Friday, March 18, 2005

Loose Tea, cheap or expensive?

Breaching the Web has made interesting calculations showing that in some instances the loose leaves she uses produce cheaper tea than tea bags: 4.8 cents for loose Tippy Orthodox GFOP Assam compared with 10.1 cents for Stash double chai spice. But when she uses USD 15 per 125 gr tea, which is her maximum, than loose tea ends up at approximately 15 cents a cup. For me, this shows again how tea bags have been able to create value for consumers in a hurry. And also how loose tea sellers are still not able to have consumers pay for the quality premium!

From a cost point of view, loose tea is bound to loose the competition against tea bags. Low quality leaves are all you need to tea bags! The secret lies than in the addition of fragrance to obtain a certain smell. The second added value for the average customer is the convenience of a tea bag: the mug becomes your tea pot. And the bag allows clever packaging and an even taste, season after season, year after year.

I never thought of comparing loose tea with tea bags! I'd rather compare my oolongs and pu-er with wine! They win all the time! Even at 50 USD for 125 gr, the cost per cup is only 50 cents (according to Breaching the Web's formula), a price only matched by low quality wines. And don't forget resteeping! Usually, the better the tea, the more often you can steep it. I make the experience all the time. Not only do I put less high quality leaves in my tea pot, but I can steep them more often. In this regard, I have found that pu-er will produce most tea (soup) for the same weight of dry tea leaves. Maybe I'll make the calculation some time...

Let's enjoy this cheap pleasure as long as it lasts. Thanks to globalization and capitalism, more and more Indians and Chinese can afford to buy their country's best teas. This and improved marketing (see my earlier post) will drive up prices, but also improve quality.


Anonymous said...

I had heard it said that teabags were more expensive, and I wondered if it were true -- I am in no way comparing the resulting liquors, or my desire to drink them! :) I've discussed my comparison with a couple of teabag tea drinkers I know, and they were shocked -- they assumed that loose tea was much, much more expensive per cup. Also, I purposely left out reinfusions, in part because I don't reinfuse the Assam I drink everyday, but also because I wanted to make the comparison as conservative as possible. Also, while US $15/125 grams is the maximum I will pay for a tea that I drink every day, I will -- and often do -- pay much more for special teas that I drink less often (a fine oolong, for example).

I really like your blog and find it very educational -- thanks for writing!

Unknown said...

Since 2005 ... now 8 years have past. In that time, a number of wonderful, inexpensive, GOOD independent internet-tea-sellers have been bought out by TeaVana and the like.

It is no longer easily possible to buy quality tea, by the pound for between $8.50 to $25 (or for those 125 gram packs, $2 to $7).

Simply, we now have to pay through the nose for tea, because the largest companies have decided to monopolize it. Moreover, any tea sellers left who still have competitively priced tea, carry teas of generic quality, and no particular pedigree.

Here's the rub: you might say, "well, certainly the price of tea has gone up internationally!" ... it has not. From my research of the Indian and Kenyan national tea council sites, its barely budged.

No. Tea has become outrageously expensive because of monopolization. And yes, $32/lb for a good, but not world-class Assam is outrageously expensive