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A Full Infusion
Market Trends,
Tea Associations,
History, and
Brewing Vessels
The Quality
Question
Determining the
Value of Tea
A Spiral Through
the Tea Leaves
An Exploration of
Tea Clonals
Specialty Education
Cultivating
Connoisseurship,
One Consumer
at a Time
A Study
in Sommeliers
Sages of the Tea Leaf
In the Garden
A Tradition as
Old as Tea Itself
Italy Takes to Tea
The Land of Espresso
Ushers in a New
Hot Beverage
Tea as Teacher
Display Teas
An Artistic
Expression of Tea
Kombucha
The Myth and the
Magic of an
Ancient Elixir
Far Leaves
Berkeley, California
Crazy Wisdom
Bookstore &
Tea Room
Ann Arbor, Michigan
Teany
New York City,
New York
From the Publisher
From the Editor
Tea Industry
Directory 2003
Advertiser Index
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The Quality Question
Determining the Value of Tea
by Jeff Bacon
Say you know everything about tea and nothing of art. A friend of yours, a curator
at a city museum, invites you to see a new modernist exhibit, excitedly noting
what a coup it is that he obtained several works by Alexander Calder and Mark
Rothko for the show. You might feel like yawning. As long as it looks pretty on
the wall, you ask, what else really matters? He rushes into a discussion of quality
standards, of benchmarks and paradigms set by international art experts who meticulously
measure the worth of art by genre, originality and influence. Such well-defined
conditions, you realize, change everything. Suddenly, you do understand why the
inclusion of Rothkos and Calders is such a big deal. You change the subject by
offering him a rare-not to mention expensive-Chinese white tea you just received.
He says it tastes fine. "As long as it quenches my thirst," he adds, "what else
really matters?" And you don't know how to answer.
Tea may be the second-most consumed beverage
in the world, but it is the least understood product in many American retail shops.
What determines a quality tea is probably one of the most vexing questions a retailer
deals with daily. To begin with, the price of tea does not automatically translate
to quality, and the tea industry has no standardized criteria upon which to rely
for assessment. Determining a tea's price and value is therefore almost completely
subjective.
In order to get a handle on tea pricing, it's important to understand the different
roles the beverage plays in various cultures. In many countries, it is an integral
part of daily life, both socially and economically. Unfortunately for the United
States, tea got a bad rap just before the revolutionary war when England began
exorbitantly taxing tea, prompting much of America to rely on coffee instead.
Now, specialty coffee's popularity has piqued the interest of customers looking
to continue trying new things, specifically, specialty tea. Savvy retailers are
beginning to educate their customers about premium tea, consequently maturing
the American palate.
As this interest in tea grows, the opportunities to introduce fine teas in a retail
setting will expand. But without well-defined quality standards in place, your
ability to market teas to your customers will be based on your personal understanding
of price versus value in relation to your customers. A patron of a teahouse in
China, for example, would likely pay more for a well-made leaf because they would
know how impeccable tea estate conditions would have to be in order to generate
such a leaf. But the typical American customer might be turned off by the hefty
price, not understanding why the tea is so expensive.
It's a matter of education. Households in China have been serving fine green teas
for centuries. Generation after generation has handed down an appreciation for
the preparation and consumption of fine tea. If American consumers had such a
tradition, it wouldn't take long for even a novice tea drinker to understand the
subtle differences between a well-made tea and an extremely well-made tea. The
distinguishing marks of quality tea in China are much more complicated than in
the U.S. In addition to expecting great flavor, Chinese tea consumers will often
check the tea leaf to determine how much handling it was subjected to or if it
was withered or dried correctly. American tea consumers, on the other hand, generally
don't have enough experience to look for such qualities. You think it's hard to
sell tea based on flavor and smell? Try selling it by saying, "Yes, but look at
how well the leaf is made."
Take this example: After the 2002 growing season, China is enjoying the good fortune
of excellent growth in the Hangzou area. Mother Nature helped make this year's
Dragon Well green tea very nice in the cup, much like it was in 2001. Consumers
in China are willing to pay more for this tea because they are quick to notice
the high quality of the leaf, which indicates that it is classic Dragon Well.
American consumers, however, are wondering why the price of Dragon Well tea went
up this year even though the flavor has remained unchanged. But because the consumer
in China values the leaf quality, the price is set in China before the tea is
imported to the U.S. As a retailer, it is your responsibility to determine whether
or not your customers would understand the significance of the well-made leaf
and be willing to pay more for this tea. If not, it does the American retailer
no good to carry an expensive tea that has little chance of being appreciated
for its price.
Value vs. Price
When determining the value of a tea, it's crucial to understand your particular
market. Consider, for instance, hot tea versus iced tea. There are countless teas
available that would brew a terrific glass of iced tea. I've tasted green and
white teas from China that have sat after cupping and cooled and still have a
great flavor with a refreshing feel. But I don't know anyone willing to pay $50
per pound for an iced tea blend, which is what you could expect to pay for those
higher-end Chinese white teas. U.S. iced tea drinkers have paid so little for
so long that the standard has long since been set for the price of a glass of
iced tea. Most likely, before a customer even sees your tea menu, she already
knows how much she expects to pay for iced tea. As a retailer, it's your job to
educate her on the benefits of spending more for a better cup.
