Page 6 of 12

A mix of different theories

January 27, 2016 / Xavier / 6 Comments

Price… a huge topic and one on which much could be written on.
I already wrote a post on it but focusing on a “simple” question that @lahikmajoe had asked me: how can two companies sell the same product at different prices.
This time, it is @lazyliteratus that said something about the price of some teas here.

Price is different things depending on who you ask the question to.
For most of us, it is how much we are paying for something we get but for the other part (the seller), it is an income that should exceed the production and sales costs while for others, it is also a symbol of who you are (“I paid xxx for this, which makes me one of the happy few”).

How are prices formed?
On the one hand, they depend on their costs of production and sales, as no company (at least one that wants to stay in business or one with a decent accountant) would sell anything under these costs. If you disagree with this, you should speak to someone, like him.

Uncle Scrooge doing what he likes the most, checking that his products are sold at the right price and generate enough profit for him.

On the other, it depends on how much you or me, in other words us, the customer, are willing to pay for this little something we want to drink (I will stay with our favourite drink).
When the two meet, you have a price.

This is what microeconomics (the branch of economics that studies the behaviour of individuals and firms when they decide to allocate their limited resources) defines in other words as the supply and demand model, while giving us a nice graphic to illustrate it.

Supply and demand model by Paweł Zdziarski

Who said economics couldn’t make things simple and easy to understand? If I am honest and I am, I must say that there are some hypothesises behind this model that are making it a little more complex but we shall ignore them for now.

One of them is that this equilibrium is always dynamic.
As illustrated in this curve, a low price usually means a huge demand but less supply (see Uncle Scrooge) while a high price means a high supply but a low demand (once again I am not in the world of luxury products).
But overtimes, things change and new equilibriums are found while the market and the companies react to the price producing more to get their share of the high price (and thus contributing to it decreasing on the long run) or producing less to try to increase the price (and thus decreasing the demand for the good). The demand side works the other way around.

So in this perfect world, everyone adds their costs (which are different from one country to another, just think of the differences in labour costs), take a small margin (while staying perfectly on target with how much the customer is willing to pay. Such a nice picture.

There are two problems with that.
First of all, the willingness to pay depends on everyone as we don’t have the same “sensibility” to price (depending on our incomes, our past experiences, what we think of the product…). This complicates the “perfectly on target” thing making it a mix between science (with nice algorithms and big data) and art (educated guesses/feelings/knowledge/luck).
The second is that some of the tea production is sold via auctions, which means that sometimes it can be sold under its estimated price, or via futures contracts.
Future contracts?

Great Scott!

No, this has nothing to do with Back to the future but everything with rice. You have to thanks our Japanese friends for that as apart from making tea, they also invented in the 18th century this interesting financial tool and all of this because the samurai were paid by a mix of silver and rice. In order to secure stable incomes, a new trading tool was invented by which the parties agreed to buy and sell a certain amount of rice at a certain price and a certain time. If the price goes up during this time, it is all benefit for the buyer but if it goes down, it is good for the seller. In other words, if I agreed to sell you something at 10 and the market price goes up to 12, you managed to make a profit of 2 if you sell it again and if the market price goes down to 8, I made a profit of 2.

There are still a lot to say on prices but I think it will be enough for now.
So to sum it up, price, however it is determined is just the meeting of two minds: one willing to sell something for a determined amount of money and one willing to buy it at another determined amount. When the two agrees, there is a deal and a price.
It is simple as that.

Do Stormtroopers dream of good tea?

December 25, 2015 / Xavier / 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,

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

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.

To my friend in tea

November 26, 2015 / Xavier / 6 Comments

I hope you will forgive me for this little piece I wrote dedicated to my Thermos Bottle during which I might have been overcome by a poetic enthusiasm and slightly I have exaggerated a little.
But let’s get back to the poem.

O you my trusted friend in tea,
Together we lived so many adventures,
Going through so many ventures,
Sometimes in the deepest and darkest sea.

To be fair to you, and this I must,
Because in you I trust,
You were always there for me
Without howling like a banshee,

You are my true brother in arms.
Testimony of my numerous trips.
Bringing me out of harms,
Bringing me out of my eclipse.

