Category: Industry

There was no doubt that it paid to make the gardens

June 30, 2016 / / 6 Comments

As quite often these days, this month article was inspired by @lazyliteratus or rather by him being quoted by the Nikkei Asian Review in an article on Nepal and Darjeeling teas.

Even if Geoffrey’s article was not focusing only on how the tea is produced but more on how civil, all the tea industry/drinkers… can and should be. To quote him “Tea is just tea. It’s dead leaves in hot water. Nothing more. There is no money in it. The value lies in the way we -as people- experience it. The value is in the story of the person who picked the two leaves and bud… in the person who did the withering, rolling and drying… in the artisan who shaped it… in the merchant who hocked it… in the wide-eyed seller who bought it… and in the drinker who experienced it.” If you want the whole story, just go there.

But he did write that the “old plantation model is dying.” And this assessment that I overlooked at that time came back to me when I read by the other article I was referring too. That question was too big to let it go away and I will try to bring some elements to answer it, not from a tea quality point of view (I won’t judge if a model is better than the other as there is never a true answer that is valid forever and out of a peculiar context) but more by trying to draw elements from different social sciences (to see what is in this field of research, you can check here).

The fist question that needs to be answered is what are we talking about? In other words, what is a plantation? Is there a plantation model? Do Nepal and Darjeeling tea organisation fit into this model? I will try to answer the question of its oldness along the way.

According to the Cambridge dictionary, a plantation is “a large farm, especially in a hot part of the world, on which a particular type of crop is grown.” Now, this brings more questions than it answers but it is a start.

From an article on agricultural plantationsi, it seems English classified their rubber tree plantation based on the size of the piece of land. With the estate being more than 40 ha and the small holding less than 40, we can see there is a huge gap between the two of them and to make it more solid, a further distinction was made with small holdings (less than 4 ha), medium estates (4 to 40 ha), estates (40 to 200) and big estates (above 200 ha).

So let’s compare Nepal tea estates and Darjeeling ones to see who fits where.

Number

Surface

Production

Total (ha)

Per site (ha)

Total (kg)

Per ha (kg)

Per site (kg)

Estates

87

14,596

167.46

13,265,152

908.82

152,473.01

Small farmers

14,898

11,569

0.78

9,803,934

847,43

658.07

Total

17,985

26,165

1.45

23,069,086

881,68

1,282.68

Data from fiscal year 2014-2015 on Nepal tea estatesii

Number

Surface

Production

Total (ha)

Per site (ha)

Total (kg)

Per ha (kg)

Per site (kg)

Estates

87

17,820

204.83

8,480,000

475.87

97,471.26

Data from fiscal year 2014-2015 on Darjeeling tea estatesiii

I couldn’t find any data on small farmers in Darjeeling apart from a few references to them, which means the comparison between Nepal and Darjeeling is not 100% complete but it is a start.

From the data gathered and their average (which is not always the best instrument to compare things as I once said), it seems obvious that there are two different sets of production places in Nepal, the small holdings (the more numerous and with almost 50% of the total tea plantation surface) and the estates (with the biggest production share).

When comparing Nepal to Darjeeling, where plantations are in the big estates category, some counter-intuitive facts are brought forward. For example, the productivity of the tea hectare in Darjeeling is lower than in Nepal or the production of the Darjeeling tea estates is lower than those of the small farmers in Nepal alone.

Regarding the productivity, there are three obvious explanations that might need some further research: a more sustainable/biodynamic approach being used in Darjeeling, a productivity problem (with trees being older and thus giving less tea), a deliberate lowering of the production with the aim of increasing the price on the short/middle run.

Traditionally in agriculture, the intensive farming was the dominant model, meaning that the aim was to mass produce to give access to the maximum number of people, which coupled with the high amount of money needed to create tea plantations (between jungle clearing, bringing the tea trees, nursing them, bringing the needed labour to the selected area) meant that only people with a good financial support could do it.

