Brewing up value: Dilmah's boutique push

  • Marketing
  • July 16, 2014
  • Skye Wishart
Brewing up value: Dilmah's boutique push

Dilmah’s gone added-value with its tea marketing in New Zealand, pushing its luxury teabags and loose leaf tea into cocktails with a tea mixology demonstration at Bedfords in Ponsonby on Monday, and into food by holding its annual Real High Tea Challenge this week where chefs compete on pairing tea with food in ‘tea gastronomy’.

It’s all a bid to push up interest in specialty teas—and indeed, despite long being a gumboot-tea-nation sipping on Bell tea, sales of tea in New Zealand beyond regular black tea are slowly growing. According to Nielsen figures, of the $88 million worth of tea New Zealand’s supermarkets sold in the year to June 2014, about $53 million of this was still of the regular gumboot variety, but these sales had dropped 1.5 percent from the year before. It was the herbal, green and ready-to-drink teas that have seen sales growth—up 5.3 percent, 12 percent and 7.2 percent respectively on the year before.

In the Nielsen figures below, the percentage of Kiwis actually drinking at least one cup of black tea per week dropped three percent over the past four years, and those drinking special teas increased by three percent, albeit from a much lower base. 

Bell Tea's chief executive Mark Hamilton told Stuff last year that "there is still a lot of growth in the likes of green tea which is now 11 percent of the total tea market and growing quite rapidly, and herbal infusions".

Basically, Dilmah is working on that audience and sees a future in going premium. Dilmah director Dilhan Fernando, son of the founder Merrill J Fernando, says tea was heavily commoditised in the seventies, with most tea no longer handpicked but harvested industrially, and homogenous black tea bags from big companies flooded the market with low prices. Selling on supermarket shelves for only one or two cents a bag, and with black the only ‘flavour’, this was the tea market in New Zealand even into the '90s. “That compromised quality, and created an image in the minds of a lot of people, that tea is simply a commodity. For example in the US where many retailers refer to tea as 'belly wash' as people chuck it down and keep it cheap.”

Dilmah is marketing speciality teas as less of a “cuppa” and more of an “experience” by pushing the concept of terroir. Like wine, tea is influenced by its growing conditions, affecting its colour, taste and aroma. “Each of the leaves, over a period of two weeks prior to being picked, are conditioned by climatic influences. Just like with wine, tea is affected the soil, wind conditions, wind chill, humidity, rainfall, intensity of light, shade, whether eucalyptus or wild mint is growing next to it. On one estate you can have 20 different terroirs depending on the microclimate. But unlike wine varietals, all of this comes from one plant, Camellia sinensis,” says Dilhan. 

Dilmah (a fusion of the two sons' names Dilhan and Malik) has been talking about gastronomy now for more than a decade and pairing tea with food, but also as an ingredient in emulsions, marinades, tea-inspired sauces, infusions into both sweet and savoury foods. Dilhan says when you take tea with certain type of food, it brings out certain flavours so, for example, chocolatey, earthy low-elevation teas go well with chargrilled steak (that's going to be a tough sell in New Zealand), and high-elevation teas with bright citrus notes will complement cupcakes. Over the last two years Dilmah has worked with the sommeliers of L'Union de la Sommellerie Française in France, who taste and nose the tea like they do wine, to add to the gastronomy movement, and the company has schools of tea in Sri Lanka and France at L’Institut Paul Bocuse to explore these concepts.

Dilmah, which works closely with New Zealand agency Curtiss and Spence and celebrated 20 years of its 'Do try it' slogan last year, is targeting what it says is a lucrative new generation of tea drinkers who are willing to pay for specialty tea and are not conditioned for life on cheap teabags. “Fourteen and fifteen year olds are writing to us and seeing what tea should have for their friend’s birthday parties – they’re interested in quality, and conditioned by the coffee market to pay what we would call high prices for tea people. They are accepting they can have tea for more than two cents a cup.”

This niche is also being educated by Dilmah on water quality, brewing times and even the porcelain and the shape of the cup. “They’re engaging in the whole ceremony, which is a 360 degree turn from the '90s when it was all convenience and quick.”

Dilmah is not, however, targeting an older generation of New Zealanders who tend to enjoy their gumboot tea. “You have a very solid tea drinking habit there. They have their tea, their preference for strong, medium or weak, and it’s fixed. With the younger generation it’s a lot more about the varieties, they’re much more adventurous, and more accepting of tea gastronomy. So I wouldn’t go to a traditional tea drinker that drinks a lot of tea and try to talk to them about this, it will be ridiculous.”

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