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© 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News www.worldteanews.com [email protected] Booth No. 106 Friday | Sept. 9 | 8:00 – 9:30 a.m.

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Page 1: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

Top Tea Retail TrendsDan BoltonEditor and PublisherWorld Tea [email protected] No. 106

Friday | Sept. 9 | 8:00 – 9:30 a.m.

Page 2: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

CELL PHONE SURVEYPoll Everywhere is a simple text message votingapplication for live audiences. Vote by textingCODES (or Tweet) your answer to questions on-screen. Poll results within the presentation update inreal time. Silence your phone. Let’s try it now.Test the system by answering: World Tea East is?

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Code 32595 Really hot! 46%

Page 3: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

How To Vote via Texting. Use 22333 and put CODE in message.

1. Standard texting rates only (worst case US $0.20)2. We have no access to your phone number3. Enter CODE in message line (not subject line)

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32563 or32595

22333

32595

32563

Page 4: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

How To Vote Online via www.Poll4.com

Enter 5-digit CODE in window, click submit.

32563 COOL or 32595 HOTTIP

EXAMPLE

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Page 5: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

How To Vote via Twitter

1. CODE immediately follows @poll (one space between)2. Since @poll is the first word, your followers will not receive this tweet

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@poll 32563 or 32595

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Page 6: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

Responses appear in the frame above in real time.

Responses appear in this fram

e in real time.

Page 7: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

AUDIENCE BUSINESS TYPE• CODE (50 Show Responses as of June 26)

• 79706 |Tea Room/House 23%• 79860 |Specialty Retailer

27%• 79861 |Hospitality/Restaurant 0%• 79867 |Mass Merchant 0%• 79871 |Spa/Wellness Center 2%• 79874 |Coffee House 10%• 79882 |Web-based Store 19%• 79897 |Supplier 4%• 79898 |Distributor 6%• 79919 |Manufacturer 8%

Page 8: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

79706 |Tea Room / Tea House79860 |Merchant Specialty Retail 79861 |Hospitality / Restaurant79867 |Mass Merchant

79871 |Spa / Wellness Center 79874 |Coffee House79882 |Web-only Tea Store79897 |Supplier79898 |Distributor79919 |Manufacturer

CODE

Responses appear in this fram

e in real time.

Page 9: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

OVERVIEW: U.S. MARKET UPBEAT

Tea retail and foodservice sales will top $8.4 billion in 2011.1

Sales of tea and RTD teas grew 31% from 2006 to 2011.2

Tea imports increased 18% to set a record in 2010.3

Thanks to $4 billion in RTD sales, tea gained market share.1

Tea now holds 5.4% share of refreshment beverage market.4

Tea ranks 7th− close behind juice, ahead of sports beverages.4

“… market growth will be driven primarily by an increasing consumer focus on health and wellness, growing consumer awareness of tea and the continuing emergence of epicurean preferences in food and beverages.” Teavana IPO (Teavana S-1filed with SEC on April 28, 2011)

Source: 1) Packaged Facts, Tea and Ready to Drink Tea in the US. Sept. 2011; 2) Tea and RTD Teas – US Mintel International, July 2011 3) Tea Association of the USA State of Industry/Tea industry Statistics Feb. 2011; 4) Beverage Marketing Corp. Liquid Refreshment Share 2011, Mar. 2011.

Page 10: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

OVERVIEW: CHANNEL GROWTH

Convenience Channel: Record $1.2 billion sales, up13.5%.

144,541 stores reported 18.2% increase in volume.1

Natural: RTD tea rose 17%, entire tea category is up 5%.

Tea & coffee sales total $465 million2 in natural channel.

Mass merchant: $3.9 billion sales, shelf stable teas up 10%.3

Foodservice: $1.02 billion, returning to pre-recession spend.4

All channels: Fair Trade5 sales up 38% and organic tea

sales rose 8%.6 Tea & coffee now 60% organic in Natural.2

Sources: 1) Bottled and canned tea sales, National Association of Convenience Stores; 2) SPINs scan natural 52-weeks Mar. 2011, SPINS, Inc. Natural Food Merchandiser, June 2011; 3) SymphonyIRI 52-weeks ending Feb. 19, 2011; 4) Packaged Facts, Tea & Ready to Drink Tea 2011; 5) Fair Trade USA – Tea Impact Report/2011 Almanac; 6) Organic Trade Association Annual Organic Industry Survey.

Page 11: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

OVERVIEW: GLOBAL

Global consumption expanded 6.2% in 2010.1 Production is 4.2 million tons (mt) since 2000, green production up 90%.2

U.S. consumption rose 25% in10 years, up 4.7% to a record 127 million kgs in 2010.1 U.S. is now 9% of global market.3

India, China and Sri Lanka are in a three-way race to dominate exports of specialty tea. All three intend to expand their share of U.S. market. China now growing black tea for export.

