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Firms flavour millennials’ cup of tea amid distaste for drink

By Wainaina Wambu | November 19th 2019

Nairobi - once a bastion of tea consumption is slowly losing its allure.

This distaste is reflected in many other areas across the country.

However, firms keen on retaining customers and attracting millennials amid falling consumption are innovating to increase the beverage’s uptake.

And at the Ronald Ngala-Tom Mboya junction, with the city’s Central Business District, one is met by a rare scent. It may be exotic to your nostrils, but you’ll pick up a hint of good old loose tea leaves.

A closer look reveals a trendy tea shop. Inside, one is hard-pressed to find anyone taking a cuppa of plain tea. It’s either iced mango tea or some other sizzling tea infused with mint or herbs.

It’s here in the middle of Nairobi that Kenya Tea Packers (Ketepa) - the country’s oldest tea packager, blender and marketer, is trying to reinvent itself to stay ahead of the competition.

Tea firms are now battling for the souls of millennials who are increasingly losing the appetite for the beverage amid an influx of tea bags, speciality and infused teas. The millennials distaste for tea is on the back of declining local consumption currently standing at 0.8 kgs per head annually. 

Perhaps they’re drinking more coffee - evidence’d by the restaurants cropping up across town and others opening more branches - riding on the allure of the exotic bean.

It has now become about “coffee dates” or meeting up for “drinks and cocktails.” Conversely, the global appetite for Kenyan tea is on the rise.

Kenyan tea is known globally for its distinctive taste and quality that has seen it used to blend other inferior teas. Tea is Kenya’s third-largest foreign exchange earner and contributes about four per cent to the country’s gross domestic product (GDP). In the last nine months to September, official data shows that tea exports rose to 374.55 million kgs from 349.12 million kgs during the same period last year.

In September alone, Kenyan tea was exported to 42 countries, up from 38 during a similar period last year.

Pakistan remains Kenya’s biggest tea export destination, accounting for 35 per cent of total export volumes and it imported 12.8 million kgs in September alone.

However, the exports dropped 14 per cent compared to 2018, a worrying statistic for Kenyan tea exporters. Other key export destinations included Egypt, UK and Russia.

The rise in exports is amid declining production.  Kenya is the third-largest tea producer in the world, averaging over 500 million kgs annually.

In the last nine months to September, Kenya’s tea production dropped 8.5 per cent attributed to dry weather and poor rainfall at the start of the year. Exports and production figures differ because of unsold tea from the previous year. However, fresh data from the Tea Directorate show that local tea sales in the nine months to September have increased to 31.23 million kgs from 30.36 million kgs during the same period last year. 

Ketepa Managing Director Albert Otochi admitted that tea is associated with old people. “You’ll find them saying this brand is for my parents not for me … these young guys are very demanding. We are dealing with discerning consumers,” he said.

Kenya is among the top countries with a high percentage of youth, with millennials known for their absurd consumption and spending habits making the bulk of this group.

Otochi said this has prompted Ketepa to diversify from the traditional loose tea and bring in infused exotic teas to appeal to the millennials palate’s. They now have 27 brands or flavours. “That’s an important segment that we can’t afford to ignore. That’s why we’re bringing in a wider basket from traditional heritage brands from herbals, infusions to wellness products,” he said.  “We were predominantly focusing on the loose variety, but now you have all these variants.”

Tea messaging, he observed, is also changing to include health benefits.

Among the 27 brands are herbal tea infusions that can palliate digestive issues, with benefits to the heart and help with insomnia.

Otochi said Ketepa was planning to set up more shops in Nairobi and other towns to encourage local tea uptake. “Kenyan consumption is almost flat, we need to spend a lot more time to encourage it,” he said.

Tea firms globally have also had to diversify including adding biscuits and oils to their stable. Ketepa added bottled water to their brands. The firm, that has enjoyed a monopoly for long, has also launched an aggressive marketing drive to ward off competition from peers.  It has had to change packaging about five times over the last ten years for the popular brand in a bid to make it more attractive.

Ketepa controls over 80 per cent market share - mainly due to historical advantage as a subsidiary of KTDA - the umbrella body for smallholder producers. It controls the majority of Kenyan tea production.

Last year saw the entry of Sudanese Tea brand Faraja that is owned by global firm Cofftea Agencies, the third-largest purchaser of Kenyan raw tea.

The firm aims to produce 600 tonnes of tea monthly at its Mombasa plant. Other brands in the market include Melvins Tea, Eden and Baraka.

Otochi said counterfeits and taxes are negatively impacting their business. A 25 per cent duty is charged on tags, envelopes and filter papers, which are imported.

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