Cultural branding holds key to success for Chinese tea
Despite having a long history and large production capacity, Chinese tea needs to enhance its value by building brands, said experts and industry insiders at a tea branding seminar last week in Pujiang county, Sichuan province.
The event attracted about 150 delegates from companies and research institutions in China.
Chen Zongmao, honorary president of the China Tea Academy, said China's tea production will surpass 2 million tons this year, but domestic tea consumption will be 1.3 million tons with an additional 320,000 tons to be exported.
"There are some 70,000 tea companies in China, but none of them can compare with Lipton," said Hu Xiaoyun, director of the Center for China Agriculture Brands at Zhejiang University.
She said the essential problem was that the culture of branding "failed to advance with the times".
"Most of the Chinese tea makers are small and separated," Hu said. "In fact, scarcity makes value. They should think about product orientation, so that every one of their products has targeted consumers."
She also suggested that domestic companies use their cultural background to increase their brand value.
She used Sichuan as an example. The local tea was once imperial tea and there are many other cultural symbols from the province, such as the ancient trade route known as the Tea and Horse Caravan Road and the world's first tea grower Wu Lizhen.
"Most tea companies like to use traditional packages, but overlook fashion trends of the current consumers," said Hu. "Besides the tea itself, they also need to study its users, and add more modern styles into their products.
"Twinings is an example that Chinese companies can learn from," she said. "Also as a royal tea, it is popular among young people and leading the consumer trend."
Beijing-based tea brand Wuyutai has developed a product that targets the younger generations. It features packages with three servings for the day with different flavors and functions - jasmine tea for the morning, green tea for the afternoon and Pu'er tea for the evening.
In comparison Sichuan's local tea companies are far behind in terms of market segmentation and package design, Hu said.
She called for a collective mark for local companies to improve their competitiveness.
"Based on the parent brand, a company can develop a series of sub-brands that interact with the parent brand," said Professor Jiang Hanchun from Anhui Agricultural University. "Building brands is not the purpose. It is useful only when it can bring about profit to companies."
According to a report released by CCAB and the Chinese Academy of Agricultural Sciences last year, the brand value of Sichuan's Mengding Mountain Tea was about 1.53 billion yuan ($241.3 million), which ranked it 19th nationwide. And Pujiang Queshe, the only geographic indication for tea in Chengdu city, was evaluated at 1.42 billion yuan.
Professor Liu Zhongchun from Hunan University said that the development of Sichuan's tea brands started late, but was growing quickly with plenty more room for further expansion.