“Despite its relative smaller market size and low consumption levels, tea is slated to score over coffee in the long run in volume terms, on account of factors such as economical pricing, new flavors and ‘healthy’ brand value, as new tea drinkers join the brigade.”4

Sources: 1) Economist Intelligence Unit/2011; 2) ITC 3) Packaged Facts, Tea and Ready to Drink Tea in the US. Sept. 2011; 2) Beverage Marketing Corporation 2011; 3) International Tea Committee May 2011 Web Summary; 4) Global Industry Analysts, Hot Beverages, Feb. 2011

Page 12: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

OVERVIEW: VALUEGlobal market projected at $69.77 billion by 2015.1

Tea prices averaged $2.88/lb in 2010 an all-time record.2

Tea’s growth in value averaged 16% from 2005-10. Increases in volume sales still outpace value sales making the sector ripe for development of brands where health credentials justify a price premium.3

Convenience drives growth. A paradox is that tea in its most convenient forms requires smaller quantities and lower quality leaf. As demand increases, less tea is required. CTC in 2- to 4-gram tea bags yields twice the cuppage per given weight of tea. Blends require one-third the amount of tea leaves served in a cup of orthodox and single-estate tea.4

Sources: 1) Research and Markets; 2 Economist Intelligence Unit/2011; 3) Euromonitor Hot Drinks , with import statistics from International Tea Committee May 2011 Web Summary; 4) The Tea Market – A Background Study 2002

Page 13: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

OVERVIEW: OUTLOOK

Most of the world’s tea remains unbranded, inexpensive.

Coffee commands three times the value per liter. But demand is growing for value-added tea. India, the world’s largest consumer, now supports 300 tea brands.1

Bottled teas and iced tea brands are emerging in Russia and instant tea is the largest branded category in China.1

Even Brazil, the top coffee producer, reports big gains. China and Russia will drive future growth.1

Climate change is a wild card. Harvests are less predictable, drought more frequent. Research is needed into heat resistant cultivars and pest-resilient teas.

Sources: 1) Euromonitor/Cultural Evolution is Affecting Tea Consumption, 2010.

Page 14: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

TEN TRENDS FOR 2011

Availability Boosts Consumption

A Million is not a Mirage

Differentiated Teas Gain Market Share

Export Target: America Gets Noticed

Ready-to-Drink Volume Surges

Iced Tea Goes Global

Money Making Mergers

Enhanced Elixirs: Health in a Bottle

Convenience is the Starting Gate

Grocery Growth

Page 15: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

I’m not an expert.I don’t grow, process or or sell tea.I am exposed to a flood of information. World Tea News distills this into business insights.

This presentation is fast-paced. Slides are dense. The overview is broad, don’t get lost in the details. Print the handout. We need to make time for an exercise guaranteed to improve retail profits.

Availability Boosts Consumption (Thirsting for Really Good Tea)

Grossing a Million is not a Mirage (Retail Success Stories)

Differentiated Teas Gain Market Share (Certifications Count)

Emerging Export Target (America Gets Noticed)

We have time for only a third of the slides in this deck. To download the Retail Trends handout visit: www.worldteaeast.com and subscribe to WTN to keep pace.

Raise a hand toSTOP

Page 16: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

AVAILABILITY BOOSTS CONSUMPTIONSixty-five percent of U.S. tea is sold in tea bags.Eighty-five percent is served iced, 80% is black tea. Green tea consumption is at19.5% and rising.1

Compiled by Packaged Facts from Experian Simmons National Consumer Survey data, Winter 07/08 and 10/11. Used with permission.1) Tea Association of the USA, Annual State of the Industry Report Feb. 2011

Tea by Type 2007/08 2010/11

Packaged Tea (all types) 83.9% 84.0%

Bagged and Loose Tea 75.4% 73.9%

Bagged Tea (only) 72.0% 70.9%

Bagged/Loose (to make hot) 56.8% 56.9%

Bagged/Loose (to make iced) 46.2% 46.3%

Ready-to-drink Tea 43.5% 45.3%

Instant Iced Tea Mix 28.4% 27.3%

Loose Tea 10.4% 10.2%

Page 17: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

CONSUMPTION CLIMBSTwenty-eight percent of Americans drink freshly brewed tea (hot or cold) daily.

Tea was 5.4% of liquid refreshment beverage volume in 2010. RTD tea is up .2%, and comprises 1.7% of all tea sold.1

Consumption of instant tea is declining in its familiar form.2

Tea made from tea powder (Snapple) represents much of the bottled segment.

There is growing demand for fresh-brewed bottled teas (Honest Tea and SweetLeaf ) and foodservice concentrates, like B.W. Cooper’s Ice Brew Tea.

Source: 1) Beverage Marketing Corporation/2011 Annual Liquid Refreshment Report; 2) Packaged Facts

Page 18: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

RESILIENT RTDThe recession clobbered beverages for a -2.8% decline that is reversing.

Hardest hit: value-added water, fruit beverages and soda. Tea prevailed.

Volume is steady, value is rising.

Americans consume 38 grams (25 tea bags) or 13.4 dry oz. (six 2 oz. pouches) or 157 cups, mostly iced.

The British, Turks and Irish consume 200 grams or 5 times more tea per capita. Canadians drink 264 cups a year, about 16.2 ounces, mostly hot. Asians each drink 730 cups.

Source: Beverage Marketing Corporation.*Includes bottled water, carbonated soft drinks, energy drinks, fruit beverages, RTD coffee, RTD tea sports beverages and value-added water.

Page 19: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

TRADITIONAL RETAIL DRIVERSTaste. Media & marketers keep the health attributes of tea top-of-mind but taste remains the primary attribute cited by 77% of respondents who purchase tea. Others buy it because it is refreshing (68%) and healthy (42%)

Convenience. Brands like Honest Tea (Coca-cola); Lipton (PepsiCo-Unilever) and SweetLeaf (Nestle) guarantee tea is present in every possible outlet. RTD now accounts for two-thirds of tea volume.