I might not have treated you well.
You bear the scars to show it.
But you didn’t split,
And kept on ringing the bell.

The bell of tea.
Keeping them warm,
To protect me from the storm
Those I couldn’t foresee.

This is why I wanted to thank you
My trusted friend in tea.
You are truly one of the crew.
My trusted friend in tea.

While follow eyes the steady keel

October 21, 2015 / Xavier / 2 Comments

Those who follow me may have noticed that I have a soft spot for tea (obvious) and for history and when both are mixed, it is pure bliss. And this is what happened to me during my holidays.

I had seen that there was a possibility to go near Lorient, a town in the Southern part of Brittany, famous for being bombed by the Allied air forces because of a massive U-boat base there but less known for being the headquarters of the French East India Companies (its name coming from L’Orient, which means in French The Orient).

And near Lorient, on the other side of the estuary, in Port-Louis, a citadel could be found and within it, the East India Company’s Museum (or Musée de la Compagnie des Indes in French).

To be honest, the citadel was not built by the French but by Spanish (yes I know, what where they doing in Brittany? Let’s say it had something to do with kings, nobles and rebellion). And even today, it looks impressive, even if Vauban, the foremost military engineer of its time, wrote that it was strong but unnecessarily complicated.

Just take a look at it

« La citadelle de Port-Louis ». Sous licence CC BY-SA 3.0 via Wikimedia Commons.

But let’s get back to what brought me there: history, tea and the East India Company.

The French East India Company’s coat of arms

The motto reads Florebo quocumque ferar (“I will flourish wherever I will be brought”), something quite in line with the spirit of the French monarchy of that time.

Speaking of which, the first company was founded by no other than Louis XIV.

Founding declaration of the French East India Company

I said first company as it is not well known that there were 3 different companies over the under 131 years it existed : the French East India Company from 1664 from 1719 (having lost its monopoly in 1682), the Companies of the Indies (Compagnie perpétuelle des Indes) from 1719 to 1769 (when the French King made its debt a public one after it had survived a financial bubble, a war, the lose of all its holdings in Asia but not the lack of confidence of Choiseul, the “Prime Minister”) and then the French East India and China Company from 1786 to 1795 falling to the Reign of Terror and ending in a financial scandal.

Jean-Baptiste Colbert and John Law, two Statesmen behind the first Companies

What the company lacked was a proper base in France and the first one was Port-Louis (you know the place where you can see the citadel above) with some land given on the other side of the roadstead where the Company first put some slipways. In 1675, its base of Le Havre being too exposed to Dutch attacks, the Company transferred its activities on the other side of the roadstead, which lead to a development of the town of Lorient where the main activities where soon relocated.

A view from Lorient and all the buildings needed to support the Company activities and fleet

Speaking of which, let’s have a look at the different trips and those built to make them.

Two maps of Asia

The different routes taken by the ships

How long did it take?

For a trip to China, the ships would leave in January-February and get there in August-October before leaving with goods in December-January and come back in July-August, a 19 months trip.

For a trip to India, all would begin in March-April and end in July-August of the following year, a 17 months trip.

Over the 15 years, a ship could be expected to survive, it could only make 7 or 8 trips. 15 years is a long time if you take into account the storms, the wars, the pirates…, even for ships built with care.

Three different ships

If you take a closer look at the ship on the upper left side, you will see cargo: porcelain, silk, spice and tea.

I know you were thinking “when will he at last speak of tea.” I am sorry to say that tea was only one good among others as you will see.

Coffee, spice and tea, the names of the big Game

But these exchanges, even if they were regulated on both sides, provided an exchange of technologies and cultural goods.

A view from the European legations in Canton during the 19^th century (the white flag was the French flag at that time)

A Chinese shop full with tea for Europe

Items from the VOC

And the jewel of the collection, at least from my point of view, teaware, all kind of teaware with different themes and inspirations: Asian landscapes or people, European ones, stories from the mythology, libertine ones…

You will see some of them below.

