Middlemen surround us and for once, we should forget the Alamo

I was in holidays and during that time, I saw something I already knew but sometimes you rediscover things you already knew: in hotels, camping places, bars, coffeehouses… you don’t have loose leaf teas but only the “not so good” old tea bags (from several brands, some completely unknown to me).
This puzzled me and I thought about it after coming back from holidays.

Are the people in these places unwilling to give good quality products? Probably not as you could buy/drink/eat other things that you would consider of good/upper quality.
Do they care for their tea customers? Perhaps or perhaps not. Tea is not the most drunk beverage out there and they probably (I didn’t dare to ask them) think that with 3-4 different tea bags (let’s say Darjeeling, Earl Grey, Lemon or Mint and then Assam or Ceylon), they have all it takes to satisfy all their customers. We know this is wrong but do they?

However, after giving it a second thought, blaming the shops (a generic term I use here for all the places where you can buy/drink tea from) is perhaps a bit too easy.
After all, they are only a small part of all the things that are happening between the producer and the final consumer (see the picture below) and most of the time, they don’t have access to all these wonderful products we do have access to but only to the catalogue of wholesalers, which are the middlemen helping them to get all kinds of supplies in an almost efficient way (after all, they don’t sell them good quality teas).


Now that you see the picture, how does it work in real life? Let’s take a simple example: a small baker that makes different small breads.
He might need up to 10 different flours to bake his breads and some in really small quantities.
Does he have the time to visit potential sellers and ask them for price? The answer is obvious: no and this is where middlemen come into the game. Another advantage (remember this is theory) of these people is that they buy more goods, allowing them to get better prices.

So if you want to change things on a big scale, those are the men you should target as they are the one buying and selling to others.
No comes the tricky part, convince them of changing everything. You will probably say, “they should sell better quality teas. People would drink more of these higher quality beverages. This way everyone would be happy.”

Right but wrong.
Nowadays, they have a rather standardised product that can be bought from identified suppliers. Tomorrow, they will have to buy/store/sell a lot of different teas with big questions on constant quality, quantities…
A second argument against the change is price. Who is willing to pay more for this higher quality tea? You will answer me: “I am”. Yes but the “average” people in the street? It is one thing to have a better product, it is another to have people see it that way and it is a third one to make people pay more for what is basically the same thing: drinking a hot beverage.

So is there no solution to this endless tea in bags thing?
I wouldn’t be so grim.
People (and this is a trend in a lot of products) want more quality, traceability and for some a fair attitude/experience.
If you don’t believe me, just look at Lipton (I know this is the example that everyone uses but they are among the most famous and the usual bagged tea reference): not only do they now sell their teas  also in loose leaf boxes but their Yellow Label is fair…
There is also a new product with cube shaped tea bags that gives more space to the tea leaves.

In the end, what people want is simple: they want a better experience and they want more for their money.
Is it possible to achieve this and to replace the usual teas in bags from the different places I mentioned earlier?
I do think so but it will take a lot of work towards the wholesalers or the shops.

For example, several “small” shops could get together and decide to focus on a few higher quality products at a reasonable price and by banding together (which is not easy to achieve), they could achieve this.
Why? Simply because what is needed to get this is critical mass and the willingness to skip several middlemen that can be useful but sometimes add really low added-value or no value at all for a rather high price.
For example, imagine your business is just collecting tea from different small blenders, repackaging them and selling them to hotels. What would be the price of your products? I stop you before you begin answering me in an accounting way, the answer is simple, you take the price of your supplies and you multiply it by 4 (or 3 or 5).
If you don’t believe me, this is a true story I learned from the boss of a small company working in the food industry.
Obviously, for our shops to be able to offer good quality prices, these people have to be skipped (sorry for them but such is the way of the market).

Another way around this could be to lobby the wholesalers to convince them that they should change.
This is probably out of our reach as individuals but companies and professional associations could and should do it.

As usual, all it takes to begin such a revolution is a few good men that are convinced that they are right.
Don’t stop asking for tea in restaurants, hotels… but ask them if they have real tea.
If we all do this, we might change the world, probably sip of tea by sip of tea but it will still be another step in the right direction.

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Xavier

My name is Xavier.

I live on the other side of the pond but you had probably found this out thanks to my “strange” English.

I am a tea addict and I studied several (and I do mean several) years ago marketing, hence this blog, which will try to combine both worlds.
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