Availability. The more readily available, the greater overall sales. Grocers stock larger selections, advertise tea more aggressively, convenience stores are doing record business and vending machines promote national brands.

Page 20: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

EMERGING RETAIL DRIVERS

Ice tea is the darling of top chefs at 5.4 billionservings.1 Surveys show10% of customersordering more iced tea than two years ago.2

Tea is the trendy base for functional and enhanced lines.

In grocery, big brands now embrace premium organic, Rainforest Alliance, UTZ and Fair Trade certified offerings.

Nielsen reports 72% of Millennial households drink tea. Young men are exploring tea and drinking less coffee.

Tea is an important lifestyle choice but a recent Wi-Fi Alliance survey noted that 75% of Millennials would sooner give up coffee and tea for a week than their Wi-Fi connections.

Source: 1) SymphonyIRI Foodservice sales of iced tea 2010 2)Technomics 2011 Market Intelligence Report: Coffee and Tea,

Page 21: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

EMERGING RETAIL DRIVERSTea Celebrities: Lady Gaga, Mel Gibson, Gwyneth Paltrow, Prince Charles, Victoria Beckham, Heidi Klum, Jennifer Aniston, Oprah Winfrey, Dr. Oz and Jennifer Alba. NPD Research shows celebrities influence 3% of customers.

Celebrity Tea: Chris Noth, Brittany Spears, Donald Trump,Australian Prime Minister Kevin RuddRush Limbaugh…

Innovative packaging ranges from rustic Kraft to wood boxes and tins. Elegant designer accessoriesand giftware contribute up to 40% of sales.

Page 22: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

A MILLION IS NOT A MIRAGE

Despite these headwinds, grossing a million dollars ayear is not a mirage.

World Tea News estimates there are at least a 100 U.S.shops earning this sum and the number is growing.

The group mainly consists of shopping mall merchants like Teavanain the U.S. and Teaopia in Canada. Success takes many forms:

• An urban oasis like San Francisco’s Samovar Tea Lounge and The Urban Tea Merchant in downtown Vancouver.

• Suburban hangouts like Teaism in Washington, D.C.

• and traditional settings like Seattle’s Queen Mary Tea Room.

It’s not impossible, but getting there isn’t easy.

Page 23: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

A MILLION IS NOT A MIRAGE

Source: 1) NDP Group ReCount 2011; 2) Tea Assoc. of USA 2011 State of Industry Report; 3) American Pulse Survey 5,242 respondents June 2011.

These are not the boom days of 2006.

Consumption faltered during the recession and attrition in foodservice since 2009 remains very high. During thepast year 9,450 U.S. restaurants closed, of these 8,650 were independents. “The decline in independent units is the steepest we’ve seen,” says NDP Group (April 1, 2010 to March 31, 2011). 1

Tea foodservice annual growth is projected at 1.5% to 2%.2

Setbacks continue as consumers struggle with unemployment and job security. The buying power of Americans is weak. An American Pulse2 Survey in June revealed 89.9% of respondents who currently have a job are not counting on a salary increase in the next year.3 The unemployed number 16.5 million.

Page 24: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

A MILLION IS NOT A MIRAGE

An estimated 3,000 specialty tea outlets1 present appealing and diverse choices.

Consumers encounter high-visibility, high-traffic teamerchants like Teavana, Teaopia and DavidsTea in mallsand suburban shopping centers.

Specialty drink outlets like Argo Tea Café, tea lounges and urban tea bars serving alcohol cater to the city crowd.

Afternoon tea in upscale hotels and weekend leisure stops in Victorian tea rooms lure tourists.

Tea-themed spas and trend-setting resorts cater to young professionals seeking a calming Oriental-influenced refuge.

Source: 1) Sage Group 6th Edition Specialty Tea Report

Page 25: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

A MILLION IS NOT A MIRAGEHere is what these retailers share:

Great locations, efficient use of retail space.

A focus on the taste preferences of customers.

A large selection of fresh, premium teas (80% custom blends including classic herbals with 20% orthodox /estate selections).

Enthusiastic, well-trained staff focused on retail excellence from quality offerings to customer service.

• Significant online sales (10% of gross with100 teas on offer).

• Sophisticated marketing (web presence, active social network).

• A sharp eye on business metrics using sophisticated technology to monitor business expense and influence loyalty purchases.

Page 26: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

Teavana Holdings operates 175 company-owned storesin 37 states with 16 franchised locations (13 in Mexico).Expansion: 50 stores (33 built) with 60 in 2012 to 500in 2015 with franchise growth in the Middle East and Canada. Retail Space: 900 sq. ft. Rent: $76,000 average ($83 per sq. ft.)Stores employ: 11.8 part-time, full-time including region managers.

TEAVANA IS NOT TYPICAL

Teavana stores averaged $862,000 in annual sales in FY 2010 and earned profits of $165,000 per location. Sales at several stores topped $1 million.

