Is Ceylon Tea still hot? The Tough Tea Talk with a strategist
Whether served hot or cold, colored green or black, tea is the beverage 
of choice among today’s consumers. Nibras Bawa, CEO of Intimex Consulting spoke to Daily Mirror FT on the strategies for Tea Industry of Sri Lanka. Bawa, whose consulting company is working on globalizing a local tea brand advocates promoting single origin tea. We posed some hard and controversial questions to the outspoken globiz strategist whose insights were equally thought provoking.
Is the tea industry sustainable the way we are proceeding?
The industry faces stress, but long-term progress looks likely. Export statistics, auction prices and production data alone do not reveal a complete analysis of the tea industry. It’s well beyond these quantitative factors. Sri Lanka never looked at its tea industry strategically. Only in the recent past there have been some attempts. Many reforms with the participation of all stakeholders should have taken place long ago. However, as the saying goes where there is tea there is hope.
Is Ceylon Tea the most ethical tea in the world?
Arguably Yes. There are many positives like No child labour and worker welfare and so on. However we still have a long way to be really ethical. It requires a holistic mechanism whereby everything you do is ethical. You can’t be ethical in some areas and totally unethical in others. Ethics are a must, not an option nor a voluntary adherence. It’s mandatory and has to be integrated in our entire value chain.
Haven’t brands like Lipton made a name purely based on Ceylon Tea and now riding that success?
International tea marketers have historically exploited Ceylon tea. True, Lipton was Piggy bagging on the image of Ceylon Tea, but they have also moved on. Unilever has announced plans to source its entire tea supply sustainably, starting with the certification of its tea estate in Kericho, Kenya to Rainforest Alliance standards. This certification involves a holistic approach, treating environment, ethics and economics equally.
What are the new trends in the global tea industry?
Bubble teas, Red tea, Green tea, White tea, Yerba mate, RTD or bottled tea, Premium loose-leaf teas, higher-quality tea bags, functional teas, Organic and fair trade, Silky Nylon Bags, Artisan Teas, Pu-erh are just some of the latest buzz words. There is no "Starbucks of Tea", not yet. But some have tried.
What are the current challenges faced by the industry?
There are many obvious and not so obvious issues to deal with. The industry has been slow to innovate, upgrade, add value, and move closer to consumers with only a few notable exceptions. Most are contract packers with focus on bulk teas. Competition is not on the basis of innovation and specialization. Even where exporters own a brand, they depend heavily on distributors in overseas markets. Low productivity of the ageing tea bushes leading to low crop yield, Skilled worker deficit, Low worker productivity, cost of production that is now around U$ 1.75 per kg, well above that of Vietnam with around U$ 0.75 per kg are all concerns. Besides our strategies lack professionalism, worse still we don’t realize the need to re-plant and the rate of replanting in the corporate sector is believed to be less than 1%. Inconsistent policies, CESS fund malpractices, cut throat competition among our local exporters that lead to price war, ever increasing freight charges, rather under developed value addition base and technology, auction that is still age old and has not kept phase with advanced technology enabled auction systems are to name a few and the list is never ending. Ceylon tea image and heritage alone can not address and compensate for all these and other critical issues.
Is Ceylon Tea fast becoming a myth?
This is very subjective, however I couldn’t totally disagree. If only the image and heritage could do wonders for the industry as some seem to believe, why is it that we are still unable to unilaterally fix price for our tea globally? Leaving aside the interplay of demand and supply. Why is it the same giant that once capitalized on the Ceylon tea image and built a bullion dollar brand now moves to Kenya and talks of sustainability? In a way our image has eroded or is eroding. Its time we asked some hard questions ourselves and went through a self realization process. Every right thinking citizen of our country should protect this legacy for our future generations.
Why do you advocate Single origin tea?
Single origin tea makes more sense and should be our value proposition
to the consumers as we compete mainly in the orthodox tea market where we have a higher market share besides being the leading producer. Most tea brands use CTC Teas, the hallmark of a commoditized tea to give quick colour at the expense of quality. Fresh single origin tea packed at source, richer in flavour, aroma and character with guarantee of consistency, quality and authenticity is a distinct proposition in the world of tea that is so commoditized. Discerning consumers would also pay a premium for tea that is fresh, clean and authentically refreshing. Single origin tea makes sense as it addresses the triple bottom lines of people, planet and profits whilst treating environment, ethics and economics equally.
Labelling and packaging regulation Coopholes lead to exploitation by multinationals?
Most labels list only the nation to which the tea was transported for blending; implying the nation of blending is the source of the tea. This can be legal. Companies take advantage of this loophole, stating or implying, with narrow technical accuracy, an importation source, but without a single reference to the producing nation. This keeps the consumers ignorant of tea sources making the nation of blending more prestigious than nation of origin. For instance Tin mis-labelling occurs in three ways: wrong location of tin manufacture, wrong filling location, and wrong location of origin of the contents or the Tea itself. The word “blend” carries regulatory meaning that is often misinterpreted. Laws differentiate between blending and packing. This labelling differentiation is regularly violated by companies.
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