Coffee Tea International

GMO: DREAD OR WELCOME? 2nd MOSCOW INTERNATIONAL COFFEE FORUM HOT DRINKS IN CHINA MYCOTOXINS IN TEA AND TEA PRODUCTS

# 1 (79) 2010

# 1 (79) 2010 Establisher ZAO INTERNATIONAL TEA HOUSE Publisher ZAO INTERNATIONAL TEA HOUSE Chief Editor RAMAZ CHANTURIYA Deputy Chief Editor SVETLANA BELIKOVA Computer aided makeup VALENTINA GUSKOVA Advertising Director JULIA CHANTURIYA Advertising Manager ELENA TREGUB Technical maintenance JULIA MARKOVA Circulation manager MARINA FOMINA

THE EDITORIAL BOARD Chairman of the Editorial Board R.O. CHANTURIYA, general director of «Rusteacoffee» Association

This January Otari Davidovich Chanturiya, the de facto founding father of our publishing business (the Russian magazine Coffee&Tea in Russia and the international magazine Coffee&Tea International) who had been managing the USSR tea industry for years, would have celebrated his 80th birthday. For obvious reasons I can hardly be impartial speaking of him, but the fact remains that with his departure (summer 2006) ended the era of people who had shaped and developed tea business in the USSR, who had worked all their lives devotedly and put their heart in promoting tea, and who had advanced new achievements in science and industry. He remained committed to his tea creed – quality over money – throughout his life. He was ready to sacrifice what seemed essential to uphold his fundamental professional principle. We never discussed why he was so adamant in protecting tea quality (even during the years of Sovietera shortages, when this principle obviously and directly contradicted the Party and government goals of increasing production volume, and such obstinacy could easily cost him his job). I often think of it now. Recently, as I was going through my father's notes, documents and fragments of his unfinished book, I involuntarily lingered over the topic of his Ph.D. thesis which was a study of substances contributing to the tea aroma.

In the very beginning of his tea career he took up the problem which neither his predecessors nor successors could solve. Despite the progress of modern science and technology, tea aroma is still elusive like the Blue Bird: it keeps escaping its chasers and gives tea its uniqueness, beauty, perfection and immortality. Tea aroma is the key quality characteristic which the man has not so far captured. It is hard to describe or reproduce artificially, but so easy to spoil!

It seems to me that already than, in his youth, as Otari Davidovich spent months and years in laboratories, he became one of the guardians of Higher Tea Knowledge. All his life he strove to protect it from any encroachments as he understood that only the best quality of tea can preserve its centurieslong history. He achieved his goal: a new generation of tea keepers has already taken over!

We have decided to focus on the subject of GMO in this issue. The reason is that this subject, which has not yet been fully investigated, makes people scared, wary and, therefore, easy victims of speculation.

Mass media in some countries publish increasing amounts of materials concerning GMO, which casually mention tea and coffee among the products which could be manufactured using genetic modification technologies. We resolved to rebuff such groundless accusations and consulted with many public, nonprofit, and research organizations around the world. The verdict is clear: the world does not use genetic modification technologies to produce tea and coffee. Please refer to page 28–33 for detail.

Members of the Editorial Board S.G. BELIKOVA,

Best regards, Ramaz Chanturiya Chief Editor

deputy editor in chief of «Coffee&Tea in Russia» magazine, PhD of Philology, Editorial Board Secretary

S.V. KASIANENKO, chairman of the board of directors of «Orimi Trade» company

A. MALCHIC, chief executive of «Montana kofe» company

R.D. PANZHAVA, Georgian Tea Producers Association

MANUDZHA PEYRIS, International Tea Committee

CONTENTS

S.V. PUGACHEV, deputy director of Federal Agency for Technique Regulation and Metrology

1

EDITORIAL

20 Great Tea Road from China Through Mongolia Completed in Russia

2

CALENDAR OF EVENTS

22 To the 100th Birthday M.A. Bokuchava

4

PRESSING ISSUE GMO: Dread or Welcome?

REVIEW&STATISTICS 24 Statistic of tea turnover in Ukraine for April-June 2009 24 Statistic of tea turnover in Ukraine for July-September 2009 25 Statistic of tea turnover in Ukraine for October-December 2009 25 Study of TEA Retail Sales in Russian Cities with the Population over 10,000.

Data for August 2009–January 2010 26 Study of COFFEE Retail Sales in Russian Cities with the Population over 10,000.

Data for August 2009 – January 2010 28 Absurd Suspicions 30 No GMOs in the Tea Sector!

33 Mycotoxins in Tea and Tea Products 36 Crisis does not stop the breakthrough of coffee shop chains in Baltic states

V.A. TUTELIAN, Head of the Institute of Nutrition of Russian Academy of Medical Sciences, Member of the Academy

G.V. SMIRNOV, director general of «SDC FOODS» company

Editorial Address: Russia, 123060, Moscow, Berzarina str., 36, building 2, of. 214 tel./fax: +7 495 935-87-06; +7 495 935-87-07 E mail: magazine@coffeetea.ru, design@coffeetea.ru www.coffeetea.ru PRINTED IN ZNAKPRESS

NEWS 6 2nd Moscow International Coffee Forum 14 Coffee and Tea Oriental Style 16 Orimi Trade Presented Over 350 Products at the Prodexpo Exhibition 16 Russian Technical Regulation News 16 Is a Stiff Fine the Best Certification?

16 Rusteacoffee Association Is Expanding

Distributed worldwide among coffee and tea producers, wholesale companies, shops, and restaurants. Printed in Russia.

According to the registration certificate of mass media П И №77 7213 from 30th January, 2001.

Reprinting of materials is allowed only by permission of the magazine. The reference to the magazine «Coffee and tea in Russia» is obligatory. The editors don't bear any responsibility for reliability of data placed in advertising blocks or announcements. The editor's point of view may not coincide with the author's point of view. All provided materials will not be returned or reviewed.

