Impact of COVID on the Tea Industry

Impact of COVID on the Tea Industry
 

The global tea industry provides livelihood to more than 80 million people worldwide. COVID 19 impacted everyone in the tea industry one way or the other. We have lived with COVID for over a year, and today my article will  very briefly reflect on how the industry has been impacted and how these have led to changes.  

First, I would like to discuss about the channels that have shown prominence during the past year. Online has been the channel that has caught on to the livelihood of many consumers including the business sectors. Example - we see the traditional tea industry in Sri Lanka shifting to e-auctioning, which was a novel idea sometime back. However, this was given prominence and executed immediately to adapt to the current situation.

Next, we saw that the cost of transporting goods and services among countries were growing. This was seen in the tea industry as well. This rise in transportation costs were absorbed by some brands while others passed it down to consumers in their finished product. The rise in transportation costs have given rise to tea companies looking for alternate suppliers within close proximity to their country.
Rise in tea companies looking for alternative suppliers are also growing, in order to avoid the impact of emergency need of raw materials for companies. It is more of a defensive mechanism adopted by companies in order to ensure the supply chain is not harmed.

Outside of transportation, we see that the demand for tea types are changing rapidly. The demand for herbal and health tea are on the rise as it helps immunity boosting. Also, it is seen that there is a requirement for outer bag packaging unlike before.

It can be seen that COVID has had a continuous impact on the tea trade. The industry is expected to adapt to changes the stakeholders pose, in order to work in the new normal.
 
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