Oolong Supply Chain and Time To Market

[Intuit]

repeat post

[Herb_Master]

Where middle men and vendors can and do collude to artificially stabilize the market to keep profits high, while base costs (fuel costs in production and shipping)and actual demand have plummeted in recent months as the global economy tightens.

Whether they collude or not cutting out middlemen is a concern that has not changed for centuries.

Chapter 2 of Gardella introduces the role of Comprador.

The Intermediate institutions often lumped together all their purchases and sold them on without discriminating , as well as adding their own mark up.

Both Native and International Merchants resorted to employing compradors to circumvent some of these issues.

A comprador's job was basically to be employed by his employer to secure the best tea. He had to wander from village to village in the best tea producing areas ingratiating himself with the locals and sullying up to the best tea growers and Mao Cha producers once he had ascertained who they were.

In the early days of the East India company their own employees had gone inland seeking the best teas, but years of friction had resulted in British, American, Dutch and Portuguese were treated extremely suspiciously inland and at times were in mortal danger. A few Scandinavians escaped this wrath, until bad markets forced local labour lay-offs and even they had to retreat in fear of their lives.

But a Chinese born Comprador with far better taste evaluation than westerners could ensure prize pickings for his employer and was 'worth his weight in gold'.

He was given the money to grease the wheels of production, was held in high regard by all the successful producers and was richly rewarded by his employers. And his basic job was strolling round the best tea producing villages drinking tea with the best producers.

Who would not want a job like that!

[gingkoseto]

As for middleman, I personally think getting a good middleman is more important than getting rid of middleman. But of course it depends on how we define middleman. I would define middleman as someone who collects tea from different farmers and resell. In China, most farmers don't run large plantations. So it's up to the middleman to choose the best tea from farmers, and do the quality control. But that's what a good middleman does. We don't want to have bad ones

I also notice the trend of drinking tea as a "healthy beverage". It's both amusing and annoying to find that a so called "official wu yi site" is a seller of weight control tea But I believe there are many different tea vendors who have different niches or means of living. Most vendors people talk about at tea chat are the gourmet/specialty tea kind, and they take very different approach from those of "healthy tea" vendors. I suspect those who make most and easiest money are those tea bag wholesalers - not sure if it's true or not. But after all, many of us don't see tea bag related to "the real tea" to the least degree so how they do business may not affect us anyway.

[Intuit]

Compradore = local/regional purchasing agent who works for one or more vendors to ensure supply chain quality?

Not a middleman, but a means of guaranteeing quality product to vendor(s), presuming he is scrupulously honest and incorruptible. This would have been essential to establishing trust and obtaining quality product, under colonial rule.

There were similar purchasing agent for various English importers, for porcelain and woven goods, at about the same time period as is covered, no?

I do not mean to imply that the majority of supply chains are corrupt. It's a matter of rapidly expanding markets and the risks to vendors purchasing at distance, especially when vendor salesmen are naive with respect to product particulars.

~

There is an unrelated problem that is beyond the control of growers/processors, buyers/distributors and vendors, not discussed much in these discussion groups, and that is fluctuating quality in teas driven by extreme weather events (eg., global climate change related weather), particularly in SE China, eastern coast of India and Ceylon, where weather records have been studied closely in the past decade to discern patterns - norms and outlier/extreme events.

But that is a topic for another thread.

[Intuit]

One model that has been around for decades is the family that has tea farms/estates/plantations in Asia, and also has a retail presence (shops, often with online store component) in one or more cities in North America or Europe.

Family run business controls ALL of the chain. These retailers appear to me to be pretty safe bets for purchasing teas, but supply and choice can be quite limited, - these tend to be elite vendors, peddling high-end product at (to me, anyway) jaw-dropping prices, $30 per ounce or more.

However, we also have 'name brand' family-run tea businesses that have grown into larger companies that loosely follow this model, but have...errr.....suffered slippage in product quality, as demand outstrips limited, seasonal supply.

A wee birdie tells me that this is almost inevitable in China/Taiwan, as demand for these popular teas spreads among the (maybe growing number) of willing buyers, and high-end supplier number remains constant or shrinks.

At the other end of the spectrum, you have growers who lack high-profile garden/estate name, but are producing very good quality teas that are sold as 'no-name', but are full leaf, carefully processed, and fresh. That is the case of the oolong I purchased a few days ago. At $15/lb, it is an exceptional buy, but the vendor isn't dedicated to selling just teas, and they aren't very good about protecting their teas from oxidation - the teas are displayed on a high shelf, under UV lighting, in large clear mason jars!

Fortunately, the teas turn over quickly. I've asked the person who purchases these teas to identify the source, if she can and I told her why - because I wanted to know where it originated from and needed it's proper name, if possible.

Disclaimer: at this point in my tea drinking experience (>30 yrs), I'm just now starting to properly explore oolongs. I 'know' Indian/Ceylonese teas (black, green and some oolongs). I'm working on 'learning' Chinese blacks, too.