Coffee&Tea International magazine has been included in the VINITI (All Russian Institute of Scientific and Technical Information of the Academy of Sciences Vserossiisky Institut Nauchnoi i Tekhnicheskoi Informatsii (VINITI)) list of synopsis journals and the institute's data base.

Information about the magazine will be annually pub lished in the «Ulrich's Periodicals Directory», international handbook of periodic magazines and ongoing publications.

Coffee&Tea International is an appendix to the Coffee&Tea in Russia magazine.

16 SDC Foods Is Eleventh Among 300 Fastest Growing Companies in Russia 16 Finance-500 Rating Published 16 Web-space of KLD Coffee Importers 16 Ukraine Will Not Certify Food Products 16 Tea Consumption Grows by 15% in Kazakhstan 16 Azerbaijan Company to Invest in Tea Factory Construction in the Kuban 16 Is a Stiff Fine the Best Certification?

18 New Heights for China Tea: Hong-Kong View 20 Dedicated Man's Smile

ECONOMICS 38 Hot drinks in China 40 Hot drinks in Georgia WHO IS WHO? 42 NEWS RELEASE: Glatfelter 44 ADVERTISER INDEX

1

CALENDAR OF EVENTS April–November 2010

25-27 April 2010

15-18 June 2010

26-29 September 2010

TEA&COFFEE WORLD CUP

ROSUPAK

PIR. HOSPITALITY INDUSTRY

Country: Russia City: Moscow Company Page: www.rosupak.ru

23-25 June 2010

Country: Austria City: Vienna Company Page: www.tcworldcup.com/Vienna

28-30 April 2010

Country: Russia City: Moscow Company Page: www.pir.ru

CAFFE CULTURE

11-15 October 2010

Country: Great Britain City: London Company Page: www.caffeculture.com/ctr

AGROPRODMASH Country: Russia City: Moscow Company Page: www.agroprodmash-expo.ru

12-14 August 2010

HONG KONG INTERNATIONAL TEA FAIR

28-30 October 2010

TRIESTESPRESSO EXPO

INTERFOOD ASTANA 2010

Country: China City: Hong Kong Company Page: www.hkteafair.com/06/

Country: Kazakhstan City: Astana Company Page: www.astanafood.kz

08–11 September 2010

28-30 October 2010

RIGA FOOD 2010

TALLINN FOODFEST 2010

19-21 May 2010

WORLDFOOD AZERBAIJAN 2010 Country: Azerbaijan City: Baku Company Page: www.worldfood.az

4-6 June 2010

COTECA Country: Germany City: Hamburg Company Page: www.coteca-hamburg.com

11-13 June 2010

WORLD TEA EXPO Country: USA City: Las Vegas Company Page: www.worldteaexpo.com

2

All materials are provided by support of WWW.COFFEETEA.RU

Country: Italy City: Trieste Company Page: www.triestespresso.it

Country: Latvia City: Riga Company Page: www.bt1.lv/bt1/rigafood/?link=20000000

Country: Estonia City: Tallinn Company Page: www.profexpo.ee/foodfest/

13-16 September 2010

10-13 November 2010

POLAGRA-FOOD 2010

INTERFOOD & DRINK

Country: Poland City: Poznan Company Page: www.polagra-food.pl

Country: Bulgaria City: Sofia Company Page: http://www.bulgarreklama.com/

14-17 September 2010

12-14 November 2010

WORLD FOOD MOSCOW

SINTERCAFE 23th EDITION

Country: Russia City: Moscow Company Page: www.world-food.ru

Country: Costa Rica City: Guanacaste Company Page: www.sintercafe.com

COFFEE&TEA INTERNATIONAL # 1/2010

PRESSING ISSUE

Pressing issue:

GMO: Dread or Welcome?

Polling by Svetlana Belikova

Of late, the press and TV have been giving ever broader coverage to genetic engineering advances in the food industry.

Some people are scared, others capitalize on it, yet for the majority of the world GMO is the only chance to ward off hunger.

Experts and market players share with Coffee&Tea readers their viewpoints on GMO in general and with regard to tea and coffee.

OLESYA KARPACHEVA, Director of Marketing Communications and Business Development Department of SDCFOODS LLC, sole distributor of the Ahmad Tea brand in Russia «Today, transgenic plants are a synonym of cloning, which often scares the customer. But I think that within ten to twenty years there will be no point fighting them. For instance, we know that the best option (organic products) is not to use pesticides (insecticides, herbicides, etc) at all, but in this case yield losses may amount to 90% or more. Not enough studies have been done on the effects of GM plants on human health to make categorical conclusions.

As for the market, it is possible that sooner or later genetic engineering will be used to produce tea and coffee for the mainstream (mass) segment. Yet Ahmad Tea Ltd does not introduce or plan to use any GMOrelated innovations. It is a conservative, British, family business based on quality and traditions.»

4

teristics (resistance to insect pests or herbicides) beneficial for producers only. Cultivating GMplants allows an extra profit (~10%) through saving on chemical pesticides. The customer receives a product which is neutral at best, but can be harmful. Man now sets an experiment on himself: people have been consuming food products containing GM-components for just over ten years, while the consequences may appear not earlier than in the second generation.»

ALEXANDER VIKTOROV, Candidate of Science in Biology, Senior Research Scientist, A.N. Severtsov Institute of Ecology and Evolution of the Russian Academy of Sciences: «At present there are no industrial transgenic types of tea and coffee: it is not economically feasible for biotechnology corporations to sell seeds (saplings) of genetically modified (GM) breeds of perennial plants. All GM agricultural crops bear genes which determine charac-

COFFEE&TEA INTERNATIONAL # 1/2010

ANDREY ELSON, General Manager, KLD Coffee Importers Ltd: «The GMO issue hardly ever drops off the press columns. Possibly, no harmful effects have been identified yet, but nobody knows how the future generations may be affected. Since using GMO in food production has become a fact, consumers should simply be informed of GMO presence. As far as I know, coffee does not contain any genetically modified organisms, and no production of GMO-containing coffee is envisaged in the near future.»

