Organic Tea focused on community is a winner
ECONOMYNEXT – A Sri Lankan organic tea exporter, English Tea Shop, says it gained easy access to upscale markets by being focused on ‘creating shared value’ throughout its supply chain.
Suranga Herath, CEO of English Tea Shop (UK) Ltd told a forum in Colombo Monday that his company managed to bypass regulations which he called “ stifling” in the more sophisticated markets.
He said that in those highly developed “ markets customers are mindful and they look for a greater level of ethicality, purpose, radical transparency and authenticity across the value chain.”
“We (Sri Lankans) are far behind in this,” he said.
Creating Shared Value (CSV) is a business model which focuses on bridging the gap between business and society by integrating societal improvement into economic value creation.
English Tea Shop was launched in 2010 focusing on the community as a focal point of its CSV business model.
“We don’t own estates as part of our business model, but we facilitate the building of small organic farms and move beyond,” Herath said.
English Tea Shop works with 12,000 small organic tea farmers and exports to 50 countries primarily in the European Union, US, Australia, UK and Japan generating an annual revenue of 20 million US dollars.
It caters mainly to the premium, natural and organic segments in the export market and said that the tea it sources from its partner growers fetches 5.30 US dollars per kilogram at farmgate.
According to the Tea Exporters Association of Sri Lanka, the average monthly tea auction price for all three elevations per kilogram in January 2020 was 3.72 US dollars.
As of 2018, the main tea export markets for Sri Lanka were Iraq, Turkey, Russia, Iran, and Libya according to Tea Exporters Association data.
“If you look at our tea export countries, 50 per cent of our volume goes to just 5 countries and 75 per cent goes to 15 countries and the majority of these countries are commercially undemocratic countries,” Herath pointed out.
“In those markets, you got to be dealing with mass-market players and conglomerates. It’s a very hard, difficult thing to do.” (Colombo/Feb26/2020)