Quality over quantity: Why APAC tea sector needs to focus on functional innovation to drive growth

According to the firm’s CEO Suranga Herath, for many years the firm marketed itself as having the largest number of organic tea blends in the market, but more recently found a need to move towards more specialised innovation.

“Seven years ago, before we did a revamp in 2017, I would have boasted a lot about the number of products we had, that we had the largest and most diverse assortment of organic blends in the market,”​ Herath told FoodNavigator-Asia​ in the latest edition of our Food and Beverage Trailblazers podcast.

“After that, we realised that the modern consumer is not about creating more types of products for the consumer, but more about providing more meaningful, distinct, high-quality and needs-based items [instead of just overwhelming them] with choice.​

“So at that point, we had over 1,000 SKUs and about 500 blends in total and that was a point of pride – but today we boast the opposite, saying that we still can provide quite a lot of offerings with our 250 or so SKUs and about 60 different blends, but are able to more accurately target these to suit the array of needs for the markets we are in.”​

English Tea Shop exports to about 60 markets globally across eastern and western markets, and has made a name for itself having broken away from the traditional tea auctioning system by focusing on organic teas.

Even so, he believes that as a whole the tea industry is far from meeting its full potential.

“[I have] been in the tea industry for around 26 years, and I can say that as a whole it has not really been the most innovative,”​ he added.

“Whether in terms of format or the offering itself, nothing's changed seriously if compared with coffee for example, as tea has pretty much stayed the same once the teabag came into the picture, as it has stayed in that teabag format for many decades now.​

“Whilst the teabag itself has gotten innovated from a sustainability perspective and a performance perspective, still in terms of the whole convenience factor or the art of drinking tea, it has remained the same.​

He also believes that the way forward for tea innovation across the board is in terms of functionality.

“So there are multiple angles to consider here – firstly, bringing health and well-being to consumers that like that brewed cup of tea, which could be things like no or less caffeine; or even moving beyond the state of just putting basic ingredients together to address that health and wellbeing need, which is growing fast,”​ Herath said.

“We can't ignore the fact that the modern consumers including the youths are very aware of their mindfulness and their physical body and it's functionality – I’ve had many conversations with consumer groups and retailers and trade bodies, and everyone is hearing these noises and these requirements from the market.​

“The modern consumer is concerned about things like the gut, digestion, immunity, focus, energy, detoxing and so on – but not in the old fashioned manner that has been in play over the last few decades, but instead in a more very sophisticated manner [from] daily food and drink.​

“Tea has the potential to play the biggest role here as we already have the science and the ingredients in hand, so now it’s about mastering the consumer and their needs as well as the ingredients [such that] the offering can evolve to something more convenient, more affordable and [more convenient].”​

Listen to the podcast above to find out more.