Photo: ITH

General Sponsor:

Alena Velichko

SIMPLE FORMULA OF

COFFEE FORUM SUCCESS:

"Gather a lot of interesting people for a day and offer them good coffee and an opportunity to discuss topical issues of the coffee world." he 2nd Moscow International Coffee Forum has left the splendid aftertaste of all sorts of coffee, words of gratitude, and the firm belief of all participants that such events should be continued. The magazine Coffee&Tea in Russia provided a unique venue for exchanges of opinion between all kinds of representatives of every coffee market segment: distributors, representatives of specialized wholesalers and retailers, coffee houses, vendors of all types of coffee equipment, packing, and various ingredients, employees of specialized ministries and agen‘ of the cies, and commercial attaches embassies of the countries producing and supplying coffee.

"This event surely ranks among major industry shows: the Forum addresses current industry problems openly and professionally, discusses development prospects, and presents the lat-

T

est industrial advances serving to efficiently meet consumer demand for various coffee products of high quality," said Ramaz Chanturiya, Chairman of the Forum Organizing Committee and General Director of the Rusteacoffee Association which supported the Forum, as he described the event’s specific nature.

It was not only due to the success of the 1st Moscow International Coffee Forum (2008) that the event gathered a range of participants; interesting people had been invited and a busy program developed to submerge the guests into the coffee world's diversity for the whole day. And sure enough, to a large extent the event became possible through the sponsorship of many companies, with the considerable contribution of KLD Coffee Importers, a member company of Neumann Kaffee Gruppe, deserving special mention.

Coffee Breakfast any Forum guests, when asked what associations the word "coffee" provoked, answered: "morning," "entry into the day," and "communication with friends." That was what the Coffee Forum

M

2

morning began with: good coffee and lively exchanges of views among the guests arriving to meet the appointed time. The space was filling up with the coffee aroma enveiling the conversing people whose number kept growing and was steadily approaching 500. The majority of the guests gathered around coffee machines of the Ambassador company, one of the sponsors of the Forum coffee breaks, which offered excellent coffee to everybody.

Alexey Mudonov, Ambassador's representative, commented: "We have three stands at the Forum. We do not usually bring so much equipment to exhibitions, but here at the Forum one can even see it in operation, which is a new practice for us. Two baristas will work in shifts on our equipment all day long, and we will try to make everything look beautiful. I expect that our company will attract considerable interest at the Moscow International Coffee Forum as our products can satisfy every client's needs.

There are many venues for the coffee world's representatives to meet, but the Forum stands apart, first of all, in terms of its unusual format."

The stand of SFT Trading, one of the event sponsors, was among the first to begin operating. It presented lots of green coffee types and books about coffee, and even conducted the action "Grow Your Coffee Plant!" during which bags with green coffee seeds were handed out. Sergey Boganov, the company director, spoke of his expectations for the Forum: "We are glad to participate in this event. We are planning a seminar on green coffee and have invited a

lot of our partners from different countries.

We supply coffee to many companies and, naturally, expect many guests. The Moscow International Coffee Forum is one of the most successful events. Its felicitous format provides a strong impetus to the further development of the coffee industry. It draws the attention of professionals and general public to such a wonderful beverage as coffee.�

There were many newcomers to the Forum.

These people were open to any exciting impressions and strove to attend all events of the coffee day. Luca Betti, Petroncini's Project Manager, described his company's interests as follows: "We participate in the Forum for the first time, and so it is hard to say what we expect. First of all, we hope to meet interested people and attend various seminars." Thomas Bischof from Buhler said: "For us, Russia is a very important market; that is why the event means a lot to us: here we can see the latest trends and decide what equipment is in demand on the market. We hope to meet many Russian producers to establish contacts and invite them to participate in our projects."

Old-timers who had participated in the 1st Forum spoke of more specific expectations and of the particular status of the event.

Vyacheslav Kaganovich from the American Plitek shared his impressions and expectations with us: "We are at the Forum for the second time and I can say that we feel it’s a must. The results of the first Forum were very good and inspired us greatly; that is why we are here again and we hope it will be even better." Warm atmosphere which emerged at the very beginning of the Forum not only due to coffee, but also thanks to the smiles of

people who were glad to strike up new acquaintances and meet their colleagues, old friends, and partners, showed that the Forum started on a good note and would be a success.

Fernando Ray from Sucafina Ingredients, as well as many other Forum participants, wondered about future prospects. "I would like to know Russia's potential now, two years after beginning of the global crisis."

It could be viewed as one of the main Forum questions. This and many other questions were answered before long... The pleasant small talk preceding the beginning of this unusual working day was replaced with concentration and purposefulness as the Conference room doors opened to invite the participants to leave their coffee cups in the hall and take part in the opening ceremony. This moment always sets the tone for the rest of the events, which at the Moscow International Coffee Forum were all focused to cover the main trends of global coffee consumption and analyze the situation on the global and Russian coffee markets. The official opening was marked by traditional cutting of a ribbon of nontraditional coffee color‘ by the key participants in the event: Nestor Osorio (ICO), Sergey Seryogin (the RF Ministry of Agriculture), Ramaz Chanturiya (the Rusteacoffee Association), and Andrey Elson (KLD Coffee Importers). A message of greetings from Yelena Skrynnik, RF Minister of Agriculture, was read out, and the work began...

The presentations that followed helped the Forum participants to get a general picture of the global and Russian coffee markets. The speech ‘ Osorio, Executive Director of given by Mr. Nestor the International Coffee Organization (ICO), on the main trends of global production and consumption opened the round of presentations.

The follow-up reports by the main organizers and sponsors of the event, Andrey Elson, General Manager of KLD Coffee Importers, Ramaz Chanturiya, General Director of the Rusteacoffee Association, and Alexander Malchik, President of the Organization of Coffee

Manufacturers in Russia, highlighted the specifics of the Russian market.

