• Hula Consulting

Four Key Challenges in the Tea Industry

As the first half of 2019 comes to an end, tea businesses have faced four key challenges that have left them wondering what to do or where to turn. Here are some insights on each.



1. The New Organic Ruling

In the 27 December 2018 United States Department of Agriculture’s Federal Registry Vol 83. No 247, major changes were published to the National Organic Program; Amendments to the National List of Allowed and Prohibited Substances (Crops,Livestock and Handling) – 7 CFR Part 205. Luckily for the #tea and coffee industry, the change that impacted the tea industry the most does not come into effect until 27 December 2019.


Most of the other changes went into effect on 28 January 2019. The new ruling requires all flavours to be organic-certified flavours when commercially available. Organic compliant flavours will no longer be allowed under the 95 percent rule, which are most of the organic flavoured teas and coffees on the market. We are already seeing major delays, with #organic certifiers taking 10 to 12 weeks to review and approve new product applications. Any company that has certified-organic flavoured teas, and uses organic compliant flavours, should be acting now.


First, decide if you are going to re-certify under the new regulation, drop the product from your organic certification, or move the product to the 70/30 organic category (which was not affected by this change). If you are going to re-certify, you should be working with your flavour supplier now. Some suppliers do not carry organic-certified flavours, and if they do, the chance of the product tasting the same is low. Additionally, the flavour company will have to get the flavour certified (10 to 12 weeks) before you can get your new tea certified (another 10 to 12 weeks).


2. The Farm Bill Legalizing Hemp and CBD

The Farm Bill, which legalized hemp and CBD (cannabidiol) derived from hemp, has created a new gold rush. You can now find CBD in just about any product. But beware – there are some major issues to consider. Not all CBD products are derived from hemp. Some are derived from marijuana. Not all CBD suppliers are honest.


Over 65 percent of the suppliers I tested, with my own third-party CBD lab, had results showing no CBD or lower CBD percentages than advertised. Of those that passed the testing, 50 percent could not be used with tea or coffee because they created food safety issues or did not blend well enough to ensure a consistent dosage per serving. Make sure to do your homework and your own third-party testing with a lab that specializes in CBD. Here are some companies that got it right: StartYourOwnCBDTeaBusiness.com, TeaDaddyCBD.com, greenroadsworld.com.


3. Potential Tariff on Chinese Teas

The addition of 25 percent tariffs on Chinese teas has become a hot topic in the past couple of months. Only time will tell, but many tea suppliers are already notifying their customers that if they are charged this new tariff, they will be forced to increase their pricing to cover all or some of the increased costs. While this affects only teas imported from China, these teas make up the largest percentage of the specialty tea market.


Purchasing teas from another origin is not really an option since these teas will have different taste and aromatic components. First Tea tried to rally the industry offering a simple way to submit public comments. Though the deadline passed in June, I applaud them for trying to help the tea community.


4. Inferior Grades of Tea

For many years some overseas suppliers have tried to pass off inferior grades of tea or mark the tea from one region but use another, to fetch a higher price. Tea professionals, especially buyers and blend developers, have had to rely on their finely tuned organoleptic senses to weed out these products. However, learning this skill takes time, practice and constant training. Often these trainings have had to rely on other industries for support, like the wine industry, to understand the aromas naturally produced in teas.


Thanks to Dr Virginia Utermohlen Lovelace’s research into this field and her partnership with The Scents of Tea, there is now an aroma kit based in science, that can help cuppers train and fine tune their senses to these tea aromas. At this year’s World Tea Expo in Las Vegas, they introduced this new product to rave reviews. For more information visit www.ScentsofTea.com.


Tea and Coffee Trade Journal published the article above in the July/August 2019 publication, written by Scott Svihula. To subscribe to the publication, visit https://www.teaandcoffee.net


For assistance with sourcing your ingredients, regulatory compliance and certification, contact us at Scott@hulaconsulting.com . We look forward to helping provide solutions for your business.


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