The pitfalls of discussing puerh prices

Top of the tong green mark puerh from the early 1990s

Early 1990s green mark raw puerh

If you've studied economics or business strategy, you'll know that there are 2 basic strategies for any product:
- Number 1: economies of scale. That's where you try to have a very standardized product and the main players are those few companies that are able to cut the cost the most and achieve the lowest price. The best example in the tea industry is Lipton with its tea bags. It always kind of tastes the same and this is achieved by mixing leaves from different origins. This was also, due to ideology, the strategy of the CNNP in Yunnan with regards to puerh until 1975: they made only 3 puerh cakes: a green, a red and an orange mark. Right now, this is still the strategy for mass produced plantation puerh.

- Number 2: Differentiation or niche marketing. This strategy doesn't emphasize the lowest cost, but superior quality. A good example of such a market is top wines: every estate strives for a good reputation, quality productions, limited editions... This strategy works well for teas that see their quality improve depending on which cultivar is used, where it's planted, how the trees are cared for, when it's harvested, how it's processed... It also works for Gushu, old arbor puerh, which is made from trees that are over 100 years old. Such puerh only represents 4% of the total puerh production. Thanks to its limited amount and special qualities that vary from one mountain to another, old arbor puerh is a good fit for differentiation.

We can see this strategy implemented since the liberalization of the tea market in China in early 2000. When the first Taiwanese merchants went to Yunnan, they mostly pressed cakes simply called Yiwu (see my 2003 spring Yiwu wild cake, for instance).  Nowadays, the producers are very precise and will tell you if the leaves come from Mahei, Guafengzhai, Bohetang, Wangongdingjiazhai... Each village has different market prices for their gushu (古树) puerh. This article has a detailed list of maocha prices for spring 2017 and you can see that prices for loose gushu puerh from the 6 famous mountains vary from 1,200 to 15,000 RMB (highest in Laobanzhang).

Pitfall number 1: The market for regular plantation puerh is very different from the market for gushu puerh. Increased demand for plantation puerh can be met by increasing supply with new plantations within a few years. That's why price increases are more gentle and simply reflect the increasing labor costs in Yunnan. For old arbor puerh, increased demand leads to higher prices, because production is difficult to increase without harming quality. The dynamics of these 2 puerh categories are very different. So, while it makes sense to discuss about plantation puerh prices in general, it makes little sense to discuss prices of gushu puerh without discussing their quality AT THE SAME TIME. In any case, there's less and less one market and one price for puerh, but many different markets and prices for different quality levels of puerh.

Pitfall number 2: High prices don't necessarily mean a puerh is gushu or of superior quality. The higher the price, the more careful and demanding you should be about quality. Tasting (a sample) yourself is the best (and only?) way to participate meaningfully in the price conversation.

Pitfall number 3: For gushu, a low price doesn't necessarily mean a low quality, but it could mean that it's not a gushu puerh! If we take 1200 RMB/kg the lowest gushu maocha price from Yiwu in 2017, this means a cost of 23 cents per gram for the loose tea material paid to the farmer. Let's double this cost to roughly include the pressing, packaging and domestic delivery costs and we obtain 46 cents per gram of cost. Let's assume then that the markup factor is 2 and the minimum price for a gushu cake from Yiwu is 92 cents per gram in 2017. (That price should be roughly tenfold for Laobanzhang or Bingdao!)

Pitfall number 4: You can't go back in time. Low prices for gushu puerh are a thing of the past. The Chinese economy creates an affluent upper class that wants to enjoy the best teas that China produces. It would take a third world war to make China as poor as it was 20 years ago when puerh was cheap, and in that case we'd all have other priorities than finding good puerh! 15% yearly price increases (or more) for gushu puerh are the new normal. Such increases have been called unsustainable every year in the last 10 years. Negative adjustments are always possible, but are not likely to be long lasting given the specific dynamics of the gushu puerh market. Instead of focusing your attention on the long gone prices of the past, understand where the prices are now, where they are headed and don't wait to find the puerhs that best fit your taste and budget.

