• Today we are selling over 80 per cent through the auction system where identity as Kenya tea is lost at the fall of the hammer.
• Branding is key right from the garden to finished products that end up at the table of the final consumer.
To a tea farmer in Kisii, Kiambu, Meru or anywhere else in Kenya, their lives revolve around two things:
First, being able to deliver green leaf to a tea factory. And second, getting paid a decent price for their teas on time.
Previously I have argued around the current glut in the market, which has continued to impact tea prices, diminishing farmers’ hope of a great price for their produce. I am convinced that as a country we must embrace long-term mechanisms that would address any situation that would tend to lead to a glut as they start to happen.
Kenya is a net tea exporter country. At the current national per capita consumption of almost 800 grammes, the country is doing very well and is the fourth best in Africa after Libya (2.07kg), Morocco (2.02kg) and Egypt (910 grammes).
This represents tremendous improvement in the last 20 years, as a result of increased local branding and marketing activities by primary processors and increased number of packers. This has improved uptake from four per cent to about seven per cent of total national production. But the tea export market remains critical to the survival of the Kenya tea industry.
The movements in the global tea markets in global production patterns and absorption are critical to Kenya. Someone must keep tabs on this on behalf. Claims of the additional production being of poor quality and low values teas with Kenya being a culprit must be addressed.
The mechanisms we are using as country to offload our teas into the global market need to be reviewed. The positioning of our produce as the product of choice amongst all other tea products available globally is critical.
Today we are selling over 80 per cent through the auction system where identity as Kenya tea is lost at the fall of the hammer. Locally, we are absorbing about seven per cent, with the other 13 per cent being sold directly to the same people buying through the auction system and equally losing identity as we load into the ship.
Well, a few overseas packers have claims of their blends containing Kenya tea but that does not translate to any financial value to a Kenyan tea farmer.
With global tea production rising rapidly and the market only growing marginally partly causing the glut, we must embrace aggressive marketing, but yet frugal mechanisms in our market approach strategies.
At first, we must have a real-time monitoring system on global production and absorption of teas.
We must develop a national quality production system that ensures we only produce and give to the world the best possible quality teas. With the science available to us, we must for the first time be able to characterise Kenyan teas garden by garden, building to similar zones, regions and the entire country, then package these attributes deliberately as brands to the world. This way we will be creating a rich basis for product preference that we currently lack.
The trading mechanism must change to create greater efficiency through robust smart systems that use the above Kenya tea packaging and branding based on defined quality as a basis of offer, as well as opening up to thousands of other traders so as to spur competition, push prices and easily open up new markets. A Commodities Exchange floor could offer additional advantages in pushing uptakes along these lines.
Branding is key right from the garden to finished products that end up at the table of the final consumer. My previous argument for a one-stop Common User Facility solution as a primary tea trading floor, a marketing strategy centre, a brands creation centre, a blending floor, a packaging solutions centre and global standards packing floor, squarely sits here.
For all these to happen, we must embrace technology. This must start at the production stage where quality is created, continue to the marketing stage where the product is defined and sold, and at the trade where prices are discovered.
There are no shortcuts to this. It’s a journey that we must embark on urgently for the tea industry to triumph and be sustainable away from glut.