The issues of the Russian coffee market development raised during the plenary session were discussed within the framework of a round table on the regional development prospects of the Russian coffee market. Representatives of various coffee segments from different regions were invited to participate in the discussion. They tried to answer one question of common interest: "What will the next stage of the Russian coffee market development be like and can a significant increase of regional interest in coffee in Russia give an impetus to further market development?" Due to the skill of Igor Vittel, a famous TV and radio host, the discussion appeared lively and interesting as it focused on new avenues of Russian coffee market development.

New subjects for further discussion in the business community were also raised.

Vladimir Savinov (SFT Trading) characterized the discussion as follows: "The round table was extremely interesting. I especially liked the repeatedly mentioned idea of the necessity to unite the coffee community. I hope that many people will follow this appeal and it will not remain just a good intention."

In his speech Evgeny Yasin, Scientific Supervisor of the State University Higher School of Economics, Director of the Expert Institute, and in the recent past the Minister of the Economy, also sought to answer questions about the future of the Russian coffee market. He reviewed the current economic situation in Russia. The speech aroused keen interest of the audience as it contained an expert analysis of the Russian economy which is essential for running a business, including a coffee business.

2

Coffee Break ll speeches at the forum addressed the various aspects of the theme of coffee. Time for official coffee breaks was also found among the coffee events. Yet this did not mean hitting the "pause" button to stop drinking coffee for a while. On the opposite! The coffee break only shifted communication from the formal conference room to the informal atmosphere of coffee tables where one could talk to the partners, discuss the speeches, and strike up new acquaintances.

The experienced baristas of the Ambassador company skilfully served the influx of people asking for an espresso, capuccino, or americano.

But they had to compete with other sites which also offered coffee. Each tried to attract attention by some special feature.

For instance, the company ALMA FOOD served coffee in elegant coffee cups considering it the only way to drink espresso.

Francesco Corsetti, Commercial Director of ALMA FOOD, spoke of his observations and expectations regarding the Forum: "I am here for the first time, although I have known very well many participants for ten years of doing business in Russia. This event is interesting for those who want to start a coffee business. For experienced business players it is important to develop a flexible management system and take every opportunity. Everything is very well organized; I liked a lot the official opening and the participants' speeches. I wonder, if the coffee market is not growing, why so? And if the instant to ground coffee ratio used to be 70 to 30, why has it remained so for 5 years? I hope to get answers to these questions.�

A

2

Coffee Lunch he program was developed to include a great number of both theoretical ad practical topics of great diversity. This allowed every participant to choose an individual package of master classes or seminars of interest which would have a common subject or, on the contrary, be quite different.

Those who wanted to understand better the latest development trends of the coffee world could attend seminars describing the specific way of Brazilian coffee market development, the concepts of Sustainability, Fair Trade, Global Coffee Village, and Organic Coffee. They helped to better grasp these subjects and think of one's viewpoint on these issues.

Virtually practically everybody took interest in coffee quality. Questions on the subject were addressed at seminars on new technologies, taste and quality criteria as well as during practical master classes. In the course of the work session “Key elements of SCAE barista competitions – flops and tops” Jon Willassen, a representative of SCAE, WBC judge (Spain), spoke in detail of what the competitors should pay attention to in order to achieve true heights and become champions, and described the main mistakes the contenders for victory were apt to make.

The tasting session Cup of Excellence held in Russia for the first time in partnership with Montana Coffee was a treat to many Forum guests. The number of participants was strictly limited, and only 30 persons were lucky to taste various sorts and select those that went for the Cup of Excellence.

Paul Songer, one of the leading consultants in the coffee industry, defined the objective of his participating in the Moscow International Coffee Forum as follows: "The objective of our

T

master class is to show the difference between good and excellent coffee, which is considerable. Professionals differ from amateurs in that the former may spell it out why they consider the coffee good."

At the very end of the business day the magazine Coffee&Tea in Russia and the Russian branch of the Speciality Coffee Association of Europe (SCAE), who organized the cup tasting, invited all those who wanted to test themselves to take part in this exciting competition. It was won by Ivan Petrov, Rieckermann's representative, who coped perfectly with the task of identifying the difference in taste and aroma of eight groups of brewed coffee specimens. "It was for the first time that I have participated in cup tasting. I have never done that before. I won due to my lack of interest in the victory, and, probably... my natural aptitude. If one keeps a cool head, it is easy to choose the right coffee." One of the central events tailored for both professionals and consumers was the seminar Coffee and Health. It was attended by specially invited mass media representatives. All those who drink a lot of coffee have health concerns; expert answers to such concerns were given by Astrid Nehlig, research director at the French National Institute for Health and Medical Research in Strasbourg, INSERM, and a leading authority on the influence of coffee on human health.

The seminar was sponsored by Orimi Trade, the leader in the roasted/ground coffee segment.

2

Coffee Dinner M any Forum guests, when asked what associations the word "coffee" provoked, answered: "morning," "entry into the day," The great coffee event ended with a gala dinner in Zurab Tsereteli's Art Gallery. There jazz music provided the background for animated discussions and quiet talks following the busy day. Nearly all Forum participants admitted that they had learned a lot about the Russian coffee market trends; many had found new partners and met old friends.

Several guests noted that they had expected more representatives from the regions, for instance, coffee roasters. The newcomers who had not anticipated so many interesting master classes promised to plan their participation in the next event differently so as to attend more master classes and discussions.

