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South Africa's "Long Life Tea" Looks to HK for Asian Distributors

Rooibos, South Africa's most popular health tea, is on the cusp of conquering a number of global markets. With the Hong Kong International Tea Fair looming, many of the tea's producers hope to use it as a platform for accessing Asia.

Photo: Rooibos tea: South Africa’s best-known herbal tea export. (Shutterstock)
Rooibos tea: South Africa's best-known herbal tea export.

A needle-like indigenous plant grown only in a small area of South Africa's west coast is creating considerable interest among Asian tea lovers and importers. The plant, known as rooibos ('red bush') because of its reddish-amber colour, is the source of South Africa's best-known health tea.

Tea companies and end consumers in Europe, North America and Japan are already familiar with rooibos tea, with over 12,000 metric tonnes of the beverage consumed globally every year. Approximately 60% of this is exported, according to the South African Rooibos Council.

The export volume, however, is growing quickly and this uniquely South African tea now looks set to make a big impact in Hong Kong – and elsewhere in Asia – according to a number of rooibos exporters, with many of them lining up to exhibit at the Hong Kong Tea Fair 2014 and elsewhere across the continent.

The earliest use of rooibos (botanical name Aspalathus linearis) can be traced back to the Bushmen of southern Africa, who favoured it for its beneficial and versatile medicinal properties. Sold commercially since the beginning of the 20th century, today it is one of South Africa's leading food export products and is distributed worldwide. In 2013, the largest markets for rooibos were Germany, Japan, the UK, the Netherlands and the US (see tables below).

Table: Approximate export volumes of rooibos tea to Southeast Asia in kg (2013)
Table: Top 25 importers of rooibos by approximate volume in kg (2013)

This herbal tea, with its earthy-sweet palate, is available in conventional (red) and unfermented (green) versions. Its broad appeal – and one that is especially relevant for Asian consumers – stems from its health-giving properties. Rooibos is naturally caffeine-free, low in tannins and has high concentrations of disease-fighting antioxidants (flavonoids).

According to research commissioned by the South African Rooibos Council (and other organisations) the herbal tea's high levels of antioxidants have beneficial properties in relation to cancer, heart disease, stress management, the digestive system, liver function and, possibly, weight loss. Additional studies conducted in Japan have shown that the active compounds in rooibos also protect the blood cells, while also having anti-ageing properties in terms of slowing down brain degeneration. Perhaps significantly, in Japan rooibos is known as 'long-life tea'.

Rooibos tea producer and exporter Khoisan Tea will be exhibiting at the Hong Kong Tea Fair 2014 for the third time. The company attends the event as it sees Hong Kong as the ideal gateway to the competitive Asian tea markets, with the tea expo being highly effective in terms of raising awareness of its range. Overall, it sees exhibiting at the event as a key part of its marketing strategy for Asia.

This year, Khoisan Tea will be supported at the trade show by the United Italian Corp (HK) Ltd, its exclusive agent for Hong Kong, Macau and Singapore. The agent is currently working with Khoisan on distributing its organic pre-packaged ranges.

Addressing the brand's aspirations in Asia, Berit Elmau, Khoisan Tea's International Sales and Marketing Director, said: "Rooibos already has a huge following among tea lovers in Japan, Europe and the US. Now we hope our markets in Hong Kong, Taiwan, Malaysia, Singapore and China are also going to take off."

At present Khoisan Tea provides bulk/loose tea as well as pre-packaged ranges, including private-label options. Explaining its strategy of distributing products via a Hong Kong agent, Elmau said: "We find that Hong Kong is an open and reliable platform to use as a base to access the Asian export markets. Our customers there are also genuinely interested in our products – for what they are and their overall quality, and not just for the price points and volumes they can achieve. We enjoy a reliable relationship with our agent in Hong Kong. He also gets our products into Macau and will soon offer us the possibility of expanding into Singapore."

Organic certification

An important component of the Khoisan range is its 100% organic teas. These are audited by Lacon, a German certifier that is fully accredited for organic inspection and certification. This guarantees that Khoisan's range meets the organic certification requirements of the EU, the US National Organic Program and the Japanese Agricultural Standards.

Khoisan Tea produces its organic teas from certifiably organic seedlings, as opposed to the conventional varieties favoured by some of its competitors. According to Elmau, one of the real advantages of exporting via a Hong Kong agent is that the city recognises the organic food-product standards and certification schemes originating in the EU and the US. Chinese mainland, however, does not accept non-Chinese certification, creating a constraint on certifiable organic-food exports.

Essentially, for Khoisan Tea's products to be labelled as "organic" in China, they would have to be packaged in China. Instead, the company uses an exclusive agent in China to distribute its conventional, non-organic tea, with considerable success.

Elmau said: "The fact that Hong Kong accepts our organic certification is therefore a unique selling point and one of the reasons we choose it as a regional export base. In Hong Kong, the end consumers are also very big on organic products."

Elmau also believes that part of rooibos' appeal to Asian consumers lies in its novelty value. She said: "It's branded as a tea, but in reality it's a herbal tisane – a health drink – and consumers are drawn to this. Naturally caffeine-free, rooibos is seen as ideal by many health-conscious Asian consumers who have a stressful life and a demanding work environment.

"It provides a kind of antidote for people with a high-stress lifestyle, many of whom are looking for a drink that is soothing, calming and low in acidity, unlike black tea. Rooibos, arguably, fulfils a social need in Asian communities by addressing specific health concerns."

The South African tea is also proving popular in Hong Kong – and beyond – thanks to its status as a genuinely international product – one grown, produced, packaged and shipped from Africa. As a result, rooibos producers (and their Hong Kong agents) have the opportunity to capitalise on the city's strengths as an import base, while helping maintain the international branding advantage of their products.

She believes that, once the Asian market has become more familiar with conventional (red) rooibos, there will be "huge growth" in green (unfermented) rooibos. This is currently the fastest-growing rooibos subcategory and a drink that has a natural appeal for those Asian consumers with a penchant for green tea.

No longer a niche product, the demand for rooibos has increased rapidly in the developed world over the last few years. This has been partly stimulated by a number of international retailers, notably Starbucks, which started selling the South African tea in 2010.

As a result, it is believed there is now significant scope to increase international market awareness of rooibos beyond the major markets. According to South Africa's Department of Agriculture, Forestry and Fisheries, export volumes of rooibos into the new and emerging markets are on the increase. This view is endorsed by René Wolfaardt, Sales and Marketing Manager of Cape Natural Tea Products, producer and distributor of rooibos teas. He maintained there was "considerable interest" in the product among importers at Shanghai's May 2014 SIAL food and beverage expo.

Increasing global demand is inevitably driving rooibos exports. Wolfaardt feels, however, that while there are huge opportunities for this product in Asia, more market development is needed. Currently, China accounts for less than 1% of global rooibos sales.

To maximise the potential of the product in the region, the company intends to use the Asian trade shows to identify appropriate agents. It then hopes to work with them to feed into the value chain by providing sophisticated market education and by raising awareness of the tea through a number of marketing promotions.

Photo: Tea for two or more: African exporters now seek Hong Kong partners. (Shutterstock)
Tea for two or more: African exporters now seek Hong Kong partners.

The Hong Kong International Tea Fair takes place from the 14-16 August at the Hong Kong Convention and Exhibition Centre.

Mark Ronan, Special Correspondent, Cape Town

Content provided by Picture: HKTDC Research
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