Source: Teavana S1 IPO filing (April 28, 2011) Teavana Holdings 2011 S1: NYSE, Ticker Symbol: TEA

Page 27: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

Consolidated Statement (abbreviated)

Sales: $124.7 million (FY2010)

Sales and administrative expense: $50,571,000Net income: $12 million (126% growth over FY2009)

Online sales growth: 56% (7% of net, goal is 10%)

Average store net: $82,193Operating margins: 18.8%Same store sales growth: 8.7%Sales per sq. ft.: $994History: $63.8 million(FY2008)

$90.2 million(FY2009)

TEAVANA IS NOT TYPICAL

Source: Second Quarter Financials, Sept. 2, 2011, Teavana 2011 S1: NYSE, Ticker Symbol: TEA

IPO Asking Price: $17 (July 28 - NYSE)

Share Price: $23-$25 ($23.99 9/2 - NYSE)

Market Cap: $725+ millionFiscal year-to-date (July 31, 2011)

Net Sales: Up 36% to $66.3 millionNet Income: Up 74% to $4.4 millionFiscal 2011Revenue: $164 million

Page 28: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

TEAVANA IS NOT TYPICALNet Sales (by category)

Independents

Bulk Tea 56%

65%

Merchandise 40%

30%

Beverage Tea 4%

5%

Stores offer 100+ selection of teas.Gross margins: rose to 62.9% from 59.6%. Pricing: $7.80 for 2 oz., $18.80 for 4 oz. and $67.32 for 6 oz. Average ticket: $36.

“A primary driver of our expected margin expansion will come from the continuation of our sales mix shift away from tea-related merchandise towards higher margin loose-leaf teas that our stores generally experience as they mature.” S1 IPO Filing

Page 29: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

AMERICAN TEA ROOM IS NOT TYPICALThis tea bar seats six. A pot sells for $5. Tea service with scones and snacks is $20. Top selling Nirvana, a blend of Japanese Sencha, berries, figs and kiwi retails at $15 for 100 grams. Food is 4% of sales. Yet the American Tea Room grossed $1.5 million in 2010 selling premium loose leaf and teaware. How did they do it? • A typical transaction

consists of four $15 bags of tea with an accessory.

• Average ticket from Jan. 1 to June 1, 2011 was $89.

• Exceptional online sales.

• Relentless marketing.• Ever-changing

offerings.

Page 30: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

RETAIL TEA TRENDS TAKEAWAYS Few shops gross $1 million, but it is not a mirage.

Teavana IPO establishes industry benchmarks.

Teavana may dominate but will not exclude other tea retailers in the specialty channel. Teavana simply demonstrates one of several ways to bring specialty tea to market.

“In July the NYSE enthusiastically funded Teavana at 65% above its asking price of $17 per share. Teavana now will mimic the Starbucks expansion that made specialty coffee the multi-billion business it is today. But the 500 shops they build will not put independents outof business. There is ample room for expansion for rival chains and independents.” – Dan Bolton, Editor/Publisher, World Tea News.

Page 31: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

RETAIL TEA TRENDS TAKEAWAYS• Location and ambiance retain overarching

importance.

• Top earning shops emphasize sales of premium tea to boost margins. Offer an 80% mix of fruit and floral blends and herbals with 20% orthodox and estate teas.

• Online sales are significant contributors to visibility and the profitability of brick & mortar ventures. Online sales account for 7-10% of daily transactions.

• Teaware is a critical component contributing 30-40% of sales.

Food is complementary contributing 5-10% of sales.

Tea-themed restaurants are a different business model that closely resemble QSR, family dining or full-service restaurants.

Page 32: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

TRAFFIC & TICKET EXERCISENow that you can see it can be done let’s take a fewminutes for an exercise that will help you understandprecisely what is needed to boost sales in your own shop.

Whether you sell packaged loose leaf, tea bags or operatea foodservice tea room consider these two critical benchmarks.

• The first is average ticket (average ring or transaction).

• The second is average daily traffic.

These benchmarks are equally important. Shop owners generally benefit most when they concentrate their energy and resources on the weakest. When we last did this exercise 26% of the retail audience indicated an average ticket of $10-14. Another 20% reported average sales of $15-19. Let’s see how this group does.

Page 33: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

You Can Vote via www.Poll4.com

Enter 5-digit CODE in window, click submit.

Ticket CODE RESPONSES ARE ANONYMOUS

TIP

EXAMPLE

32563

32563

32595

Page 34: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

How To Vote via Texting. Use 22333 and put CODE in message.

1. Standard texting rates only (worst case US $0.20)2. We have no access to your phone number3. Enter CODE in message line (not subject line)

TIPS

EXAMPLE

32563 or32595

22333

32563

32595

Page 35: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

129298 | < $4129302 |$5 - $9129304 |$10 -14129305 |$15 -19129308 |$20 -24129309|$25 - 29

129319|$30 - 34129322|$35 - 39129323|$40 - 44129333|$45 - 49129334|$50 - 54129335|$55 - 59

129339|$60 - 64129345|$65 - 69129349|$70 - 74129350|$75 - 79129351|$80 - 84129356|$85 - 89

129360|$90 - 94129365|$95 - 99

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Page 36: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

AVERAGE TICKET (50 SHOW RESPONSES AS OF JUNE 26)

Code 129302 < $4

Code 129304 $5 - $9 4%

Code 129305 $10 - $14 1

Code 129308 $15 - $19

Code 129309 $20 - $24

Code 129319 $25 - $29

Code 129322 $30 - $34 4%

Code 129323 $35 - $39 4%

Code 129333 $40 - $44 3%

Code 129334 $45 - $49 4%

Code 129335 $50 - $54 2%

8%

20%

16%

10%

26%

Page 37: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

WHAT IS YOUR AVERAGE DAILY TICKET AMOUNT?