A fine example can be found when tea was introduced in Assam: “The situation continued to deteriorate and by 1847 the Company would have been glad to sell out if anyone had been ready to buy.iv” The first dividend was paid in 1853 and at that time, fortune began to change, favouring those who had invested so much.

So capital was needed to enter the tea market which combined to the high expectations from those putting money in this business, only big estates were being build (something that was natural in these days) but did this problem suddenly disappeared to allow for smaller tea gardens to become interesting?

No. This is a rather straightforward answer, isn’t it? Don’t worry, I will back it up. “Establishment of tea garden requires huge investment with long gestation period. Equity capital forms only a small portion of the total investment. The rest has to be raised through loans from the financial institutions. It has been found that the loans provided to tea gardens for the planting of tea and its maintenance per unit of land is inadequate.v”

So the financial problem is not the key to the selection of one model or of another and we will have to look a little bit further to see if one model is better than the other.

Sources

i Jean Delvert A point of view about agricultural plantations, in Bulletin de l’Association de géographes français, 67e année 1990-3

iiNational Tea and Coffee Development Board, http://www.teacoffee.gov.np/en/

iiiTea Board of India, http://teaboard.gov.in/

ivGreen Gold, the Empire of tea by Alan Macfarlane and Iris Macfarlane, Ebury Press, 2004, p.146

vConcept Paper on Study of Nepalese Tea Industry -Vision 2020, March 2005

Any customer can have a car painted any color that he wants so long as it is black

April 23, 2016 / / 9 Comments

1919 Ford Model T Highboy Coupe photographed by User:Sfoskett

Everybody has heard this sentence by Henry Ford that is usually misunderstood to mean something like “we don’t care about customers, we know what they want”. The truth is that because of the development of assembly line (which allowed for a drop in price), black was the only colour that could be used because it dried quicker than any other.

 

Are customers taken into account in the tea industry and since when? To answer that question, we will have to travel to…

 

Austria… This name implies different things depending on your sensibilities.

Joseph Schumpeter

Portrait of Elisabeth in 1865 by Franz Xaver Winterhalter

For an economist, it rings a bell on Joseph Schumpeter and his “creative destruction” (something linked to economic innovation and business cycles) or the Austrian School (an approach of economy related to the motivations and actions of individuals).
For those more familiar with history or the crowned people, Austria means the Empress Elisabeth of Austria aka Sisi or Maria Theresa, an earlier Empress whose accession to the throne sparkled a war known as the War of Austrian Succession.

Portrait of Maria Theresa in 1759 by Martin van Meytens

None of this really seems linked to tea, even if Maria Theresa had a taste for Chinoiseries that you can see when visiting the Schönbrunn Palace in Vienna (if you want to see a part of it, here is a 360° picture of one of the rooms http://www.schoenbrunn.at/fileadmin/content/schoenbrunn/panoramas/29_vieux_laque_zimmer.swf)

Which brings us to the main city of Austria, which I visited some times ago and was the subject of a blog post (http://teaconomics.teatra.de/2014/07/27/cause-im-tnt/), which for an obscure reason is now without my pictures. However, you might say and you will be right that in spite of everything I found there, Vienna is a coffee town.

However what brings me today in Vienna (at least on my keyboard) is something completely different and I am sure it will frighten some of you when you read my topic for today post: sociology and most specifically one of the major figures in 20th century American sociology: Paul Lazarsfeld.

Paul Lazarsfeld ©Bardwell press

This Austrian was a doctorate in mathematics and when he came to sociology in the 1920s-1930s, he brought to this field his expertise in mathematics and quantitative studies. Thanks to a study on the social impact of unemployment on a small community (Die Arbeitlosen von Marienthal) published in 1932, he attracted the attention of the Rockefeller Foundation and was invited for a two-years travelling fellowship to the USA. When the time to go home was there and because of the political climate in Austria (he was a Jewish and a socialist), he decided to stay in America, where he created an institute in Newark along the lines of his Vienna Research Centre. I will spare you the details but he created another one  in Columbia, became a major figure on the impact and power of mass media (first radio) and created/experimented with several new and “modern” techniques like panel studies, mathematical models and an empirical approach to his studies that since the beginning and the Vienna years allowed him to get funds from private companies, a way to fund his institute at a time when Universities were not ready to support such a group.

