Will green tea revive Darjeeling’s ailing tea industry?

As traditional black tea falters, Darjeeling turns to green flush for a shot in the arm. But will it be enough?

The tea industry has been in the doldrums for some time, and there is unanimity among stakeholders that a one-time injection of cash is essential to stem the decline while long-term alternative measures are explored.  | Photo Credit: BY SPECIAL ARRANGEMENT

At the Smart Tea Conclave 2023, held in Kolkata in August, Anshuman Kanoria, managing partner of Balaji Agro International (BAI) Group, which owns two of the most well-known tea estates of Darjeeling Goomtee and Tindharia likened the Darjeeling tea industry to a patient in an ICU, “virtually on its deathbed”. Speaking to Frontline three months later, he said the situation had worsened. “This is the worst ever situation the Darjeeling tea industry has faced,” he said. Even investors who earlier bought tea estates as “land bank” now show reluctance to come forward. According to industry sources, most of Darjeeling’s tea estates are languishing in the hope of finding buyers.

As the industry sinks deeper into financial loss and infrastructure neglect, tea growers are desperately exploring ways to keep the industry afloat. While it is unanimously agreed that an injection of cash as one-time support from the government is essential to at least temporarily stem the decline, industry experts think that long-term alternative arrangements should be explored immediately. According to an influential section of the industry, one long-term solution lies in exploiting the growth potential of the market for green tea, particularly for the season immediately following the second flush (July onward). The first flush, or the spring flush, of Darjeeling tea, which occurs between late April and May, is the industry’s most prestigious product, followed by the second flush, or the summer flush, which is obtained from May to June.

Once a thriving industry, Darjeeling Tea was one of the first agricultural products in the country to get a GI tag. Today, more than 50 of the 87 gardens in Darjeeling are believed to be up for sale. | Photo Credit: BY SPECIAL ARRANGEMENT

Until recently, a commonly held perception in the Darjeeling gardens was that estate owners would recover garden costs from the first and second flushes alone. “There is a saying that Darjeeling planters slog during the first and second flushes and go to sleep after that. But now the first and second flushes are not enough to sustain the industry,” a high-level industry source told Frontline. A number of factors have contributed to the shift: changing climate and rainfall patterns; the Ukraine war and the weakening economy in Europe and Japan with a consequent dip in demand and prices; increase in wages and cost of production without any concomitant rise in prices; and last, but not the least, the influx of tea from Nepal that has flooded domestic and international markets once monopolised by Darjeeling tea.

How will green tea help?

How will the production of green tea help? According to Sudhangshu Shaw, director of Giddapahar Tea Estate, the period following the second flush would be the ideal time for tea growers to focus on green tea. “There is always a good price for the first and second flush. But after that the big packeteers start operating. They need to buy in bulk for their blends. In monsoon the quantity is high and the quality is low, and that is the time when the gardens go for green tea,” Shaw told Frontline. He pointed out that the green tea market in India is picking up now though it has not caught on like in Japan or China.

Sorting and segregation process under way at the factory in the Gopaldhara tea estate in Darjeeling. | Photo Credit: BY SPECIAL ARRANGEMENT

Interestingly, more than 30 years ago, Harish Mukhia, considered an authority on Darjeeling tea during his lifetime and a stalwart of the tea industry, predicted that green tea would be the “health drink of the 21st century and the youth would be its biggest consumers”. In an interview to a local newspaper, he had said: “Green tea should be made during rains flush, especially from Assam and Assam Hybrid bushes. These teas have a smoother taste and delicate flavour, which is different from the teas of other regions. The gardens should continue making black teas from the Chinary tea bushes since green tea from these bushes would have a slightly astringent and stronger taste. Teas from China [also known as Chinary] plants will continue to command good prices in the rains due to their inherent quality. There is a huge market within India as people are getting health conscious and the awareness level has increased and youth have disposable income.”

Green tea from Darjeeling. Many growers believe that the popularity of green tea will help revive the industry.  | Photo Credit: BY SPECIAL ARRANGEMENT

During the monsoon season, Sudhangshu Shaw uses all the leaves plucked during the morning hours in his Giddapahar garden to produce green tea. “People don’t want monsoon tea much, and there is a growing trend among the younger generation for green tea. I make a limited amount for green tea, and all of it is sold. The export market is not so good, but there is huge potential in the domestic market. In fact, I have been telling my colleagues in the industry that if green tea production can be promoted in a big way during the rainy season, it might do the Darjeeling tea industry a lot of good. But not everybody is willing to listen,” he told Frontline.

A government source in the industry acknowledged that the market for green tea is growing in India but saw this growing preference, particularly among the young and affluent sections, as a passing fad. According to one industry expert who did not want to be named, both green tea and black tea are the same in terms of health benefits and antioxidants: “It is really a matter of preference. China has the biggest market for green tea and is the highest producer, but of late the younger generation has shown a preference for black tea or milk tea. The reverse is seen in India.”

