Category: Analysis

Do Stormtroopers dream of good tea?

December 25, 2015 / / 3 Comments

No I didn’t fell for Star Wars, since that title came to my mind before finding this picture on the Internet.

Snowtrooper drinking tea

Snowtrooper drinking tea,

photoshoot by Mike Stimpson (http://www.flickr.com/photos/balakov/)

But who could blame a Snowtrooper from drinking something warm between patrols on cold worlds? Certainly not me.

And no, this title has nothing to do with Blade Runner (I don’t even think they know anymore what tea is in this book/movie).

What I will try to do here is to bring a little imagination to our tea world and try to think about what would happen in the far future if mankind was to explore and colonize space. Yes Space, the Final Frontier (I hear someone telling me this is another show and that I should keep the focus on what I intend to say).

Since this topic is so huge and complex, I will go through a small set of hypothesis and examine what their impact on this topic is.

Obviously, it will not be that much compared to the full set of possibilities that the real Universe will bring us but I had to begin somewhere.

Since we are talking about a huge number of colonies, units, spaceships, all of them spread in the known universe; there are three obvious problems : getting there (wherever there is) with the needed quantities of tea and the right quality/freshness.

The first obvious answer to this problem and to all logistical problems can be found in Star Trek with the generalised use of replicators.

I can hear the less Trekkies among us (including me before I made some research before writing this post) wondering what is this device. In an obvious answer, I will tell you that it does what its name implies: replicate. Working from whatever raw organic materials are available onboard and what can be recovered from the close ecosystem of the ship, the replicator can generate all kinds of food, including Earl Grey, the favourite drink of Captain Picard.

This doesn’t sound too glamorous but if we managed to analyse the tea leaves or more likely a good tea cup, we would be ready to have a ready-made and yet perfect cup of tea.

Unfortunately, there would be no tea ceremony and we would lose this wonderful feeling of having managed to make the perfect cup of tea. But there is a solution to this “problem”, just focus on the tea leaves and be ready to get your cup of tea with you everywhere and on every ship.

This was the easy solution provided by technologies and by some soft science universes.

What about the other universes where Faster than Light Travel is not available? Or where technology is advanced but not that much?

The first answer would be to bring it with us aboard ships or on some advanced automatic depots available for whoever needs them.

This would mean freezing the tea (I don’t see any other solution) be it in leaves or in bags (yes I know it sounds strange) through exposure to cold freezing gas like liquid nitrogen (or any other that would be used for this purpose).

However this means that depending on the total number of people, planets, stations, ships, units… that would drink tea (remember this is science-fiction, I can make all people drink tea if I want to), good old Earth would need to produce a really great amount of tea year after year for an ever expanding number of people and place, leading to both an exhaustion of the production capacities (intensive farming) and an over-stretching of the supply chain needed to bring them to the last people in the line.

Nowadays, this works in the corn business but on a much smaller scale thanks to a lot of silos and transportation but having to move things all along the universe seems a bit too unrealistic unless you focus on huge spatial mobile “silos” (along the lines of what you can see in Dune) that would need to have access to a lot of supplies.

Dune space ships

Dune space ships

Which bring us to the next question: would it be feasible to have the needed production to supply everyone?

First of all, the question is whether or not there is a lot of terraformed planets or planets where our agriculture could be brought without having too much to do.

Given the right conditions, this could happen and since these planets would not have been exposed to our plants and seeds, it would be easy to see “our” products invading and destroying everything on perhaps an ecological catastrophe scale but this is not my main focus here. However, for those wondering about this, just look at what microbes did to the Native Americans way before they saw an European. A plant (or a seed) without natural predators or a limit to its grow (like those you can find on Earth) could grow and spread, slowly (or quickly it depends) destroying the native plants and seeds (or worst for us, mutating and becoming something else before we find about it).

If we had access to a lot of planets like this, it would be easy to produce a lot of tea (among other things but my focus here is on tea) and thus supply all this huge silos floating in space.

However since tea depends on the terroir (meaning among other things men, soils, weather…), what would happen if it was brought on other planets? The likely answer is that it might become something else, perhaps something we would not recognize any longer as tea.

An other solution would be to focus on tea already made that would be transported in huge containers. For this to become a reality, new huge factories would have to produce tea using every leave available. This could create problems while leading (but on a much lower scale) to an increase in the tea production needs, leading to other problems as there is a limit to how much we can produce with one tea plant.

The transport and preservation of this tea would be much easier to do. After all, it would just be bringing in and keeping cold enough bottles or cans. The only thing that would still be left to find out is how should we warm them without changing the taste? This is something people might still think about before mankind launches itself into space colonization.

But then like with the replicators, where is the fun in making ones tea if you do it like that?

After looking rather quickly at a few scenarios, the only conclusion is that “diversity is the spice of life” and trying to make everything uniform and to convert everyone to one food, one thought… is probably the best way to big catastrophes and problems that we might not oversee yet (I did mention terraforming and/or bringing plants and seeds from Earth and the possible negative consequences of such an action, didn’t I?).

Therefore, the best idea would probably be to let everyone free of drinking whatever they like and however they like it. After all, chaos and diversity lead to creativity.

A quick and oversimplified look at a complex problem

August 25, 2015 / / 8 Comments

This post was prompted by an article I read on the Web about Mac Donald changing the way the Quarter Pounders is made with small steps made in order to improve their quality.

