winter Issue 2010 Quarterly Newsletter Inside this issue: An Unorthodox View of Trade Associations By: Joseph P. Simrany An Unorthodox View. 1 When business is bad the natural reaction of managers is to cut costs. This is as automatic as breathing and as controversial as adding milk to your breakfast ce- Vic Ferretti Honored at 4 real. While the concept is not in question the process of identifying which costs Annual Holiday Dinner to cut is critical to the long term success of this strategy. All too often managers seek immediate relief at the risk of long term consequences for growth and profit- Staying out of Hot 5 ability. Water. Unfortunately, during troubling times, speed is usually of the essence and deci- Tea Pillows Can Pro- 6 sions are made in a rushed fashion without sufficient analysis of the ramifications mote a Healthy Lifestyle of those actions. Examples of these failed executions abound and frequently become the focus of business journal articles with the worst examples becoming It is Okay to Exhale. 7 fodder for case studies at leading B schools across the country. Trade Association memberships are particularly vulnerable during these tumultu- ous periods as the benefits are either too obscure or taken for granted by the com- Hot Milk Tea 8 panies who support them. These past two years have been particularly cruel to all kinds of trade associations including those in the hot & cold beverage industries. The Tea Association of the USA as well as related herbal and regular tea associa- Tea Entrepreneur Wins 9 tions in other countries have similarly been affected. International Award. During recessionary times virtually nothing is immune from consideration when it comes to controlling costs and Trade Association membership is certainly not an Country of Origin, 10 exception. To reinforce the value of Trade Association membership let’s take a More Than a Label look below the surface to examine the more obscure benefits of membership. Did you know that membership in a WTE to Co-Locate 11 Trade Association is analogous to taking With Natural Market. out an insurance policy? There is not a single corporation that would ever dream Member Announce- 12 of exposing their backers, shareholders, ments. partners, employees, or customers to the vagaries of doing business without the STI 2010 Sponsors 13 protection of multiple insurance policies. Similarly, there are very few individuals who would ever leave their families un- Editor’s Corner 14 protected without the security of multiple layers of insurance coverage. Tea Bits Volume 17, Issue 1 Page 2 Why then do so many business operators elect not to join the Trade Associations that pertain to their line of business? The answer is found in the sim- ple fact that all insurance policies protect specific policyholders while trade association membership protects the industry. Secondarily, there is a ten- dency for those companies not currently members to seek to maintain the status-quo because they know that others within their industry will support Trade Association activities. Sitting on the sidelines may work during periods of plenty but this strategy quickly falls apart during harsh economic times as even the stalwarts of any industry are hard pressed to maintain their dues commitments. Trade Associations work only if they have the support of their industries. They cannot exist in a vacuum for two obvious reasons; first, they require financial support if they are to perform in the best interests of the industry and second, they need to represent a broad spectrum of the industry if they are expected to function as the legitimate “voice” of the industry. Trade Associations are often underappreciated particularly by those non-member companies sitting on the sidelines. It is easy to become complacent relative to the stability of ones industry especially if you are not privy to the intricacies of problems challenging that industry. I am reminded of a recent comment made by my colleague Louise Roberge – president of the Tea Association of Canada during the course of her Annual Tea Conference last September. Louise was about to announce a tea break to the convention delegates but instead announced that the tea break was cancelled because they could not get tea into the country. She was obvi- ously joking but very cleverly making a point that thanks to the Trade Association activities there were no barriers to the importation of tea. Needless to say she got every ones attention even through they were a bit more introspective during the tea break. So what functions do Trade Associations perform? Clearly they differ from one organization to another but they all share the same basic concerns including: ⇒ Setting basic guidelines for the industry so that consumers are comfortable with the collective message being delivered by all companies within the industry. No individual company can perform this function and the absence of clear guidelines could cause consumer confusion, even to the point of inviting regulatory involvement. ⇒ Acting as the spokesperson for the industry when dealing with regulatory authorities to insure com- pliance with all applicable laws and/or to represent the industry in the development of new laws. Once again, regardless of individual companies’ specific resources, a single company cannot legiti- mately represent the industry as a whole because of the vagaries of their own situation as well as the likelihood of competitive interests preventing an unbiased solution. ⇒ Providing Industry wide services such as the Bioterrorism Agent offered by the Tea Association of the USA for worldwide tea exporters sending tea to the USA. These services are offered on an impartial confidential basis at miniscule cost to the exporter. No other single company could offer this same level of support to the global tea industry. ⇒ Coordinating international cooperative efforts concerning many aspects of the growing, processing, packaging, shipping, storage or exporting of a commodity. No individual company can achieve this on behalf of an entire industry. Tea Bits Volume 17, Issue 1 Page 3 ⇒ Acting as a guardian for the industry, reining in rogue companies making exaggerated claims, or cor- recting misstatements made by individuals, competitors or the media. ⇒ Acting as a spokesperson for the industry in dealing with difficult/sensitive/ or complicated questions. ⇒ Acting as a spokesperson for the industry in dealing with generic media inquiries or inquiries where it is important to keep an individual company name out of the spotlight. ⇒ Development of position statements on a wide variety of issues for use by member companies. ⇒ Trade Associations take leadership positions when dealing with industry wide emergencies. ⇒ Trade Associations track trends, compile statistics and commission research studies for the benefit of their members. While individual companies can do this they cannot do it impartially nor can they do so as efficiently. ⇒ Trade Associations coordinate the assembly of industry wide experts to address any kind of situation confronting the industry. Most have created a wide variety of committees made up of member experts who are ready to tackle any issue that may develop. ⇒ Facilitates networking through organized trade activities such as conventions, conferences, work- shops, Board and Committee meetings and social events. These activities frequently lead to business relationships that could ameliorate specific company problems. ⇒ Some Trade Associations such as the Tea Council of the USA generically promote tea for the benefit of the entire Tea Industry. Concerted efforts over the last 20 years have been hugely successful in associ- ating tea consumption with a great many health benefits. This consumer message has been primarily responsible for stimulating tea consumption and creating an overall business environment conducive to growth. ⇒ Some Trade Associations such as the Specialty Tea Institute (a division of the Tea Association of the USA) have developed educational programs designed to ensure a standardization of tea knowledge. These programs not only lead to the development of a more professional industry but could also serve to eliminate individual member training costs by functioning as in-house training centers. ⇒ Trade Associations also serve as clearinghouses for job recruitment and for the identification of industry needs and desires. So now that we have removed some of the cobwebs that tend to accumulate during periods of specific inactiv- ity or from the superficial view of non-members, we can see the critical role played by the Trade Association. Comparing Trade Association membership to acquiring an insurance policy is suddenly not so far fetched. Protection against the known and unknown challenges of doing business in an ever more complex environment is what Trade Association membership is all about. So the bottom line message is clear; while the need for controlling costs is always of primary importance, especially during unfavorable business conditions, please think twice before cutting your Trade Association membership. It may result in short term financial gains at the risk of long term industry and category advantages. To all of the long term supporters of Trade Associations through- out the Coffee & Tea Industries our sincere thanks for your confi- dence. For those companies who remain uncommitted, now is the time to reconsider your decision as there is a very real risk that you will be leaving your company and the industry unprotected at a time when we could all least afford it. Tea Bits Volume 17, Issue 1 Page 4 Vic Ferretti honored at Annual Tea Association of the USA Holiday Dinner Keeping with a long standing tradition, the Tea Association honored one of its own at its Annual Holiday Party. This year’s hon- oree was Vic Ferretti on the occasion of his retirement after 51 years in the tea industry.

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