Chinese jasmine tea battles with Britain to be tops

[auhckw]

Chinese jasmine tea battles with Britain to be tops
http://english.peopledaily.com.cn/90001 ... 93670.html

17:05, November 09, 2010

China is one of the world's largest producers and consumers of tea, but on the international market, 80 percent of profits from tea production are scooped up by Britain. However, this is likely to change — at least in some certain sub-sectors such as the jasmine tea.

Lipton, the world famous British brand, boasts nearly 3 billion U.S. dollars in annual sales, while Chinese tea exports are priced at even less than 1 U.S. dollar per 500 kilogram, much lower than that of Lipton.

Several problems have kept Chinese tea off the coffee tables off foreign consumers. On one hand, China’s tea export has low added-value and exporters are not successful in brand-building on the international market. On the other hand, tea importing markets are increasing their health standards, such as the pesticide residue standards, which makes it even more difficult for Chinese tea to compete with British tea.

Jasmine tea used to be a luxury product and an important export in and from China. The jasmine tea business was very prosperous in Fuzhou, the capital city of Fujian Province in the southeast costal areas, during the 19th century until the 1980s. For example, 35 percent of China's tea exports in the late 19th century came from Fuzhou. But now jasmine tea has become regarded by most consumers as a low-end, cheap tea, and its production has been scaled down a lot due to its low quality and distorted market.

Local enterprises and governments are trying to change that and have made some progress. Fuzhou jasmine tea has become the world's only jasmine tea with the three qualifications, including a geographic indication trade mark, a recognition and protection in place of origin and a geographic indication for agro-products. The annual output value reached 1.5 billion yuan. With the support of the government, an industrial alliance has been launched to combine the resources from experts, growers and enterprises to push forward a healthy, booming market and brand-building.

The alliance is led by Fu Tianlong, chairman of Chunlun Group, the leading jasmine producer in Fuzhou. Its environmentally-friendly tea plantation creates more than 1.5 million kilogram for sale each year. Roughly 20 percent of it goes to the overseas market, mainly covering Russia, Europe, the United States and Southeast Asia.

"We dominate the world market of jasmine tea," said Fu.

Chen Qi, vice mayor of Fuzhou, disclosed that the government is supporting the application of the Fuzhou jasmine tea for recognition as an U.N. intangible cultural heritage. Chen Wenhui, an official with the local agricultural administration, said farmers who grow jasmine would see their subsidies double next year. He added that the government was also helping local producers with brand promotion by sponsoring some market promotion activities.

The business benefits farmers. By joining Chunlun's production base, a household can increase their income by 20,000 yuan a year, Fu said.

And jasmine tea is also catching up with foreign tea producers in terms of prices. The high-end Chunlun tea costs 2,000 yuan for every 500 grams on the Beijing retail market. And one of its products even was auctioned at a price of 52,000 yuan for 450 grams.

Whether Chinese jasmine tea will be able to challenge the dominance of British Lipton needs time to prove, however, it is good that customers have more choices on the international market.

[bagua7]

Lipton is not real tea. I hope they get the picture once and for all.

But...wait why am I saying this in this place of geeks.

[Oni]

I want to tell a story about Fiat and Ferrarri, Ferrarri sold handmade high end automobile products for a very high price, for the rich and famous, Fiat sold all kinds of consumer models, small and cheap cars for the masses. Who made more money and profit? Fiat of course, so they bought up the whole Ferrarri company.
The analogy is, that branding something cheap and selling it to the masses beats producing high end teas for enthusiastic people, this is why Lipton makes money, selling garbage, teadust, enhancing it with chemicals.
Another story is with Coca Cola. ........

[skilfautdire]

Yes, but then these are two extremes. Fiat and Ferrari.

Why not take the way of the middle ?

Provide to the masses a relatively good tea, for a somewhat higher retail price. Not the price of a Ferrari, though. Why not ? Like the 'lu cha' that I am currently drinking these days. That's the name. It goes by not other name than 'lu cha' which is 'green tea'. Good daily Chinese (in this case organic) green tea. $9 for 250 grams. Sustains multiple infusions. From YS.

Convenience is by itself a seller. A teabag is more convenient. That's a sell. Drinking tea from a bottle is more convenient. That's another sell. It is convenience that is sold to the consumers. You make a song that can be figured out in the first 30 seconds, that's convenient.