Pitfall number 5: 20 years aged puerh and more is even more limited than fresh gushu puerh! Expect prices to increase even higher and faster. The reason is simple: every year, there's a new harvest of gushu puerh which increases supply, but in the aged puerh market, for a particular year, there's no new supply, only a dwindling amount of puerh cakes as collectors drink what they have in their inventory. At the end of 2017, the price of a 88 qingbing (aka 7452 from 1988 or little green mark) is 10,000 USD at auctions in China. In 2009, it was around 2,000 USD. (This is a 20% yearly increase).

The 20 years cut off for aged puerh is meant to separate the CNNP period of very standardized, mixed leaves puerh from the modern era when private factories have taken all kinds of approaches. The appeal of older CNNP era puerhs is that they were made almost exclusively of gushu material, since it was cheaper to harvest existing old trees than planting new ones when demand was low. New puerh plantations started in the late 1970s and their proportion has grown progressively over time. This is another reason why older puerhs command higher prices. It's not just that they are older, but that their material has a higher gushu proportion. And therefore their quality is also often better (all other things being equal). This quality level is relatively homogeneous and easy to assess for puerhs that are over 20 years old. For puerhs that are less than 20 years old, all bets are off. Big private factories have used economies of scale and their cakes are made of pure plantation tea. Product differentiation with gushu quality only concerns a very low percentage of puerhs less than 20 years of age. And remember that good teas tend to sell out first...

The end of this article is near and I should write a few words about the puerh I've recently added to my selection and that you can see pictured in this article. It is an early 1990s Luyin (green mark/qingbing/7542) raw puerh cake from the CNNP and made by the Menghai Tea Factory (its neifei mentions the CNNP). At the top of this article, you can see a picture of one of the cakes I bought from a Taiwanese collector. This is the cake that was at top of the stack in the tong. From this wear and tear we can see the slow impact of time. The other cakes are in much better shape as you can see nearby, but they have the same scent of precious wood incense.

Early 1990s Lu Yin

What can you tell from the view of this cake? First, we look at the back of the cake, because the front is often made up with the nicest looking leaves. The back is closer to what's in the cake. We can see the that the color of the leaves varies a lot. This is a good sign, because it means the cake wasn't subjected to artificial humidity that would have evenly fermented all its leaves black or red. There's a good proportion of buds and many look big (= gushu). Besides, the color of the buds is a good tool to estimate the age of the cake. Compared to my 1997 and 1999 green mark cakes, the color of the buds is darker here and points to an older production, in the early 1990s (the exact information was lost). We can also see the typical cloths marks left during the pressing of the cake. 

It's pricey compared to most puerhs available on the net, but cheap compared to actual market prices in China.It comes close to the famous 88 qingbing and even to the 1950s Lüyin! I've made it available as a 8 gram sample so that you can form your own judgement about the quality of such an aged sheng puerh. If you ask me, it's wonderful!

Acknowledgement and thanks: this article was inspired by following posts from TeaDB: 

1. The dearth of aged pu'erh from Western facing vendors.

2. Western pu'erh prices at conception have risen since 2011 (and probably before).

Addendum: 

Lew Perin from Babelcarp has reacted to my article with 2 good points. First, that plantation puerh has become better. I agree and see this as the positive impact of higher prices, which allow tea farmers to pursue better quality instead of the lowest costs (= the differentiation strategy). But if you're looking for top quality, it's still gushu that have the best potential for greatness. Second, there is some elasticity in gushu puerh supply. As prices rise, tea makers have more incentives to harvest leaves from more remote areas. A good example of this trend is my 2017 spring top wild raw puerh cake. But such productions are always quite confidential and the limited amounts they produce don't have a significant impact on the market.

L'esprit de la coupe du monde

D'habitude, le football c'est de la saine activité physique, l'esprit d'équipe, la beauté du geste technique, mais durant le mondial, tout cela est relégué au second plan. L'important, c'est de voir son équipe gagner!

Pour le thé, la plupart du temps on pense harmonie avec la nature, échange fraternel avec le fermier/maitre de thé, partage des connaissances entre experts et débutants, ambiance zen, peace and love durant la dégustation... Mais le thé a aussi son côté hyper compétitif. Dès la dynastie Song, on faisait des compétitions de thé vert en poudre fouetté au bambou. Le vainqueur était celui dont la mousse était la plus épaisse: on attendait de voir dans quel bol on verrait apparaitre le liquide en premier pour déterminer le perdant. De nos jours, il y a des compétitions chez les producteurs. Celle de Dong Ding est la plus célèbre, mais on en trouve dans toutes les régions de thé de Taiwan. Il y a aussi des compétitions de préparation de thé et de Chaxi organisées pour et par les dégustateurs.

