By Jeni Dodd, Jeni Dodd Tea
Trust me, I know exactly what you are thinking and how you feel. I have been there. I have lived it and I’m now on the other side with a very different perspective. Ten years ago, at the World Tea Conference + Expo’s “World Origins Tasting Tour,” I tasted a Nepalese white tea that altered my perception entirely. First of all, I had no idea Nepal made tea. Secondly, my thought was “white tea tastes like this???” This was an entirely new flavor profile and sensation for me, and I was completely captivated. Little did I know, this would become my complete obsession and focus for the next decade.
As someone with a fledgling tea business at that time, I did what you should do. I went to the booth after the tasting, spoke to the people from Nepal and attempted to buy samples. I wanted to taste the tea with water at home and determine whether I could get others as interested in this tea. I proudly told these men – who had bought plane tickets, were paying for hotel rooms and flown across the world to promote their tea – how I would be buying directly from them. When they asked how much I planned to buy, with a great deal of satisfaction (and let’s face it, a bit of smugness), I told them “5 kg, maybe 10 this year.” I still see my face when I said it. Not only did I feel like the brightest bulb in the room for finding something so unique and rare, but I saw my chance to do something really good in the tea world by helping those from a developing country.
They were not prepared for someone like me. And, I was not prepared for my journey that started that day. The guys (who I now gently tease about this initial interaction), did not have samples prepared, so they gave me a plastic shopping bag with some tea leaves thrown in it with promises to send me more samples upon their return to their country. Those samples never came, even after repeatedly requesting them. Eventually, I resigned myself to the idea that the only way to get the samples was to go directly to Nepal and pick them up myself, which I did. Ten years later, I have traveled to Nepal about 30 times, made friends, business partners and family. While I now import significantly more tea than I initially projected, and despite having spent about 100 percent of my time in the last decade promoting Nepalese tea in the United States, I still dream of the day I will be bringing a container of tea a year from Nepal.
Therein lies the rub. The tension between the aspirations and good intentions of those trying to deal directly with growers and producers with the hope of increasing the amount these hardworking people earn from their labor and the realities of the market. Because of my unique experience in the last 10 years, I see the issues on both sides.
A Look at Production Costs
Growers and producers in countries of origin manage daily the realities of production costs. Each aspect of producing the dried tea leaves that end up in our cup requires a specialized skill set. Growing and managing tea fields is very different from processing tea – a challenge for even the most basic quality of tea. In the field, you have to master soil, irrigation, pest control and plucking standards. In the factory, one must direct complex systems to extract the best flavor from the leaf while creating transportable and stable product. Growing and processing tea is labor intensive and much more skill-driven than we give credit for in the United States. And, if a grower or producer wants to tap into a high-end/whole-leaf market, to maximize profit, they encounter additional concerns. To compete in this market, the tea must be of superb quality and consistency. As the market continues to move towards mandating organic, fair-trade agricultural products, certification must be incorporated into production costs. These certifications not only require monetary investment, but also time and training. (Time and money that are not generally reflected by an increased market price, by the way.)
Once our growers and producers have finished tea with marketable certifications, they must be able to export their tea. Exporting tea requires understanding of shipping logistics and customs requirements in the country of origin and the importing. This is not an easy feat without specialized knowledge and skill, as evidenced by the fact that many corporations have whole departments dedicated to this process alone – not to mention an entire profitable industry that supports export matters.
Oh, but wait, I have completely missed the step before can even discuss international shipping. The tea has to travel from the garden to a port of international shipment. For a landlocked country like Nepal, there are two options for international shipping. Either by air, where the tea must travel about 150 miles from the tea-growing regions to Kathmandu. (A journey that takes about 15 hours in this developing country with insufficient infrastructure.) This is the most expensive option particularly for shipments of less than 100 kilos. Or, by sea, which requires the tea to cross through customs into India and then transport to the nearest seaport. Besides the additional money needed to physically transport to the seaport, for Nepali tea growers and producers, the by-sea option poses significant risk of theft and requires a bit of hope, as India often seeks to protect its own tea industry by making it difficult and sometimes impossible for Nepal to get tea to port. Furthermore, the by-sea international shipping option only makes sense with container-sized volumes of tea and is not a viable choice for small orders of five kilos or less.
Does It Make Sense to Sell Direct to Consumer?
