Posts from 2016-02-04

Tea Supply Chain - Explained!

Tea comes from an evergreen bush—Camellia Sinensis—that grows best at a fairly high altitude. It can take from 5 to 7 years after being planted for the tea bush to become suitable for commercial exploitation, after which it can remain productive for over 100 years. All types of tea—black tea, green tea, white tea, Oolong tea, etc.—are produced from the buds and leaves of the same plant; the difference is in the processing. Technically, tea is harvested all year round, but there are also certain peak seasons. For example, the highest quality (and most expensive) Darjeeling tea is plucked in April. After plucking, the tea leaves need to be delivered to a factory, preferably within 5 to 7 hours after harvesting to prevent loss of quality. Although most plantations have their own processing units, small growers need to sell their green leaf to independent Bought Leaf Factories (BLFs) or to estate factories nearby. At the processing plant, the tea leaves go through a process of drying and crushing, resulting in factory tea—also known as “made tea”. This processed tea is then sold in packets and chests through auctions and international traders, ending up at the tea blenders, retail and eventually the consumer. The tea supply chain is characterized by a very strong vertical integration by just a few multinationals. At the global level, 85% of global production is sold by multinationals. Direct links between manufacturers and producers are common. The main packers, Unilever (12% of the global market) and Tata Tea (4% of the market) are key players in the consumer market. They dominate the trade, have a strong influence on transport companies, and source part of their supplies from their own plantations.

Tea is a very labor intensive crop. Plantations and small farmers employ thousands of workers to maintain and harvest their tea fields. Work in tea gardens is usually gender specific. Harvesting, generally referred to as plucking, absorbs the most amount of labor and is carried out almost exclusively by female workers. There is typically a daily wage for tea plucking, with a stipulated minimum quantum of leaves to be plucked. Male workers are generally employed only for pruning, applying fertilizers and agrochemicals, or hauling heavy loads. As these are largely seasonal or occasional activities, men sometimes have work only for 10-15 days in the month.