There is no universal formula to achieve retail riches.

Success demands brilliant execution of a million details from scheduling staff to social media marketing.

The first step is to consistently deliver great tasting tea. Sourcing well and training are essentials.

A retailer’s next priority should be stocking, pricing and displaying offerings that establish a transaction average calculated to return gross margins of at least 75+ percent.

A common ticket average for tea retailers is between $20 and $25. The simple exercise that follows invariably helps shop owners boost sales.

Page 38: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

TRAFFIC & TICKET EXERCISEIt is important that you know what your average ticket should be before selecting your teaware line.

Veteran coffee and tea retail executive Joe Capp says:

“In my experience the average ticket for a specialty tea retail store should be between $20 and $25. If your average tea product sale is, say, only $12, you need to choose teaware products that complement your core product offering in a way that will generate an additional $8 to $13 per transaction.”

Next, identify the percentage of transactions that include teaware purchases. You can then use this information to identify what your target teaware product price range needs to be.

Use this information to establish a tiered product mix by price.

Page 39: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

TRAFFIC & TICKET EXERCISE

Price Range Product Mix Product Descriptions

$0-$10 20%Paper tea filers, food products, storage tins, utensils, etc.

$11-$20 35% Infusers, mugs, cozies, etc.

$21-$30 20% Ceramic tea pots, etc.

$30+ 25% Electric kettles, cast iron tea pots, etc.

Let’s say that you sell teaware in 65% of transactions. You need to generate an additional $8 per transaction to average $20. Better yet, sell $13 worth to average $25.

Divide $8 by .65 (65%) and you will see that your average sale of teaware products needs to be $12.31.

Source: World Tea News, “The Business Benchmarks of Teaware” Feb. 16, 2011 ($13/.65=$20 average teaware sale)

Page 40: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

HOW MANY SALES DO YOU TRANSACT DAILY?Now let’s look at the impact of traffic on your top line.

Frequency matters. Every customer returning monthly brings you $300. That same customer visiting weekly spends $1,300 a year in your shop.

You can gross a million on $25 transactions but it requires150 customers a day, or 15 transactions per hour. Teavana averages a $36 sale for every visiting customer.

Increase your store’s ticket average to $45 and the traffic count falls to a reasonable 70 customers per day.

A high transaction average enables the

American Tea Room to earn $1 million while

serving only 35 customers a day.

Page 41: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

CODES 129767 | < 20

129768 | 20-39129773 | 40-59129790 | 60-79129803 | 80-99129807 | 100-119129812 | 120-139129815 | 140-159

129816 | 160-179129840 | 180-199129841 | 200-219130809 | 220-239130811 | 240-259130812 | 260-279130813 | 280-299130816 | 300-319

231840 | 320-339231841 | 340-349231842 | 360-379231850 | 380-399231851 | 400-219231853 | 420-439231856 | 440-479231857 | 460-499

231858 | 480-499231859 | 500-519231861 | 520-539231862 | 540-559231862 | 560-579231863 | 580-599231886 | > 600232800 | > 700

232802 | > 800

Resp

onse

s appear

in t

his

fra

me in

real ti

me.

Page 42: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

AVERAGE DAILY TRANSACTIONS (MAY 2011) (50 SHOW RESPONSES AS OF JUNE 26)

CODE 129767 <20

CODE 129768 20 - 39

CODE 129773 40 - 59

CODE 129790 60 - 79

CODE 129803 80 - 99

CODE 129807 100 - 119

CODE 129812 120 - 139

CODE 129815 140 - 159

CODE 129816 160 - 179

CODE 129840 180 - 199

CODE 129841 >200

0 %

10%

0%

0%

2%

0%

2%

0%

45%

19%

12%

Not to scale

Page 43: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

TRAFFIC EXERCISEA shop like Teavana grossing $862,000 annuallyand with an average ticket of $36 does 21,500 transactions annually or about 68 to 70 per day.

Teavana’s shop hours are 10 a.m. to 9 p.m. so they need to average 5 to 7 transactions per hour.

Teavana does 10% of its business online adding another 6.5 transactions per day to the mix. In the previous sample 60% of the retailers who responded served fewer than 40 customers per day.

The ticket average must rise to compensate.

Shops with a $25 average ticket can still earn $750,000 annually on 30,000 transactions (5,000 online and 80 in-store daily) but traffic averages of 20 and fewer mean gross revenue of $157,500.

Page 44: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

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TAKEAWAYS: ROAD TO RETAIL RICHES

Retailers prosper by getting people to taste great tea.

• Chains in high traffic areas like Teavana, DavidsTea,Teaopia, Argo Tea Café and Ten Ren Tea, introducethousands of people weekly to premium blendsand tea beverages consistently produced.

• Chains like Argo that are popular with younger tea drinkers address a critical demographic as they open a window of opportunity to make tea their coffee alternate.

• It does not matter whether your shop is in a large city or suburb. It does not matter that you earn more online than over the counter. Profitability demands quality offerings, customer service, effective marketing and retail skill.

Retail excellence is the common denominator.

Page 45: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

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QUARTERLY RETAIL REPORTSThe information you just offered is extremely valuable.

A good case can be made for the tea industry to initiate a Quarterly Retail Tracking to establish benchmarks.