Baozhong semi-sauvage TM vs Baozhong Tsui Yu (visiteur)

 Ainsi, la semaine dernière, quand un ami en thé pris rendez-vous avec moi pour déguster ses thés, j'ai eu envie de donner du sel à cette rencontre en organisant des matchs entre ses thés et les miens. On commença par du Wenshan Baozhong. Il apporta un Baozhong d'hiver 2017 fait avec du cultivar Tsui Yu, commandé sur un site concurrent anglophone. De mon côté, je sélectionnai mon Baozhong semi-sauvage de ce printemps, car c'est en prenant le meilleur qu'on a le plus de chances de gagner! Si j'avais su à l'avance que j'allais affronter un Baozhong Tsui Yu, j'aurais pris mon Baozhong 'forêt subtropicale'. Le match aurait été (un peu) moins déséquilibré. J'aurais encore eu l'avantage du cultivar supérieur (Qingxin Oolong) par rapport au Tsui Yu, mais plus l'avantage de la plantation organique.

Baozhong Tsui Yu (visiteur) vs Baozhong semi-sauvage TM

Mon Baozhong semi-sauvage a une oxydation un peu plus poussée, ses odeurs sont bien plus fines et persistantes, tandis que le goût est plus doux et harmonieux. Bref, c'était l'équipe de France contre le FC Meudon!

Je n'ai pas de photos de notre second match, mais il opposa mon Hung Shui Oolong de Shen Mu torréfié aux infrarouges à 2 thés d'un coup: un thé rouge torréfié de Lala shan fait avec du Qingxin Oolong et un Oolong à forte oxydation, non torréfié, fait avec du Qingxin Oolong également. Dans l'idéal, on essaie de faire jouer des thés les plus similaires possible afin de plus facilement comparer leurs qualités/défauts et trouver le meilleur. Ainsi, avec ces 3 thés, on a le même cultivar, on a un degré d'oxydation élevé ou complet et plus ou moins de torréfaction. Il y eut donc des notes similaires chez ces 3 thés, mais mon Hung Shui finit au-dessus du lot grâce, notamment, à sa bonne torréfaction qui lui donne plus de profondeur et de complexité que les 2 autres thés concurrents.

Le résultat de ce match est 2:0. La sélection TeaMasters est victorieuse. On a ga-gné, on a ga-gné! On a ga-gné, on a ga-gné! On a ga-gné, on a ga-gné! On a ga-gné, on a ga-gné! On a ga-gné, on a ga-gné! On a ga-gné, on a ga-gné! On a ga-gné, on a ga-gné! On a ga-gné, on a ga-gné!

De la hi-fi pour mon Gao Shan Oolong

Oolong de Tian Chi du printemps 2018

Le rayon de soleil qui illumine le Chaxi met la pureté du thé et des accessoires à nu. Cette lumière resplendissante des premières heures de la journée exerce une fascination raisonnée et apaisante. Le cerveau cherche l'éveil, la clarté. Il est loin de vouloir s'enivrer, divaguer à la lueur tamisée d'une faible lumière artificielle avant de trouver le sommeil. Au contraire, le soleil des matins de juin éveille nos sens en les affutant, en les rendant sensibles aux couleurs vives et intenses. Dans l'ombre, tout est plus ou moins gris, indistinct ; cela fait appel à notre imagination pour compléter les informations qui nous manquent. La lumière révelle la vérité avec la plus haute fidélité! Elle est aux couleurs ce qu'un bon système audio est à la musique.

La pureté des Oolongs de haute montagne se marie parfaitement avec cet atmosphère ensoleillée. Leurs saveurs fraiches, limpides et pleines d'énergie correspondent si bien à ces rayons envoyés par l'astre céleste comme promesse de l'aube!

Cet Oolong de haute montagne provient justement de Tian Chi, lac du ciel, situé non loin de Fushou Shan, à 2260 m d'altitude. Chaque lever de soleil y est une symphonie pastorale où perce l'hymne à la joie! La beauté de ce Gao Shan Cha, nourri de rayons de soleil matudinaux, est qu'il restitue ce chant de montagne avec haute fidélité.

