Local beverage may not be everyone's cup of tea

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Local beverage may not be everyone's cup of tea

    Local beverage may not be everyone's cup of tea

    Updated: 2012-03-27 08:00

    By Tang Yue and Zhang Yuchen in Beijing (China Daily)

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    Position as leading global exporter has been lost, report Tang Yue and Zhang Yuchen in Beijing.

    The practice of drinking and serving tea has been part of the Chinese cultural identity for centuries. The beverage, and its complicated serving ceremony, have inspired poets, writers and artists down the ages.

    Along with silk, gunpowder, paper and porcelain, the drink is one of the country's most famous products. Tea and China are synonymous, so much so that the British, noted tea drinkers themselves, use the phrase "Not for all the tea in China" to describe something they believe has great value.

    Tea is the world's most widely consumed beverage after water, and Chinese teas are still highly prized: A pre-sale 500-gram batch of West Lake Longjing, a renowned roasted green tea, drew a bid of 180,000 yuan ($28,500) at an auction in Hangzhou last week. Weight for weight that made the tea 25 percent more expensive than gold on the day. Despite the long and illustrious history, however, China is no longer the world's biggest exporter of tea.

    In 2010, Kenya was the world leader, with 441,021 kilograms, while China's 302,419 kg only secured second place.

    What's more, in the age of multinationals and branding, China is fast losing its name as the cradle of the drink because of a dearth of world-famous brands.

    China sold 320 million kg of tea last year, earning $96.5 million in the process, amounting to roughly $3 per kg, almost 50 percent higher than the price five years ago as a result of the appreciation of the yuan and rising labor costs.

    Pickers select the first batch of leaves this year for West Lake Longjing tea in Hangzhou. Li Zhong / for

    China Daily

Brand China

    "We mainly sell tea as a raw material rather than a branded product," said Li Jiaxun, board secretary of Zhejiang Tea Group, China's largest tea exporter and the world's leading exporter of green tea.

    Zhejiang Tea sells its tea in Africa, the largest importer of Chinese tea, and also Europe and the US, although they account for less than 10 percent of the company's market overseas.

    "The profit margin is only about 5 percent, and sometimes we even lose money," admitted Li.

    China provides 80 percent of the green tea on the global market, which is supposed to give a country a bigger say in the pricing of the "soft" commodity. However, the country's voice has gone unheard in recent years. Although more than 400 companies in China export the beverage, only three of them sold more than 20 million kg overseas in 2011, while 260 sold less than 100,000 kg.

    Li said the number of tea exporters has been rising in recent years, since the government abandoned its system of quotas and licensing restrictions on tea exports in 2006.

    Moreover, the newcomers have been engaged in a price war, expending valuable energy that they could otherwise have been harnessed in promoting the product instead. "It is a pain that we have to endure during this period of transition," said Cai Jun, director of department of tea, drinks and horticultural products under the China Chamber of Commerce for the Import and Export of Foodstuffs, Native Produce and Animal By-products.

    He said that before the reforms only a few State-owned companies were allowed to export tea, but they had little conception of brand awareness. Meanwhile, the problem for today's private enterprises is that they don't have enough money to undertake promotions overseas.

    "In the other major exporters such as Sri Lanka and Kenya, the government takes a leading role in the tea industry. But tea only accounts for a very small part of our country's total exports (0.0027 percent in 2011) and the trade in other agricultural commodities takes priority," said Cai.

    "But China used to be famous for its teas, so it's important that we restore it to its former glory."

    A tea farmer checks the quality of new leaves at Meijiawu in Hangzhou, Zhejiang province, an area

    famous for its fine green tea. Li Zhong / for China Daily

East meets West

    As the cradle of tea, China was the world's sole provider for centuries. However, the British, who formed the habit of drinking black tea in the 17th century, introduced tea trees to India and Sri Lanka in the late 19th century and then to Kenya in the early part of last century.

    Partly because of their long connection with Europe, those three countries still dominate the global market for black tea, which accounts for 60 percent of all tea in the global trade. "Unlike the Chinese, Europeans and people in the US prefer black tea to green, and prefer teabags to loose-leaf teas," said Li.

