Rwanda is the most recent of several tea lands branding their country as a source of exceptional leaf.
In November, officials said the newly designated Rwanda Tea brand “will empower and inspire tea value chain stakeholders to conserve and value” the nation’s natural heritage. Agricultural Minister Geraldine Mukeshimana told KT Press that working together to promote the brand “ensures that Rwanda tea will continue to be a sought after, trusted, and high-quality product backed by robust regulation and policy standards.”
“In doing so, we can achieve the best possible outcomes for the industry,” she said.
Future growth of specialty tea in Kenya, Nepal, India, and Sri Lanka lies with millions of smallholders who don’t have access to the expertise or financial resources to establish a brand in a highly competitive global market that is dominated by multinationals. Unilever, Nestlé, Tata Global Beverages (Tetley), Starbucks, and Twinings (Associated British Foods) annually buy and sell billions of dollars of tea.
In Rwanda, there are 42,840 farmers growing tea on 65,000 acres of land. It makes sense to promote a national brand because no one tea factory has the financial resources to promote tea globally on its own. Rwandan estates that ship quality products, including teas from the well-known Sorwathe Tea Factory, don’t yet have the Rwanda Tea logo on their packaging, but intend to use it.
Mukeshimana did not disclose Rwanda’s promotional budget. Local growers say it is likely modest and predict it will be a long process educating consumers. It seems unlikely Rwanda will finance commercials priced from $1.9 to $2.2 million, equivalent to 1.7 billion Rwandan francs (Rwf). The country’s 25.1 million kilos of tea exports earned $74.5 million for the financial year July 2016 to June 2017.
The National Agricultural Export Board (NAEB) intends to increase revenue from tea exports to $94.9 million by 2018, up from $65.7 million in 2013. Last year, Scottish investor Sir Ian Wood invested in Mulindi and Shagasha tea factories citing a pledge to double the country’s tea production in the next two years.
“It is imperative to protect the reputation of Rwanda tea by setting it apart from other global teas,” said Her comments suggest that the designation will be reserved for teas that contain 100 percent Rwanda tea. Most teas from Rwanda are blended with teas from other origins before being packed for sale at retail outlets. Rwanda currently ships tea to 48 countries.
Four years ago, in its first global campaign on behalf of the company’s Lipton brand, Unilever licensed Kermit the Frog, Ms. Piggy, and the Muppets and produced television commercials in support of its “Be More Tea” campaign. These TV spots aired during programs including the Academy Awards where the price of a 30-second ad reached a record average high of $61,000 per second. Lipton’s message delighted 43 million viewers that night and prompted 21 million online visits. There were 770 million TV impressions the following month.
Lipton is the world’s best-selling tea, a household name in more than 110 markets earning $3.5 billion in sales. Unilever’s other regional tea brands include PG Tips and Brooke Bond in the U.K., Red Label in India, and Bushells in Australia. The company also produces ready-to-drink Lipton iced tea.
To attract this attention, Unilever spent $40 million on social and traditional media. Its entire range of unified Lipton hot and iced tea brands were boosted through public events, leased billboards, and advertising in many countries. Spokespersons such as Hugh Jackman in Australia and members of Canada’s Cirque du Soleil have partnered with Lipton to generated additional sales, but Unilever ultimately committed far more money to acquiring and expanding T2 (an Australian chain of tea retail stores); Pukka Herbs, a $30 million British health tea brand; and Tazo, a grocery and convenience store brand purchased from Starbucks for $384 million. Recent promotional efforts are more targeted as a result.
The Ceylon brand of Sri Lanka is one of the best known in the world. It dates to colonial times and retains its luster. Lipton got its start in Ceylon 150 years ago and teas grown in Sri Lanka remain an ingredient in some of the world’s most popular blends. Unlike growers in Darjeeling, India, Sri Lanka growers resisted the temptation to dilute the brand by preventing blends from displaying the widely recognized seal. Only 100 percent Sri Lanka tea can display the seal.