This strategy is called differentiation, trying to make ones product more attractive than those of the competitors to a peculiar target, whether to charge more and make more profit of it or to increase brand fidelity and making it more difficult for people to change from one brand to another.

One of the biggest name in this strategy field is Michael Porter that wrote a lot of books on competitive forces in industries, their impacts and some generic strategies to deal with specific situations.

A picture being worth a thousand words, here is a small look at those generic strategies.

Strategic advantage

Uniqueness perceived by the customer

Low cost position

Strategic target

Industry wide

Differentiation

Offering the lowest prices

Particular segment only

Focus

Michael Porter’s Three Generic Strategies

Now, I am sure you are wondering why I am talking about this and what is the link between Mac Donald and tea.

Simple, the idea hit me as I was just looking at this news, could this strategic thinking work in the tea world?

After looking at it, I just had to think that yes, believe it or not, it works (don’t worry things are not cast in stone and without a proper analysis, this might be considered as an oversimplification).

I already wrote things on companies selling speciality teas and what they can do (in strategy and marketing, there is never a definitive and absolute answer), I will summarize what I wrote below before expanding it a little and then looking at the industry wide companies.

Speciality teas companies are usually focusing on a particular segment, trying to be perceived as unique by their customers. The focus on low cost is not something these companies are trying to do as their focus is more on higher quality products, for which people are willing to pay more.

They usually stay “small” and focused on their core business and area of expertise. By small, I don’t mean no growth or something like that but a maximum size in their development (which will change for each company depending on its market, its products…) just before they get into direct competition with the big names and might lose their soul trying to fight against them on their terms.

The other approach is to “grow” but by keeping on targeting new specific needs and markets, which are not overcrowded and where there is no competition (you can call this approach Blue Ocean Strategy or White Space Strategy or even indirect approach (who would have thought that I would one day use a military strategy term for a post on tea?)).

The industry wide companies (call them whatever you want but you know them, don’t you?) have usually focussed on the low cost position on the whole market. After all, their aim is/was to offer the best tea at the lowest price, making a common product of what was before a luxury.

However, faced with increased competition from newcomers while being stuck with a bad image among those willing to pay more for higher quality products (a growing niche market) and yet with a known image for most people as well as a position on the “good quality for the lowest price possible”, these companies had to find an answer and focusing on only one strategy was not the solution as it would have blurred the message/image of the company, changed its profile, leading potentially to a decrease in their market share.

Therefore, they went for a mix between the two strategies, keeping on their low price offer while trying to bring new products on the market (to satisfy the thirst for novelty) and offering different loose leaf teas in nice boxes at a “reasonable” price (thanks to their negotiation power) to try to attract new customers while keeping on with their marketing motto of “good quality for the lowest price possible” (I am not judging the quality of their products here, just trying to explain some things).

You don’t believe this is happening? Just go to your local supermarkets or check on the websites of these companies.

Now, you probably saw three different kinds of products: the good old classical and “basic” offer, some new “innovative” products and the reworked loose leaf classical.

Can this approach be successful? It might thanks to the distribution capacity of such companies and because addressing every need on the market means they might keep their customers (which is always a better and less resource consuming option than conquering new ones) and even attract new ones.

However, if the market seems too big, newcomers might come or be launched by competitors (or the same companies) but the traditional industry wide companies have a secret weapon, their easier access to the retail industry, which allows them to “kill” any competitor trying to attack them straight ahead.

This is a glimpse at the strategies being deployed in the tea industry and its close friend and competitor, the coffee one.

To give a good overview, I had to be synthetic and generic while each company has unique advantages, targets and needs that shape its business and its strategy and with an end result that might be slightly different from what I wrote but without proper data and knowledge of one market and structure, it is difficult to be more precise.

And after all, I promised a quick and oversimplified look at a complex problem, didn’t I?

Torture the data, and it will confess to anything

April 22, 2015 / / 4 Comments

My dear fellow Teatrader @thedevotea wrote a few weeks ago a post on a report about the increase in tea consumption in the world between now and 2019. His main complaint was that Australia didn’t make it to the top 20 of this list.

This is something rather unfair because there is a tea brand in this country that tries to change things out there (no name @thedevotea, no name).

When I read this post, I knew I had to write something about the report behind it.

I first looked at the tables available and wondered what was going on there until I noticed that it was all about market value and not consumption.

Now I got it.

So the overall tea market value in the whole world is going to increase in the 4 next years of a total of 32.56% (5.8% per year), with the situation being completely different from one country to another.

From a classical point of view, a market increases in value if it either:

– increases in volume while increasing/retaining its prices or not going through a huge decrease in prices,

– goes through an increase in price while keeping the same volume of sales.

An increase in volume on the tea market of a said country can mean several things. First of all, that the country population just grew or that people buy more tea or both of them at the same.

An increase in price can either mean a lack of supplies or an increase without any increase in quality (a monopoly or oligopoly situation), or with an increase in quality (new competitors coming to the market with better products, customers willing to get more for their money) leading customers to be ready to pay more for what they buy. This happens quite often when the incomes in one country rise.

The last option is a mix of both.

You can understand that the consequences of these different reasons are quite different in terms of what can be expected in the future for tea.

The situation will of course be different from one country to another.