    "That's why we are now focusing on the development of teabags, fruit-flavored teas, and instant teas (tea in granulated form, like instant coffee)," he said, adding that the company is preparing to open its first shop in the US.

    And while Chinese companies are attempting to meet the needs of the Western customers, those customers also seem to be changing their habits.

    Data from the London-based International Tea Committee, which compiles and publishes statistics on the industry, show that between 2001 and 2010, the global market share of black tea fell by 10 percent to 60 percent, while green and oolong teas combined saw an increase of 8 percent to 31 percent.

    "A lot of people drink tea because it's healthy, and green tea can provide lots of benefits. Increasingly, people are beginning to realize that now," said Wu Xiduan,

    secretary-general of the China Tea Marketing Association.

    He explained that studies in the US and China suggest that green tea can help to lower the risk of contracting certain types of cancer and also illnesses such as strokes that can cause cognitive impairment, and osteoporosis in the elderly.

    And it's not just the health benefits that are prompting consumers to change their habits, it's also the taste. Loose-leaf teas are now beginning to take root in places where tea bags were previously the most popular form of the beverage.

    "We believe there is no comparison between premium loose-leaf teas and tea made from bags," said Diane Walden, co-founder of California Tea & Coffee Brewery in Los Angeles, which opened in 2008.

    "Studies have shown that the maximum antioxidant benefits are derived from freshly brewed loose leaf tea and that tea from bags loses much of its antioxidant value once it's steeped," she said in an e-mail interview.

    "The tea in bags is usually the 'dust' or 'fannings', the lowest grade of tea. Our customers are amazed at the difference in the taste of loose-leaf tea when compared with tea bags. "

    A man examines Pu'er tea in a market in southern Beijing. More people are drinking Pu'er for its health

    benefits. Wang Jing / China Daily

More than business

    But, despite the rise of tea shops and related centers across the US and Europe during the past decade, no company from the Chinese mainland has yet opened an overseas outlet.

    "We should be open-minded and take it (the rise of tea shops overseas) as positive news," said Sun Danwei, general manager of Beijing Wuyutai Tea, a 125-year-old brand that owns 270 shops in China.

    "They are promoting knowledge of tea all over the world and preparing customers for quality tea," said Sun, whose company is planning to open a store in Hong Kong as a first step to entering the market outside the mainland.

    Recognizing the growing demand, the US-based coffee giant Starbucks has launched a variety of tea-related products in recent years. In response, Chinese companies such as Wuyutai are also attempting to broaden their appeal to younger consumers by producing tea-flavored ice cream and also developing applications for Apple electronic products providing subscribers with the latest news from the industry, and instructions on how to brew the perfect cup. It has also opened a restaurant in Beijing that serves a range of dishes in which tea is used as a flavoring or major ingredient.

    "It is not only about selling tea. It's about everything to do with tea: The drink itself, the history, even the pots used in its preparation. The Japanese are doing a better job than us," Sun said, referring to the vast numbers of tea shops and centers on the streets of China's neighbor to the east.

    She admitted that it can be something of an effort to explain the cultural significance of tea to foreigners, but once they become interested, she said, many find it fascinating. "The government should take full advantage of existing networks such as the Confucius Institutes (government-backed organizations that promote the Chinese language and culture overseas) to push China's tea culture across the world. The task is too difficult for individual companies to undertake at the present time."

    Song Heng, an enthusiast who has published four books on China's tea culture, is upbeat about the future. He believes that the country's increasing economic power means that the eyes of the world are increasingly drawn to all things Chinese.

    "I often drink tea with foreigners, but I rarely see them drink it slowly and savor it wholeheartedly as the Chinese do. They can't understand why Chinese people like to spend so much (time and money) on quality tea.

    "But I believe it will change, things always do: At one point, Chinese people didn't drink coffee, but white-collar workers are drinking it a lot nowadays, and historically the Chinese didn't drink wine, but now they are willing to pay good money for a decent bottle," said Song.

    "Chinese tea is set to regain its popularity overseas, because more people are becoming interested in the country and tea is an integral part of our culture."

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