Which brings me at least (at least for you reader) to tea.
One of these early sociological studies is named Tea and the Viennese or in German Der Tee und die Wiener was made in 1932. This study was commissioned by a coffee and tea importer company Julius Meinl that still exists today.

Julius Meinl logo over the years © Julius Meinl

A translation in English was made in 1934 for Rensis Likert’s students but it seems to have been lost and the only documents are in German and in the Lazarsfeld Archive at the University of Vienna. This means that I couldn’t get my hands on any original document and that I had to rely on secondary sources.

The goal of this study was to know why some Viennese drank tea and whether or not others could be “convinced” to drink tea, which meant in a city dominated like most Europe by coffee drinkers, a huge potential market.
According to the results, it seems that at that time people had no troubles speaking with researchers for long period of times, a situation rather unlikely nowadays.
353 tea drinkers were interviewed and the split is quite interesting: 63 were members of the working class, 166 of the lower middle class and 124 of the higher class. To further the knowledge, 288 people were asked about what they thought of specific words or sentences that could be used for tea and 1,749 others about what they drank and how often. This shows a rather complete approach to understand what motivate people.
All of them drank tea either barely each day or occasionally. The former was more common among the members of the working class while the later among the two other classes. However, something that set tea and coffee apart was that tea was drank all day long and its consumption increased as the day went on (while coffee was mostly drank in the morning).
A third of the Viennese tea drinkers came from a family where it was a customary beverage while the majority of them began drinking later on for three main reasons:
1. a conscious choice to do something different than in your previous life be it because of study, getting married, rebellion against their old life, new job…;
2. an external influence like wanting to be a part of something different, a smaller society with a higher social status;
3. an introduction to tea because of sickness and keeping with it.
Only one respondent, even in the Great Depression times, answered that her motivation was the lower cost of tea.

Even if this study was made 80 years ago, there are still some things that could be useful in it and knowing why people drank tea in these times is still an insight for us on who we are, why we drink tea and so on. Now the question that remains is do we drink tea for the same reasons or not? I will let everyone think about it and answer that question.

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?

For you little gardener and lover of trees…

July 28, 2015 / / 0 Comments

By mere luck, I write this post while drinking a Darjeling tea, probably the most suited one as you will soon read.

While going once again through some books and papers I have used for past posts, I became interested in knowing more about the role of botanical gardens in the spread of tea in different colonial possessions, starting with India but also among others in French Indochina or in the Dutch East Indies.

First, what is a botanical garden? It is a “garden” (sometimes a big one) focused on the collection, cultivation and sometimes display of different plants and trees.

Orangery in Schloss Sanssouci by Els Diederen at li.wikipedia [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0/)], via Wikimedia Commons

The first ones were made to cultivate medical herbs and with Renaissance and the first discoveries, they changed their focus and began to focus on the display and preservation of newly found plants and trees with orangeries becoming the new hype for those with enough means to build and maintain them.

This culminated with the development of botany as a modern science and of economic botany, ie the commercial exploitation of plants by people (I know that people always did it but not in a systematic way) and with the increase in the number of lands colonized and their intended use to produce everything and anything, the botanical gardens were born.

These places were used for the transplantation and pruning of trees and plants before an eventual use in their new country.

This led to the Calcutta Botanic Garden being founded in 1786 after the British East India Company had approved Colonel Robert Kyd’s plans to build a garden for identifying new plants of commercial values and finding new sources of food to prevent famine.

With the final control of the whole Indian subcontinent, several Botanical Gardens were built with the centre and “commanding” point of this network being the oldest one, the Calcutta one.

