Africa's cup of tea

Growers such as those in Kenya and South Africa are exploring China as a market and working with Chinese companies to improve processing

As the birthplace of tea, China has a long history of tea culture that has greatly influenced the world. But now, some students plan to add new tastes to the teacher's drink list as African tea growers see China as a huge potential market.

Henry Njeru, managing director of Njeru Industries, has achieved an exceptional feat: he is selling 90 percent of his teas in the highly competitive Chinese market in a partnership deal with The Flamingo, a retailer based in East China's Fujian province. Packaged colorfully and emblazoned with "Made in Kenya", the product is filling cups of high-end Chinese consumers. It is sold under the brand Kenya Black Tea and seems to be most popular during the winter months.

"Kenyan tea is organic. Research has helped us grow varieties that have unique flavors liked by Chinese who are looking for change. Those who are well-traveled have interacted with our tea elsewhere and hence prefer it, too," says the burly entrepreneur.

Another fact playing to his advantage is his decision to specialize in orthodox tea, which is relatively new in Africa. This is when two leaves and a bud from the tea plant are either curled or stripped together by hand or machines that mimic hand-rolling. The technique is often used in China. Diversifying into this product line has enabled Njeru to access the Chinese market while also expanding into other areas like Japan.

These markets are renowned for a strong tea-drinking culture. Njeru Industries, located in Meru, about five hours drive from downtown Nairobi, is meeting their needs by manufacturing black, white, green and purple teas, the last of which is revered for medicinal value.

The difference between the first three is in the processing technique. Black tea is fully fermented while green is unfermented. White tea is semifermented and releases little color when mixed with water. Purple tea is a special variety that originated in India and is grown only in Kenya.

Despite rising global demand for these products, Africa continues to export mainly semiprocessed black tea produced using the crush, tear, curl method, also called CTC tea. The method, imported from India, involves passing the leaves through cylindrical rollers with hundreds of sharp teeth that crush, tear, and curl the tea into small, hard pellets. This tea is destined for tea bags.

Popular in the Middle East and in European countries, especially the United Kingdom, CTC tea is known for its ability to deliver a higher number of cups per measure.

Tea from South Africa is also trying to gain acceptance in China. Rooibos, or red bush, tea is an herbal tea made from a plant in the legume family and is regarded as one of the most valued and recognized agricultural products from South Africa. It has no caffeine and is good for sleep quality and skin texture, giving it growth potential among Chinese consumers.

According to online retailer Duoduo South African Products' shop on Taobao.com, China's largest online sales site, more than 500 consumers purchased this tea last year and response was largely positive.

"Rooibos tea is extraordinarily rich in a diverse array of antioxidants," according to naturalnews.com. "These amazing substances protect our bodies from the cell-damaging effects of free radicals, thereby guarding us from a host of serious degenerative diseases such as macular degeneration, Parkinson's disease and various types of cancer."

The Duoduo shop concedes the product is still largely unknown among Chinese consumers. Buyers are mostly those who have been to South Africa or had it recommended by others. The branding campaign and quality classification still need to be improved, the company says.

It is still quite challenging to introduce African tea to the Chinese mainstream market, according to Zhou Chonglin, a Chinese tea expert and author of many books on tea. Zhou says African tea traders can benefit from collaboration with special drink brands and identifying with particular consumer groups.

Selling tea is not only selling a product, but also a way of life, he says. It also involves the world view and culture of a particular group of people, making it tough to introduce something new in a well-established environment like that of tea in China.

"But cooperating with the beverage industry might provide a good opportunity as many giant Chinese producers of bottled drinks like green tea and milk tea have chosen to buy raw materials from overseas markets," he says. "Also, a growing number of consumers are choosing to try new products, so proper placement and identification can produce stable sales and consumption."

Working against African teas is the fact that most of the output is sold in tea bags or loose tea powder, which are not favored in Chinese tea culture, Zhou says. Tea bags sold by international companies haven't performed well during the past few decades.

