We first met Michael at the World Tea Expo a few years back. He was then the brand ambassador and operations manager in the tea industry in Seattle. Michael has a major in history. He has toured China extensively and we've enjoyed his company at our Aideobarie and Rangajan tea estates in Assam. Welcome to the Tea GRAM podcast. Michael. How are you?
Michael: Thank you for having me very well. Very well. How are you?
Boroon: I’m well, thank you. Let's begin by asking about your earliest association or memories with tea. Michael.
Michael: It’s kind of funny, that tea has had such a big impact on my life because I think I got started much later in life than most people. I didn't really become a regular consumer of tea until I was about 17. I left the States and I attended Hong Kong Baptist University in college. Green tea was very popular, but everything was either English tea, as we called it or green tea. English tea is what we call black tea here in the States and I came to, to start having that every morning and I was sort of hooked in a good way, From there ended up traveling to the UK to sort of finish my education. Obviously, as another very big tea drinking culture, I was exposed to many different kinds of tea and just, it became part of my life after that.
So, yeah, I think I got started later in life as a tea drinker, but it was the start of something big.
Boroon: As they say, better, late than never.
Michael: Better late than never. That is correct.
Boroon: So what do you do today and are you still connected with tea in any way?
Michael: I haven't worked in the tea industry for about four years now. In 2009, I was finished with university and I was living in New York at the time and I left New York for Seattle. And so I've been in Seattle for the last almost 12 years. 2009 was a time of a sort of global economic downturn for those old enough to remember. And I got a job waiting tables as a server at a tea restaurant at a tea room here in town.
And I slowly worked my way up. To management and then the company expanded and began selling to retail. We started selling online and then moved to selling online globally as well. And I was able to sort of grow with that business and got into sourcing, importing, blending, and then the sort of business management side of the tea business. But now I work in the collectibles industry. I worked for a company called Card Kingdom here in Seattle. It was a big jump from tea to the toy and hobby industry, but the one key thing that it has in common with my days and tea is that I still get to focus on a product, that is focused on bringing people together. Games and tea provide a vehicle for people to get together in an increasingly digital world. So I still get a lot of satisfaction out of it. And I still have enough connections in the tea industry to get some really good tea when I want to drink it.
Boroon: That’s a good bridge that you've built between what you did and what you're doing now.
You said Seattle, so Seattle is coffee capital of the world, right. Just as Melbourne is. How did you, how did you compete or collaborate with coffee during your time?
Michael: It’s funny. It was a challenge and yet also ended up being a great opportunity as well. It was a challenge from the standpoint of like, Hey, you have a city full of coffee, drinkers, coffee, shop on every corner type of town. That's the market that you're competing in. But by being in this market, I was also able to work with and visit the tea, sourcers and tea blenders, and tea distributors of companies like Starbucks because that's a local company. Well, their primary product is coffee. They were really getting into the tea business in a big way at the same time I was. And so I got to meet some really good people over there and also get exposed to how a multinational corporation like that does business and how they get their tea and how, I guess, really how their whole process works. And they do, they've got some really good people over there still to this day. So challenging, but also rewarding, I would say.
Boroon: The coffee roasters in Melbourne, they have such a great collaborative effort. We always compare coffee between Melbourne and Sydney. And the collaboration we see between the roasters here in Melbourne, I think gives them the edge, over other parts of Australia. Collaboration is definitely good when it comes to beverages is what I see overall.
Michael: Of course. That's interesting that you didn't use the word rivalry between Melbourne and Sydney, for the comparison that often happens because we always have to see how we stack up against someone else.
Boroon: When you were a buyer, what did you look for when you visited tea gardens around the world? And can you talk about your visit to Assam and in particular Aideobarie and Rangajan?
Michael: What I looked for, when I think back on, it was sometimes difficult as somebody new to the industry to know what to look for. And it really came back to three different things. One was an assessment of expertise, one was an assessment of their process, and one was an assessment of their workers and the mentality of the ownership of the estate. What I mean by that, like expertise, for example. I was really impressed. You mentioned Aideobarie and Rangajan, an example of that level of expertise would have been how they're able to deal with a red spider and how quickly they can recognise it. For those who don't know, that's a common pest that affects tea leaves and the effective way in which they were able to recognise and deal with it relative to others in terms of their process, is it mechanised?Is it efficient? Is it effective? Are they working well, collaborating between technology and, you know, human intelligence? I was really impressed by a lot of what I saw there.
