‘Affecting everything’: COVID-19 cracks the tea cup, too
PITTSBURGH (AP) — Margaret Harris has stockpiled $50,000 worth of tea in her basement.
Ms. Harris, owner of Blue Monkey Tea Co. in Squirrel Hill, has been in the tea business for 20 years. In March 2020, as the pandemic hit, she realized there were going to be supply chain issues. She relies on shipments from places like China, where COVID-19 was quickly disrupting business as usual.
“I had to take a loan from the banks, and I ordered extra stash of teas,” she recalled. “We could barely move in our storage room because we had so much stuff.”
Like so many businesses, tea sellers — who source their products from around the globe— have had to maneuver to cope with the pandemic. Some, like Blue Monkey Tea, have chosen to stock up, while others, like Fuku Tea in Oakland, decided their best bet is to wait it out.
Fuku Tea has a sign posted that informs customers about the shortage of boba — those jelly-like pearls made of tapioca that sit at the bottom of a bubble tea drink — and limits them to only one topping per drink. Toppings offered include traditional boba, popping boba, red bean and pudding.
“We’re not getting the same supply,” said Hannah Ku, a senior team member who said most of Fuku Tea’s shipments come from Taiwan. “We’re asking for X amount of our tapioca or another topping, but we’re only getting way less than what we actually need.”
Right now, a 16-ounce bubble tea costs $3.65, and a large 24-ounce at $4.40. One topping is included in the price, but pre-shortage, it would run a customer an extra 50 cents per additional topping.
Holdups at ports
The challenges for the tea industry are coming from more than one direction.
A recent surge in shipping container costs has caused headaches for many industries, including the tea business, said Peter Goggi, president of the Tea Association of the U.S.A., a New York-based organization that represents upward of 100 corporations.
“A typical 40-foot container out of China, which would have cost about $3,000 a few months back, is now up to $13,000,” he said.
A 40-foot shipping container can hold more than 2,000 cubic feet of volume, according to iContainers, a supply chain-tracking platform headquartered in Barcelona, Spain. If these containers are not filled or shipped, suppliers are missing out on a whole lot of tea.
Because of a lack of workers as a result of COVID-19, Mr. Goggi said there was a slowdown in the unloading and loading processes of large port groups like Los Angeles and New York.
As the globe now transitions out of a pandemic-centered world, there is a buildup of demand for containers, especially in Asia.
“Shipping vessels and shipping lines are absolutely trying to get as many empty containers out to these Asian ports for exports around the world (as they can),” he said. “In many instances, they’re refusing to take cargo from other countries. In the U.S., there’s been a lot of communication between various industries and the Federal Maritime Commission about the fact that it’s impacting our ability to export agricultural products.”
The U.S. is the third-largest tea importer worldwide, behind Pakistan and Russia, according to a 2019-20 report by the Tea Association of the U.S.A. However, the U.S. is also the only Western country to grow in tea imports, as well as tea consumption.
Back in Squirrel Hill, Ms. Harris is expecting a big hike in wholesale tea prices soon due to the lack of shipping containers. She predicts a 15% to 20% increase in shipping costs, but she doesn’t think it will affect the price of the tea at her shop very much because local shipping prices are the same.
“We don’t see an increase in our shipping costs yet locally, because the issue is not local shipment,” she said. “FedEx (and) UPS are still good. The problem is for my wholesalers to get shipment on those containers.”
Still, Ms. Harris said Blue Monkey increased prices an additional 10% a few weeks ago for the first time in years.
One thing helping to keep prices from going still higher is the wide range of other business and supply avenues. Ms. Harris said African-grown tea crops in places such as Kenya and Malawi have been largely unaffected.
Blue Monkey Tea has also started its own wholesale business, supplying other retailers with locally made beers that incorporate their tea. “If there’s no tea, I’ll sell something else,” she said.
Melissa Underwood, manager of Blue Monkey Tea, oversees herbs for herbal teas and said she had to go through multiple distributors to get specific products due to a lack of people working crops overseas.
“It was really bad for many months,” she said. “Now I would say it’s much better. It’s not back to normal, but it’s much better.”
Ms. Harris said many herbs come from Balkan countries such as Bulgaria and Romania, while Ms. Underwood noted chamomile comes from Egypt.