Anonymous third-party surveys conducted by phone (instead of internet or panel interviews) allow clarification and better control. This proven, unbiased method insures accurate data and the best representation of current market conditions.

Projections are based on in-store traffic, online orders and average ticket sales. Core survey questions establish pricing benchmarks, cost of goods averages and labor. Several questions can be used to explore developing trends with an eye for opportunities.

Page 46: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

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Tea Certifications: Differentiated TeaIndependent certification authorities reassure consumers that production of certified teas benefits the environmentas well as the lives of farmers and workers.

Customers rely on third-party certifiers to verify that marketers merit a social premium of 10% to 20%. The additional revenue is an incentive to not exploit farm laborers, improve quality and adopt business practices that ensure a sustainable future.

Certifications differentiate retail offerings. Tea merchants, restaurants and grocers depend on certifiers to protect their reputations. Manufacturers say that certifications are important to investors and essential in obtaining celebrity endorsements that contribute to sales.

Source: Fair Trade USA, UTZ Certified, Rainforest Alliance, USDA Organic, Canada Organic

Page 47: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

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Fair Trade CertificationFair Trade USA last year certified 9,500 productsfrom 878 producers in 70 countries on offer by700 industry partners at 60,000 retail locations.

The volume of Fair Trade tea grew 38% as highly visible early adopters like Honest Tea and established brands like 300-year-old Twinings made public commitments to support Fair Trade.

Since 2001 more than 7.3 million pounds of Fair Trade certified teas has been traded in the United States. In 2002 there were 16 Fair Trade certified tea producers, today there are 46.

Only Fair Trade guarantees a minimum internationally guaranteed premium. Last year $631,000 went to tea garden workers. The premium for tea totals $2.5 million since 2001.

Source: Fair Trade USA, Tea Almanac 2011.

Page 48: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

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U.S. Fair Trade Tea Imports

Source: Fair Trade USA, Tea Almanac 2010

India31%

Rwanda25%

China20%

S. Africa10%

Egypt 7%

Sri Lanka5%

Tanzania1%

2010

Country Pounds Growth

India 564,465 32%

Rwanda 442,216 46%

China 365,402 25%

S. Africa 179,755 165%

Egypt 119,876 -1%

Sri Lanka 93,929 133%

Tanzania 20,063 562%

Africa 764,556 55%

Asia 1,032,454 36%

Total 1,889,259 38%

Page 49: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

USDA Certified OrganicIn January USDA/FAS began tracking imports of organictea for the first time. We knew sales were increasing. The Organic Trade Association reports sales of organic tea among its 15 tea manufacturing members grew 8%. But we did not understood precisely how much imported tea is certified organic.

The answer is 12%. The U.S. imported107.5 metric tons of tea this spring (all categories). In the four categories that include organics (green and black, in tea bags and loose leaf) organics accounted for 12.4% of total volume and 20% value.

The differential is very pronounced in greens which account for only 8.5% of the volume but 18.2% of value ($9.2 million in the first six months of the year).

Source: To access the USDA GATS database visit: http://www.fas.usda.gov/gats/default.aspxDepartment of Commerce, U.S. Census Bureau, Foreign Trade Statistics, Organic Trade Association, 2011 Organic Industry Survey,

Page 50: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

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USDA Certified Organic

*Non certified conventional teas in same format at organic (green loose leaf, green flavored, black in tea bags etc.)Source: To access the USDA GATS database visit: http://www.fas.usda.gov/gats/default.aspxDepartment of Commerce, U.S. Census Bureau, Foreign Trade Statistics

Declared Value of All Imported Tea (in millions)

2006 2007 2008 2009 2010Jan-June

2010Jan-June

2011 Change

$430 $455 $497 $494 $582 $294,315 $309,569 5%

Declared Value of Imported Organic Tea (Jan-June 2011)

Type Value (000s) Quantity (MTs) % Volume % Value

Organic Green $9,283 876.2 8.5% 17.3%

Green* $44,441 9,487.3

Organic Black $7,209 836.3 24.1% 21.9%

Black* $25,742 2,627.6

Organic Total $16,493 1,712.5 12.4% 19.0%

Total $86,675 13,827.4

Page 51: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

USDA Certified Organic

Tea imports are up 5% in the first six months of the year compared to the same period last year when Americapassed an historical milestone by exceeding tea imports in Great Britain for the first time.

More significant is the availability of organic tea at competitive prices. Choice Organic Tea, for example, is now in 845 Kroger stores. Americans are drinking about the same amount of tea but more expensive tea. This is especially evident in green categories.

Blends that include organic spices such as cinnamon, nutmeg, peppermint and chamomile now appear in the mix. Last year 79% or 1.42 million of the 1.89 million pounds of Fair Trade certified tea imported into the U.S. was also certified organic.

Source: Organic Trade Association, 2011 Organic Industry Survey, Fair Trade USA, Tea Almanac 2011

Page 52: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

USDA Certified Organic Tea Imports

Non Or-ganic Tea

80%Value---

87.6 %Volume

Organic Tea 20%

Value---12.4%Volum

e

Organic Green Tea (all types)

Country Kilograms Value

Japan 290,106 $3.764

China 239,663 $2.085

All Others 32,476 $0.881

Total 562,245 $6.730

Organic Black in Tea Bags

Country Kilograms Value

India 346,889 $2.426

UK 76,306 $1.743

Canada 71,256 $1.413

Sri Lanka 299,301 $1.036

Total* 836,333 $7.209

* All others: Volume-42,581 kgs, Value $591,000. Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics Source: To access the USDA GATS database visit: http://www.fas.usda.gov/gats/default.aspx

Page 53: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

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Rainforest Alliance Certified TeaThe Alliance currently certifies 3.2 percent of the world’stea from producers in 11 countries. Volume last year rose53% compared to 2009 topping 120,000 metric tons.