I saw at one point a 100% organic, sustainable, small farm in Assam and it was a very, very impressive. And then in terms of the state of the conditions of the workers and the mentality of the ownership, in particular in Northeast India, how forward thinking and proactive they are because the product is important, but forming a sustainable partnership is just as important.
The tea industry in India is old and traditional and has a lot of sort of entrenched ideas. And it's a very, very interesting challenge, I think, for owners of those estates and the people working those estates to keep the best parts of tradition while also keeping up with modernity as well.
Boroon: That's really well put in. And I'm thinking back to my time as a, I'm a fourth generation planter myself, Michael, I'm just thinking back to my five years that I spent, and you know, how we had to have our eyes peeled for the red spider.
Michael: It's one of those things you don't hear about when you're so disconnected from. Where the product comes from, you know, if you're a buyer in the United States or Australia, for example, it has a huge effect on the cost of the product.
Boroon: In your experience, how has the North American consumer become more informed and educated about the process or loose leaf tea or the tea that they're buying?
Michael: Oh, that's a really, really great question. It's a question that I have sort of changed my mind on over time too, because I used to think that, and this was sort of when I was in my prime, if you will, of working with tea. I thought that I was living in sort of a golden age of consumers coming around to. Loose leaf tea, different kinds of tea, a better and more premium tea product, more connectedness to where their tea comes from. And I think some of that may have been skewed by the circles that I was running in at the time. And so I can tell you that people in North America and certainly in the United States are consuming a lot of tea right now before the disruption caused obviously by the Corona virus. The United States imported more tea in terms of value than any other country outside of Pakistan, somewhere around half a billion dollars worth of US dollars in 2019. I think Canada was somewhere around 140 million.
So, that is a heck of a lot of tea. And so we know that consumption is going up and we know that there is a lot of focus on sustainability and the health benefits of tea, and certainly the ethics involved with supply chain. So you have a more informed consumer who is trying to find out as much as possible about these things.
But at the same time, there are incentives around say misinformation and careful marketing. By careful marketing, I'm talking about marketing the health benefits of tea, for example. And that can be tricky territory as you know, because it is a healthy product but you kind of have to be careful about what you're saying that its health properties actually are. Consumers don't always have the tools to sort of dig deep and find out what exactly is truth and what is, what we'll call half-truth about what you're buying and where it's coming from.
Boroon: On that point, what are your views on what a tea producer, such as us, need to do to educate the end customer? Whether it's north America or other parts of the world. Where is the disconnect? You’re far from the source. So how do you educate the end customer? What are your views?
Michael: There's so much, isn't there. Customers have a hard time parsing out what is truth and what is skilled marketing. So how do we help them get to what the truth is? And ultimately it's about educating, using the mediums that your customers are on. This podcast is a great example. Twitter, Instagram, YouTube, Reddit, meeting your end consumer where they are, and working with distribution networks that are interested in bringing you closer to your consumer. Because you've seen that effect sometimes, right, where the middleman wants to sort of shield the customer in some instances, from us. That's not always great for anyone, is it. When you ask about what can we do? It is using those platforms and really selecting the key issues that matter to you and matter to them.
A good example would be the effect of climate change on. The industry, because that is something in North America that we're very disconnected from, but you, as someone who is close to the industry and in the industry, knows a lot about that and the effect that it's had over the years.
Boroon: You speak of the distribution channels and the middleman. We face that. We obviously, in comparison to the big players, are really small players, very niche. We are trying to pave our way in the loose leaf industry across the world. So, that's the only way we can sustain our 124-year old tea estate. We have great friends in the distribution channel and spaces, but you know, they're very territorial, so that's a big challenge for us.
Michael: I can imagine. When we talked about the traditions that the tea industry in places like Darjeeling and in Assam, the distribution networks also have entrenched traditions. And one of those entrenched traditions is not revealing information because it protects your business as the traditional thinking.
