Tea Industry analysis

1. Introduction

Tea is one of the most consumed beverages in the world, and it’s used in the brew, savor, and in the medical field since it contains a collection of health benefits. The most popular tea in the world is black and green tea, though herbal tea is gaining popularity, especially in recent years, due to being believed health benefits. Tea has several antioxidants and minerals useful in the human body. The growth in well-being awareness and rise in disposable pay has made the tea market to grow exceptionally. Additionally, increased consumption for herbal tea and the introduction of new tea tastes and varieties argued to offer growth opportunities in the tea industry.

This research paper will examine Tea Industry, growth, examine the current market structure, leading companies, major production centers and location, main sources of materials, and supply chain. Additionally, the research paper will focus on Tata Global Beverages; establish the actual and potential ethical and sustainability issues faced by the company. It will establish the impact of ethics and sustainability has to the company’s performance in the next ten years. Also, the paper will outline measures that the firm will undertake to mitigate these issues.

2. Tea Industry analysis

Tea is a major consumed beverage in the world because it has been a culture for people to take it, and the culture has been carried forward from generation to the other. Also, its health benefit had made the demand increase subsequently, especially at the current times when there are so many toxic being emitted daily, and people are using it to remove those toxins. According to (Kumarihami and Song 2018), tea instigated in China, and its production has spread throughout 35 countries in the world with major regions in Asia, Africa, and smalls scales in Latin America. Anderson (2014), the global tea production trend had moved progressively from 2008 to the year 2016, where the largest exporters were China, Sri Lanka, and Kenya, and earned USD1.6 billion, USD1.5 billion and 1.4 billion respectively. Additionally, the production in years 2014, 2015 and 2016, were 5,000,000 metric tonnes, 5,500,000 metric tonnes and 6,000,000 metric tonnes respectively. The trend indicates there are more opportunities for growth.

According to (Baral 2019) research, the results indicated that there was a low bargaining power between the input sellers and tea customers and that there was great internal competition among the manufacturers. Also, the industry looks less striking to new entrants. Again, Baral noted the sector to be facing significant challenges which included; (a).there is partial and inadequate production, (b).squat economies of scale, (c).messy supply chain system, and (d).restricted access to worldwide market by young producers.

2.1 Main or leading tea companies

According to (Szenthe, Adrianna 2019) list of the top world’s producing tea industry (appendices 2), most of leading countries includes- China, India, Kenya, Sri Lanka and Vietnam among others. China is the biggest producer of tea, as per the Szenthe’s analysis, china produces approximately 30-35% of the total production in that year. The country is believed to have a long history in tea industry, where they consume it as beverage and medicine. Consequently, Anderson, (2014), analysis indicated major five companies which consumed tea mostly were, James Finlay, McLoed Russel, Tata Global Beverages, Twinings and Unilever (Appendices 1).

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