To go back to the car makers parallel, I prefer the middle way. Take for instance Renault and the Renault Spider. An affordable sport car. Almost got one. Why not ? Why pay more ? And why settle for cheapness and mauvais goût when being part of the masses ?

renaultSpider.jpg (19.9 KiB) Viewed 1498 times

Ferrari remains Ferrari, even when bought by Fiat. Well, hopefully. After all, how much design-for-production learned in Fiat can be applied to Ferrari making ? Somehow I am not sure the principle will apply if for instance Tetley/Lipton/Coca-Cola would buy and subsequently have as employees thousands of Chinese tea farmers. I am not sure that the end product of these farmers as the consumers will it them will remain original.

[gingkoseto]

Yeah I too often find it funny to compare "real" tea with Lipton.

But it's part of the reality. I was amazed that how many times I've heard Chinese tea professional enthusiastically talking about the marketing power of Lipton. No they don't admire its tea quality. But they do truly admire its power of selling. It's a sad fact that high quality Chinese tea can hardly make a large share of western market, while cheap Chinese teas are exported in tons for $1 per pound. Many of these cheap products are said to be "further processed" by importers before selling in foreign market. But everybody knows the "further processing" is usually just re-packaging and branding.

In recent years, for several times, I've heard Chinese tea manufacturers and tea dealers saying "Chinese tea industry needs a Lipton". I am not happy to hear it. I feel it's wrong. But I myself don't have a thorough understanding of world economy and can't really say Lipton is not a good "business" model.

But anyway, as long as there is a demand of good tea, good tea will be made and we will get our good tea. So most of the time I don't think much about this Lipton thing although it occasionally bothers me.

[bagua7]

Sorry but it never will. Quality CHINESE TEA has Qi, spirit, and to acquire this you need spirit, the energy of the land and of the camellia sinensis.

Let me quote here a passage of the book Dragon Spirit: How to Self-Market Your Dream:

"Looking around, we assumed all of the workers were out working. We were wrong. For the Lees, every one of their waking hours were spent using their craft and all their indomitable skill toiling on the care and cultivation of the divine and magnificent Camellia Sinensis bush. Tea was their work, their stall of life, and like their ancestors, they too were very much imbued with its spirit.

Now Mr. Lee was from the mountain, but his voice was from the sky. It was high and soft like a cloud, and even if you understood the dialect you would still have to strain an ear to hear, as he invited us in for peace of mind and communion of soul that comes with the sharing in a bowl of tea."

The spirit cannot be purchased it needs to be worked upon through effort and determination always with a greater moral perspective in mind. Lipton would never attain this level as it is pure profit.

Can you compare the magical experience of having a meal at "El Bulli" with one at McDonalds, no you can't and you never will:

http://www.youtube.com/watch?v=_UEzDmmf ... re=related

http://www.youtube.com/watch?v=5HPnULHz ... re=related

[entropyembrace]

I think the idea is that China exports a lot of low grade tea to companies like Lipton which use it in their blends and China would like to have their own Lipton so that they can keep more of the profit of the tea that they are exporting in China....because as it is now Lipton and other western companies are making most of the money of this tea while very little finds it´s way to China where much of it is grown.

Though a lot of supermarket tea is grown in South America and Africa because even the lowest grade Chinese tea is considered too expensive for companies like Lipton....and these lowest grade Chinese teas are the expensive components of their blends.

[britt]

The analogy is, that branding something cheap and selling it to the masses beats producing high end teas for enthusiastic people, this is why Lipton makes money, selling garbage, teadust, enhancing it with chemicals.

I actually know people who prefer Lipton green tea bags over high quality sencha ones like those sold by O-cha and Hibiki-an, sad but true. These people also seem to like the items purchased from typical vending machines, so I guess if you're used to a certain quality level something of higher quality doesn't always seem better.

[Oni]

There is a chinese saying that if "you grow tea for money, your tea will taste like money", maybe in the future people could get more educated, it is just a matter of education, if someone has lived all his life in a great metropolis, they have never seen green grass and a cow, or sheep, the have never tasted fresh homegrown vegetables, they do not know the diffrence, for instance I have only eaten banana sold by our local market, that is import stuff, I visited Turkey, I have been to a farm that produced banana and I bought fresh ripe banana, well there was a huge diffrence in taste, and so was it with figs, and exotic fruits, if you never get to try quality, you do not know what you are missing, this applys to the tea market, if all your life you only had teadust in a bag, you never know real tea.
I served good quality TGY to complete novices, and also Gyokuro, and they were amazed, ofcourse both teas were high quality, the admired the intensity and aroma, lingering aftertaste, but they have found it very expencieve, maybe they would have bought a middle grade of one of these teas, even if it was 10 times as expencieve as teabags.