The gala dinner had its own, non-work, program summing up the event, which included all kinds of awards and prizes. Awards were presented to the winners of the SCAE final national championships (Latte Art, Cup Tasting and Barista Championship) which were held upon the recommendation of the Organizing Committee of the Moscow International Coffee Forum in the run-up to the Forum. Lottery winners received gifts from KLD Coffee Importers, Montana Coffee, Ambassador, Orimi Trade, and Buhler. Ivan Petrov, the Forum's best cup taster, got an annual subscription to the

2

magazine Coffee&Tea in Russia and gifts from the Ambassador company and SCAE. Valentina Kazachkova (chief process engineer of Montana Coffee) got a wonderful hand-made crown. She got the award by winning in the nomination "Person of the Year – Coffee King/Queen" by the Coffee&Tea in Russia awarded to people who made a significant contribution to the national coffee industry development. In 2009 Valentina became the first Russian champion at .. the 2009 World Cup Tasting Championship (Koln, Germany). The Russian coffee world should definitely be proud of such specialists!

The event was crowned with a splendid coffee cake bearing the logo of the 2nd Moscow International Coffee Forum served to the guests.

The 2nd Moscow International Coffee Forum is still another example of how important it is to unite in order to resolve common problems and issues. It took just a little for this to happen: the initiative of a small group of people supported by the coffee community through all kinds of participation. The resultant environment showed many opportunities and gave new impetuses. The 3rd Coffee Forum to be held (here we are mentally crossing our fingers) in 2012 will show what will come out of it. And of course, the success of such an important event is ensured by the support of serious and respected market companies who know the real value of such industry meetings. The 2010 Forum was sponsored by the following companies: KLD Coffee Importers, Ambassador, Buhler AG, GEA Niro, Goglio SpA, IMA Flavour, Orimi Trade, Probat, Sucafina Ingredients and SFT Trading.

ко д ля

по дп ис

чи

ко в

ур ! ла на

Пр ез ен та ц

с

CD диск — толь

ж

ии

ог йн е ф Ко

ма — ору оФ

13

he Middle East lures and attracts business from all quarters of the world. Coffee and tea companies also have a keen interest in the region where these beverages enjoy a rich history. However, the exposition arranged by the Specialty Coffee Association of America (SCAA) did not turn out to be as large-scale as had been expected. Yet the enthusiasm of the local barista fighting for the main title of the 1st Barista Championship in the region made up for it. The judge panel found the

Photo: ITH

T

overall level of the competition high enough. Gwilym Davies, 2009 World Champion, gave master classes at the SCA stand during the breaks. One could walk around the small exposition area in five minutes. Strange as it may seem,

Coffee and Tea Oriental Style

only tea industry representatives presented some innovations: tea champagne in a stylish package at one of the stands, and tea packed in metalized pipes with small vents for instant brewing at another.

This new type of packing is not yet common in Russia,

but may become popular in the domestic fast food segment. In the course of the conference held side by side with the exhibition local businessmen got an insight into the development trends of both the Middle East and the world coffee and tea markets.

NEWS

Orimi Trade Presented Over 350 Products at the Prodexpo Exhibition Orimitrade.ru

Russian Technical Regulation News On December 22, 2009, Technical Committee for Standardization 451, Tea, Coffee, and Their Derivatives, of the Federal Technical Regulation and Metrology Agency operating on the base of the Rusteacoffee Association, held a meeting. The Committee reviewed draft national standards Tea and Tea Products. Terms and Definitions, Black Tea. Specifications, and draft national standards specifying the methods for estimating the composition of substances in a product. These standards are required for applying and observing the Technical Regulations for Tea and Tea Products, and also for harmonizing the national and international standards. The draft Federal Law Technical Regulations for Tea and Tea Products has been prepared for submission to the State Duma Coffeetea.ru

Is a Stiff Fine the Best Certification?

On February 15 Russia abolished mandatory food certification for a range of food products. A system of voluntary declarations and tenfold fines are supposed to raise the manufacturers' and traders' responsibility for selling substandard products Coffeetea.ru

Rusteacoffee

Rusteacoffee Association Is Expanding

he Strauss company (Chornaya Karta, Roberto Totti, Elite), one of the major international coffee producers and a leader of the Russian coffee market, has joined the

Rusteacoffee Association. By entering one of the most influential and respected Russian industry communities the international group makes clear its strategic plans. At the same time, according to the Association, the membership of a major coffee operator boosts the structure's overall influence as it works for the industry’s overall goals.

SDC Foods Is Eleventh Among 300 Fastest Growing Companies in Russia The magazine Expert has published the TOP-300 of the most dynamic companies; SDC Foods, the exclusive distributor of the Ahmad tea in Russia, occupied the 11th place as it has risen from the 30th position (as of 2007). The average annual growth (on which the rating is based) amounted to 72.67%, while the company revenues for 2008 equaled 3,957,850,000 rubles. (1 E = 40 RUR) Coffeetea.ru

Finance-500 Rating Published The business magazine Finance has published its annual rating of the top 500 Russian companies. The following tea and coffee companies are on the list: Nestle Russia (No.110), Unilever Rus (No. 249), Kraft Foods (No. 259), and Orimi Trade (No.426). Only Kraft Foods and Orimi Trade have improved their positions in the rating since last year (+9 points and +8 points, respectively).

Coffeetea.ru

16

KLD Coffee Importers (Neumann Kaffee Gruppe), one of the leading importers of green coffee to the Russian market, has completed development of its new web-site.

Coffeetea.ru

Prodexpo-2010, the largest international exhibition of food products and beverages in Russia, was held in February 2010 in Moscow. National expositions from 57 countries took part in the exhibition. Orimi Trade, the leader of the Russian tea and coffee market, presented its entire product line consisting of more than 350 tea and coffee products and including the premium brands Greenfield, TESS, and Jardin.

T

Web-space of KLD Coffee Importers

COFFEE&TEA INTERNATIONAL # 1/2010

Ukraine Will Not Certify Food Products Ukraine adopted a resolution on abolishing the mandatory certification of all food products except baby foods and alcohol. The Government believes that abandoning this procedure will result in producers' saving about 40 mln. hryvnyas per year. Abolishing the mandatory certification was one of the conditions for a World Bank $500 mln loan to the country.

Obozrevatel.com

Tea Consumption Grows by 15% in Kazakhstan The Kazakhstan market is estimated at 28.5 bln tenge in cash terms and about 25 thousand tons in physical terms. Experts expect the positive trend to remain and consumption to grow by 3% in 2010.