Let's go back to something we talked about before. I mentioned earlier that the United States in 2019 imported somewhere around half a billion US dollars of tea, but when you look at the cash exchange in the wholesale tea market in the United States in that same year, that's the distribution network we're talking about, right. That's tea getting from the grower and ultimately into the hands of the end customer. That market was around 12.5 billion US dollars in 2019. And now is that a one-to-one number? Of course it's not because markets don't exactly work like that.
It's not one producer, one wholesaler, one retailer. But that is a pretty astonishing number. I mean, that is a difference of 12 billion US dollars! And so something is happening in between imports and retail sale to the customer. And it's not always in the best interest or the perceived best interest of someone in that supply chain to reveal how that works.
Boroon: I think, you know, our focus has been to get direct to customers. Try as far as the specialty that we're trying to produce the small batch tea that we are trying to produce. Your advice on being available in the spaces that the end customer is prevalent is I guess the best way to go.
Michael: We’re not going to compete with Unilever or Tata. Those are very, very large corporations and they obviously have - not all of the market - but effectively all of the market. And we have to carve out our space and make sure that we know our customers inside and out. I think that you folks are doing a very good job of that really. And I think it shows in the quality of the product and the sort of relationship building that I see on social media and on this podcast.
Boroon: Let's flip it to the tea drinker. In your view, why do you think tea drinkers who live very far from the growing areas should reach out directly to the growers from around the world? What do you think bridges the gap for the tea drinker?
Michael: We have customers that are looking for more things than just a good product at a cheap price. Nowadays, they want to know about where it comes from and who is getting paid. And is it ethical and sustainable and all those things. One of the best ways, if you're that consumer, to understand the inputs and outputs of those things that you're concerned about is to be in as close contact as possible with the grower, because the grower is the person who understands the issues of the day, the short-term and long-term impact, and the history.
Trying to think of a good example. Some years ago, the subsidised good grain supply for tea workers was removed and the grain subsidy was, I think it was withdrawn in 2015, but it had been around since, I don't know, 1951. The plantation labor act legitimised it. The green subsidy was there from the colonial time.
So to your point, it was there during the colonial government and it was after they left and it only went away in 2015 or around that time? That is a really large event in a major tea growing area of the world. No one in my circle of colleagues in the tea industry at that time, knew anything about that. What was going on and what the implications of that could be on prices, on workers at all? Because that information, despite being an increasingly connected age is still held by people in parts of the world where - those of us in the United States are just not necessarily that plugged into what's going on. So the more informed you are as a customer, the more, you understand the impact of your purchase. You understand what is going on with the growers and labourers that produce your product … Ultimately you're going to enjoy a better product too. Because the people close to the product know the different varietals better than you ever will. And so it's not a bad way to enjoy a cup of tea either.
Boroon: In fact, the latest development in that front is the government of Assam has raised the daily wage of the workers by 30% effective the 20th of February. That has far reaching consequences in itself for a lot of tea farms such as ourselves. How do we adjust to that? Wage increase is playing on our mind.
Michael: The same thing is happening in Sri Lanka right now. I think they are pushing for a similar increase of probably about 30% I would say. And this is good, this is another great example of that disconnect right. Because, well, when you talk about the dollar amount in US dollars or in Australian dollars, the number seems — you know, there's really no other way to say it, this isn't a value judgment, it is just is what it is — it seems so small to the average consumer in a Melbourne or in a Seattle. The daily wage of a farm worker in Sri Lanka is less than 5 USD a day, but the increase of 30%, you're too far removed from the process to understand what impact that's going to have. And what your purchase at the end of the day actually means for that.
Boroon: True, absolutely true. And in fact the daily wage is one aspect of it and then all of the other welfare activities that go into, especially Assam is very, very strictly governed from a labor welfare standpoint — that adds to it as well. And that's an unknown fact that I think we're trying to educate as much as possible that it's no longer viable for us to sell our teas to the Unilevers and the Tatas as a commodity. And we have to go back to making our teas the original way of loose leaf tea and, you know, also enjoying it in that fashion. That gives us the opportunity to continue to help and maintain the community of 150 farmers that we have in Aideobarie that help us, the workers that help us in Aideobarie and Rangajan.
Michael: I can’t agree more.