La porcelaine claire permet d'exprimer ces saveurs sans filtre. Et ce thé n'en a pas besoin, car sa première qualité est sa pureté éblouissante!

Brewing outdoors in Norway and elsewhere

Hakon from Norway sent me this picture and wrote the following note:

"Dear Stéphane,

Earlier today I sat outside reading your well-written newsletter for Spring 2018 and it inspired me to brew one of the teas I've bought from you earlier. It became an incredible tea moment and it felt almost magical when the rain started pouring down, which it hasn't for many weeks now. I thought I would like to share this with you and thank you for your inspiration. I included a picture to better share the moment.
Your teas have been greatly enjoyed. I'm also really happy with the classic teacups I got from you." 

Thanks a lot for sharing your positive experience with me and my readers via my blog. Brewing tea outdoors is something that I enjoy a lot and I am glad to see that I'm inspiring other tea lovers to give it a try. Here, a balcony is a first good step, since it means you're still reasonably close to a source of boiling water in your home! In your garden, you could use an electrical extension cord to boil water in an electric kettle.

When you're in a remote location, you can use the most traditional water boiling accessory in gongfucha: the Nilu. Or you can use a gas stove for camping.

A small kettle then makes a lot of sense with a gongfucha set: the water heats up quickly in a small kettle. (I remember one of my first outdoor Chaxi in a public park in Paris in 2009: the water in a big kettle was heated by an alcohol lamp and it took forever to come to a boil!)

Drinking tea outdoors is fun because it changes the way the tea is experienced and even how it tastes! Outside, the mind receives a lot more stimuli than in a room. There's more to see, the sounds of nature are much louder, there might be some wind, the temperature can vary greatly and there are plenty of scents emanating from the surroundings. If you brew your tea lightly, it is likely to feel subdued, because you can't notice its intricacies. Brewing tea outdoors, therefore, often means to brew your tea rather strong. 

 It's always a challenge and a balancing act to find the strength fitting your circumstances and the tea you're brewing. Some teas will feel more in harmony with your surroundings than others. I've shared my experiences with you in the past, but the best is that you find out by yourself which teas resonate most for you in a particular spot.

 Summer is quickly approaching, so I post these sunset Chaxi pictures from the beach in Kenting. They show that it's even possible to brew tea on a white sand beach. Bring extra cups, because tea isn't only connecting you to nature but will also help you make new tea friends!

The good morning Oolong

When you have a large selection of teas in your collection, it's always a challenge to decide which tea to brew. This week, I had a top mountain Oolong every morning and it made so much sense! The month of May/June is called the 'Plum rain' season in Taiwan. Strong afternoon showers are quite frequent, even though, this year, these rains came rather late in the season. These rains have an impact on tea harvests. Since the mornings are sunny and the afternoons rainy, the pickers start their work early in the high mountains. That's why high mountain Oolongs are mostly picked in the morning under a clear blue sky!

A sunny spring morning on Lishan is a spectacular event. The colors are vivid, the air is crisp and nature seems to glow with pleasure under the first rays of sunshine. And it's that same feeling I get at 6:30 AM on my Chaxi this week.

On Monday, my bliss came from this spring's Lishan Oolong, harvested on May 15th 2018! Its elegant sweetness and thick aftertaste are so pure...

Tuesday morning, the sun was slightly veiled by high altitude clouds. That's when I chose to brew this spring's president tea (next to the white house on the picture!) It's the tea from Fushou Shan, the plantation with KMT connections and supplied to Taiwan's presidency. Its reputation crosses party lines in Taiwan and if the current president Tsai wants to gift some tea to an important emissary, there are good chances that it would come from plantation!

This Chabu lets the mind travel to a high Chinese mountain surrounded by water. The blue colors fit well with the pure feeling I wish to recreate. It's as if there were 3 suns, one in each cup!

This spring's Fushou shan has produced another impressive high mountain Oolong!

On Wednesday morning, my daily dose of tea came from DaYuLing 93K. Méav's beautiful and pure voice accompanied this moment thanks to her first Celtic album. To emphasize the purity and lightness of this tea, I was brewing it with my silver dragon and phoenix teapot. The first 2 brews were almost magical.