Usually prices for teas are based completely on supply and demand. But today,
more people are finding themselves with the means to enjoy better tea, thus, demand
is beginning to out-pace supply. Take India, for example. Currently, India's production
is the largest of any tea-producing country. India's population is also one of
the largest in tea consumption per capita. It is so large, in fact, that the country
usually ends up as number two, or sometimes even number three, in world exporters.
Add to that the fact that India is home to the fastest growing middle class economy
in the world, and it becomes clear why its tea exports may continue to drop dramatically,
especially in the quantities of the higher-quality teas we have come to expect
from India year after year. The price of teas will almost always be affected if
new markets are vying for the same teas upon which you and I, for example, have
come to rely.
Of course, Mother Nature also impacts the balance of supply and demand. For example,
recent weather patterns in many of the world's preeminent growing areas have wreaked
havoc on tea production. Circumstances like an abundance of rain when the ground
is already saturated, or a lack of rain when farmers are desperate for it, have
forced some growers to use a less-than-desirable picked leaf upon which to build
their teas. During the growing season, pickers are sent into the fields daily.
On one day, they will fan out over a small, two-acre section facing to the east
at the bottom of a hill in an area where the soil has great drainage. The next
day, however, the pickers might work at the top of a west-facing hill, picking
plants from soil that has considerably more clay in its composition. Obviously,
each day of pickings will produce a different version of the tea for which this
area is famous. Ready for the tricky part?
When this tea is offered for sale, buyers who are well schooled in leaf quality
will recognize the tea picked on the first day as having the correct characteristics
of tea grown in this area. But the tea picked on the second day will likely sell
in the U.S. market because few American consumers will know to even check the
leaf quality-they only know the name. And depending on how many people are looking
to purchase this tea, the first-day tea may end up costing much more than the
second-day tea because those willing to pay more understand the differences between
the two. Do your customers understand the differences? Do you?
Supply and demand can also show up in the form of limited-production teas. Teas
that are made with special processes or with unique pickings can easily fetch
much higher prices because the grower has produced a limited supply. China has
become famous for its limited-production teas, such as pu'er, which can take up
to 10 years to produce. As another example, some white teas are picked at the
height of the spring season, when the grower should be picking the top two leaves
and a bud. By only picking and using the top leaf bud, the grower makes it impossible
to use the next picking as a "fine pick," and he must find a use for the leaves
from the next picking in a less-than-premium tea, making the first picking much
more valuable.
Limited-production teas are probably the most difficult for American consumers
to comprehend. But these teas can be likened to fine art. The local poster shop
has many respectable reproductions of some of the world's most famous paintings,
but it is the connoisseur who understands the differences between the print and
the original. If you are interested in carrying some of the worlds' finest teas,
it's important to understand the reason behind their price-in other words, their
value.
Quality vs. Price
But it gets even more complicated. The subjectivity of tea pricing is so precise
that arguably minimal differences in quality can make for major differences in
price. Take this year's most recent season of Keemun teas from China. If two
Keemuns are presented, both whole-leaf, both from the same season and growing
area, and both shipped to the U.S. at the same time, then one can deduce that
the Keemun costing $40 a pound must be a much better tea than the one costing
$3 per pound tea, right? If it were only that simple.
The Anhui province of China grows the world-famous Keemun teas. Each summer, as
the season's production is offered to buyers around the world, the process of
purchasing begins by comparing the current year's production to the previous year's
purchases. The grower, knowing how many pounds of each style he was able to produce,
will set the price. The first price is based on how many pounds he sold last year
against how many were produced this year. As the buyers begin to make purchases,
the grower may drop or raise prices if he starts to see a shift in sales. If a
grower has set the price for the top-quality teas much higher than last year,
it is up to the buyers to determine if the price increase can be justified in
their market. Sometimes a grower will have limited-production teas that will sell
for considerably more money in one country, while buyers in another country will
simply pass, knowing their customers would not pay more for those subtle differences
in quality. In some markets, the higher price will not be a problem because the
leaf style has improved dramatically, but in other markets, leaf style may be
of little importance.
As for the two Keemuns, the first, at $40 per pound, has a well-made leaf style,
great cup color and a nice, balanced liquor with all of the flavor characteristics
that make Keemuns famous. The second, priced at $3 per pound, has a consistent
leaf style, good color, a nice flavor profile, and a balanced liquor. Both teas
represent great quality and good value depending on their intended use and the
knowledge level of the consumer.
It Pays To Buy Good Tea
The more the American tea industry continues to expand and develop, the better
chance for success your tea program has. Perhaps there will soon be set standards
with which to measure quality in relation to value in relation to price in the
near future. Consider the fact that the American Premium Tea Institute (APTI)
and the Specialty Tea Registry (STAR) recently merged to form the Specialty Tea
Institute, whose mission is to promote growth and provide an educational forum
for all involved in the industry.
But for the time being, judging the value and quality of specialty and premium
teas remains mysterious. In navigating a tea program, retailers would fare well
educating themselves as best they can about origin, climate, season-to-season
growth, and of course, about their customers' level of appreciation for tea. Buying
good teas means making sure they have the best characteristics possible, but paying
the most you can for a certain tea will only guarantee the most expensive tea
menu in town, not necessarily the best. By adding an intimate knowledge of your
specific market to all those qualities of perception, and by understanding your
customers' preferences, you'll develop not only a quality control system, but
also perhaps the most personalized and potentially successful tea program yet.
Jeff Bacon is
the director of marketing for the G.S. Haly Company, an importer of fine teas
based in Redwood City, California. He can be reached at 650-367-7601.
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