Tea Production — Think Big or Think Small?

Golden Heaven Yunnan China Black Tea (Photo source: The English Tea Store)
Golden Heaven Yunnan China Black Tea (Photo source: The English Tea Store)

To anticipate this, no, I am not serious about that question. If we are talking about the pros and cons of small or large scale producers, we first need to define which end-consumer market segment we have in mind. How would a small scale producer setting fit the requirements of a food discounter market chain selling 6 different types of bagged tea in its several hundred or thousand branches nation- or worldwide? And on the other side, where will the large-scale producer of standards, such as broken teas, machine-harvested teas, say mass teas, meet with the highly individual and demanding passionate tea lover, who might even be “limited” to certain tea properties and qualities? In fact, there are fewer contact points between those two market participants than one would think, being an outsider to the tea scene.

For example, a producer in Yunnan, China, produces 1 ton of tea per year. Not the very smallest, but still quite a small producer. His tea is excellent and top notch in every respect. Now, that discounter market with 1000 branches all over the US comes around and says “Wow, this is really good tea, we would like to sell this tea in our shops”, so there would be 1kg of tea for each of their shops for a whole year, and in order to sell that 1 kg of tea, the food discounter market will have to finance a nationwide million-dollar launch and marketing campaign across all media, including TV. For the laws of the numbers, this is not going to happen.

Another example, a large tea producer estate produces several hundreds of tons of tea per year by means of highly standardized and automated processes, and with much of their focus being on producing the largest possible quantity at the lowest possible price in order to remain profitable and competitive on what is often referred to as the “mass tea” market. Now, will their marketing managers spend their time talking to highly specialized individual tea lovers, in order to convince them that their tea will deserve a place in every passionate tea lover’s tea shelves or cabinet? For the same laws of the numbers, this is not going to happen either.

So, both on the producer and the trader side, the decision on whether to go for and/or source from large-scale production estates or small individual producers, such as family-based tea cultivation operations, will depend much on the targeted audience. For a supplier of exclusive, high quality, maybe even rare teas, it will make some sense to team up with an identifiable small-scale supplier to further enhance the uniqueness and exclusiveness of the product and its sympathetic and identification potential with the dedicated and demanding end tea consumer, and at the same time benefit from the possible advantages of having comparably easier access and control. Or, on the other end of the scale, to offer a tea to those people who buy, so they will have one in their kitchen cabinet just in case they will ever need it, what they can grab from the supermarket shelf and put into their cart without having too much effect on their checkout sum, you won’t have to travel the Taiwanese highlands and befriend farmer families, but rather might check for a supplier on Alibaba or in the official supplier lists of national trade ministries.

[Editor’s note: Of course, The English Tea Store, owner of this blog, is another great option for both unusual and more mass market teas.]

See more of  Thomas Kasper’s articles here.

© Online Stores, Inc., and The English Tea Store Blog, 2009-2014. Unauthorized use and/or duplication of this material without express and written permission from this article’s author and/or the blog’s owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Online Stores, Inc., and The English Tea Store Blog with appropriate and specific direction to the original content.

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