Exploring Ceylon Tea Country

Riding by train through the Sri Lankan highlands recently, I found it difficult not to be mesmerized by the views of mountains blanketed in tea plantings and cool mist. My days spent exploring Sri Lanka's mountainous interior were among my favorite as a first-time visitor to the country.

The Sri Lankan tea industry dates back to the mid-1860s British colonial period when Sri Lanka was known as "Ceylon" and plantation owners replaced disease-ridden coffee plantings with tea. The term "Celyon tea" is now synonymous with Sri Lanka, and is renowned for its high quality and superb taste; ideal climatic conditions allow for a year-round harvest.

Sri Lankan tea production is focused mainly on black tea, which is popular domestically. The tea, which accounts for 15% of Sri Lanka's exports, is also exported to Russia, former Soviet republics, the Middle East and the U.K. The tea industry provides direct and indirect employment to about 1 million of Sri Lanka's population of 20 million with most of the hand-picking done by women. Though it faces stiff competition from other countries, most notably in Kenya, Sri Lanka remains among the world's few major tea exporters.

Considering the importance that tea production holds to both Sri Lanka's economy and the global tea supply, I reflected on how its tea industry might evolve. One thing that struck me on my plantation tours was the lack of mechanization. I learned that tea stems are picked by hand and sacks of tea are carried back to factory buildings more than 100 years old. There, they are weighed before their contents are dumped into drying vats. Leaf separation is also done by hand, and much of the transport between factory processing machines is manual. While the government has laudably imposed higher minimum wages for plantation workers, rising labor costs still pose a major challenge.

That said, strong brand and quality production can command a higher price. The Ceylon Tea brand known for quality and its limited usage of pesticides seems an under-utilized comparative advantage. While Sri Lanka can certainly sell tea for blending to the Liptons of the world, better promoting its own Ceylon Tea brand could make a difference in growing affluent tea-drinking markets.

Finally, there is great opportunity for the tea industry to leverage Sri Lanka's growing tourism industry. While trains make Sri Lanka's interior highlands easily accessible, visits to tea plantations are not the tourist experience they could be. I couldn't help but compare my tea plantation visits to visits to Napa Valley wineries in my home state of California. Here, winery tours are typically led by passionate winery spokespeople. We taste multiple types of wine side-by-side in order to detect subtle differences. Napa-related gifts are sold along with bottles of carefully branded wines. And a Napa winery might even allow us to enjoy lunch with a bottle of their wine at an outdoor picnic table overlooking the rolling green valley. For all these experiences, I would usually pay a healthy visitors fee. These were not among my Sri Lankan tea plantation visitor experiences.

In the same way that the wine industry has segmented between high quality brands and mass production, I believe Sri Lankan tea producers have a unique opportunity to leverage their incredible global reputation for high quality Ceylon Tea.

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