Kings Lake – Banyan Avenue – Indian Botanic Garden by Biswarup Ganguly [GFDL (http://www.gnu.org/copyleft/fdl.html), CC BY 3.0 (http://creativecommons.org/licenses/by/3.0), GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons

Robert Fortune’s tea seeds were sent to this garden before being sent to Darjeeling through the local Botanical Gardens. The different Superintendents in the Calcutta Garden were very supportive of the introduction of tea in India and in Darjeeling, believing that the area was the most suited to the development of this plant. And who am I to say they were wrong (check my first paragraph to see why)?

The other colonial powers also used Botanical Gardens or things quite similar.

For example, France had one in Pondichéry (India) and another one in Cao Bang (in the North of Vietnam near the Chinese border), both being useful in the spread of tea from Java to the Réunion for the first one and through Indochina for the second one.

The Netherlands had specialised Proefstation or Experimental Stations notably in Indonesia with one being specialised in tea. The job of these gardens was first and foremost to select the mother-plants, to create more plants through cloning or seeding and finally to check the health of these new plants. Later on, this Proefstation also became a renowned research station on tea, its problems, how to improve its productivity… with several reports being written and kept secret or rather inaccessible to strangers.

Proefstation for tea in West Java by Tropenmuseum, part of the National Museum of World Cultures [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

This is a first glimpse at what I found out to be a little know part of how tea spread in so many different countries. However as quite often these small (when compared to the tea gardens and plantations) areas played a vital role in ensuring the widespread of our beloved drink.

And to finish, here is another quote found only a few sentences away from the one I used for the title

“Though you should find all barren and laid waste, there will be few gardens in Middle-earth that will bloom like your garden, if you sprinkle this earth there” J.R.R. Tolkien, The Fellowship of the Ring.

Doesn’t it sound like a tribute to the work of these Botanical Gardens?

Prince of Persia

May 26, 2015 / / 0 Comments

For a whole generation of video players, Prince of Persia was a major hit with a “complex” story of prince, princess, assassins and a Persian kingdom (and a heart) to conquer. It sounds familiar? You change the name and the settings and you will have another mega-hit (but a Disney one) with Aladdin.

I knew from reading here and there some blogs and for having bought some tea from there that Persia (as usual with tea, I will stick to the old name of the country but for those wishing more precise things, you can replace the name with Iran) was a tea producer but I never really give a thought about its history.

This changed when I read a world history book that presented the major powers of the time around the death of the French King Louis XIV (1715). Among the chapters and the powers was a presentation of the situation in Persia and the story of an ambassador being sent to France to try to settle a military and trading agreement. What interested me foremost was that among the interesting things noted by some memoirists was that Mohammed Rheza Beg drank all day long chocolate, coffee and tea. Yes, you read it right. He was drinking tea all day long.

I was so intrigued by this that I decided to make some research on tea and Persia and I found interesting little things, not enough to have a clear picture of things but enough to “paint” some views of it.

At first, Persia was associated with coffee. But at first is somewhere in the 15th century when coffee became available from Yemen and Ethiopia and then in the 16th century exported to the Middle-East including Persia.

This is when I noted something was wrong as I read somewhere else that the tea culture was introduced in Persia at the end of the 15th century and that because it was closer to the homeland, it replaced coffee.

I don’t really get this idea of tea production places being closer to the coffee ones but perhaps this is the influence of the Silk Road that went through Persia?

This would necessitate further research but one hypothesis I can make is that Chinese traders could have brought some with them (perhaps to create a market or as a drink or as gift as Chinese didn’t trade); another is that it could have been brought though Tibet.

If anyone has any information, I would be glad to hear from you as this is the part I find the more puzzling in this story.

By whatever road it really came to Persia, tea must have really picked up in Persia as in 1697, Dutch ships were used to bring tea from Formosa. And knowing the VOC, it must have meant they thought it could be lucrative.

Let’s make a back to the future trip and move to the end of the 19th century with Prince Mohammed Miza, a diplomat, who had first directly imported tea from India, managed to steal tea production secrets and samples from the British in India bringing them back to his own town of Lahijan.