These 3 Oolongs come from elevations above 2000 meters. They share a lot of similarities, since they were harvested mid May, just a couple of days apart. Their aftertaste is particularly thick and their energy powerful. This is this year's attribute for this type of top altitude Oolongs.

But no matter if you use an Yixing zhuni, a porcelain gaiwan or a silver teapot, it's possible to enjoy their fine aromas! What doesn't change is the necessity for a preheating the tea vessel well, because the the large rolled Oolong leaves need energy and heat to unfurl, especially on the first brew.

It's a wave of freshness that comes from Da Yu Ling! (The Fuji mountain on this Chabu is also a little reminder that Taiwan used to be Japanese from 1895 to 1945.)

Majestic cedar and pine trees are growing around the Da Yu Ling tea plantations. Their long shade reach down to my high mountain Oolong Chaxi!

When a cup is a trip to a sunny morning peak...

Magnifying the beauty of tea

2011 Dian Hong from old arbor trees

One of the biggest challenge of our time is to see through appearances, because they can often be misleading. Marketing asks designers to create very enticing and beautiful packagings to suggest that the tea is of very high quality. This often reminds me of those YouTube videos with extreme makeup transformations! What you see at the end is miles away from reality. So far, the best teas I had came in very common bags, while leaves in great looking packages were almost always disappointing.

Thus, in the tea world, consumers must remain very rational and sensible when approaching a new tea. This also applies to professional buyers who travel to the production sites. It's easy to get emotional and carried away by the surroundings, the expert tea master who brews the tea... One of the best way to stay unbiased is to brew the tea in a standardized fashion to evaluate it (and compare it to others). In Taiwan's Dong Ding competition, the standard is 3 grams for 6 minutes in a porcelain tasting set. Glazed porcelain doesn't impact the taste of tea and the long brew makes sure that all defects in the leaves come out in the brew. If the tea tastes OK like this, it can only taste better when brewed with skill and care.

Bowl by Michel François

That's why, when you select Oolong, puerh or red tea on my online tea boutique www.tea-masters.com, you see the same things a tea professional does when he's tasting tea:
1. 3 grams of dry tea leaves
2. The sight of the 6 minutes brew of these leaves without filtering.
3. The sight of the open leaves, after the brew.
4. This year, I've also started to make pictures of 1 or 2 open leaves only to better see their details.

These pictures go to the heart of the quality of the leaves. For scents and taste, you can read my description. And if you're still not sure, it's always possible to order sample sizes of the tea to taste it by yourself before committing to a bigger quantity. (Note: for this 2011 wild Dian Hong featured in this article and a few more teas, I haven't taken these detailed pictures in my boutique, because I always forget to do so! Sorry!)

Once the rough diamond is found, it's the brewer's task to prepare it to perfection! This step 2 comes after the selection, after the commercial transaction. This is what I am doing in this Chaxi, using a silver teapot to extract a maximum of aromas from these golden buds. And I'm using thin white ivory porcelain cups to emphasize the finesse and lightness of the taste. This is magnifying the beauty and the character of this red tea. The aesthetics of these pictures are not simply an appearance. They reflect the truth and beauty of this tea. The key to brew it well is to understand that buds are baby leaves: they are very concentrated with flavors and so small that these flavors are quickly extracted. That's why it's best to use few, especially with a silver teapot, and brew rather quickly.

To sum up, even the most elegant packaging will end up in the trash. Disregard it.
True tea beauty comes from within the leaves.

My tips to enjoy the best teas of the world on a budget

A few days ago, I had tea at the Lin Gardens with a tea enthusiast who has purchased 6 aged '7542' puerh cakes from the late 1980s for roughly 70,000 USD! This high price reflects a new reality in the tea market: exclusive teas are getting more and more expensive. Affluent Chinese buyers bid up the prices of tea as they seek the same prestige and complex flavors of top quality wine.
If you've been following the wine market a little, you'll know that a bottle of top wine are reaching astronomical heights. The most expensive wines comes from Burgundy with its tiny estates: a bottle of Domaine Romanée Conti (6000 bottles per year) will easily take you back more than 10,000 USD. In 2001, I purchased 6 bottles of Chateau Margaux 1999, a premier grand cru classé from Bordeaux, at 120 USD per bottle and now each costs 600 USD! In the US, the current bottle, from 2014, of Opus One from Napa valley is priced at 385 USD... (Both wineries produce roughly 150,000 bottles per year of those wines). Tasting famous wines has become a very expensive luxury, while famous teas are still extremely affordable, especially if you follow my tips!