[skilfautdire]

There is no Chinese tea company known at large in the West. Maybe China needs one large scale tea company that sells to regular consumers and does not pack teas in boxes that looks like the most fabulous object in the world (Ten Fu). Then again, maybe it's darn difficult to get shelf space here for selling such products. There a problem with local (eg. Canadian) micro-breweries to get shelf space in corner stores for their beers, imagine about products from a foreign country, not largely known here, trying to get shelf space at Safeway/Loblaws.

And also, China did not, I think, historically applied the drastic approach to producing teas that the British did, often resulting in deaths and by-products such as Tamoul people blocking the 401 highway in Toronto last year or so. (After being lured to work for British tea production way back then, these people found out that their living conditions were horrible (eg. no school for children and such - always keep working on the plantation) so they wanted to go back to Sri Lanka but Sri Lanka did not recognize them anymore. In a nutshell. Correct me if I'm wrong.)

I think China never applied such a production approach for their teas. I'm not saying they should. The approach was/is different. It's also nice that they did not engineer for production on a large scale level teas that need milk and sugar to taste good ! I still marvel at how Yunnan black teas taste spicy-good in general, w/o adding anything.

[gingkoseto]

Like Entropyenbrace said, having a larger share of profit is a big incentive for some people to build up some big brands. Skilfautdire, I think your description on the historical differences between Chinese tea business and British tea business makes a lot of sense. It seems to me that the world tea market was pretty run based on British model. I personally think a problem of Chinese tea industry is people have been struggling hard to catch up with trends of international market, instead of exporting its own unique products and values. But I know it's easy saying than doing and I don't have much good idea on how to do it.

[skilfautdire]

Gingkoseto, yes, it seems that until recently China was pretty much a world by itself not caring much, as you mentioned, about making a mark on the international market. The realm of the middle (hmmm.. sounds better in French: l'empire du milieu) or middle kingdom, rather, was way too busy. Then again, it could be that nature-based spiritual approach such as taoism does not push one to conquer and colonize outwardly in any matter. One catastrophic event in recent China history, the Taiping Rebellion (circa 1850), that made 20 million Chinese deaths, was lead by a Chinese converted to (fanatical) Christianism.

I do not know much, but how many times, in the thousand of years was China invaded vs. how many times they invaded or conquered ? At one point they thought heck, might as well get into horses since all those foreigners are successful invading us using horses. And so compressed tea was born as a way to pay the Uighurs, Tibetans and Mongols for buying horses.

I made this stretch there simply to bring the idea that it seems that need was driving Chinese tea business for a long time. Need to drink it as cultivated by the farmers, but also need to use tea as a trading value. Eg. no business plan as with the British. The Chinese did sell a lot of green tea though to Occident, but perhaps not in a concerted manner which would have left the imprint of the names of famous Chinese tea companies since perhaps the 18th century.

As you mentioned, there is some catching up going on although now I do not see it as struggle as much as an adaptation. Perhaps inertia is a driving force. Eg. the weight of China is driving the moves, not necessarily agressive business plans. Although I think it could be that the adaptation will be logarithmic. On Chinese terms, which is perhaps refreshing. I do not think we will see a Chinese Abba. I.e. a Chinese band/artist being popular singing in a foreign language (Abba was Swedish).

Already China is asking for extended character set support in internet URLs which would let Chinese form internet addresses using Chinese characters. Or perhaps a Sa Dingding, as I posted a link in the thread about music, who is becoming popular singing in Chinese. (Anyways her English-sung song on the 2010 'Harmony' CD is not that good even if the words are nice).

Big Chinese teas ? I think it is possible since they do have most of the infrastructure to have such a thing. They made a point in executing one company boss who put melamine in babies' milk, which is not something we'd see here.

In between the coarseness of some Chinese episodes lies delicacies and fineness not commonly known to the Occident way of life and if Chinese businesses do make it here on their own and not as subcontractors it could be a refreshing impact. But then again, maybe it is just misplaced optimism from me.

[Oni]

I think one of the reasons that chinese teas should get a shelfplace everywwhere in the world is that they should poses a threat to British - Indian tea, they had a monopoly on the global market, and they marketed their profit oriented ideals, I am not saying that the chinese would have not done the same thing, but if there are more sellers at a market than the competition between them should get the best out of both (Like Ati and Nvidia).