Highlights

• The Darjeeling tea industry is in dire straits, facing financial losses, infrastructure neglect, and declining demand.
• Green tea production during monsoon is seen as a potential solution, given its growing popularity and higher margins.
• Challenges remain, including the need for government support, promoting green tea consumption in India, and addressing the influx of cheaper Nepal tea.

Market waiting to be explored

The amount of green tea produced in the country is just a little over 1 per cent of the total tea production. India’s annual tea production is around 1,345 million kg a year, with green tea accounting for only around 16 million kg. Green tea had a niche market, and this market had to be explored, promoted, and marketed, said a government source. While doing so, efforts should be made “to make other teas along with green tea and create a market for them”, according to Shaw of Giddapahar estate. “That way, the industry’s chances of survival improve,” he said.

A manager of a prominent tea garden in Darjeeling, who did not wish to be named, pointed out that while green tea had the potential to become an important aspect of the Darjeeling tea industry, its cost of production was higher. “In the steaming process during the production of green tea, there is loss. For 100 kg of leaf, one gets around 22 kg of ‘made tea’, that is, 22 per cent. In the case of green tea, this dips to 18 per cent. But the Darjeeling green tea has an additional advantage due to the flavour it derives because of altitude, climate, and soil conditions,” he said. He pointed out that certain “innovations” need to be done in the estates to identify bushes that are more conducive for green tea.

Packaged and ready for the market. The biggest problem for green tea, according to growers, is the lack of promotion of the product by the government. | Photo Credit: BY SPECIAL ARRANGEMENT

The biggest problem for green tea, according to growers, is the lack of promotion of the product by the government. An industry source said: “Who is going to promote is the question. We should write to the Tea Board for promotion of Darjeeling tea, not just subsidies. The government is also fed up and wants Darjeeling tea to stand on its own feet. Subsidies can be a stopgap but cannot be permanent. If the Tea Board starts advertising, people will believe.”

In November 2023, the green tea market got a shot in the arm when Coca-Cola entered a partnership with the well-known Makaibari tea estate of Darjeeling to produce ready-to-drink iced green tea. The product will be marketed under “Honest Tea”, the US brand that Coca-Cola purchased in 2011. “With Coca-Cola entering the market, the demand for green tea is likely to go up to such an extent that a relatively small garden like Makaibari will not be able to meet the demand, and I am sure that at some point many more gardens will have to start producing more green tea. Overall, it is bound to be good for the industry,” an industry source told Frontline.

Rishi Saria’s tea estates, Rohini and Gopaldhara, produce a considerable amount of green tea, but he believes the demand for green tea is not growing fast enough to make any perceptible difference in the industry in the near future. “The international market for green tea is dominated by Japan and China, which also have serious research institutes on the product. The people there are interested in having something extraordinary. We need to start educating Indian consumers on super speciality tea,” Saria told Frontline. According to him, tea as a product is not taken seriously in India, and the government has been done little to change attitudes towards the product.

“What bothers me is the perception we have created about tea. Its position is somewhat like a poor man’s beverage in India. That is probably because not much thought has been put into it. In India, tea is almost like a recipe, often consumed with masala and added flavours. As a result, the original quality and the aroma remain largely unappreciated. Most of the traders also don’t care. All they are only looking at are the prices they are getting. We, as representatives of the industry, have not explained the value of real tea to consumers and, ironically, to the fraternity either,” said Saria.

While India’s domestic market has huge untapped potential, according to Saria, quality takes a back seat as CTC tea dominates the market. “Unless a culture of drinking quality tea develops, the industry has little hope to grow qualitatively.... Unless we get people to pay more for tea, we cannot pay the workers. Tea should have an important place in people’s lives. Ideally, there should be a separate domestic budget for tea. It’s not that discretionary spending has gone up in India, it’s just that tea is not on the consumer’s list,” he said.

Bringing about a change of perception will undoubtedly take time. But the Darjeeling tea industry’s decline, seemingly inexorable, that started with the 107-day shutdown in the hills in 2017, needs to be addressed urgently. Kanoria believes nothing short of a “one-time injection of financial support, and imposition of a minimum import price on freely dumped Nepal teas passing off as Darjeeling tea in India, can take the patient out of the ICU”. He admitted that such a measure would not come close to fully addressing the damage. But it would “still send out the message the government is responsive to our problem”.

While production has been declining for the past five years (from 7.69 million kg in 2018 to 6.64 million kg in 2022), the biggest problem, according to industry insiders, is the shortage of demand. “Even with a huge reduction in crop we are having trouble selling a large part of our produce,” a prominent tea grower told Frontline. Kanoria pointed out that of the 87 gardens in Darjeeling, around 75 are operational and more than 50 of these are up for sale. “Right now the future of Darjeeling tea looks bleak, and everything appears to be up for sale. Only if the government shows that Darjeeling is a priority for it, can we hope that the tea growers’ desperation to sell and exit Darjeeling can be halted for a while,” he said.