Daily Mirror (Sri Lanka)
The global loyalty towards Ceylon Tea
With the blow on tea cultivations by the shortage of fertilizer, Sri Lanka experienced a 25-year low drop of tea production in 2022. Local media reported Sri Lanka exported 250.19 million kgs of tea in 2022, 13 percent down compared to 2021 and the figure was the lowest since 1997.
However, despite major constraints international buyers loyal to Ceylon Tea had reportedly paid up to 9% more even with high freight rates, disrupted shipping schedules and other constraints.
Reputed for its signature taste and aroma, Sri Lanka today is a leading producer and exporter of tea in the world including the distinction of supplying tea to high profile global events such as the Olympics and Commonwealth Games. Widely regarded as one of the best tea in the world due to its unique flavor, aroma, and color, Sri Lanka retains its position as the ‘Best in Class’ producer of quality tea in the whole world, as per the Technical Committee of the ISO.
Amounting to 2% of Sri Lanka’s Gross Domestic Production (GDP), the tea production industry provides direct and indirect employment to nearly 1 million people. Tea production also plays a critical role in the country’s economic development in terms of its contribution to national output,employment, and net foreign exchange earnings.
Why is Sri Lanka’s tea industry a lucrative one?
The distinct rich flavor found in many varieties of Ceylon (Sri Lankan) tea when compared to products of other countries is credited to tea leaves being exclusively handpicked according to the 2 leaves and bud method.
Almost 93% of Ceylon Tea produced annually is produced according to artisanal and orthodox methods and is known to the world as the cleanest tea in terms of minimum pesticide residues. Packaging methods to deliver a fresh product to the consumer are encouraged among production companies. Sri Lanka’s tea industry also maintains the highest quality in the global tea market with ISO 3720 as the minimum standard applied for its products.
The lion logo legally owned by the Sri Lanka Tea Board only appears on consumer packs of tea containing 100 percent pure Ceylon tea. The tea should also be packed in Sri Lanka, and the brand should satisfy the quality standards set out by the Board. Moreover, Ceylon Tea also became the world’s first ozone friendly tea to be produced under the global food regulations.
What the experts suggest
The tea industry is the most organized agriculture sector in the country which has survived for the last 152 years. However, one noticeable drawback of implementing strategies is lack of funding and the government is looking at possibilities of obtaining equity through multinational agencies to revive the tea industry. Experts point out that misunderstandings among the stakeholders should be addressed through dialogue to uplift the status of the tea industry. It should have a proper value addition at each stakeholder level otherwise they fear no person will be interested in investing in the tea industry.
The blue ocean strategy
In 2020, a seminar was organized by the Tea Exporters Association under the theme of “Inventing New Horizons for Ceylon Tea” with the objective of finding new strategies for the development of the Sri Lankan tea industry. At the seminar, Dr. Ravi Fernando, a well-known corporate strategy expert, spoke on the theme of “Creating Blue Oceans for Sri Lanka Tea Industry”.
According to Dr. Fernando, the essence of blue ocean strategy is to open up new market opportunities for interested stakeholders and create new demand where the competition will be irrelevant. It is about creating and capturing uncontested market opportunities where competition does not exist. In the blue ocean strategy, the demand is created rather than fought over with other competitors. The strategy focuses on identifying opportunities for rapid growth and profitability. The competition is rather irrelevant as the stakeholder companies target unexplored market space. The strategy also considers the “Red Ocean” or current market space where the boundaries or the limits and competition are known. The companies that are in Red Ocean try to out-perform the competitors to get a share of the current demand.
At the seminar Dr. Fernando listed four factors that will influence any initiative to take the tea industry forward.
■ Team performance – all stakeholders to work as a team
■ Tea is a beverage – Ceylon Tea has to be relevant to tomorrow’s consumers and not to the past
■ Tea is an agro-based industry – climate change impact is already set in on the agriculture sector. Any strategy should take this fact into consideration.
■ Create value in the consumer mind / at the consumer end to get better prices for Ceylon Tea.