Because certain ingredients are lacking or unavailable all together, certain tea blends cannot be made.
Chai blends are largely made up of black tea, cardamom, cinnamon, cloves and the main component — ginger. With a shortage of ginger — a bad harvest didn’t help — coming out of Thailand, Ms. Harris said there is no way to make chai.
Tea as a hobby
The shortages hit as demand for tea has increased during the pandemic.
“Tea is such a comfort measure,” Ms. Harris said. “Not only were they drinking tea because it was pleasant and something to do, but they develop a hobby now. We created so many new tea drinkers because of this pandemic situation.”
That included a spike in sales for immunity-boosting teas — Blue Monkey Tea features teas such as Flu Fighter and herbs that help with coughs.
Tea was second to water as the most consumed drink in the world from 2019-20, according to the Tea Association of the U.S.A.
Ms. Harris teaches her own class on how to grow tea, and she highlighted the Great Mississippi Tea Co. as an example of places producing more domestic tea crops. Located in Brookhaven, Miss., the Great Mississippi Tea Co. was just one of 60 tea farms in the nation in 2017.
“Tea is so amazing, so interesting, because you can learn history, geography, language, culture (and) customs,” she said. “If you know how to drink tea, if you can train your body, you can become a real tea connoisseur.”
The quality of tea available has been affected by a lack of employees picking crops overseas, according to Ms. Harris. When tea leaves are first picked after their dormancy period, it is known as the first flush — the most valuable round of harvesting.
“Most teas in the world will sleep in winter, depending on how far they are from the equator,” she said. “After they wake up, there’s a lot of nutrients accumulated in branches that are being pumped to these fresh leaves. So these are the most precious, the best teas.”
When COVID-19 surged in India in the spring last year, many people had to stay in isolation. That meant the first flush leaves couldn’t be picked. The Darjeeling first flush in the Darjeeling district in India, Ms. Harris said, was diminished.
By comparison, tea coming from Sri Lanka has been relatively unaffected because it is grown all year long.
The global workforce shortages slammed everyone from tea pickers to wholesalers. There are fewer buyers going overseas to taste and purchase teas as well, she said.
“Tea is one thing you can’t really assess virtually,” she said. “You have to be there. You have to smell it’ you have to taste it before they buy a big batch.”
What about bubble tea?
The shortages have extended to boba and bubble tea. Bubble tea originated in Taiwan and began to gain popularity in the U.S. in the 2000s. In Oakland alone, there are seven locations surrounding the University of Pittsburgh’s campus that serve bubble tea.
Sihyuk Choi, owner of Chick’n Bubbly in Oakland, said college students are a large part of his customer base. Mr. Choi’s menu is a combination of bubble tea and chicken bites.
He said the industry is unstable right now, as his shipments of boba come from Taiwan. Increased production in the United States would help to stabilize it, in his view.
The costs of boba shipments have increased about 10% since the pandemic began, he said, and the cost of chicken has increased significantly, too.
“The chicken wings was $80 per case or something, now it is $130 or $140,” Mr. Choi said.
Edward Lui, a partner at Bae Bae’s Kitchen, Downtown, said he first started to hear about the boba shortage at the end of March.
“My mom always watches the news overseas, and she informed us about it,” he said. “They were reporting about it overseas a couple months ago.”
He orders boba by the case about once a week, costing about $60 to $70. This is about a 15% increase from his pre-pandemic prices, he said. About six 10-pound bags come in a case.
But food costs have risen across the board. “With the whole food supply process, there’s a lot of change going on in the industry,” he said. “A lot of people have left the industry; some people are exploring other options.”
Mr. Lui thinks the general goal of the food industry is to place more emphasis on domestic farm-to-table supply chains, and consumers are more aware of the process.
“I think that’s always going to be a goal in the food industry,” he said. “But there’s also the bigger corporations that are taking things overseas and whatnot. There’s always that balance and battle between those two worlds.”
Mr. Goggi said bubble tea is a very small percentage of imports to the tea industry.
“Those people who have some inventory will be selling it, probably at a premium,” he said. “Like most things, give it three to six months and the supply chain should probably settle down and get more into a replacement mode.”