Let’s try to do a guess on the top 20 growth rate found in the study and to categorize the different countries depending on the reasons behind their growth. Obviously, this analysis is 100% personal and subjective but it is based on my educated guess.

Since I don’t know everything about these countries so what is left blank are the topics I don’t know enough about to make an educated guess (but you can always give me the info I am lacking).

In order to try a bit more rigorous in my approach, I decided that the first two columns (increase of population and growth of average basket size) would be based on “hard” data, which means that the first one is based on the UN prospects while the second one is based on the tea consumption per capita and the position when compared to the world average.

Country Increase of population Growth of average basket size Lack of supplies Oligopoly situation Increase in quality

China

Possible because of the sheer number of inhabitants

Unlikely, competition of coffee

Unlikely unless massive change on the production side

Unlikely, due to the number of local producers

Possible, will depend on the evolution of the competition with coffee but for the same reason, potential risk of a drop in quality.

United States

Unlikely

Possible, tea is a challenger

Unlikely unless massive change on the production side

Unlikely, due to the nature of the market

Possible, will depend on the content of the average basket and the rise of a tea culture among the youngsters (see Tea with Gary)

Morocco

Likely

Unlikely, already high

Unlikely unless massive change on the production side

Sri Lanka

Likely

Likely, below world average per capita.

Unlikely unless massive change on the production side

Japan

Unlikely

Unlikely, competition of other drinks

Unlikely unless massive change on the production side

Unlikely, due to the nature of the market

Due to competition with other drinks and tea products, potential risk of a drop in quality.

Panama

Likely

Likely, below world average per capita.

Unlikely unless massive change on the production side

Bolivia

Likely

Likely, below world average per capita.

Unlikely unless massive change on the production side

Rwanda

Likely

Likely, below world average per capita.

Unlikely unless massive change on the production side

Ecuador

Likely

Likely, below world average per capita.

Unlikely unless massive change on the production side

Ethiopia

Likely

Likely, below world average per capita.

Unlikely unless massive change on the production side

South Korea

Unlikely

Possible, below world average per capita but with a possible diversification towards other drinks (developed country)

Unlikely unless massive change on the production side

Due to competition with other drinks and tea products, potential risk of a drop in quality.

Kenya

Likely

Likely, below world average per capita.

Unlikely unless massive change on the production side

Sudan

Likely

Likely, below world average per capita.

Unlikely unless massive change on the production side

Malaysia

Likely

Low probability, above world average

Unlikely unless massive change on the production side

Kyrgyzstan

Likely

Low probability, above world average

Unlikely unless massive change on the production side

Peru

Likely

Likely, below world average per capita.

Unlikely unless massive change on the production side

United Kingdom

Unlikely

Unlikely, already among the world top tea drinkers per capita

Unlikely unless massive change on the production side

Unlikely, due to the nature of the market

Unlikely due to the consumption habits or only at the margin

Vietnam

Likely

Unlikely unless massive change on the production side

Mongolia

Likely

Low probability, above world average

Unlikely unless massive change on the production side

Colombia

Likely

Likely, below world average per capita.

Unlikely unless massive change on the production side

As you can see, I don’t know enough to make a credible review of the 20 countries and I will let you conclude why these countries should (according to the original market analysis) experiment a rise in their tea market. But according to Socrates and the Oracle of Delphi, knowing that you know nothing is the beginning of wisdom, so I don’t worry about it, drink tea and think of myself as a wise man.

Who knows it might be true?

And since being wise is still compatible with being honest, I must confess that the title is not from me but from Ronald Coase, a British economist and writer.

Florilegium on Japanese tea

March 25, 2015 / / 2 Comments

Tea and Japan…

A lot has been written about it and a lot could still be written on this subject but I decided to focus on a really small topic, the early Japanese tea exports.

As it happens quite often, this is merely an introduction as I am lacking access to proper sources*, either Japanese (language problems) or American ones (although I looked for long series of foreign trade statistics, I couldn’t find the detailed ones that I needed).

Why American sources? Because it seems that the USA were the main export markets for Japanese teas.

However, let’s not hurry and let’s get back to the beginning.

With the arrival of the Dutch and the VOC (Dutch East India Company) on the Japanese shores in 1609 came the first exports of Japanese teas to Europe (some post-roasted ones from Ureshino).

Things went slowly until Commodore Perry opened trade with Japan with his ships in 1854.

This event was the trigger for many things in Japan, including the move at great speed towards modernisation and the restoration of the imperial power under Emperor Meiji.

But what impact did these events had on tea exports? The first and obvious one was the opening of trade with foreigners (which is always easier to do when you are not in an isolationist mood).

This led to 181 tons of tea being exported in 1859 with 1868 and the Meiji restoration leading to more exports and active support to create national (ie Japanese) companies that would be able to deal with the whole sale chain but also with a peculiar focus on the USA for the tea exports (probably because Great Britain had already access to all the black tea it needed).

This emphasis can be seen in different things.

For example, in 1874, some samples of black tea from 12 different Prefectures were sent to Italy (why Italy?) and in 1875 other sales samples of tea were sent to the USA and other countries (China, India, Europe, America) .

Protection and encouragement were given to traders with for example, the Yokohama Kocha Shokai (a company focusing on black tea in Yokohama) being founded in 1881 or the Japanese government taking steps when branch offices of Mitsui Bussan and Okuragumi were established in London to commission them for the export of black tea and other products manufactured by the governmental factories.