How did he do it? He worked for them to learn the ropes of the trade, convincing them thanks to him being fluent in French that he was French (which in my opinion, just shows that English people don’t know what a French truly is).

This man was so important that today his mausoleum is part of the Iran’s National Tea Museum.

And, the final result of the trip of this ambassador? It is another interesting story to tell as some people at that time (and some others now) thought that it was just an elaborate scheme to make some money. However, it seems that this public servant tried through a long trip to head back to Persia but lost all the gifts he had received and hearing about a palace revolution killed himself on the way back.

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

To the unsung heroes

May 29, 2014 / / 6 Comments

Since our dear friend TheDevotea asked some of us to blog for Lady Devotea’s Birthday (something he called Lady Devotea’s Birthday Blog Bonanza whatever that might mean), I decided to postpone my usual blog posting and find a better topic that the one I had in mind, which I did quickly.

I know that I said that tea is not for women only but after thinking about it, there is still something that links together women and tea.

There is the obvious duo made by Catherine of Braganza and Anna Duchess of Bedford, both of them being famous all over the world.
There is the less known (at least for me) Penelope Baker, host of the Edenton Tea Party, an all women boycott without disguise (as they all signed a proclamation sent to a London newspaper). Those were heroes and they decided among other things not to buy British teas as long as the taxes were not cut.

But the link runs deeper than that and in fact, it goes back to China and the myths about some teas being plucked by virgins clad in white robes with gloves and stuff like that.
I don’t judge it as in every civilization, you find similar myths or ideas about the magical power given to herbs/food by such young women.

But even nowadays, you find more women working in the tea gardens when it comes to plucking (men working usually in the other areas of the tea gardens/factories) as they are said to have higher yield than men when it comes to tea and also because plucking is said to be an “easy” job as one doesn’t need much physical strength to do it.

Both these ideas created a kind of “fetishism” of the woman in the tea gardens, and they are truly the unsung heroes of the tea industry.
Just look all over the Internet for pictures of the plucking season and guess what you will see in most (and I do say most) countries?
These women are so clearly identified with tea that when the Tea Board of India decided to protect Darjeeling tea by creating a certification and a logo, guess what they went for?

 

DARJEELING logo © Tea Board of India

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.

What could we all read?

August 26, 2013 / / 21 Comments

I don’t know how you react when looking at a tea industry magazine but I know how I feel: frustrated. Why? To answer that, one must understand what is really a magazine and what is not one.

“Magazines, periodicals, glossies, or serials are publications that are printed with ink on paper, and generally published on a regular schedule and containing a variety of content. They are generally financed by advertising, by a purchase price, by pre-paid magazine subscriptions, or all three” (http://en.wikipedia.org/wiki/Magazine)

Know that we all agree on what a magazine is or isn’t, I can keep on telling you why I am bothered by these publications.

The ads do not disturb me at all, after all if I get them for free, someone has to pay for it.

What is more “annoying” is the content as sometimes:

  • it is free ads under disguise while they mainly speak about their products,

  • it is mixed quite often with coffee/spice/other drinks news,

  • the topics are sometimes too industry oriented and focusing on some obscure tools/techniques…

What would I want to see in such a magazine?

I don’t think tea reviews as nowadays with Internet and so many people doing that, it is not really worth it and could be easily skipped.

Articles focusing on explaining the industry in its complexity and organisation (all along the value chain) could be really interesting and could provide useful insights on how things work for the tea-lovers and also what works or doesn’t.

Another important point would be articles on countries and their specifics, be it in the way they see or produce tea.

Reports on new and actual trends would also be interesting and could foster some debate.

I know that what I describes makes this hypothetical magazine something between a generalist or for the general public magazine and a trade journal (one focusing only on the industry as its target), something that would make it difficult for it to find its target.

I know I am a bit partial here but I think it could be useful to allow all of us to better understand tea.

A lot of other things could be added and since this is just my opinion, I open the debate here on what you would like to see in a tea industry magazine but one focusing on you and me.