Cultural thirst drives premium tea boom in China

Tea poured into Chinese tea cups
Image caption Tea is becoming a distinctly Chinese way to flaunt wealth and invest savings

On a humid September Saturday, a group of 20- and 30-something professionals gather at a tea house in an industrial building in a now gentrified Hong Kong neighbourhood.

They sniff and sip a type of Oolong tea from tiny, white china cups while making notes on its aroma, body and aftertaste, and consider what food with which to pair it.

Part of a generation that had eschewed tea leaves in favour of the lattés, espressos and frappucinos sold by international chains like Starbucks, young Chinese are rediscovering the country's tea drinking tradition.

And in doing so, they have sparked a boom that is both a cultural and business phenomenon.

Image caption China's fascination for tea mirrors the Western captivation with wine

"My parents drink tea like this every day but I seldom do," says Sharon Ho, a 30-year-old who works in accounting, as she sips a cup of Wuyi Dark Rock Oolong tea grown in the mountains in Fujian province in southeastern China.

"Normally I drink coffee, but as Chinese we should know about this."

Prices of rare, high-end Chinese teas - such as Pu Erh, a black, fermented tea that can be aged for up to 100 years, or First Flush Longjin, a freshly picked green tea - have rocketed over the past decade.

The industry has been shaped in ways that parallel the Western captivation with wine, with tea becoming a distinctly Chinese way to flaunt your wealth and invest your savings.


Vivian Mak, the tea master who runs the tastings, brews the tea in the traditional way using small fine china tea sets and metal implements on a wooden tray that drains off excess water. But she prides herself on taking an innovative approach to an old industry.

Image caption Businesses are taking an innovative approach to an old industry.

Her signature drink is a jasmine blossom-scented green tea she likes to serve in a martini glass. She serves the fragrant and visually arresting beverage as an alternative to wine at corporate events for clients like Goldman Sachs.

"There's not too much water inside, so you can sip while you mingle," she says.

Mak believes different Chinese teas can complement any type of cuisine, be it a nutty, malty Longjing green tea with a Chinese seafood dish, or a stronger Oolong tea to accompany a hearty French casserole. She also likes to pair teas with different types of chocolate.

"It's like wine. You serve something more gentle or with more body depending on what you eat. Tea is the same way."

Modern manner

Ricky Szeto, the executive director of Hong Kong herbal tea maker Hung Fook Tong, has also found business success repackaging a traditional product in a manner that catches the attention of younger consumers.

Teas infused with medicinal herbs have long been a popular drink in southern China to help relieve the effects of hot and humid summers and damp winters.

Traditionally sold by the bowlful at corner shops from bronze urns, Mr Szeto says the business was a "sunset industry" by the 1980s, when vendors were hit by sky-rocketing rents.

Image caption Herbal teas are common in convenience stores

Today, Hung Fook Tong's bottled drinks feature ingredients like ginseng, chrysanthemum, honey and goji berries, and are stocked at supermarkets and convenience stores across Hong Kong and China.

The company also has 93 stores in Hong Kong and 32 across the border in China that sell freshly made herbal drinks and snacks.

One of Hung Fook Tong's best-selling products is Tortoise Plastron Jelly, a black, slightly bitter concoction made from the underbelly of a tortoise that folk medicine claims is good for the complexion. It is sold in an aluminium bag, like an energy drink.

"People love something traditional, but with the trendy packaging," he says.

Mr Szeto says demand is strong, with sales increasing at 20% a year, and turnover is expected to be around 700m Hong Kong dollars ($90m; £56m) this year.

Foreign interest

Image caption China has hundreds of different varieties of tea

Overseas companies have taken note of the boom. In 2010 Starbucks, which opened one outlet in China every four days last year, began selling three types of traditional Chinese tea alongside its myriad coffee-related products.

And Rahul Kale, director of international business at Typhoo Tea, sees opportunity in China for its stable of teas that include specialty brands such as Heath & Heather Infusions and Ridgways as well its namesake mainstream UK brand of black tea.

"The palate is shifting from 100% Chinese teas to something much wider," he says. "And Chinese like foreign brands." But for now, China accounts for only about 1% of Typhoo's sales.

China's large market hasn't spawned a well-established domestic tea chain. According to the China Tea Marketing Association, there are more than 60,000 tea houses scattered across the country, most independently run.

Once a place where average people could relax over a game of cards or mah-jong and pay next to nothing for their fragrant beverage, many tea houses now target affluent businessmen seeking a place to negotiate deals. They pay by the hour for a room plus the tea they drink.

The move upmarket is reflected by the eye-popping prices some types of Chinese tea command. A compressed cake (around 345g) of Pu Erh dating back to the first half of the last century can be sold for up to HK$200,000 (more than $25,000).

Image caption Rare Chinese teas command high prices

Sellers charge a premium for leaves picked from older plants, wild trees or particular mountain ranges. Enthusiasts talk about oxidation or fermentation levels, loose-leaf versus pressed, and whether the tea was harvested in the spring or the summer.

The hype has prompted one entrepreneur in the southwestern province of Sichuan to grow a tea fertilised by panda dung that costs $3,500 for 50 grammes.

However, connoisseurs like Ms Mak in Hong Kong are sceptical of buying tea for investment purposes. There is no empirical way to establish a tea's provenance, so buyers are easily duped.

"It's too speculative," she says. "It doesn't matter whether it's expensive or not, you have to focus on the taste."

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