The first port opened to foreigners for trade was Yokohama, followed by Kobe much later in 1868. Each port had its own hinterland (a German word meaning here the area from which products are delivered to a port for shipping elsewhere) with Uji of Yamashiro and Asamiya of Goshu going through Kobe while teas from Kawane, Honyam or Sakura from Shiuka going through Yokohama.

A “funny” thing I found out is that at first, Japanese were somehow alien to Westerners preferences, customs, money or languages and so they used Chinese experts to introduce tea-making techniques (including the artificial colouring of tea leaves with dangerous products).

Another “strange” (at least for us nowadays) thing was that Japanese teas were categorized by method of production as Basket-Fired, Sun-Dried or Pan-Fired (and not by place of production) leading to some problems during transportation as fired teas could sometimes mold.

Problem with fired teas was during the transport where it could mould in the ships but a man named Kahei Otani found a solution in 1861 by buying only well-dried Pan-fired teas and storing around 40 kg of it in large porcelain jars (leading to what was called porcelain teas)

In 1875, in an attempt to diversify their production output, more Chinese experts were hired to begin working on black teas (remember the name of these society founded in 1881. However, it was never popular in the USA and ended up representing only a small percent of their imports.

Why do I keep on talking about the USA? It is because for a long time, they were the primary customers for the Japanese tea exports with these last one becoming an important part of the American tea imports.

In 1860, 10% of tea imported to the US came from Japan becoming 25% in 1870 and 47% in 1880.

Let’s not be carried away too quickly as in 1890, only 1.3 pounds of tea were consumed per capita in the USA (a little more than today), which with a population of 62,979,766 should make the American tea consumption around 37,140 tons for that year.

But what about the production? Did it rise? Decrease?

The figures I could find out are not really complete but will give us an overview.

Year

Production (in Kan)

Production (in tons)

Exports (in Kan)

Exports (in tons)

Local consumption (in tons)

1880

5,040,000

18,900

1890

5,760,000

21,600

1895

8,240,000

30,900

1905

6,970,000

26,138

1910

7,695,444

28,858

4,880,000

18,300

10,558

1935

12,500,000

46,875

2,960,000

11,100

35,775

Tea production, exportation and consumption in Japan between 1880 and 1935

The production did rise and quite a lot while at same time, the exports were decreasing and the local price for tea (in real price, which allows us to compare the 1880 and the 1930 prices) was divided by 2 in just 50 years (the basic law of supply and demand). Because of the wage rise in Japan at that time, this led to an increased mechanisation in the Japanese tea fields and in the whole tea making, leading to whole new processes.

* For this post, my main sources were:

– Foreign Trade Policy in the Early Meiji Era by Yasuzo Horie in Kyoto University Economic Review, Volume XXII, Number 2, October 1952 published by the Faculty of Economics, Kyoto University

– Technical Progress in the Tea Manufacturing Industry in Japan by Masahiko Sintani in Hitotsubashi Journal of Economics, 32(1), 1991-06

– Japanese Tea Exports in the late 1800s by Bruce Richardson in The Book of Tea by Okakura Kakuzo, Benjamin Press, 2011

It’s in your gut

February 22, 2015 / / 2 Comments

Send your grain across the seas,
and in time, profits will flow back to you.
But divide your investments among many places,
for you do not know what risks might lie ahead.

Ecclesiastes 11.1-11.2

Why start with a quote from the Bible and one that seem to focus on investments?
To answer that, I must get a few days back in time when I was working on my stock of tea, putting them from bags into metal tins and trying to rationalise which tin should contain which tea.

 

 

Gordon Gekko in Wall Street Copyright 20th Century Fox

Then I must forward two days later when I was driving for work from one place to another and I heard someone on radio talking about stock picking, the name of a method to select stocks to invest into.
The more I heard them, the more it made me think about how we pick up teas. I kept on coming back to the way companies/banks/investors manage and pick their investments and stocks, wondering if there was anything in it for us?
Before we go any further in this post, don’t worry, this won’t turn into a lesson on investing.

What are the goals of any investor? Have the higher return on investment for the risk he/she is willing to take. Common sense says that if you risk a lot, you will probably earn more but this is not sure as it depends on a lot of factors and also on the expectations or likeness to take risks.
Classical strategies are to have some secure assets that will bring you the same amount of money whatever happens and some more risky ones that should reward you with a higher return on investments.

But how does this translate to tea selection?
Stop everything you were doing and look at your teas before thinking on how you picked them up.
Yes, that’s right, you have some you know are good ones and some newer that you expect much of.
In other words, you diversified your portfolio by splitting your stocks between secure assets (those you know) and risky ones (those you want to discover).
The split between both depends on your willingness to accept risk or if you are in an adventurer mood.

 

Technical analysis by Kevin Ryde

How do you select your more risky tea? You start by gathering some information on the place it was grown in, the kind of tea, how it was prepared, what is in it (if it is a flavoured tea), who is selling it… You will then compare these data to the one you already have, which will tell you what you should expect from it and you will perhaps even try it to see if it suits your tastes.
Based on all these information, you will decide if you want to buy a small portion of it, a bigger one or none at all.