Kazakhstan exports 70% of its tea from Kenya and over 22% from India.

Kazakh-zerno.kz

Azerbaijan Company to Invest in Tea Factory Construction in the Kuban The Azerbaijan company Anadolu Investments plans to build a tea packing factory in the Krasnodar Region. The project is estimated at $1.8 mln.

Yuga.ru

Is a Stiff Fine the Best Certification?

On February 15 Russia abolished mandatory food certification for a range of food products. A system of voluntary declarations and tenfold fines are supposed to raise the manufacturers' and traders' responsibility for selling substandard products.

Photo: ITH

In August Hong-Kong welcomed tea specialists from all countries. A great number of professionals as well as ordinary guests visited the tea exhibition held simultaneously with a food show.

NEW HEIGHTS FOR CHINA TEA:

Hong-Kong View

he Hong-Kong Exhibition Center kindly and competently arranged for visits of numerous foreign delegations. Participants from nearly all tea-growing regions of China contributed to the exhibition. Many companies designed their stands to reflect cultural peculiarities of their native provinces, which helped enhance the flavor of their teas.

Indeed, the perception of organoleptic properties of food depends greatly on our emotional state and visual background.

T

It must have been for this reason that the exhibition organizers, who surely wanted it to be most spectacular, allocated a special venue for presenting various tea cultures of the world. Staying in Hong-Kong for two days gave one a feeling that this patch of land, where skyscrapers rub shoulders, effectively brought together Asian and European mentality. As we flew back, the desire to return, and not just to attend another tea exhibition, grew more and more pronounced...

NEWS

Dedicated Man's Smile Svetlana Belikova, Deputy Chief Editor of C&T n January 2010 Otari Davidovich, Chief Editor and the person thanks to whom the magazine Coffee and Tea in Russia was launched and has been published for over 12 years, would have celebrated his 80th birthday. He laid a sound foundation: it has been three years and a half since he left us but the business which he established like a caring father and managed for many years lives on and prospers. Still, we miss his wise advice and clear vision of this complex world...

During these years without him, we have published 22 issues of the magazine Coffee and Tea in Russia, 6 issues of the magazine Coffee&Tea International, and 12 issues of the Statistical Supplement to the magazine; and the number of our website Coffetea.ru visitors has doubled.

We have grown up; the ebb and flow of economic life does not let us stagnate. We look for new ways and try to live up to the time and to the mission of our publications.

Otari Davidovich and our memory of his kind smile and his commitment guard and support us in all our actions and undertakings.

I

Great Tea Road from China Through Mongolia Completed in Russia Coffeetea.ru

he main stage of the Great Tea Road project, which ran from February through March, was completed at the Baikaltour2010 Exposition held in Irkutsk (Russia) on March 2-5. According to one of the expedition organizers, the Great Tea Road project provided a good promotion opportunity for the tourist resources of the Irkutsk Oblast. The old trade road, which is now called the Great Tea Road,

T

20

COFFEE&TEA INTERNATIONAL # 1/2010

started in Guihua (now Hohhot). From there caravans of camels, or sometimes wagons, loaded with tea used to set out through the Gobi Desert to the far-away Russia. Numerous meetings and discussions of Chinese, Mongolian, and Russian representatives resulted in the Tea Caravan project, which attracted the attention of many tea lovers and travelers.

NEWS

O THE 100th Birthday

The year 2010 marks the 100th birthday of Professor Mikhail Alexeyevich Bokuchava (1910-1995), Doctor of Sciences in Biology and Academician of the Georgian Academy of Sciences.

he year 2010 marks the 100th birthday of Professor Mikhail Alexeyevich Bokuchava (1910-1995), Doctor of Sciences in Biology and Academician of the Georgian Academy of Sciences.

Mikhail Alexeyevich was born into a large peasant's family on February 1, 1910, in a small village in Western Georgia. His father died early, and he had to combine work with studies in the secondary school; after that he was sent to preparatory courses for a higher educational institution and enrolled in the Tbilisi State University, the Faculty of Agriculture. He graduated with honors in 1932 and the same year began his postgraduate education in the All-Union R&D Institute of Tea Agriculture (VNIIChKh) in Anaseuli. A year later the postgraduate student M.Bokuchava was appointed director of the VNIIChKh branch in Chakva. It was then that the young scientist met famous scientists A.I.Oparin,

T

22

MIKHAIL ALEXEYEVICH BOKUCHAVA

COFFEE&TEA INTERNATIONAL # 1/2010

A.L.Kursanov, and staff members of the Biochemistry Institute who participated in scientific expeditions to Georgia, including Anaseuli.

In 1933 systemic biochemical studies of tea began under the guidance of A.N.Bakh and A.I.Oparin in Moscow on the basis of tea factories in Georgia, Adler (Russia), and Dagomys (Russia). Throughout his scientific life Mikhail Alexeyevich remembered his first teachers with respect and gratitude.

The tea plant appeared to be a good basis for resolving general biochemical issues – the role and transformations of tanning agents, polyphenol compounds in oxidation-reduction processes, activity of enzymes in a plant cell.

M.A.Bokuchava defended his thesis at the Biochemistry Institute of the Academy of Sciences of the USSR in 1937 and since 1939 worked there as a senior researcher and deputy head of the laboratory.

In 1949 he defended his doctoral thesis on the subject Tanning Agents and Oxidative Enzymes of Georgian Tea, and in 1952 became head of the technical biochemistry lab-

NEWS

oratory, where he worked for 50 years. He got his professorship in biochemistry in 1954, was elected a corresponding member, and then academician of the Georgian Academy of Sciences (in 1691 and 1979, respectively), and was awarded the title of Merited Worker of Science of Georgia in 1986.