A tea box from the 19^th century

A small tea box from the 19^th century, following a model available since the end of the 18^th century

A quick and oversimplified look at a complex problem

August 25, 2015 / Xavier / 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 / Xavier / 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?

The best and most beautiful things

June 27, 2015 / Xavier / 3 Comments

Marcel Proust in Swann’s Way explains how a cup of tea and a madeleine allowed the narrator to get back to his childhood and to remember things long forgotten, the sensory experiences triggering all kinds of flashback.

“No sooner had the warm liquid mixed with the crumbs touched my palate than a shudder ran through me and I stopped, intent upon the extraordinary thing that was happening to me. An exquisite pleasure had invaded my senses, something isolated, detached, with no suggestion of its origin. And at once the vicissitudes of life had become indifferent to me, its disasters innocuous, its brevity illusory – this new sensation having had on me the effect which love has of filling me with a precious essence; or rather this essence was not in me it was me. … Whence did it come? What did it mean? How could I seize and apprehend it? … And suddenly the memory revealed itself. The taste was that of the little piece of madeleine which on Sunday mornings at Combray (because on those mornings I did not go out before mass), when I went to say good morning to her in her bedroom, my aunt Léonie used to give me, dipping it first in her own cup of tea or tisane. The sight of the little madeleine had recalled nothing to my mind before I tasted it. And all from my cup of tea.”

Marcel Proust – Du côté de chez Swann/Swann’s Way.

The tea/tisane is obviously the key to this remembering process and this got me thinking about what I would remember and why.

This is where some of my fellow Teatraders might try to step in and say that I am wrong or that I lost my mind while thinking about this topic and that I probably never found it as the first thing that came to my mind as I thought about what could be my madeleine, is a former tea that is no longer sold, Indian Spice (a black tea flavoured with red fruits and cardamom), one that I drank as an adolescent and that conjures the taste of Krisprolls, the cardamom little Swedish breads and the pictures of a warm place into the middle of the winter. I am not even sure that these memories are really one thing and that I am not mixing different moments into one (something that can happens with memories from old times).

Why did I start this research on myself? Why am I speaking of this? Because I lived something very special a few days ago and one of the things I am sure that will make it remember (even if no one can know for sure what will make him/her remember something) is the tea.

Not any peculiar tea but an instant tea too much sweetened and quite often served with a not hot enough water. Why do I think I will remember this? It is simple enough, it was given with all the heart of the world by people wishing to please me for no peculiar reason, simply because we were there.

And no, I wasn’t in a hippy community of any sort.

It made me think about what we call good tea.

I know like most of you that a good quality tea is made of leaves, must be served at the right temperature and steeped for the right time to allow all the flavours to come out in your mouth… but without the intention behind it, it is not worth a cent and something that I would not consider drinking if I were alone in my home can become a great memory if it is meant to make me happy and shared with great people.

The context and thus some subjectivity allows us to enjoy specific things and to remember way after.

This is why, I still think of Indian Spice as a great tea (even though I would probably nowadays never taste it if given the opportunity) or of this sweetened instant tea as a nice memory.

These examples are just there to show us that as Helen Keller said “The best and most beautiful things in the world cannot be seen or even touched – they must be felt with the heart.”

We are all able to experiment new things, things that we might at first sight consider bad/not worthy of our attention but what is really important is how we are touched by them.

So next time, you are offered a “bad quality” tea by someone and you know that this someone intents his/her best to please you, stop to be a snob, behave and be nice, who knows what might come of it?

It is the end of this post and I know that some of my fellow readers will disagree with what I wrote but don’t worry, any opinion is welcomed and if I speak like I just did, it is because I thought for a few moments about memories, what I had just lived and why I still miss this Lipton tea.

To quote a famous movie, “Life is like a box of chocolates. You never know what you’re gonna get.”

Don’t be shy, try the chocolate.

Prince of Persia

May 26, 2015 / Xavier / 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 15^th century when coffee became available from Yemen and Ethiopia and then in the 16^th 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 15^th 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 19^th 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.

Torture the data, and it will confess to anything

April 22, 2015 / Xavier / 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 / Xavier / 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

Teaconomics

Recent Posts

Recent Comments

Archives

Categories

Meta