When one thinks of tea in France, one pictures a Mariage Frères tea parlour: old-fashioned, high-priced, and disputable product quality. Fortunately, things have changed since the brand opened the specialist retail tea market in the 1980s. The country boasts dozens of old and new brands, and better quality than its tea-related neighbor – the United Kingdom. This can be understood by the fact that French people have never been used to tea as a cupboard staple, born from the need of the Industrial revolution to boost workers. Instead, they learned to appreciate it over the last two centuries, swaying between British tradition and their own wine-born, gastronomical approach.
History may explain why today, the specialty tea segment accounts for 25% of French tea sales, while it represents only 5% of European sales as a whole. These whole-leaf teas of origin command more value, but a lot less volume : among the third of French people who drink tea, ¾ still buy teabags from supermarket. However, health awareness and ethical concerns support a steadily growing trend for premium offering.
Because of their health benefits, green tea and herbal teas (plants other than camellia sinensis) are the most dynamic categories (+5% per year since 2011), but black tea remains an all-time favourite of previous generations who make up most of the tea consumers: black tea still holds two thirds of the French market, led by the specialty segment (40% of loose black tea category).
What opportunities does this all mean for producers? Competition is so hard nowadays that a producer either needs an outstanding product quality (1), a powerful brand (2), or exclusive premium consumers (3). (2) demands massive marketing investments that do not always pay off ; on the other hand, investing in (1) will be useful on any market, and (3) helps bypass wholesalers (Germany, Belgium…) who grab most of the supply chain margin.
So before anticipating how many tonnes to export and how much money to make, a producer needs to build a strategy: what tea is he good at making? Which consumers buy this tea? Where from? What is the distribution channel and constraints to reach them? In the case of CTC, it is consumed in teabags at a low price: benefit is driven by volume, so a producer will by forced to deal with wholesalers. In the case of specialty tea, it is bought from specialist, organic and deli outlets whose owners buy directly or through one local intermediary; consumers are willing to pay more and will drive benefit through sheer value.
As a good strategy stems from understanding the consumer market, it may be easier for a producer to dig in his local/regional/national environment, especially as purchasing power and pride for national produce increase in most tea-producing countries. An interesting combination would be to hit a market close to home with a consuming-country label such as AVPA’s…