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Value addition: A bright future for the tea industry

  • Published at 06:31 pm February 19th, 2018
  • Last updated at 06:32 pm February 19th, 2018
Value addition: A bright future for the tea industry
Offering a cup of tea is a common courtesy to a guest in Bangladeshi culture. A cup of tea carries different significance to people from different strata of society. A health conscious consumer thinks of having green tea while an overweight person too can consider drinking green tea to lose weight. A person who has caught a cold feels a ginger or turmeric tea would be the remedy. An executive wants a cup of premium black tea when s/he is stressed after a long meeting. It is not only difficult to satisfy people from different ages, cultures and tastes, with a certain kind of tea, but almost impossible. Change in demands of consumers is driven by health-consciousness, improved purchasing power and lifestyle. Considering these aspects, tea growers and manufacturers have moved to value addition of tea by introducing a set of premium brands of tea, to satisfy the consumers’ taste.

Why value addition

In course of time, lifestyles have changed. People do not have adequate time to make a cup of tea thanks to the shift from a joint family to a nuclear family, and people getting engaged in multi-tasking. To retain these consumers, tea growers shifted to the tea bag culture from loose tea. But customers took further steps forward, driven by health-consciousness and economic development. “In the past, people used to drink normal black tea. But now, they are not satisfied with the normal tea and moved to organic and value added products, concerned about their health benefits and taste,” SM Didarul Hasan, senior manager (marketing ) of MM Ispahani Limited, told the Dhaka Tribune. “The demand for premium brands have inspired us to develop higher valued and niche products,” he said. Every year, 3-5% of people tend to consume from the premium segment in general. Keeping that in mind, consumer products manufacturers have to produce premium products. Tea is not outside this trend, he added. “Tea consumption is an indicator of national economic growth. More consumption of tea means people have enough money in their pockets,” Nader Khan, chairman of Halda Valley, a producer of premium tea. “Tea is considered the second best drink after water. In selecting a tea brand, consumers mostly consider health benefits, as they are now more interested in green and organic tea instead of caffeinated drink,” said Asma ul Roxana Sylvia, head of operations of Kazi & Kazi Tea. Ginger Tea, Tulsi Tea, Medley Tea, Orthodox Black Tea, First Flush Tea, Green Tea, Orthodox Green Tea, Jasmine Green Tea and White Tea are among the many value added tea products.

Export opportunity

The demand of organic and value added tea is increasing around the world, which opens a new avenue for Bangladeshi producers. European Union, US, Middle East and China are the potential markets for Bangladesh. “In selecting a tea brand from export markets, retailers are choosing a country where they get organic and premium quality tea. We are producing customized organic and premium tea considering that demand,” said Sylvia. “Currently, we are exporting to the US and other countries and have been receiving a good response from buyers as our products are 100% organic,” she said, adding that the company has 11 premium brands. Kazi & Kazi is the first and only internationally certified organic tea brand in Bangladesh. The Kazi & Kazi official said as a leading brand, they are having double digit growth in sales. After having a perilous journey, Bangladesh has secured a good position in producing high quality products like white tea, said Nader. “We have a large market in the European countries. Once we explore the distribution channel, Bangladesh can grab a reasonable market share,” he further said. According to Export Promotion Bureau data, in FY 2016-17, Bangladesh earned $4.7 million, which was $1.83 million in the previous fiscal.

Challenges ahead

Introducing new products and gaining acceptance is not an easy task. Though the sector has enormous potential to grow in local and foreign markets, it faces numerous challenges. To retain local consumers and capture export markets, Bangladesh has to increase production capacity. According to Bangladesh Tea Board data, in 2017, Bangladesh produced 79 million kg tea against a consumption of nearly 86 million kg. Those involved with the industry called for finding new areas for cultivation and clearing more land in Chittagong and Sylhet. There is a common perception that tea cultivation is not possible without hilly areas, which is not always true. Tea garden in Panchagarh is the proof, they said. “Exploring new markets is a big challenge since it is occupied by other countries. Maintaining the premium quality is the key to success in capturing foreign markets. Technical expertise is also a major challenge,” said Didarul. “The government should concentrate on research and innovation to invest in high yield variety of tea and steps should be taken to ensure quality. It is also important to increase the production capacity,” said Shamim Khan, director of Halda Valley. To increase tea production and new variety, the Bangladesh Tea Board has begun experimental cultivation. It will encourage producers to produce value added products, he added. New investment in technology and research and innovation is a must to capture market share, he further said.

What’s new in the market?

“We always develop new products considering the taste of consumers and we are introducing turmeric tea as the latest product. I hope it would gain acceptance from local consumers as it is a common herb and has health benefits,” said Sylvia, adding that the product would be launched in both local and foreign markets. Halda Valley has launched white tea for the local market. “White tea is new in domestic markets. But we are not new in producing this niche product as we have been exporting it for the last five years,” said Sylvia. White tea has high health benefits as the leaf is taken in bud, which contains higher antioxidant. The taste, colour and liquor are quite different from others, she added.
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