But having a well-known national brand isn’t sufficient to retain market share. Noting its decline as a percent of global exports, in 2010 Sri Lanka began assessing tea growers 2 cents (SLRs3.50) per kilo to create a marketing fund sufficient to increase brand awareness overseas. The fund has collected SLRs7 billion with SLRs2 billion spent locally on tea cafes, cricket matches, and pageants with little appreciable impact on global sales. Last January the government tried to claw back $45 million in funds, an effort the Promotion and Marketing Committee of the Sri Lanka Tea Board successfully resisted.
Deciding exactly how to spend the fund has been challenging. While $45 million is a significant sum, as Lipton demonstrated, marketing costs are huge and must be sustained to be effective. Sri Lanka has on several occasions interviewed creative agencies bidding to manage a global advertising campaign but failed to reach agreement. Frustrated Tea Export Association (TEA) members now want to create a campaign of their own.
Tiny Nepal is at the back of the pack globally, exporting only 13 million metric tons. Most is cut, tear, curl (CTC), but in 2017, shipments surged 19 percent and prices reached $100 per kilo as Orthodox production increased to 5 million metric tons. For decades virtually all of Nepal’s tea traveled to India where it is marketed by companies with deep ties to European importers, particularly in the U.K. and Germany, with new customers in China, Japan, and South Korea. In the past, Nepali teas were blended and legally labeled Darjeeling, one of the most celebrated of the world’s regional brands. This enabled retailers to sell 40 metric tons of Darjeeling a year when only 9 metric tons were harvested annually. Five years ago, that changed when the European Union formally recognized Darjeeling as a protected Geographical Indication (GPI). Teas grown outside the designated boundaries could no longer be blended and labeled Darjeeling. Ironically this also meant that the Indian tea could no longer claim to be the “champagne” of tea (since Champagne is also a GPI).
The Darjeeling Tea Association (DTA), which had sought intellectual property protection for the region’s teas since 1983, embraced the new status. Nepal, meanwhile, has seen CTC prices decline while prices of its handmade, organic, high-grown orthodox teas soar.
Nepal’s tea exports earned NRs2.4 billion ($23 million), up from NRs2 billion ($19.4 million) in 2014–15 and are steadily climbing. This has led to growing interest in promoting exports and renewed investment in a national brand.
“Demand for Nepali tea from China has soared, but we are unable to produce adequate amounts,” said Sheshkanta Gautam, executive director of the National Tea and Coffee Development Board (NTCDB). He told the Kathmandu Post that tea production increased by 4.65 percent to 24,263 metric tons last year. The total area under tea grew to 27,688 hectares from 26,165 hectares.
In 2014, Nepal’s government decided to create a premium brand and slogan: Nepal Tea “Quality from the Himalayas” and press for trademark protection in export destinations that include North America and Europe.
Gautam said that the board was planning to enforce the use of Nepal Tea, a collective trademark for the country’s orthodox (largely handmade teas). “We were unable to enforce the trademark due to lack of a code of conduct,” he said. The code of conduct is going through a validation process. “As soon as it is validated, we will begin distributing the collective trademark to exporters.”
The timing is ideal. Tea growers there already support a marketing cooperative known as HIMCOOP. This will be strengthened by global recognition and an unexpected development: when last June the West Bengal government decided to force the children of Nepali-speaking Gorkha to exclusively learn Hindu in grade school anger boiled over and the 200,000 Gorkha walked away from the jobs harvesting and processing tea, ultimately costing Darjeeling growers millions and greatly reducing the lucrative upcoming spring harvest (first flush).
Since 2010, Nepal’s government has successfully promoted several products by including them in its list of high export potential goods under the Nepal Trade Integrated Strategy. Nepali orthodox tea is the fourth domestic product to record a collective trademark. This spring the NTCDB and the Himalayan Orthodox Tea Producers’ Association (HOTPA) will monitor and promote the logo in the international market. Registration of the trademark in the main importing countries, which takes several years, is expected shortly.