High-end purchases are meaningless, until I've developed my palate on middling-to-better teas.

[ABx]

As to the question of whether they will let high-fire teas rest or not, I think it's up to the vendors; some will and some won't. I would say that the more knowledgeable vendors will let the tea rest for a while, while others will just put it on the shelf. Remember that most people have it drilled into their head that fresher is better - vendors like Seven Cups have to sell the previous year's yancha at a discount, even though the yancha will be notably improved. Of course specialty vendors with knowledgeable customers will raise the prices instead.

As far as prices, I really think the biggest factor is the vendor. You can sometimes find the same tea at wildly different prices. They will sell it for a) what they think they can get and b) what the customer expects to pay. Don't forget that one of the aspects of marketing is that if you sell for too cheap then people will think there's a reason for that. Things like weight loss are a big industry and people expect to pay a certain amount. Of course there are also all of the other concerns that any vendor of any product has to account for in their pricing.

[Herb_Master]

As to the question of whether they will let high-fire teas rest or not, I think it's up to the vendors; some will and some won't. I would say that the more knowledgeable vendors will let the tea rest for a while, while others will just put it on the shelf.

This presumably refers to the final, finished Cha. Where presumably Low-Fire, Green Oolongs tend to benefit from immediate consumption and High-Fire more oxidised ones may need time, or at least have aging potential. But these Greener Oolongs have still had some light roastings with REST periods in between, whilst progressing from Mao Cha to finished product. It was these REST periods I was enquiring about - perhaps one could know in a given year that an advertised date was TOO early!

Some vendors had 2008 Autumn TKY available to order in Early November, Rich Barbarian was not advertising it until well into January (and he did not even have it in stock then).

Was RB TKY receiving a more thoroughly processed tea, or [Devil's Advocate] was he just hanging fire until he had cleared his stocks of Summer Tea!

[Intuit]

..isn't the same thing as aging a tea after the main processing steps are finished.

Resting in between processing stages would be to allow 'slow step' reactions to occur, possibly to form larger complexes that are less volatile during progressive reoxidation of teas.

Educated guess: Rolling/successive re-rolling to tighten leaf shape reduces surface area, concentrates volatile oils within the rolled leaf and helps to mature (catalyze) formation of specific oxidized aromatic compounds associated with say...nutty/caramel flavor and aroma overtones.

Sweetness would be associated with theanine and maybe some sugars released from cell walls after bruising. These would be oxidized (and lost as flavor components) in later oxidation stages (past the initial 12 percent) if the leaf shape was semi-open and if heating wasn't carefully controlled (eg., slow heating steps, followed by resting periods).

Rushing processing would yield very low quality, less complex teas for the more oxidized darker oolongs.

Pretty sure you could taste the difference.

ABx's comment is apropos, if an after-processing stage is needed (eg., storage aging under specific conditions) to further develop flavor and aroma.

Maybe this later storage accounts for just 5% of the final flavor profile. The duration might be shortened, if early sales guaranteed that you sold all of your crop to anxious buyers.

Many vendors offer teas clearly marked for season/year, offering buyers a chance to obtain 'aged' teas that are very much changed in character when compared against lightly aged samples of the same harvest.

[Herb_Master]

Over 200 years ago the tea western drinkers noticed the benefits of fresh tea.

Or should I say fresher - because the tea spent many long months in less than ideal storage conditions idling it's way across the world's oceans -

London Merchants vied with each other to get the first of a new crop onto the market because they knew the first shipments to arrive would sell out.
Apparently in bad years (either poor crop OR collapse in the home market) - messages would be sent to the Fujian Officers to ship no more and the whole would be left to rot in Fujian warehouses.

I don't know how quickly they could get a message from London to Fujian

The 2 supposedly huge improvements that resulted in much greater quality being enjoyed in Europe were the introduction of Clipper Ships and the construction of the Suez canal. This may have shortened times dramatically AND improved the quality substantially but I don't think I want my 21st Century tea shipping that way

[Herb_Master]

Many vendors offer teas clearly marked for season/year, offering buyers a chance to obtain 'aged' teas that are very much changed in character when compared against lightly aged samples of the same harvest.

You have lost me there!

By 'same harvest' do you mean same season but different years?

Or by 'aged' do you mean processed to mimic the effects of aging ?

[Intuit]

http://tuochatea.blogspot.com/2008/09/2 ... olong.html

This blog entry posted in Sept 08 (commenting on seasonal harvest differences), but refers to Spring 07 and 08 batches available.

The extra year of storage will have altered the flavor.

"Some oolong taste better than they smell" may refer to tea oil component differences with respect to volatility upon heating, but may also differ with seasons (climate effects).

Example of a vendor that simultaneously offers oolongs from 2006-2008 seasons.

Caveat: more educated guessing follows.

By aged, I mean that certain flavor qualities develop slowly in tea leaves long after primary processing is completed. I've observed flavor enrichment in oolongs stored for as long as a year after purchase but before opening.

[teaguy]

Hi guys!