Farms with a Rainforest Alliance certification also meet the environmental, social and economic standards of the Sustainable Agriculture Network (SAN).

The New York-based organization, founded in 1987, recently certified the first rooibos producers in South Africa. President Tensie Whelan says, “By reaching out to new territories, the Rainforest Alliance’s certification program continues its important growth and further ensures the protection of our fragile environment and the livelihoods of farmers around the globe.”

Source: Rainforest Alliance , August 2011

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Rainforest Alliance Certified TeaLipton, Tetley, PG Tips, Yorkshire, Typhoo and Twiningsare just a few of the brands certified since 2007 when the Alliance first instituted its tea program. Unilever has pledged to certify all its tea in bags by 2015. Production of Rainforest Alliance certified tea is expected reach 200,000 metric tons in 2011.

Source: Rainforest Alliance , August 2011, Correspondence with Alex Morgan, Sr. Manager North America

The Alliance expects to certify 70% of tea sold at retail in the UK by the end of this year and 20% of the global supply by 2016.

Page 55: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

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UTZ CertifiedUTZ CERTIFIED (a not-for-profit) developed baselinestandards for sustainable tea production worldwide thathave since been embraced by the Ethical Tea Partnership.

— The UTZ Code of Conduct mandates traceability, social practices and environmentally sound farming.

— Buyers pay a premium, UTZ does not interfere in price negotiations. Premium varies widely by growing region.

— Pricing structure is transparent to producers with supply and demand analysis support.

— Third-party certification provides additional marketing opportunities. Certifiers promote firms exceeding benchmarks.

Source: UTZ Certified, August 2011

Page 56: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

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UTZ CertifiedImpact is small but growing. A total of 250,000 lbs. of UTZ CERTIFIED tea has been imported this year byNorth American retail and food service brands.

— Tea growers are projected to sell more than 3,000 metric tons (6.6 million pounds) of UTZ CERTIFIED tea.

— 1,778 metric tons (3.9 million pounds) already sold as of July 2011 (up 46% from previous year)

— Approximately 23,790 tea and rooibos producers are now UTZ CERTIFIED

— 47% of the trades are South Africa rooibos 37% Malawi tea 16% Indonesia tea

Source: UTZ Certified, August 2011

Page 57: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

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OVERVIEW: GLOBAL EXPORT MARKETAdvantagesThe trees are hardy and grow in terrain otherwise hard to cultivate. Tea is produced year round, providing a steady income. Tea is now commands records prices.Tea consumption is steadily rising.

Challenges

Tea is highly perishable. Tea processingfacilities require capital. Harvests are subject to weather extremes. Competition is fierce. No country dominates the export market. Blends make tea interchangeable. Tea is labor intensive, requiring even small holders to hire workers.

Page 58: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

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Overview: Each market wants a different tea

UK buys Kenya’s CTC. Asians drink green. Russians and Americans drink black. Germany and Japan pursue Darjeeling. The French and Poles like leafy orthodox. Latin America prefers sweet tropical flavors. The Middle East drinks dark strong brew.

Source: Euromonitor blog (illustration and inspiration ) Euromonitor/Cultural Evolution is Affecting Tea Consumption, 2010.

Page 59: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

OVERVIEW: GLOBAL TEA PRODUCTION

Page 60: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

OVERVIEW: GLOBAL EXPORT MARKET

CHINA 17%

SRI LANKA 17%

INDIA 11%

VIETNAM6%

INDONESIA5% O. ASIA 1%

KENYA 26%

MALAWI 3%

UGANDA 3%

TANZANIA 1%

RWANDA 1%

OTH. AFRICA 2%

ARGENTINA6%OTHERS

1%

Page 61: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

© 2011 World Tea Media

EXPORT TARGET: TEA TOP DOZEN*Reports on producers are twelve-month rolling totals – April 2010 to March 2011

2011 Top TeaProducers*

Metric Tons (2,205 lbs)

2010 Top Tea Exporters

Metric Tons (2,205 lbs)

2010 Top Tea Importers

Metric Tons (2,205 lbs)

China 1,387,000 Sri Lanka 298,587 Russia (CIS) 181,618

India 966,733 India 136,710 Germany 37,656

Northeast India 728,526 Kenya 117,017 Britain (UK) 36,612

South India 238,207 Argentina 102,323 Poland 32,875

Kenya 372,453 China 68,132 Pakistan 28,043

Sri Lanka 334,077 Indonesia 13,145 United States 17,397

Indonesia 60,591 Uganda 12,613 Netherlands 12,788

Bangladesh 59,582 Malawi 9,094 Ireland 10,861

Malawi 50,835 Tanzania 7,442 Japan 6,319

Uganda 48,748 Zimbabwe 2,607 Taiwan 5,145

Tanzania 31,095 Taiwan 508 France 3,370

Zimbabwe 12,787 Bangladesh 359 Hong Kong 2,048

Source: International Tea Committee Web Summary May 2011, Import figures include tea arriving for re-export

Page 62: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

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PER CAPITA TEA CONSUMPTIONData from 2007, 2010 and 2011*

Country Kilos Dry Oz. Country Kilos Dry Oz. Country Kilos Dry Oz.