"While looking at China, they also could consider other emerging countries like in the Middle East, which consume a large amount of tea annually," he adds.

There are expectations that exports will mean big profits for African farmers, but things aren't always that simple.

"Black CTC is conventional and very little value addition goes into it," Njeru says.

While the Chinese market buys black orthodox tea at an average price of $15 per kilogram and purple tea goes for double that price, white and green teas fetch about $20 per kilogram.

At the Mombasa Tea Auction in Kenya, black CTC tea fetched an average of $2.6 per kilogram in the 2014-15 financial year according to Kenya Tea Development Agency Holding, a cooperative representing about 560,000 smallholder farmers. The Mombasa auction market is the biggest in the continent.

Prices are low due to several factors. First, there is an oversupply of tea in the global market as demand lags. In 2014, Kenya's output rose by 2.8 percent annually to 444,000 tons, according to the Agriculture, Fisheries and Food Authority, the Kenyan regulatory agency.

Second, the country relies heavily on traditional markets like Pakistan, Egypt and the UK, accounting for more than 65 percent of national exports according to the United Nations Commodity Trade Statistics Database. That has made the market vulnerable to price shocks, which were exacerbated when Pakistan turned to sourcing tea from its neighbors under the South Asian Association for Regional Cooperation. India and Sri Lanka, the second and fourth largest tea producers globally, are members.

Moreover, the situation is compounded by low tea consumption in Africa. While Kenya lags behind China and India in tea production, it is the largest exporter, consuming only 5 percent of its tea.

These factors have significantly contributed to depressed earnings. Despite growing demand for specialty products, the local sector's moves to diversify have been sluggish. In March 2015, Kenya's state regulator authorized eight factories to process high value varieties, including purple tea. In total, Kenya has 100 factories with about 67 controlled by Kenya Tea Development Holdings. The rest are managed by multinational companies.

Njeru Industries holds a manufacturing license in the Mount Kenya region. It has about 500 acres of tea bushes, with 130 acres in purple tea. Frustrated by depressed prices, the entrepreneur started eyeing the Chinese market, which was recommended by the International Tea Committee based in the UK as lucrative.

He acquired equipment from a Chinese construction firm that was winding down some of its operations in the region. The firm had started processing its own tea and wanted to commercialize the venture but lacked licenses, which are difficult to acquire.

"Personally it took me two years to get the license to set up a minifactory," says Njeru, who obtained a dryer and a roller from the company.

The move to form a partnership with The Flamingo became the game-changer for the local company. Not only did it acquire modern equipment to produce purple tea, reducing capital investments for a new line, but also they learned tea-making techniques from Chinese experts brought in by the Fujian-based retailer.

"To the Chinese, tea making is a delicate art and science," says Njeru. "Technologically, we were handicapped and have benefited from this setup."

He processes both CTC and orthodox tea. He harvests about five tons of purple leaves every month and about a 1,000 tons of green leaves annually.

He exports tea in bulk in 10 kg and 20 kg packs, wrapped in aluminum foil. He ships the tea by air because he processes it only after receiving confirmation of a sale. He says shipping by air costs more but it has not hurt his bottom line. Njeru is seriously considering expanding his business to meet growing demand from European markets.

"Purple tea is attracting more queries and soon a team from Tokyo, Japan and New York, USA, want to visit to discuss improving the product," Njeru says. He says a buyer from Yunnan province in China has shown interest, too.

Under the supervision of Marvin Karimi, the company's 27-year-old factory manager, the leaves are processed to meet the standards of overseas markets. The information technology graduate has honed his skills from several training sessions locally and recently attended a three-week seminar at the Zhangzhou College of Science and Technology in Fujian province.

Karimi not only has come to understand the varied tastes of Chinese consumers but also plans to introduce diversified tea products to meet other market segments. "China is well ahead of us in the production of tea-flavored foods such as wine and snacks that can be sold in new markets," he says.

Contact the authors through Lucymorangi@chinadaily.com.cn

Shi Wenzhi in Kunming contributed to this story.