M.A.Bokuchava and laboratory experts focused in their R&D activities on studying phenol compounds, oxidative enzymes, and enzymatic and thermochemical processes, including forming of aroma in the course of interaction of catechines, aminoacids, sugars, and other natural compounds. In collaboration with his colleagues he identified the differences in the composition of catechines for more than 300 cultivated and wild plants and showed that the wild-growing Vietnamese tea was primary in plant evolution.

Defense of the doctoral thesis at the Academic Council of A.N.Bakh Institute of Biochemistry (INBI) of the Russian Academy of Sciences

With academician S.V.Durmishidze

M.A.Bokuchava and his students were the first in the USSR to study localization of oxidative enzymes in the tea leaf and their role in the tea production technology and in forming tea taste, colour, and fragrance. The laboratory of technical biochemistry also conducted research in the sphere of wine-making biochemistry with a focus on enzymatic processes in the course of wine fermentation and aging. Under M.A.Bokuchava's guidance they investigated forming of aroma of essential oil cultures and studied tobacco alkaloids.

M.A.Bokuchava's main scientific interest lay with the biochemical fundamentals of tea production. His many-year in-depth studies of tea leaf catechines, fermentation mechanisms, and termochemical processes in black tea production resulted in developing and introducing a new production technology. It is based on reducing the enzymosis and increasing thermophysical processes: the rolling and fermentation time is reduced two- or threefold, and thermal treatment is performed at temperatures of 60–700Х. The new technology using thermal treatment was introduced at many USSR tea factories; M.A.Bokuchava, who was

greatly interested in this work, participated directly in the process. Mikhail Alexeyevich's breadth of interests is amazing: he raised and resolved the issue of obtaining food colors.

The joint research with scientists from Georgia in the field of biochemistry and technology of instant tea and tea colors resulted in developing an innovative method of food colors production (green, yellow, and later red) which was unparalleled in the world, patented in a number of foreign states, and implemented in this country.

Multiple fundamental studies of M.A.Bokuchava and his students related to tea biochemistry and tea production technology helped to develop and advance national tea science and brought his scientific school into prominence.

M.A.Bokuchava summed up the results of his studies in five monographs and two textbooks; he published the results of joint research with his colleagues and students in 335 articles. The monograph Biochemistry of Tea and Tea Production received the A.N.Bakh Prize in 1963.

For many years Professor M.A.Bokuchava read lectures on technical biochemistry at the Plant Biochemistry Chair of the Biology Department of the Lomonosov Moscow State University. Numerous graduate and postgraduate students began their scientific careers in the laboratory of technical biochemistry of the INBI named after A.N.Bakh As many as 50 Ph.D. and 10 doctoral theses were drawn up and defended under the guidance of Mikhail Alexeyevich. Many students of M.A.Bokuchava

work in different countries; he had especially strong relations with Georgia. M.A.Bokuchava is the author of several biochemical methods, for instance, of identifying catechines, associated tannin, oxidative enzymes, and volatile oils; he made 34 inventions, many of which have been introduced on a commercial scale.

Professor Bokuchava devoted much time and attention to scientific organizational activities: for many years he was a member of the Academic Council of the INBI named after A.N.Bakh; from 1953 till 1959 he held the position of Deputy Director for Scientific Work; he was the member of the Academic Council for Biotechnology of the USSR Academy of Sciences, member of the Scientific and Technical Council of the USSR Ministry of Food Industry, and member of the Academic Council of the Georgian Institute of Subtropical Agriculture.

Academician M.A.Bokuchava was awarded three Badges of Honor and several medals.

The editorial office expresses their gratitude to Yekaterina Bokuchava-Pushkina, daughter of Mikhail Alexeyevich, for assistance in preparing this profile.

23

REVIEW&STATISTICS

Statistic of tea turnover in Ukraine for April-June 2009 Import

Green Tea bulck teabags other packagings Black Tea bulck teabags other packagings Total Tea Mate Tea Extracts

Export

Code

fo rs ub sc rib er s

Description

kgs

%

18,17

0902 20 0010 0902 10 0010 0902 10 0090

1 257 770,00 775 835,00 213 986,00 267 949,00

0902 40 0010 0902 30 0010 0902 30 0090

5 663 204,00 3 510 928,00 1 394 763,00 757 513,00 6 920 974,00

US Dollars

%

kgs

%

US Dollars

4 129 270,00 1 829 630,00 1 594 650,00 704 990,00

16,19

6 112,00 3 431,00 2 681,00

9,77

36 440,00 19 770,00 16 670,00

12,24

81,83

21 375 470,00 9 335 330,00 9 090 700,00 2 949 440,00

83,81

56 459,00 43 056,00 13 403,00

90,23

261 210,00 198 120,00 63 090,00

87,76

100,00

25 504 740,00

100,00

62 571,00

100,00

297 650,00

100,00

0903 00 0000

12 039,00

40 970,00

49,00

780,00

2101 20 2000 2101 20 9200

124 038,00 124 038,00

210 110,00 210 110,00

9 475,00 9 475,00

42 440,00 42 440,00

Tea Import/Export in different forms bulck teabags other packagings

4 286 763,00 1 608 749,00 1 025 462,00

61,94 23,24 14,82

11 164 960,00 10 685 350,00 3 654 430,00

43,78 41,90 14,33

Tea, main supplier countries Sri Lanka Russia India China Kenia Indonesia United Arab Emirates Vietnam Other countries

1 943 865,00 1 543 549,00 489 641,00 411 841,00 380 877,00 292 888,00 121 946,00 112 050,00 1 624 317,00

28,09 22,30 7,07 54,37 5,50 4,23 3,47 1,62 23,47

7 414 280,00 9 968 120,00 1 235 750,00 1 255 040,00 867 020,00 587 600,00 264 960,00 181 490,00 3 730 480,00