Man, Intuit & Herb Master - hard to keep up with you guys. Quite a bit of 'meat' in those posts. I'll need to read back through them again before I can catch up with everything you're discussing.

Thought I'd drop in a comment or 2.

First, about seasonal offerings. Different teas are ready for picking at different times in different areas. For example, in Taiwan, I can name a region and a date, and my instructor can tell me what teas are being picked within about a week's accuracy. Tea picked in September would be ready for sale in November as Fall Tea. The winter teas in Taiwan start picking in late October (such as Da Yu Ling) through December generally. The real 'Spring' teas are picked around mid April. In many cases, it's all Chin Xin Oolong, but has developed different characteristics from being grown in various regions at varying altitudes. Sometimes one source is ready a bit early, so is used instead of the usual source, resulting in a slight difference in quality (good or bad).

The aging/roasting issue - how much roasting, how much rest is dependent on a lot of factors. When we were prepping some competition TKY here last fall, we did 10-12 hour roasts, with 2-3 days of rest. Most of our entries were roasted 5-8 times, but some teas can be roasted 12 or more. It really just depends. Most heavier roasted teas do age pretty well, however, so I often buy 2 cans of a particular tea, and keep one unopened for up to a year or more.

I've got a bit more to add, but need to run to class now, so I'll check back in tonight. Try not to get too far ahead of me please - I'm not a spring chicken any more!!!

[teaguy]

I’m back (finally). My own experience with this topic comes from dealing with the microcosm of Taiwan’s tea business, and I certainly don’t have a complete handle on all the nuances of it (yet), but I’d like to share some of my insights on how the local market here works. In Taiwan, the model mentioned by Herb Master is much in effect. We basically have 3 categories: growers, manufacturers, and retailers. Many farmers simply grow and harvest the tea, then sell it off for someone else to process (sometimes Farmer’s Associations fill this role, collecting tea from area farms, and marketing it as a generic tea). Or, a larger company steps in to contract farmers in specific areas, so that all of their harvest is guaranteed to the same manufacturer. In either case, since these farmers are relatively ‘invisible’ to the retailers & consumers, quality isn’t as important as quantity.

Intuit’s comments regarding brand name and reputation ‘carrying’ a product are spot-on. Face is a big issue in Taiwan & China. New companies tend to pull out all the stops when launching new products to impress consumers. With tea, special effort might be made to procure the highest quality batches of tea from the most famous farms, which helps cement the image of ‘Company X’ as a high-quality brand. Slick packaging and quick expansion also further the illusion. People say, “They must be good – they’re famous!!” (helps explain why there’s a Starbucks on every corner here now). As demand increases there simply isn’t enough product of the required quality, so standards start to drop. After the first year or 2, you find yourself paying the same money for far inferior teas.

Compounding this problem is the bandwagon effect. When a certain tea sells well, everyone wants to sell that tea. Many growers use bags that say ‘High Mountain Tea’ because that’s what’s popular now, regardless of where they grow their tea. Recently there was a case of a merchant buying cheap Chinese oolong, bringing it to Taiwan, mixing it with some local stuff, then selling it back to (Mainland)Chinese tour groups as ‘Taiwan High Mt. Tea’.

Looking at the confusion and misinformation in Taiwan’s domestic market, it’s not hard to imagine the problems in international sales, and how even reputable tea shops can be honestly misled through poor translation, exaggeration, or even blatant lies on the part of brokers or other distributors. I’ve ordered different teas from online vendors (preferring teas that received high ratings from other online users) and compared them with domestic product available here. With a few exceptions, most of the ‘high end’ stuff we looked at was quite mediocre, and overpriced compared to local demand.

Wealthier consumers add to the problem, of course. They make ‘status’ purchases, like with the Pu-er market, driving prices through the roof, leading to a glut of production, and now the bubble has popped. Farmers in Yunnan who bought fancy cars and built large shops with their profits now can’t afford to buy gas, and the storefronts are deserted. Unfortunately the misinformation just keeps piling up, making it that much harder to sort things out.

As to pricing, it’s interesting to see how little farmers actually get for their product. Even with good quality teas, the farmers tend to get about 1/10 of the retail price, unless they also have their own production facilities. I used to think I was getting great discounts by haggling 1/3 off the price, but have more recently learned that the joke was on me.

There’s another issue with quality as well, and that is variations in weather, temperature, etc. that affect the price of the tea. Last year (2008) wasn’t a great year in Taiwan. It was very rainy through most of the spring, so the tea wasn’t quite as good (less sunshine, more moisture in the plants – Intuit I’m sure will have something to say about that part!  ). So, a ‘competition tea’ that placed 2nd in 2008 might not be as good as a tea that places 3rd in the same competition this year. So, if this year’s 3rd place tea is more expensive relative to last year’s 2nd place, that should tell you something. Unfortunately, it’s usually the opposite that happens - this year’s tea isn’t as good, but vendors keep prices the same thinking consumers won’t notice.

Well, my TKY has gone cold, and I need to go brew a refill, so I’ll hang it up for now.