When I touched base with Tony Gebely of Chicago, he was in China. He promised to answer my mail, but only after he’d checked into the next hotel the following evening. Till then, his pithy message implied, he would be busy, presumably talking tea. Just like so many other Americans these days.
Gebely calls himself a tea nerd, and I had sought him out precisely for that, as I wanted an inside track on the rising popularity of tea among Americans. The Tea Association tells me over half the country’s population drinks tea on any given day; thats 80 billion servings of tea or more than 3.6 billion gallons through 2014, with 285 million pounds of tea being imported during the year. The market in dollar terms is heating up too at least 4,000 tea rooms have popped up across the country, and the retail market is valued at $11 billion. The consumption of ready-to-drink or RTD tea had spiraled 15 times. According to the Global Iced/RTD Tea Drinks Report from market research firm Canadean, the RTD tea market in the US is expected to rise to $5.23 billion in 2014, with an estimated growth rate of 3-6 percent through 2018.
[bctt tweet=”So what is fuelling this demand for tea in the US?”]
As Tea Association President Peter Goggi wrote to me, “We are a coffee culture but we (US tea companies) are growing.” Yes, there were ample reasons for me to talk to an American tea nerd.
Gebely, a software engineer-turned-entrepreneur-turned-author is in China on a 25-day trip to scope out new gardens, visit the ones he has known since 2005, make new acquaintances in the trade and look up old associates. He once owned an online tea-retailing venture, now closed. Today, Gebely and his employer, David Lee Hoffman of The Phoenix Collection, also an online tea retailer, represent one end of the spectrum of US investors in tea: the small player with big dreams. On the other end, of course, there are the $15-billion Starbucks and Unilver with its Lipton brand.
Tea Associations Goggi says there is a range of reasons, and laid special emphasis on the documented health benefits of tea. “[Health] has served as a fabulous platform for growth and continues to propel tea as top of the mind, good for you beverages for the consumers,” Goggi says in an email. “Also, tea provides tremendous variety in terms of origin, elevation, leaf styles, forms (tea bags, loose), green, black and oolong and most importantly, tastes good.”
In a sectoral performance review for 2014 titled The State of the US Tea Industry, Goggi also identifies several other factors that he believes are driving the growing demand for tea in the US. The increase in competitive offerings has encouraged supermarkets nationwide to expand beyond the tea and coffee aisle, with tea products emerging in the juice, health and candy aisles, he says. And, thousands of tea shops are popping up nationwide, providing greater consumer access to finer-quality specialty teas. The demand for innovation and new products has driven an increase in awareness and interest as consumers continue to select tea as their beverage of choice.
After the why, the next question niggling me was, who was the propelling the demand? Goggi says two demographic cohorts are particularly keen on tea – the Baby Boomers and Millennials.
“There are various hypotheses,” he tells me. “But I believe the Baby Boomers seek healthful food and beverages as they age, as well as taste new experiences. Millennials have grown up with tea as the more common beverage in the house (RTD), and are particularly amenable to knowing more about what they are consuming, particularly if there are stories or there is romance.”
Goggi was referring to people born post-War between 1946 and 1964 (Baby Boomers), and those born between early 1980s and 2000s (Millennials).
[bctt tweet=”These demographic cohorts are particularly keen on tea – the Baby Boomers and Millennials.”]
Gebely who explains he sold to teas connoisseurs when he ran his own business however doesn’t attach to much importance to the romance factor. “This isn’t about romanticism,” he says. “It’s really about people making a hobby out of tea and wanting to learn more and more about where tea comes from, where it is grown and processed.”
It’s a trend that has now given rise to the term third wave tea – an obvious lift from the third wave coffee movement that has spawned words such as handcrafted or artisanal coffee: that is, coffee produced under micro-managed supervision at every stage of production from harvesting till the time it is packaged.
And yet, when I scan the Tea Association data I discover that in 2014, Argentina has accounted for the largest chunk of tea imported by the US over 39 percent. Chinese teas, coveted by the likes of Gebely, stood a distant second with 13 percent, and Indian teas a close third at 11.1.
So I ask Gebely whether he also sold Argentine teas, and he says he has never heard of anyone even tasting it! “Please tell me about it. I’ve never talked to a single person who has had a tea from Argentina in all my years in the tea industry.”
As it turns out, consignments from Argentina are used as iced tea; “80-85 percent of the tea consumed in the US is drunk cold,” says Association chief Goggi and consumers are unlikely to realize they are drinking tea from the Latin American country. Nor is there any romance or hobby attached with iced tea, thereby leaving the hobbyists disinterested.
“Argentine tea is chosen because when chilled, it is very red and does not cloud or cream down, just the way Americans prefer it,” says Goggi. “They want a deep red color in their iced tea, (and) they like a clear product.”
So that is that. I think I’ll write to Gebely demystifying the issue. I mean, he did ask me to tell him about it, right? Plus, it’s not every day that someone like me gets to teach a tea nerd something about tea, and I am not about to let the chance slip by.