1. Great teas are like great wine: they are scarce, taste fantastic and are not meant to be drunk on a daily basis!
The most famous tea in China is the Da Hong Pao, a yan cha from Fujian province, comes from just 4 tea bushes on a rocky cliff in the Wuyi mountains! The Longjing plantation that was supplying emperor Qianlong (1711-1799) with green tea was slightly bigger with 18 trees! These 2 examples show that the scarcity of famous teas is actually even more acute than wine. Therefore, don't expect that you'll be able to purchase famous and exceptional teas on the cheap. In Taiwan, the best lot from the Dong Ding Oolong competition sells for 5000 USD for 300 grams (12 kg total production). And the high mountain Oolong from FuShou shan, also dubbed the president's tea, retails at 155 USD for 150 gr on my online boutique. This plantation is one of the highest in Taiwan at 2500 meters elevation and is the unofficial supplier of the presidential palace in Taipei.

2. Group tastings are a good way to reduce the cost of expensive tea.
The wine world also uses this tool to let many drinkers share the cost of their education. We live in a world where ideas and general knowledge tends to become free thanks to the Internet. However, when it comes to wine or tea tasting, no words, pictures or videos can substitute for the actual tasting experience. The goal of this tea education is simple and essential: learning how great tea tastes helps you identify which teas are exceptionally delicious and which are not. It boils down to the same characteristics as great wines: an elegant and long lasting aftertaste. Great wines and teas have a presence that stays with you for several minutes. A few sips from a wine glass or from a tea cup are enough to make this experience. You don't need to drink the whole bottle or 8 brews of tea to experience the drink's quality. Actually, the law of diminishing marginal utility suggests that there's most pleasure in the first cup. Sharing great teas in a group is therefore an excellent strategy to lower their cost.

3. Purchase and brew top teas in tiny quantities.
This is where tea is different from wine, which is constrained by the format of the 750 ml bottle (or the half bottle). Loose tea can be sold and packaged in very small quantities, sometimes even down to the gram! This makes a lot of sense with top teas, because they are produced in very small amounts. Instead of selling it all to one very rich person, it's more satisfying to let a great number of people enjoy the tea, especially if they are going to share it in a group! This trend to smaller quantities is obvious in the puerh world. Pressed cakes are getting smaller and lighter as prices of leaves of old trees have skyrocketed in recent years.

Except for lowering the price of your purchase, there are another 3 reasons why it makes sense to brew top teas with fewer leaves. First, it's because this how you can best judge a tea. The standard brew at the Dong Ding Oolong competition, the biggest tea competition in the world, is 3 grams brewed for 6 minutes in a 120 ml porcelain standard cup. While average teas will not taste good under such conditions, the best Dong Ding Oolongs will still taste delicious, because the long brewing time emphasizes their amazing aftertaste. This doesn't mean that top teas should be brewed in this standardized manner. -Ideally, the brewing should be adapted to the character of each tea.- However, top teas shine most when pushed to their limits. The second reason for brewing top teas with fewer leaves than other teas is because the longer brews will compensate for the fact that you're using fewer leaves. Otherwise, with the same amount of leaves and longer brews you'd get a too strong concentration of flavors in your cup. Third, the most amazing tea miracle happens when you feel a lot of pleasure from a brew that seems light at first, but contains a lot of things that slowly unfold. Teaparker calls it the Wu Cha feeling, when the tea feels so pure that it doesn't feel like tea at first. Only an exceptional tea will taste satisfying and rich when brewed lightly. What is considered light will vary from one type of tea to another, of course. Loose green teas are meant to be brewed lighter than Oolongs.
During that afternoon at the Lin Gardens, I used only a handful of leaves from this spring 2017 old arbor sheng puerh (2 or 3 grams) in a rather big Yixing teapot. My visitor was amazed by the fantastic taste and energy of the three long brews we made! The open leaves barely covered the bottom of the teapot.

Conclusion: The world of fine teas is getting more expensive and quality or pleasure isn't always guaranteed by a high price. This is another good reason to purchase expensive teas in small quantities.