Monday April 13, 2015 | 4 comments
During this year’s sourcing trip through Sri Lanka I took a passenger train from Ella to Colombo. The train was packed with locals in transit and tourists lining up along the window sills to snap photos of the picturesque countryside of the island nation. Throughout the eight hour journey it looked as if tea fields covered 80% of the landscape. Rolling hills of tea bushes with aisles of waving tea pluckers make the life look like a dream as passengers overlooked the dilapidated factories and what it meant for the industry. All I had running through my head was an image of what these tea fields will look like decades from now as the consequences of an unsustainable industry have fully manifested. The major corporations that started the tea industry in the country have since left as they have found a more profitable position as the marketers of the tea while small farm holders struggle to maintain enough margin to keep their farms operating.
At the 2014 North American Tea Conference one of the sessions was on the sustainability of the industry. What was tattooed in my mind was a study of the Sri Lankan tea industry that showed that the profit margin of a tea producer had declined from about 50% in 2005 to 17% in 2012. At this rate there will be no more opportunity left for tea producers unless the market price increases seven fold. As an industry insider, I knew that I was the only one on the train who had these statistics running through my head. I was wondering how the tea bushes remain so well-manicured even today. Increasing the market price for Sri Lankan tea – and all tea – is another subject highly unlikely within the well-established distribution channels of commodity tea. The only solution I can see is the development of a niche specialty tea industry in Sri Lanka. Unfortunately, this shift will take investment of resources and time and will only serve to benefit a small portion of the current industry.
Before departing from Ella I spent two nights visiting with the innovative team of Amba Tea Estate. Since 2011, and with the help of a pioneering teamaker named Beverly Wainwright, the failed Amba Tea Estate began focusing on organic cultivation practices and high quality hand processing of tea. When the farm manager reflected on the past he said that the people of the village and the farm thought Beverly was crazy for wanting to make teas by hand. Beverly didn’t see any other solution for building a sustainable business model for the farm and insisted that with experimentation and dedication the farm would find a product that would be accepted by the market. Four years and many failed experiments later, the farm has developed a short catalog of black, white, and green teas that have gone on to satisfy the Ceylon tastes for customers of famous tea retailers in the UK and US. The farm has several revenue streams with agritourism and value-added agriculture products such as jams and spices and is now having trouble fulfilling orders for high-end overseas demand.
The Amba Estate is surrounded by mountain ridges and valleys that were once covered with thriving tea estates. What is left now is beautiful, wild forests with the remnants of tea fields below their canopies. The estate hopes to serve as a model for other failing tea estates looking for opportunity. They do not see it as competition, but are excited for followers who can help them fulfill the ever-growing demand for high quality tea at premium prices. As of now, the estate workers say other tea industry members still think Amba is crazy. It will be only a matter of years until all are looking over the Amba fence to see how it’s done. It is the difference between $0.50 a kilogram and $50 a kilogram for their hard work and tea.
Specialty tea demand is significantly less than commodity tea demand, so it is not feasible for all the tea fields of Ceylon to be saved. The innovators who invest first in this shift from quantity to quality will be rewarded first. The scenery of the train ride from Ella to Colombo will certainly change, as all things do. Before the tea dominated the hills it was coffee. Who knows what will come next? This problem is not exclusive to Sri Lanka but is also the case for other tea producing countries, such as India and Nepal. If you care about these things you should try your hardest to learn more and become more conscious in your tea purchase decisions. If you have any questions you can always email me personally at email@example.com.