Zealong's tea eyes new markets

ANDREA FOX
Last updated 05:00 26/08/2011

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Japan's radiation crisis and Northern Hemisphere food and heavy metal contamination scares could open unexpected new markets for New Zealand's only oolong tea grower and exporter, Zealong.

The Taiwanese family-owned company, which has sunk $10 million so far into its Hamilton plantation and tourist and export venture, is sending executives to Germany and Japan in response to new inquiries about its tea, which it claims is the world's purest.

Zealong said its tea is free of chemical sprays, fertilisers and additives and its processing system has a high international food safety rating. A quarter of the 50 hectare plantation so far is organic.

With 60 per cent of its 16 tonne crop last year going packaged and branded to oolong tea-mad Taiwan, and most of this year's expected 20 tonne harvest of the top-shelf beverage also destined for that country, Japan and Europe have until now been a far export horizon, said assistant general manager Gigi Crawford.

Top quality oolong tea can retail for NZ$100 for 150gm and much higher in Taiwan, where it is prized  as a corporate gift and for socialising. German tea lovers are happy to pay NZ$300 and more for a kg of fine oolong, according to Zealong's market research. Japanese are big green tea drinkers but radiation leakage from the Fukushima Dai-Ichi nuclear power station north west of Tokyo after this year's deadly tsunami has led to fears about the safety of some tea farms.

General manager Vincent Chen, whose property development family launched Zealong early last year after importing top quality  plants from Taiwan, oolong's historical home, in the 1990s, said the company had met market tea buyers and tasters from several countries while exhibiting at trade fairs, but the interest from Japan and Germany had accelerated its international marketing plan.

Zealong has also stepped up its domestic marketing focus. Today it opens a new tourist venture "Discover tea"  at its picturesque oolong camellia tree plantation, offering a landscaped "tea walk", formal tea ceremony and tasting, and a movie presentation on how a tea plantation came to be in such an unlikely region as the Waikato. A $500,000 tourism and conference pavilion will also be opened.

The Chen family plans to invest at least another $10 million in the plantation in the next few years, adding a large tea house and luxury accommodation, Chen said. In line with its business plan, Zealong has yet to make a profit, though revenue is satisfactory, he said.

Along with its markets horizon, the company could also change its original sales outlet target - "High Street" tea houses in New Zealand and overseas.  The advent of premium grocery stores - in New Zealand such as Nosh and Farro - offered a place for Zealong's New Zealand-centric  branding and packaging, into which has been ploughed top dollars, said spokesman Jeff Howell.

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While Zealong tea had scored highly and even challenged top Taiwan-produced oolong tea in blind tests and comparisons overseas, as part of its learning curve it was grappling with how to price it, Howell said.

In New Zealand Zealong tea retails for around $60 for 100 grams. To be accepted onto premium grocery shelves thereby maximising its high quality product and packaging edge that price may have to come down slightly.

Another challenge was that major overseas tea importers wanted to buy in bulk and repackage the tea, thereby claiming a margin. But if Zealong went down that path it could not retain its high ISO rating and "purity" brand, unless it finds an importer to package to Zealong's ISO standards, said Howell.

- BusinessDay.co.nz

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