Organic Tea Market Trend – Fostering Soildari-Tea Over Healthy Invigoration

Organic Tea Market Trend – Fostering Soildari-Tea Over Healthy Invigoration

By Knowledge Sourcing Intelligence Blog

Tea that is produced from tea crop that has been cultivated using organic agriculture is generally referred to as organic tea. According to a report by FAO, considering climate change adaptability, organic agriculture stands a better chance when it comes to sustaining tea production. This is important to note because tea production is by default geographically limited to a few areas around the world and it is highly sensitive to changes in growing conditions which is currently at risk due to climate change. Along with key determinants of the global tea economy which are inclusive of but not limited to cultural influences, demographics, among others the demand for organic tea is mainly driven by the increasing availability disposable income particularly because in comparison to the conventional tea organic tea is priced 20% to 50% higher. Concomitantly the growing consumer interest in organic locally secured specialized premium teas has also increased which is anticipated to drive the organic tea market.

organic tea market

From the perspective of cultivation, of organic tea, it should be noted that the use of organic permanent cropland which is inclusive of in-conversion areas in 2018 was 1,40,511 hectares compared to that of 1,24,910 hectares in 2017 as reported by Research Institute of Organic Agriculture (FiBL). In Asia, approximately 1,32,000 hectares of organic permanent cropland are utilized for tea with almost 3.7% of the total tea grown that is being organic. A majority of which is grown in China accounting for 1,11,000 hectares which are followed by Vietnam accounting for almost 8,900 hectares. On the other hand, with a rising quantum of export of organic tea, the share of certified organic tea farms accounts for 6.3 % of the total tea farms, in Japan. According to the latest report by FiBL, the share of these farms is considerably higher than that of other organic crops in Japan. On the other hand, with the adoption of the National Organic Agriculture Policy (NOAP) in 2016 by the Government of Bangladesh, there has been an increase in the growth of the organic sector in the country. The total certified area that comes under the purview of organic production is 6,000 hectares, out of which 503.9 hectares is covered by organic tea. Germany, Japan, the UK, and the USA are the main export markets for organic tea produced in Bangladesh.  The aforementioned snapshot suggests an upward trajectory in the demand for organic tea which is anticipated to contribute to the organic tea market growth.

Moreover, organic agriculture has a range of benefits that are inclusive of but not limited to the preservation of inherent soil fertility through the retention of organic matter in soils. This aids in the sustenance of soil productivity even during the cases of floods, irregular rainfall, rising temperature, and drought. Organic farming also has the potential of reducing greenhouse gas emissions as it requires less fossil fuel per hectare. The enhanced soil fertility leads to the stabilization of soil organic matter and in many cases leads to the sequestration of carbon dioxide into the soils. These benefits have incentivized various national governments to implement national programs to promote organic farming. Besides the example of Bangladesh cited earlier, the Government of India has implemented a national program that comprises the promotion of organic farming, standards for organic production, and the accreditation program for Certification Bodies, among others called the National Program for Organic Production (NPOP). A noteworthy mention is the declaration of the fully organic status of the state of Sikkim in 2016 which is known for its variety of organic teas. Such national compliance requirements are expected to augment the growth of the organic tea market.

From the perspective of importing countries, Europe holds a substantial share of the organic tea market which is facilitated by larger consumer awareness, certifications, and product innovations and the recent clean label movement that is revolutionizing the food and beverage industry. According to the Centre for the Promotion of Imports from developing countries, West European countries and Poland are the largest European tea markets, with a strong tea tradition. With the preference for unique tea blends and value-driven consumption habits, the demand for tea that is organically produced is expected to grow in the next few years. For instance, a UK based brand Jing Tea has reportedly launched its single garden Organic Darjeeling First Flush Supreme, a spring 2020 tea in July 2020. This tea pertains to those leaves picked during early March 2020 from Badamtam Garden estate. It is reportedly one of the best known and highest quality estates for the first flush in Darjeeling, India.

Besides Europe, earlier in June 2019 Davidson’s Organic Teas which is a vertically integrated organic tea company that blends, packages and distributes all its products internationally from its facility in Sparks, Nevada, USA has reportedly added 12 new tea blends to its product line. The products of the organization are Fair Trade Certified and USDA Organic Certified.  Earlier the same year in during February, AKEBONO TEA, which is the world’s first and only organic tea brand specializing in Japanese green tea bases, had reportedly announced the launch of their line of organic teas which infuse herbs with traditional Japanese teathat are derived from tea leaves that are grown and handpicked at a farm located at the bottom of Mt. Fuji. All the blends are reportedly certified organic by JAS. During the same month it was reported that to respond to the increasing demand for high quality and authentic organic Japanese matcha tea, Sugimoto Tea Company has opened a second factory in Shizouka, Japan, enabling the company to produce more blended teas in Japan. Thus, these key market developments pertaining to organic tea market exemplifies an upward trajectory that has been forecasted for the same.