Kuwait 2.86 kg* 100.9 oz Netherlands .8 kg 28 oz Norway .4 kg 14 oz

Ireland 2.31 kg* 81.5 oz Australia .8 kg 28 oz Swiss .4 kg 14 oz

Quatar 2.04 kg* 71.9 oz China .76 kg* 26.8 oz Sweden .4 kg 14 oz

Turkey 2.02 kg* 71.2 oz Germany .7 kg 25 oz USA .38 kg* 13.4 oz

UK (England) 1.97 kg* 69.5 oz India .69 kg* 24.3 oz Austria .3 kg 11 oz

Iran 1.4 kg 49 oz Pakistan .62 kg* 21.9 oz Argentina .3 kg 11 oz

Morocco 1.2 kg 42 oz Chile .6 kg 21 oz Finland .3 kg 11 oz

Egypt 1.1 kg 39 oz Canada .46 kg* 16.2 oz France .2 kg 7.1 oz

New Zealand 1.0 kg 35 oz Asia 705 to 893 cups Denmark .2 kg 7.1 oz

Poland 1.0 kg 35 oz England (4) 350 cups 70 bn Peru .2 kg 7.1 oz

Russia .94 kg* 33.2 oz Canada 264 cups 9 bn Bolivia .2 kg 7.1 oz

Japan .9 kg 32 oz America 157 cups 65 bn Italy .1 kg 3.5 oz

Source: British Tea Committee (insert); Wikipedia (lots of debate over order Ireland usually listed before England and Turkey.http://www.marketresearchworld.net/index2.php?option=com_content&do_pdf=1&id=208

Page 63: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

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CHINA EXPORT TARGET: UNITED STATESTea chests from the orient come to mind when Americans discuss imports, but Argentina is far and away the biggest supplier of the black tea that Americans prefer. ITC tallies show the US imported 5,712 metric tons of tea from South America.China is second at 2,471 tons.

Unlike Argentina, China exports largequantities of green as well sending 2,661 tons to the US in the past 12 months.The cumulative total of Chinese greens for 2011is18% ahead of last year, but the real story is China’s renewed emphasis on black teas targeted for export.

The United States is a primary export target.China reports 8,857* tons of tea in the pipeline.

Argentina

China

Source: China Economic Monitoring & Analysis Centre. Reporting discrepancies are common due to lengthy transit times, exports consigned to a particular country that are transferred to another destination in transit and the fact that imports often arrive during the following calendar year.

Page 64: © 2011 World Tea Media Top Tea Retail Trends Dan Bolton Editor and Publisher World Tea News  Dan.Bolton@WorldTeaNews.com Booth No

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INDIA EXPORT TARGET: UNITED STATESIndia has a great thirst for tea, consuming 80% of the 966,733 metric tons it produced last year. Per capita consumption is growing at 1.8%. Rising labor costs, falling yields and strong global pricing convinced the world’s second largest producer to undertake a major national program to increase tea exports. This year’s goal of 200,000 metric tons was last attained in 2009.

The US is India’s 8th largest export market.By comparison the Russia Federation is five times larger. The combined Middle East market imported 34,330metric tons of India’s tea last year.

2010 Exports: 136,710 metric tons (12% of all global exports)

US: 7,590 metric tons Canada: 1,340 metric tons

India

Source: International Tea Committee (May 2011 Web Report)

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SRI LANKA EXPORT TARGET: UNITED STATES

Last November Sri Lanka instituted a billion rupee ($9 million) campaign to promote Ceylon tea. The fund is financed by a levy on exports. Their U.S. goal is $2.5 billion in exports by 2015.

“North America was a key traditionalmarket for Ceylon tea that was “lost”as major brands that control the trade movedto newer, cheaper origins,” says Merrill J.Fernando, chairman of the Sri Lanka Tea Council.

“Discerning (North American) consumers still appreciate the unique flavor of Ceylon tea and are increasingly focused on ethics, provenance and authenticity,” he says.

2010 Exports: 298,587 metric tons (19% of all global exports)

US: 3,312 metric tons Canada: 795 metric tons

Sri Lanka

Source: International Tea Committee (May 2011 Web Report)

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© 2011 World Tea Media

EXPORT TARGET: DUBAI, UAEUnilever, the world’s largest tea group, is doubling output of its largest tea processing facility to meet European and Middle Eastern demand for green tea. Per capita tea consumption in the Middle East rivals Britain and Ireland and Dubai is now the major center oftea procurement for the Arab world.

Unilever’s Jebel Ali plant is 2,000 kilometers from the nearest tea gardens yetit produces 1.1 million tea bags an hour.

The goal is 52.8 million tea bags a day — 19.3 billion a year by 2015.

2010 Imports: 47,963 metric tons

Sri Lanka: 29,570 metric tons India: 12,200 metric tonsKenya: 5,584 metric tons

UAE

Source: International Tea Committee (May 2011 Web Report)

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© 2011 World Tea Media

Thank you for attending

Top Tea Retail Trends

Dan BoltonEditor and PublisherWorld Tea News www.WorldTeaNews.com [email protected] No. 106