And this was just an example as those of us who have a fondness for a peculiar tea (like Oolongs, Darjeelings…) are following an another strategy: the index fund, in which you try to replicate the moves of a peculiar set of an index, believing that no tea picking can beat on the long run, the constant quality of these peculiar assets you like, making the search for other good quality teas not worth the time and energy spent on it.

By acting like this, we just went to the same decision process that portfolio managers when they decide to invest in something.

Tea Cupping at Kairbetta Tea Estate, Nilgiri Region, South India Photo by Jack Strand

The only difference between both is that for tea, there are no mathematical models or computers trying to decide if you have to buy this tea or not based on a lot of maths.
And this is something I am sure will stay forever as I think that between personal tastes, crop quality, soil, harvest, the man behind the tea processing… there are too many human or natural factors turning a tea into the tea we like for a computer or model to summarize and decide for us.

And just when I was writing this, I found something said by a Canadian Kevin O’Leary (that I don’t know) that sums it up quite nicely.
“When you’re an investor, you can look at the quantitative and qualitative elements of an investment, but there’s a third aspect: What you feel in your gut.”

Are robots more likely to have good shoes or to drink good tea?

September 25, 2014 / / 8 Comments

I will share a secret with you: I am doomed. I know in the end, we all are but in my case, I am doomed earlier than you.

Why? Because a study said so.

Now you are thinking that I am really out of my mind but not at all. Once at school I read in my English a text that said that according to a study, left-handed had a shorter lifespan than the others because the world is made for right-handed, which will lead one day to a fatal accident.
This is why I only have a relative confidence in studies that show up from time to time telling you that something is that or something else is that.

Because they are based on maths or science but we (the whole of us) are lacking the information to know what is really inside them.

With luck, you might get access to the article and data that allowed someone to give you an information but most of the time, you will only get a summary like the one I made at the beginning. The other problem is that if you get access to all the data, you (like me) are probably lacking the background to double-check things.
You are probably wondering why I am speaking about this or why do I have a title that is somewhere on the road between a survey and a new version of Blade Runner (or Do Androids Dream of Electric Sheep?).

The answer is simple: because I am reading more and more things about how green tea (and now even white tea) seems to be the new solution for almost everything (I am only slightly exaggerating).
Don’t get me wrong, I like when new people drink tea and I don’t have anything against scientists and new discoveries and findings.

What I don’t like is people doing things for the wrong reasons (unless they change along time) and under influence of people that are supposed to be experts in their respective domains.

To me this whole thing screams like marketing but the bad side of it, like when companies are trying to sell their products using whatever arguments they have even if they are false or more likely half right (the most famous example being the soap that washes whither than white (is that a kind of new colour that we don’t know about?)).
I have troubles with the concept of new discoveries being made of über product that do all for you, even more when this über product is linked to tea and when big companies jump on this opportunity to launch a new product (that is not at all what the scientists tried and tested) selling it thanks to these new arguments.
You can listen to scientists and to ads but please use your mind when hearing something and try to learn a little more about what they say (and not only through the Internet) and don’t fall for easy traps.

In other words, drink tea but don’t expect wonders apart from the taste and the experience (if it was so wonderful, it would be used in the whole world).
And now, it is time to tell you the results of my new study on robots and if they are more likely to have bad shoes or drink good tea…

Rise and fall and …

August 22, 2014 / / 5 Comments

After a first glimpse at Indonesian history, mostly on how tea came to it and how the Dutch implemented different agricultural policies (http://teaconomics.teatra.de/2014/06/24/an-unexpected-journey/), it is time to see if Indonesia was such a big tea producing tea country and what happened to it.

As for my previous article on this topic, I did some research but I had troubles with some raw numbers or general statements that don’t say if they are related to quantity or value. In the end however I managed to find some raw data and information through all the colonial period and early independent one and this is what I will try to present here.

In 1885; sugar, coffee and tobacco represented 72% of the total value of the different exportations from the Dutch East Indies but tea was growing up fast as in 1928, 17% of the tea produced in the world came from these islands and in 1929, tea was the fifth export (in value) before tobacco and coffee.

However, what is unusual is that at that time the main market was not the “motherland” (a common thing for all colonial power) but London with the British houses ruling the tea market in Batavia. (1) Was it pragmatism from the Dutch with acknowledgement of where and who was the market or just a manifestation of the British supremacy over this trade?

From hints I gathered, it would say that the second option is probably the most realistic one since the main problems faced by the Dutch prior and during World War I was the irregular quality of the tea being harvested, which was a problem for their sales to America and Australia, where the Dutch had launched from 1913 on a marketing campaign to sell their products. (2)

This shows that they tried to get around and find new markets.

Assam teas were introduced in 1878 and quickly became the only ones used, probably because these plants were more efficient and also because the London market was the one targeted at that time.