With this background on growing, producing and exporting, let’s examine the trending option to sell direct to consumers. The idea is laudable. In a nutshell, the thought is to cut out any extraneous players in the supply chain and direct more profit to the laborers that toil over the leaf so they will receive a greater profit. I understand and feel the same desire to connect directly the hands and souls of those who create your cup of tea and reward their hard work. Tea feels personal; we should have a personal connection to the people making it; and, we should want those people to benefit the most from our consumption. I often use the term ethical consumerism precisely because I want consumers to use their buying power in an ethical manner and be thoughtful about those producing tea. What could be more ethical than increasing the earnings of farmers and producers in a developing country?
However, I posit some follow-up questions: Are we really increasing earnings? Or, as discussed above, are we just asking growers and producers to become experts in additional fields (pun somewhat intended) with additional capital requirements without commensurate renumeration? As well as asking them to become marketers in foreign countries?
In order to sell direct to consumers, growers and producers must acquire a domain name (costs money), a website (costs money) to interact with customers across the world. Someone to manage that website and the customers (costs money and, generally, will need to be done in a foreign language requiring a special skill). Someone must fulfill orders (costs money). Will this aid in attracting buyers? I think as many already know, just having a website does not translate directly into sales. If the grower and producers want to generate sales, they need to understand the end market and craft campaigns that connect them with potential customers. Customers that will then purchase what? 100 grams (3 ½ ounces) of tea? If the grower or producer is lucky, maybe 5 kilos of tea? Do you think this represents fairness? Do you think that asking the grower or the producer to become an expert in all of these different fields for so little return on investment, time and labor is in their best interest?
And while I do not doubt the good intentions of consumers endeavoring to buy direct from tea growers and producers (because that is who I was a decade ago), is it not possible, perhaps likely, that this only serves more to soothe western angst than addressing earnings and quality of life issues of the laborers of tea?
Arguably, not even the tea growers or producers find consumer-direct sales a viable solution when put into actual practice. While I could simply reference my initial interaction with Nepali tea men at the World Tea Conference + Expo, as to why the consumer-direct sales are problematic at the consumer end, I will also highlight a production example at origin. A few years ago, green leaf growers in Nepal felt the owners of production were making far more than their fair share of the tea profits. They believed if they took over production themselves, they would earn a great deal more. Many growers took advantage of Non-Governmental Organization (“NGO”) grants to acquire the means of production. These small stakeholders and growers discovered producing tea was more difficult than they had observed and even harder was selling at a price that would cover costs and a small profit. Without a viable market, many of the machines that were purchased through the combination of debt and NGO grants are now abandoned with the growers finding themselves worse-off economically than before.
The answer may lie with cooperative movements, where small growers and producers band together to share the costs and reduce overall individual risk for production. This alternative does spread the onerous and the labor-intensive burden of production. This also allows for an individual to master one aspect of production rather than only having the time for minimal skill development because he or she must worry about every part of tea creation. Each person in the cooperative can focus and refine the one element of production since they can rely on others in the cooperative to take over some of the production responsibilities. Collective knowledge, skill and shared financial risk and rewards in tea production can be a critical for small stakeholders and growers by providing a competitive position thereby equalizing the playing field with larger producers. However, this solution only addresses production costs. Regardless of how streamlined production is, the tea still needs to be exported and marketed in a foreign country.
The tea industry needs those who are solely dedicated to developing the market, and, more importantly, a to do so with a singular focus on developing a market that reflects the true cost of investment and profit for everyone in the supply chain. For the most part, growers and producers have completely abdicated responsibility for marketing their product to the end-consumer. They have left this role completely to those that buy their tea in bulk. Which in some regards is fair, since it is not realistic to expect growers and producers to understand the nuances of a local market in a foreign country. However, I have observed that the people and companies that have provided this service, filling this role, have done a poor job of adequately explaining the value they bring to the supply-chain, despite providing a key component to the success of tea growers, producers and end-consumers. The result is often that this role is viewed as somehow taking advantage of growers and producers. We deride the “middleman” or importer or wholesaler (whatever terminology you want to use for the role between the country of origin/production and the end-consumer – I will use importer) for preying on the vulnerable and impoverished.
Yet, importers take risks while guaranteeing growers and producers income which is critical value added. The importer is at risk of not selling the tea. The importer is responsible for clearing customs in the import country. The importer must bear the costs to warehouse the tea. They are ones that risk potential damage to the tea. The responsibility and costs associated with developing a market, marketing and expanding the market for the tea rests solely with the importer. While these costs, risks and responsibilities are not nearly as poetic or storied as the farmer in an exotic land physically transforming nature into magic in a cup, the importer role is every bit as essential for the success of tea and consequently the success of that farmer, grower and producer. A good importer has a more far-reaching benefit to those that produce and create tea at origin than the sale of 100 grams here, five kilos there. Not to mention, the importer also provides a service to the end-consumer by investing the time, money and resources to stay on top of production quality, consistency and availability at origin. While a quick Google search might yield options to buy tea from source, a computer search cannot convey the same information as being on the ground at source. Meeting directly with those that grow and produce tea, observing the actual conditions of workers and understanding the complexities and nuances of production in person cannot be replicated virtually. Done right and done well, everyone in the supply-chain should win and win consistently over time so that everyone has long-term sustainable economic growth ending with a satisfied consumer who will continue to purchase tea. The success and profitability of each link in the chain should be part of the bottom-line assessment for any tea importer.
