Dusseldorf Wait and see and drink tea – many people did that out of necessity during the pandemic. Never before has so much tea been drunk in Germany. In 2020 it was around 70 liters per capita on average – two liters more than in the record year 2019.
Of these, 42 liters were herbal and fruit teas, the German Tea Association determined. In comparison, however, tea lags far behind coffee. The favorite drink of the Germans comes to 168 liters per capita.
However, with increasing demand, the supply of tea is becoming increasingly difficult. On the one hand, this is due to the consequences of corona and, on the other hand, to climate change. The Ostfriesische Teegesellschaft from Seevetal near Hamburg is also feeling this. It belongs to the family company Laurens Spethmann Holding (LSH). The Meßmer brand is the German number two behind Teekanne.
“Regardless of whether black, herbal or fruit tea – availability is currently a serious problem,” says Lars Wagener, CEO of LSH. There are also bottlenecks in containers. “The prices for tea will therefore rise between five and 15 percent.”
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In India, only half of the staff was allowed to work in the tea gardens at times during the pandemic. During the lockdown in South America it was not possible to sow hibiscus and harvest rose hips. “For two years we have not been able to train our local farmers because of Corona,” says Wagener. “There was a certain sloppiness. We have to put in more effort to maintain our high quality standards.”
Tea cultivation in Assam and Darjeeling at risk
Then there is the climate crisis. In the 2021 crop year, there was a historic drought in the important Indian growing regions of Assam and Darjeeling. About a third of German black tea imports come from there. In addition, extreme rainfall leads to erosion. “The tea plant is very sensitive,” emphasizes Wagener.
According to studies, tea cultivation in Assam will become more and more problematic in the coming decades due to the climate. The same applies to Sri Lanka with Ceylon tea, Kenya and China. “That’s why we’re already looking for alternative growing areas,” says the 53-year-old.
The head of Laurens Spethmann Holding checks the qualities of Meßmer tea on the tea plantations.
(Photo: Laurens Spethmann Holding)
This does not only apply to black tea. In Zimbabwe, for example, the Seevetaler support farmers in switching from water-intensive cotton to hibiscus. “We guarantee them long-term sources of income and have also built 80 wells to ensure a safe water supply,” says Wagener. “This is the only way we can secure our supply chain in the long term.”
>> Read here: The global food crisis is worsening
The Ostfriesische Teegesellschaft looks back on a long history. It was founded in 1907 by Laurens Janssen. Grandson Laurens Spethmann converts the tea importer into a tea packer for private labels. Milford has had its own tea brand since 1966. In 1976, sweeteners were added with Huxol.
The family company Meßmer is bought in 1990. In 2001, shares in the cereal manufacturer Nordgetreide followed. Today, LSH also has a stake in the nut and dried fruit manufacturer Fruitworks and the bar producer Schock.
In 1996 Laurens Spethmann, who died in August 2021 at the age of 91, handed over the business to daughter Laureen and sons Michael and Jochen – the latter are still on the supervisory board today.
With Anna and Sara Spethmann, two young representatives of the fifth generation work in the operative business. Lars Wagener came to LSH in the summer of 2018. He succeeded ex-Iglo boss Martina Sandrock, who was the first non-family manager to leave the company after just one year.
The business graduate has a lot of professional experience in family businesses, such as at Mars and biscuit manufacturer Griesson de Beukelaer. He was also country manager at Danone. The former coffee lover became a tea drinker five years ago because of stomach problems.
Wagener is to make the outdated traditional company with almost 2000 employees fit for the future. Business declined in 2019, the holding company’s sales fell to 273 million euros with a meager result of 4.3 million euros.
“The turnaround was successful in 2020,” emphasizes Wagener, without giving more precise figures. He speaks of more than 700 million euros in “responsible turnover”, including 100 percent of the investments. In 2019, this turnover was still 660 million euros.
Messmer tea in particular is on the up. According to Wagener, it benefits from the brand trend and has increased sales by ten percent. In contrast, private label, which accounts for half of the business, suffered significant losses.
The Meßmer brand is number two behind Teekanne.
(Photo: Laurens Spethmann Holding)
The Milford brand was also the stepchild and problem child for a long time, as Wagener admits. It brings in only five percent of Messmer’s sales. “If you don’t take care of a brand, it withers away,” says Wagener. Milford has been repositioned as a fruit tea brand since January. “Happiness with a bang in a cup” is intended to appeal to young target groups.
Cold infusion against the summer doldrums
The problem for tea producers: sales of the winter drink traditionally collapse in summer. Since 2020, Meßmer has been offering the cold infusion “Cold Tea”. The tea bag without a label can remain in the pot or drinking bottle. “Young women in particular value taste without calories as a thirst quencher on the go,” says Wagener. “Cold infusion of fruit tea is a trend similar to cold brewing with coffee,” confirms Werner Motyka, Partner at Munich Strategy.
In 2021, Meßmer ventured into a whole new field: iced tea in a can. With “Cold Tea Sparkling”, freshly brewed tea with carbonic acid, the Seevetaler want to offer a “low-calorie alternative to the sugar bomb iced tea”. According to Wagener, however, canned beverages work very differently from tea in logistics and retail. “We’re still learning.”
When it comes to iced tea, new brands are catching up with Nestlé’s Nestea, Coca-Cola’s Fuze and Lipton. Since 2020, “4Bro” has been on the market with unusual flavors like bubblegum. Engin Ergün only built up the lifestyle brand through social media. Rapper Capital Bra recently successfully sold “Bra-Tee”, musician Shirin David her brand “Dirtea”.
Not only with iced tea, but also with tea, newcomers are stirring up the industry – such as Cupper or Pukka, bought by Unilever in 2018. With the loose organic tea Yasashi, the Seevetal-based company has therefore created a start-up brand itself.
A problem child of the group are bars. Home office reduces the demand for to-go products. Wagener has therefore entered the higher-margin production for start-ups in addition to private labels. The bars are sustainable, organic, gluten-free and fair trade. This brings new know-how into the house.
Wagener also drives innovations beyond tea and bars. Plantpack, an LSH start-up, uses the vegetable residue maize semolina from its subsidiary Nordgetreide as a compostable alternative to polystyrene. “We want to reduce climate-damaging packaging. It’s a huge market,” he says. The patented process was developed with the University of Göttingen.
Plant Pack launches first products in 2022. Discussions are ongoing with furniture and washing machine manufacturers. Wagener emphasizes: “We don’t want to wait and drink tea when it comes to climate protection, we want to set innovative impulses.”
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