However, things only heated up in 1900 when European companies (including British ones) began investing in bigger and better lands, resulting in a quick growth between 1919 and 1931 and a good reputation of some teas like those of Permantag Siantar (3)

The production changed from year to year and in 1921, there was a huge crisis (without any indications of what might have happened) that made the production dropped as showed in the table below (and don’t blame me for the wrong figures, I just copied them).

in kilos 1919 1920 1921
 Java 42,500,000 47,000,000 28,000,000
 Sumatra 4,000,000 5,000,000 4,000,000
 Total 46,500,000 52,000,000 32,000,000

Tea production in the Dutch East Indies (1919-1921) (2)

But where did they go?

in kilos 1919 1920 1921
Netherlands 25,136,000 16,865,000 11,203,000
United Kingdom 12,356,000 11,718,000 6,638,000
Australia 7,262,000 8,753,000 9,786,000
USA 2,278,000 3,475,000 2,537,000
Canada 634,000 796,000 38,000
Europa 722,000 36,000 17,000
 Singapore 466,000 452,000 60,000
China 1,117,000 35,000 0
Others 275,000 452,000 472,000
 Total 50,246,000 42,582,000 30,751,000

Tea exportations from Java, 1919-1921 (2)

in kilos 1919 1920 1921
Netherlands 1,729,870 1,165,779 1,450,892
United Kingdom 1,790,072 2,663,784 2,389,733
Australia 15,000 0 600
USA 64,000 118,344 0
 Singapore 549,320 34,582 119,065
 Java 89,591 12, 630 35,167
Others 2,652 25,468 2,336
 Total 4,249,505 5,130,587 4,197,793

Tea exportations from Sumatra, 1919-1921 (2)

in kilos 1919 1920 1921
Netherlands 26,865,870 18,030,779 12,653,892
United Kingdom 14,146,072 14,381,784 9,027,733
Australia 7,277,000 8,753,000 9,786,600
USA 2,342,000 3,593,344 2,537,000
Canada 634,000 796,000 38,000
Europa 722,000 36,000 17,000
 Singapore 1,015,320 486,582 179,065
China 1,117,000 35,000 0
Java 89,591 122,630 35,167
Others 277,652 477,468 474,336
Total 54,486,505 46,712,587 34,748,793

Tea exportations from the Dutch East Indies, 1919-1921 based on (2)

I hope I got it right as the French word was not exportations but rather exploitations, which could have something to do with the ownership but this hypothesis seems rather strange and out of place, so I kept the exportations idea.

Apart from obvious mistakes in the Sumatra figures (the figures simply don’t add) and a difference with the total produced (that could be explained for Sumatra by rounding things down), these tables are interesting and show for example that the first exportation country for tea was not the United Kingdom but the Netherlands.

The only explanation is that these figures are just the ports of destination and not the countries of final consumption (even if both can be the same), which would be consistent with the British houses ruling the market and with the usual obligation in the colonies to go through a limited set of ports, mostly located in the motherland, where products would be transformed or simply shipped to another country.

The production by the natives was stopped by this 1921 crisis as a lot of factories either stopped buying from them or paid such a low price that only the big plantations were able to keep on growing tea. (2)

What is rather interesting is that in these years, the Dutch tried to move ahead as for them, even if the United Kingdom was the best client, it was still below the pre-war level and this could mean that diversification was the way to go.

This lead to several initiatives like making rules on the tea sales regarding quality and general conditions (rules made by the Handels vereeniging (Trading Organisation) and enforced by the Vereeniging voor de thee cultuur in Nederlandsche-Indie (Organisation for the culture of tea in the Dutch East Indies), the Thee Export Bureau (Tea Export Bureau) in Batavia and the Chamber of Commerce for the Dutch East Indies in London) while making huge advertising efforts thanks to the financial support of the Vereeniging van Thee-Importeurs (Association of Tea Importers).

There were also intents to sell to new countries like Canada or other English speaking countries using the networks of the British companies already active in Indonesia. (4)

These efforts produced an increase in the exportations and therefore in the production in the following decade with the main buyer being the United Kingdom and then (but well behind) the Netherlands, Australia and Egypt.

in kilos  Java  Sumatra Total
1930 61,419,000 10,159,000 71,578,000
1931 65,922,000 12,060,000 77,982,000
1932 64,188,000 13,293,000 77,481,000

Dutch East Indies tea exportations in 1930-1932 (5)

Tea, the second export in value before World War II, suffered like all the other exportation crops first from the Japanese invasion as the number of plantations dropped (from 138 to 97) and then from the Indonesian War of Independence.

By 1948 (one year before the end of this war), only 25% of the pre-World War II plantations were still cultivated and the 1947 tea production was of 1,500 tons (1/40 of what it was before WWII). However in 1949, the situation was already improving. (6)

I don’t have any further sources or articles on what happened after but my guess (feel free to correct me if you think I am wrong or if you have more information) is that the tea plantations suffered from the different fights in the country as well as the development pattern focusing on industry and oil until tea became trendy and again …

  1. Robequain Charles, Le développement économique des Indes Néerlandaises. Le rôle des capitaux hollandais et étrangers in Annales de Géoographie 1934 t.43 n°241

  2. de Wildeman Emile, A propos du Théier in Revue de botanique appliquée et d’agriculture coloniale, 2e année bulletin n°16, décembre 1922

  3. Robequain Charles Problèmes de colonisation dans les Indes néerlandaises in Annales de Géographie 1941 T50 n°281

  4. de Wildeman Emile, A propos du Théier in Revue de botanique appliquée et d’agriculture coloniale, 4e année bulletin n°29, janvier 1924

  5. Albenque A. Le commerce des Indes Néerlandaises depuis 1931 dans Annales de Géographie t.43 n°242, 1934

  6. Evolution de l’économie indonésienne in Etudes et conjoncture – Economie mondiale 5e année n°2, 1950

An unexpected journey

June 24, 2014 / / 0 Comments

Indonesia as one the biggest tea producer (in numbers) before World War II? When I read this in one of The Devotea’s posts, I was quite puzzled and I started to dig into this topic.

