What Defines Specialty Tea?

July 31, 2018 No Comments News Dan Bolton

Jasmine Pearl

Pioneer specialty coffee trader Erna Knutsen, who passed away this summer at 96, was among the first green coffee buyers to champion the skills of coffee growers and to recognize the taste benefits of quality processing techniques. In her catalog of offerings Knutsen described characteristics inherent in terroir and priced them into transactions. She calculated the value in the cup to make the coffee she traded not just defect-free, but “distinctive.”

It was she, in 1974, who coined the term “specialty coffee” setting in motion an industry-wide effort to define what exactly makes specialty coffee special. It took another 20 years for the Specialty Coffee Association of America (SCA) to craft a *. The result is both rigidly technical and flexible, with consideration given to origin, microclimates, preservation, processing, and preparation. In short, it describes the qualities that convince consumers to pay a significant premium for quality coffee.

The payoff has been spectacular. Consumers increased their per capita spending on coffee by 30% in the past 10 years, expanding sales to $300 billion globally. In the U.S. specialty now accounts for a 60% share of the coffee market, up from 40% in 2010. This means that of the hundreds of millions of cups consumed daily, 6 in 10 are specialty brew.

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According to the SCA, “consumer perception is critical: after all, the effort put into attaining and preserving quality is meaningless if the consumer cannot perceive it.”

A similar opportunity awaits specialty tea.

A first step is to define what makes specialty tea special.

Quality Drives Consumption

Every year since 1950 the National Coffee Association (NCA) has asked a representative sample of American adults what they drank the previous day. Their responses, viewed over decades, reveal the rise and fall of specialty beverages – specifically coffee.

Darjeeling tea

Given the number of cafes and specialty coffee shops, it is surprising to discover that coffee consumption in the U.S. has plummeted by half in the past 70 years. Consumption peaked in 1946 at 46.4 gallons per person (742.4 8-ounce servings, equivalent to two cups per day, every day of the year). Americans drank about 10 gallons per year of carbonated soda at that time, mainly at soda shops. The volume peaked at more than 52 gallons of soda per person in 1998 while coffee consumption declined to an all-time low of 20 gallons per capita in 1995. Soda has since fizzled and continues a steep decline, but it remains the most consumed beverage in American homes next to water.

In the meantime, coffee consumption continues to climb. Only now, demand is driven by a preference for better tasting brew. Customers understand that specialty coffee tastes better than cheap commodity coffee and are willing to pay a premium price for quality.

Andrea Illy, chairman of illycafé in Italy, notes that per capita spending for coffee is growing at the same rate as consumption.

“That means that quality drives consumption, not price. This is a very, very important message for the coffee community because it demonstrates that we have a strategy that is sustainable,” said Illy.

“The better the quality, the more sustainable the coffee, the more positive the coffee outlook as more people will drink it,” he said.

The debate over what precisely constitutes specialty coffee continues among coffee industry professionals, but the public has their answer. Specialty coffee tastes better and is reasonably priced. Commodity coffee sells for $1.25 per pound wholesale and retails for under $2 per cup. Specialty grades were auctioned at $600-800 per pound this summer in Costa Rica and Panama, but even these top-scoring 96+ coffees retail for less than $15 per cup. Wines comparable in scarcity sell for thousands of dollars per glass.

How is specialty tea defined—by what it’s not: “it is not cheap commodity tea.” But unlike coffee, tea is not as easy for consumers to compare.

In the U.S. consumers can get a good cup of coffee within a few blocks of where they stand and a “great” cup of coffee at specialty retailers (independent and chain) within a few miles.

In contrast, cities where tea drinkers can easily obtain a cup of specialty tea are few and far between. San Francisco, Calif., Portland, Ore., Austin, Tex., Minneapolis, Minn., Seattle, Wash., Denver, Colo., Chicago, Ill., and New York City come to mind.

So, what makes specialty tea special? World Tea News asked several experts to share their definition .

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“It’s complicated,” acknowledges Mike Spillane whose family has been trading in tea for generations. Spillane is president of The G.S. Haly Co. in Redwood City, Calif. “There are three main forces diffusing this question,” he says. These include the “eager acceptance of the public for anything promoted as special, anticipating added value, uniqueness or quality (which is often not the case) and the influence of marketing in a young and uninformed industry. “

Collectively defining specialty tea is a worthwhile effort. In 1999 only 9% of adults in the U.S. reported drinking specialty coffee. In 2018 respondents reported more than half (59%) of all cups of coffee consumed the previous day were gourmet.

The same NCDT survey in January 2018 revealed that about half of American adults (48%) had tea the previous day.  Surveyors did not inquire as to whether the tea was premium, specialty, or gourmet, but it is likely most was iced tea and commodity tea in bags. Defining what makes specialty tea special will boost consumption of the best tea the industry has to offer.

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