9 tips for doing business with European tea buyers

European tea buyers want to work with suppliers that are reliable and good communicators. They expect you to have a good understanding of market dynamics and demands, especially in terms of food quality and safety requirements. There are numerous different players to look for (for example, tea traders, tea importers and tea packers). Use these tips to help you analyse their needs, meet their demands and be successful in Europe.

1. Comply with your buyer’s requirements

Complying with buyer requirements is essential for accessing the European tea market. It starts with meeting mandatory European Union legislation. Buyers will expect you to meet food safety legislation and have implemented a quality/food safety management system.

Can you submit laboratory residue analysis of your teas? Can you ensure that the products you supply are safe at the time of human consumption? Because the most demanding requirement for many tea suppliers is the European Union legislation on maximum residue levels (MRLs).

Make sure you can submit a laboratory residue analysis. This is the first requirement a buyer will be looking for. It will also give you an advantage. But be aware: not all laboratories in exporting countries have the same detection levels as their European counterparts. Therefore, many buyers will insist doing a residue analysis by a European laboratory.

If you have not already done so, invest in a quality/food safety management system to demonstrate your ability to control food safety hazards. In addition, get certification for quality control and traceability. A thorough approach to compliance proves reliability and is welcomed by potential buyers.

In addition to compliance to European Union legislation, buyers often expect you to uphold Corporate Social Responsibility (CSR) policies. These relate to a variety of environmental and social issues (see below). The expectations can differ per country and market segment.

2. Choose your buyers carefully

Who should you choose to do business with? A tea trader, or tea packer? It can make quite a difference whether you choose to sell to a tea trader, tea importer or tea packer. So choose your buyer carefully and make sure you can supply the products they are looking for.

One tea trader will import a complete range of Crush-Tear-Curl (CTC) and orthodox teas, as well as mainstream and specialty teas. Another tea trader will specialise in organic or specialty teas for instance.

A more general tea importer is potentially interested in all possible grades and qualities of tea, whilst a tea packer is usually only interested in a very specific (small) range of teas, and in most cases, almost exclusively in tea-bag grades of tea. Packers typically want longstanding relations, which take time to develop.

Determine which category your potential buyer belongs to, and make sure your products match what he/she is looking for.

3. Send representative samples to your potential buyer

There are many grades, types and qualities of tea. For this reason, business transactions in the tea market are always based on samples. These samples give potential buyers the opportunity to determine whether or not your tea matches their quality requirements, before they commit to buying.

When you send a sample, make sure that it fully represents the tea you are planning on supplying. If you do not have the same tea in stock, make sure you label it as a ‘type sample’.

Be honest and transparent about your samples and tea quality. If you are not, you run the risk of losing your client’s trust. If you can’t match the sample quality in some respect, tell your buyer sooner rather than later.

4. Offers and quotation

Monitor prices at the relevant tea auctions in Kenya, Malawi, Indonesia, India or other relevant countries. These prices serve as a reference for the price of mainstream bulk tea qualities (mainly CTC). For most other qualities, prices are negotiated between you and the buyer.

When you have reached an agreement with a buyer, you need to confirm the terms of your agreement using a contract, signed by both parties. You must include terms on price, quality, quantity, shipment and destination, amongst others.

In the tea trade, it is usual to quote in US Dollars, even when conducting business with European buyers. It is a good idea therefore, to closely monitor the exchange rates of US dollars against the Euro and your own currency.

5. Respect contractual agreements

If you want to establish longstanding and reliable relationships with your buyers, it is very important to respect your contractual obligations, even in challenging market conditions. If you do this, your buyers will honour their side of the agreements too, and come back with repeat custom (see below).

6. Use marketing tools properly

Trust and credibility are major challenges for exporters in tea-producing countries. The right marketing can help exporters in overcoming these challenges. However, be aware that poor marketing tools can actually do more harm than good.

Websites are an essential element of product marketing. High-quality websites are associated with being a modern, professional organisation. Websites offer opportunities to display and advertise your products. Therefore, your company should have a website which contains the following aspects:

• Tea varieties, grades, altitude, etc.
• Tea processing
• Sensory characteristics
• Origin
• Availability
• Packaging
• Certificates: mention the year of certification and explain how it contributes to sound products and services. Certificates can be related to food safety, crucial for many buyers, or quality management, environmental or ethical aspects.
• A specific story: explain the mission and history of your tea and your company, with specific attention on social and labour conditions at your tea estate.
• Quality and delivery reliability: explain your company’s processes to implement and monitor quality, specifically MRLs.

7. Adopt Corporate Social Responsibility (CSR) policies

Many tea buyers are interested in social issues that have little to do with the quality of your product. These are buyers who want to be sure that the labour conditions at tea plantations are at a decent level and are looking for an interesting and marketable story, frequently linked to strong Corporate Social Responsibility (CSR) policies.

Many buyers, especially the large tea packers of well-established tea brands, have a strong preference for certified teas.

The main certifications for tea are:

• UTZ Certified
• Rainforest Alliance
• Ethical tea Partnership
• Organic
• Fairtrade Labelling Organisations International (FLO).

The demand for this kind of certification is increasing at a fast pace in Europe, affecting both mainstream and speciality teas.

It is important to discuss certification needs with your (potential) buyer and research your target market(s) before engaging in costly and time-consuming certification processes. Also make sure to contact local representatives of the different certification schemes to ask for information, offers for certification services and training possibilities.

8. Communicate clearly and transparently

In the competitive tea sector, buyers appreciate suppliers who are reliable, transparent and good communicators. Buyers will consider you to be reliable if you keep to your agreements and delivery times.

Be transparent. This means developing an open relationship in which you discuss risks properly, address them and offer solutions.

Good communication means involving your buyer(s) in your considerations, and providing them with clear and prompt information, especially regarding price, contracts, quality issues and shipment issues.

9. Acknowledge cultural differences

Europe is made up of many different countries, and each country has its own business practices, industry profiles, consumer preferences and languages. Be prepared to work with cultural differences and get to know your markets before doing business with them.