According to Wikipedia and the FAO, Indonesia was in 2011, the 8th producer of tea in the world with a production just over 140,000 tons.
But this didn’t give me a hint about the situation prior to World War II and its evolution since that time.
I turned out to good old Internet and a good legal resource to find old scientific journals in French and in other languages Persee and after some researches, I found a lot of old French articles from the 20s-30s but with a few from the 80s-90s dealing with this topic (at least in part).
I found quite a lot of information and that these people had already faced a problem I had: that most books or articles on this topic were written in Dutch. (1) If anyone has access to any info and can pass it to me, it would really help.

I won’t go yet into details about the numbers but tea was important to the Dutch East Indies (as they called Indonesia then), not for local consumption but for exportation, the goal of the first European colonies (there were also settlement colonies but Indonesia was not one of these and the Netherlands were never overwhelmed with a big population).

Parts of Indonesia were first dealt with by the Vereenigde Oostindische Compagnie (Dutch East India Company) until it was nationalised in 1796 by the Batavian Republic (after going bankrupt)
During the Napoleonic Wars, most of the possessions of the former VOC were occupied or controlled by the British before being given back to the new United Kingdom of the Netherlands following the Congress of Vienna and the Anglo-Dutch peace treaty that followed.
What had the VOC achieved? A lot but I didn’t find a lot regarding tea in Indonesia (tea trade is another topic). The only exception was the land ownership, which was quite complex and in a way became more complex thanks to the VOC because of the different treaties it made with the local powers and the differences in what both parties understood from the terms and the concepts used. (2)

Following two wars in the area against local people and the Belgian Revolution in 1830, the Netherlands was in need of money as they were facing bankruptcy. Rhis is when they decided to get the most of their colonies. The new Dutch East Indies governor Johannes Van den Bosch’s priority reflected that new policy with a peculiar focus given to the increase of the resources (and therefore the money) drawn from the territory he was appointed to
To do this, he implemented (among other things) the Cultivation System in which the local peasants had to dedicate 20% of all lands to exportation crops or to work 60 days every year on government owned plantations. (3)
This system that slowly turned Indonesia into a huge plantation with sales going through a whole network of middlemen gave enough cash to the Netherlands but faced opposition because of famines and epidemics created by the priority to export crops, because of independent merchants that preferred free trade and because of the publication of Max Havelaar: Or the Coffee Auctions of the Dutch Trading Company.

The public opinion in the Netherlands forced the government to change its politics with first a “Liberal Period” focusing on free trade, free investments by anyone willing to do it, which saw an increase in the number of big plantations (owned by European and American companies) and in the exportations. (4)
Obviously, this led to a focus on plantations being optimised when it comes to crops thanks to the work of the different specialised or not garden stations that tested, implemented and improved the different cultures, following what could be defined as the British model implemented in India and probably elsewhere in the world. (5) (6)

This policy was followed by an “Ethical Policy” (starting in 1901) with a focus on the local people and the civilisation mission focus in the colonies. However, this new approach had to deal with money problems to fund these investments (in infrastructures, education…).

I just went quickly through some general things regarding agriculture in Indonesia that will allow me to introduce tea production and the reason for the sudden changes during and after World War II.

One question however remains to be solved: when was tea introduced in Indonesia?
I found two answers: 1826 with seeds/trees coming directly from China and with the first batches sent to the Netherlands in 1835 (7) but this would mean that it was there before Robert Fortune stole it from China. The other answer is 1898. (4)

 
(1) Coolhass W. Ph. Outre-Mer néerlandais in Revue d’histoire des colonies t.44 n°156-157, 3e et 4e trimestres 1957
(2) Durand Frédéric, La question foncière aux Indes Néerlandaises, enjeux économiques et luttes politiques (1619-1942) in Archipel Volume 58 1999
(3) Durand Frédéric, Trois siècles dans l’île du teck. Les politiques forestières aux Indes néerlandaises (1602-1942) in Revue française d’histoire d’outre-mer t. 80 n°299, 2e trimestre 1993
(4) Evolution de l’économie indonésienne dans Etudes et conjoncture – Economie mondiale 5e année n°2, 1950
(5) Maas J. G. J. A., La culture et la sélection du Palmier Elaeis aux Indes Néerlandaises dans Revue de botanique appliquée et d’agriculture coloniale, 4e année bulletin n°34, juin 1924
(6) van Haal C. J. J., La sélection des Caféiers aux Indes Néerlandaises dans Revue de botanique appliquée et d’agriculture coloniale, 19e année bulletin n°209, janvier 1939
(7) Robequain Charles Problèmes de colonisation dans les Indes néerlandaises dans Annales de Géographie 1941 t. 50 n°281

The answer was not in the cup

April 24, 2014 / / 14 Comments

After seeing an article saying that a machine worth 40,000 $ was able to make the perfect pot of tea, I wondered what a perfect pot of tea.
This question came back to haunt me while I was having a cup of tea with @Chakaiclub (check her website, even if it is for now only in French and for France).

“What is a perfect pot of tea? Or rather what is a perfect cup of tea?” This question came back again and again into me as if it was asking me to find an answer.
A first obvious answer is that it had to do something with tea ceremony as I had defined them in a previous post ”For this post, I will define it as a sort of tea ritual, as an unique way of making and drinking tea over and over again”.

