In your opinion, are there growth opportunities in the tea industry in Africa today?
Absolutely! Tea is the world’s second most drank beverage. Whereas the growth rate of coffee consumption is declining worldwide, the one of tea is growing mainly due to a growing health concern of populations. Within the tea industry, speciality tea is the fastest growing segment. The gourmet tea market is a niche which is not saturated, with only a few luxury brands. Most tea brands are in the premium and mass-market segments.
It is a well-known fact that Africa is the home of numerous raw commodities but most of them are not transformed locally. This is the case of superior quality teas which are widely unavailable in sub-Saharan Africa. And when available, often they don’t meet the quality standards of similar teas which could be found in tea houses outside of Africa. Tea is usually exported at a relatively early stage in the supply chain. Nearly all of the tea – more than 90% – is exported in its raw form to be packaged and processed abroad.
Blending and packaging are the most lucrative part of the tea trade. About 30-50% of the consumer price of tea goes towards blending, packing, packaging materials and promotion. Most of the value is not captured by the domestic industry. This is quite an absurd situation when Africa is the world’s third largest producer of tea and the world’s largest exporter. While, for a given quantity of rooibos, the local price of a basic quality is more than 20 times cheaper than a superior quality sold overseas. Most of the value-add is created outside of Africa and is not benefitting the producing communities.
In addition, marketing is becoming ever more important for tea brands. Tea production countries are usually insufficiently equipped to address consumer choices, which make value addition even more difficult. Large profits therefore do not accrue to the tea-producing countries, let alone to the small farmers or plantation labour force. This alienation of the farmer from the market is worsened by the increasing market share of innovative processed products, such as iced tea or instant tea, that demand advanced production and packing technology and a matching marketing budget. In creating an African gourmet tea brand, YSWARA, we are retaining most of the value-add in Africa and participating in a movement to reverse the status quo.
As a respected businesswoman, what advice do you have for other aspiring women entrepreneurs trying to make it in Africa?
Before you start anything, my advice is to find your passion and pursue it passionately. In addition, as an entrepreneur, you need to be able to create a compelling vision, to passionately own the vision, to define the roadmap to execution, and to bring together and relentlessly drive the energies, the talents and the values necessary to ensure success. You need to become an execution machine. Building a venture from scratch is not for the faint-hearted, you need to be courageous, tenacious, have perseverance and resilience. Never take no for an answer and be solution-oriented, constantly.
I love this quote from journalist Eric T. Wagner who wrote: “True entrepreneurs never, never, never quit. Never. Like a bull-dog latched onto a bone. Like a mountain lion with its jaws around the neck of a deer. You’re not prying any of this loose. And the same goes for trying to hold a good entrepreneur down. Not going to happen.”