Ten years ago, asking for a sample of tea, I didn’t foresee this as my role. I foresaw my role as the one buying directly from a grower or producer a small amount of tea that I could drink myself, and that I could maintain a small inventory for retail sales. I could not see then what I know now. Dabbling, buying a small amount of tea so that I felt good was of no use to the tea growers and producers. I had to think bigger and do better. It has meant becoming a true advocate on their behalf by buying much more tea, paying a fair price and increasing the market for their tea. I view my role as finding the way to create the most successful win for everyone in the supply chain.
This is what I do now. I attempt my best on behalf those growers and producers across the world that I consider family. I have had to become a much more effective advocate by taking on more risk, continuing to increase my buy of tea each year from tea growers and producers in Nepal, and performing my main duty – educating retailers and consumers on why they are not paying enough for the tea they buy. The ability to obtain a fair price for my growers and producers is the ONLY way I can increase their livelihood. The market needs to reflect the true value of what is created in that cup. I also advocate on behalf of the consumer at origin by keeping the growers and produces alerted to what is important to the consumer, making sure that voice is heard in the supply chain as well.
It is no understatement that I spend 100 percent of my time advocating for Nepalese tea, speaking about the beauty of the tea, writing articles and creating new events to expand tea knowledge. Because, I now understand that it is the market that matters. Without a robust and fair market, nothing else will matter. It may be basic, but worth noting, the only capital available to share with those in the supply-chain is the market price for tea. So, at the end of the day, the market price is the limitation of what we can do for those at origin. When the market price does not reflect the value of the product, that is a significant issue. As western consumers, and consumers of conscience, we must address this issue of undercutting and undervaluing what we require of these growers and producers in order to earn our dollars. True story: One retailer once said to me, “I want to buy some whole-leaf Nepalese tea that is certified fair-trade, certified organic and costs me no more than $10 a kg.” Seriously. Shipping costs alone would be in the range of $5-7 per kg. That does not leave much of a margin for pluckers, growers, producers, certification fees and expenses, exporters, importers. Moreover, merely cutting out that last step would not have any effect on increasing the earnings of those at origin at that price. Expecting to have all of this quality and assurance at such a price is not realistic. We need to learn this in the United States. Yet, here lies the hope. Once I explained why this was not realistic to this retailer, or fair to the very people he wanted to support, he understood and was able to explain it to his customer base and, consequently, sell the tea at a price that allowed everyone in the chain to win.
Pay the True Price of a Cup of Tea
This is what we have to do better. We must explain the value added at each step in the chain and obtain a retail price that is representative of the true value that goes into that cup of tea. This is true for all levels of tea from CTC to the rarest of buds. Until consumers are willing to pay a fair price, a price that reflects the labor, the skill, the passion that transforms a leaf into the liquor in the cup…the rest (streamlining production, removing extraneous players in the supply chain, etc) will have no positive long-term economic, sustainable effect.
So, instead of burdening the growers, producers with additional work that is not compensated, if you really want to help, pay the true price of a cup of tea.
Born and raised in America’s heartland, Jeni Dodd has journeyed far from the plains of Kansas to remote tea-growing regions throughout the world in search of the perfect cup of tea. The owner of Jeni Dodd Tea, a company dedicated to importing hand-crafted, unique specialty teas and offering tea education for groups and events, Dodd seeks to expand the public’s awareness of the specialty tea market and lead consumers to discover the exquisite joy of the leaf. A Certified Tea Specialist through the Specialty Tea Institute, she has completed all of STI’s Level IV courses offered to date. She’s also taught future tea entrepreneurs and enthusiasts at the Specialty Tea Institute and has presented several times at the World Tea Conference + Expo and TEXSOM, as well as regional tea festivals in the United States. She was the keynote speaker at the Australian Tea Cultural Seminar and spoke at the International Tea Festival in Nepal. True to her roots, Dodd remains an avid Kansas Jayhawk basketball fan. Learn more at JeniDoddTea.com.