After all, if you do something in an unique way over and over, it must be the way to do, which means that if you look at the different tea ceremonies be they British, Chinese, German (yes I know I have offended the most traditionalists here be it is also a tea ceremony) or Japanese or … you will find quite easily what is a perfect cup of tea.
For the British one, the method is quite easy and was defined in 2003 by the Royal Society of Chemistry (see there).

If I oversimplify things (and once again I am sorry for the most traditionalist readers), one of the Chinese tea ceremony Gongfu cha or “”making tea with effort” like the Japanese tea of ceremony or “the way of the tea” are ritualised ways of preparing tea in order to make a tea that taste good but also as a way to enlighten your soul directly or indirectly (through others).
As such, they follow elaborate rules to really get the best of a cup of tea.

As for the German tea ceremony, I described it here (with a video) and it is the way to make the perfect German cup of tea.

If you look at it, you will see that every country/tradition thinks it has an unique way of making tea that is is so good that nothing else could be better.
The problem being that they don’t do it the same way and that depending on your tastes, you might find the results a little bit disappointing or not suiting them, which is somehow a paradox as if its results is a perfect cup of tea, there is no way you could be disappointed.
Or it could be worse and you could thinking that the way you make your tea is what makes your cup of tea perfect for you.

And this is when I was struck by the obvious.
The answer was not in the cup but in philosophy and in Aristotle who wrote that is perfect which is so good that nothing of the kind could be better but also which has attained its purpose.

The purpose here is to drink a tea that suits your taste and to make the best of what you have used to do it. So you can use whatever method, technique… that you prefer for making your tea as long as it enlightens your, makes you feel better and brightens your day turning a “normal” cup of tea into the perfect one.

Don’t get me wrong, I do know that to make a good cup of tea, good ingredients are needed turning it into an even more enjoyable experience but what I wanted to point out here is the relativity of “perfection” and that we should all make our tea the way we like it and be open-minded and curious about how other people make their perfect cup of tea.

With a little help from my friends

March 23, 2014 / / 2 Comments

No, this blog is not about musics or whether or not the Beatles, Joe Cocker and some others ever drank tea.
This title is a thanks to @thedevotea for helping me finding a topic with one of his latest posts (http://thedevotea.teatra.de/2014/03/13/hypocrisy/) and also a hint to what my post is really about: boycotts or rather whether according to classical economics (and the different research papers I read),  boycott is efficient or not.

A boycott is when someone or a group of people decide on their free will not to buy, use… anything related to someone, to a company or to a country as a form of protest (be it for political, environmental or social reasons).
Is this linked to tea? In a way. Do you remember the Boston Tea Party, throwing away tea in protest for a tax rise (to be honest, it was also a problem of smugglers wanting to still make money and merchants being afraid of an increase in the monopoly of the East India Company).
You could also protest because of the working conditions in some estates or because you think that such or such country doesn’t or does support something you don’t like or find unethical.

The real question is whether or not this has any efficiency not from a moral point of view or in the real life but for economics.

The first issue is whether people will get along the movement. When someone hears about the boycott, he can decide to follow it and not consume the said good or he can go on and do as before. Why? Apart from the moral/political sensibilities, boycotting a product has a cost because you give up consuming a good with a certain utility for you and substitute it with another good with a lesser utility for you (since it is not as perfect as the one you consumed before) or with none. In both cases, it has a cost.
Furthermore people know that one people more is unlikely to have much effect and make things change. This is the free ride problem: people are likely not to boycott while wishing it succeeds.

A second issue is scattering. A lot of people are needed to start a boycott, to make it last and to win but how can you coordinate people around the world or a country?
Now with the Internet, forums, Twitter, Facebook and such ; it is easier than before but it could still be a problem when trying to bring more people who are not active in the right media channels in the game.

In a way, boycott is an attrition warfare between people minimising their utility and companies/countries… seeing their sales and benefits go down. Who will stand at the end of the day? The side with more “resources”.

What makes a boycott successful?
The first and most important factor is the market structure. Is this a monopolistic market with only one producer of a certain good? If the answer is yes, the boycott will face difficult times. Is it easy for the consumer to replace these goods? If the answer is no, there again the boycott will be in troble
From the producer point of view, there are three questions to answer. The first one is it diversified enough, i.e. does it have access to a lot of markets or only one? The second one (which is linked) is whether or not this boycott is a huge phenomena or just an isolated one. The last question is how much does it cost to change what is targeted by the activists?

Because you are all polite people, you will not have boycotted me for not tea ranting but here it comes.
So how does it work for tea? My analysis is that thanks to a huge number of companies, it is easy to boycott one  specific company and turns to others with “similar” products.
For gardens or estates, it might become a little more difficult as one tea is not another and although you will have the same utility, the taste and personal preferences might lead to a difficult experience if you can’t find a substitute.
And for countries, it is even more difficult as if you go for the boycott, you will not have any access any longer to a whole type of teas. It might not be a problem if you decide not to buy anything from one of the small tea producing countries but what about the big ones?

In the end, against companies, boycott could work but against the biggest tea producing countries in the world, I think that even “with a big help from our friends”, we would lose much more than we might win.
Think about it, there are plenty of customers ready to buy from them and if not, it is the small producers, those with less power to influence what you are against that are most likely to be hit.