29,07 39,08 4,85 42,55 3,40 2,30 2,84 0,71 14,63

Source: Customs Cervice of Ucraine

46 487,00 16 084,00

74,29 25,71

217 890,00 79 760,00

%

73,20 26,80

Statistic of tea turnover in Ukraine for July-September 2009

Import

Description Green Tea bulck teabags other packagings Black Tea bulck teabags other packagings Total Tea

on ly

Mate

kgs

%

%

kgs

%

US Dollars

18,17

4 129 270,00 1 829 630,00 1 594 650,00 704 990,00

16,19

6 112,00 3 431,00 2 681,00

9,77

36 440,00 19 770,00 16 670,00

12,24

0902 20 0010 0902 10 0010 0902 10 0090

1 257 770,00 775 835,00 213 986,00 267 949,00

5 663 204,00 3 510 928,00 1 394 763,00 757 513,00

81,83

21 375 470,00 9 335 330,00 9 090 700,00 2 949 440,00

83,81

56 459,00 43 056,00 13 403,00

90,23

261 210,00 198 120,00 63 090,00

87,76

0902 40 0010 0902 30 0010 0902 30 0090

REVIEW&STATISTICS

US Dollars

6 920 974,00

100,00

25 504 740,00

100,00

62 571,00

100,00

297 650,00

100,00

0903 00 0000

12 039,00

40 970,00

49,00

780,00

2101 20 2000 2101 20 9200

124 038,00 124 038,00

210 110,00 210 110,00

9 475,00 9 475,00

42 440,00 42 440,00

Tea Extracts

Tea Import/Export in different forms bulck teabags other packagings

4 286 763,00 1 608 749,00 1 025 462,00

61,94 23,24 14,82

11 164 960,00 10 685 350,00 3 654 430,00

43,78 41,90 14,33

Tea, main supplier countries Sri Lanka Russia India China Kenia Indonesia United Arab Emirates Vietnam Other countries

1 943 865,00 1 543 549,00 489 641,00 411 841,00 380 877,00 292 888,00 121 946,00 112 050,00 1 624 317,00

28,09 22,30 7,07 54,37 5,50 4,23 3,47 1,62 23,47

7 414 280,00 9 968 120,00 1 235 750,00 1 255 040,00 867 020,00 587 600,00 264 960,00 181 490,00 3 730 480,00

29,07 39,08 4,85 42,55 3,40 2,30 2,84 0,71 14,63

Source: Customs Cervice of Ucraine

24

Export

Code

COFFEE&TEA INTERNATIONAL # 1/2010

46 487,00 16 084,00

74,29 25,71

217 890,00 79 760,00

%

73,20 26,80

REVIEW&STATISTICS

Statistic of tea turnover in Ukraine for October-December 2009 Import

Green Tea bulck teabags other packagings Black Tea bulck teabags other packagings Total Tea Mate

Export

Code

fo rs ub sc rib er s

Description

kgs

%

16,76

0902 20 0010 0902 10 0010 0902 10 0090

1 296 819,00 848 588,00 205 789,00 242 442,00

0902 40 0010 0902 30 0010 0902 30 0090

6 442 682,00 3 670 922,00 1 681 811,00 1 089 949,00 7 739 501,00

0903 00 0000

US Dollars

%

kgs

%

US Dollars

%

4 423 674,00 2 009 607,00 1 657 815,00 756 252,00

13,80

5 277,00 2 237,00 3 040,00

8,88

32 104,00 12 626,00 19 478,00

10,47

83,24

27 639 078,00 11 413 312,00 12 246 632,00 3 979 134,00

86,20

54 149,00 38 863,00 15 286,00

91,12

274 497,00 185 967,00 88 530,00

89,53

100,00

32 062 752,00

100,00

59 426,00

100,00

306 601,00

100,00

3 335,00

15 662,00

-

Tea Import/Export in different forms bulck teabags other packagings

4 519 510,00 1 887 600,00 1 332 391,00

58,40 24,39 17,22

13 422 919,00 13 904 447,00 4 735 386,00

41,86 43,37 14,77

Tea, main supplier countries Sri Lanka Russia China Vietnam India Indonesia Kenia Other countries

2 363 356,00 2 015 486,00 901 478,00 619 826,00 555 553,00 433 140,00 282 757,00 567 905,00

30,54 26,04 11,65 8,01 7,18 5,60 3,65 7,34

8 913 670,00 14 890 042,00 2 178 232,00 1 194 687,00 1 526 722,00 1 163 392,00 928 440,00 1 267 567,00

27,80 46,44 6,79 3,73 4,76 3,63 2,90 3,95

Source: Customs Cervice of Ucraine

-

41 100,00 18 326,00

69,16 30,84

198 593,00 108 008,00

64,77 35,23

Study of TEA Retail Sales in Russian Cities with the Population over 10,000.

Data for August 2009 - January 2010

Distribution of TEA Sales in Terms of Money. Percent

August-September 2009

by urban type Population of 10 000 – 50 000 population of 50 000 – 250 000 population of 250 000 – 1 000 000 population over 1 million by distribution channel supermarkets mini-markets grocery stores pulse shops and open markets

October-November 2009

December 09-January 2010

14,4 24,3 25,9 35,4

14,6 23,7 26,2 35,6

14,1 23,7 26,3 36,0

38,6 18,7 24,9 17,9

41,0 19,0 23,8 16,2

42,3 19,2 22,7 15,8

Source: Nielsen

Share of Packed Tea in Total Sales Volume of TEA

on ly

Physical sales volume, percent

Tea in teabags Packed tea

August-September 2009

51,4 48,6

Oktober-November 2009

Monetary sales volume, percent

December 2009January 2010

52,5 47,5

August-September 2009

52,0 48,0

Oktober-November 2009

68,6 31,4

69,4 30,6

December 2009-January 2010

67,7 32,3 Source: Nielsen

Share of Each Category in Total Sales Volume

black black flavored mixed: Hedbal&Fruit green green flavored red white black & green

Physical sales volume, percent August-September 2009

73,5 11,5 2,7 5,4 5,6 0,1 0,1 1,0

Oktober-November 2009

73,6 11,7 2,7 5,3 5,5 0,1 0,1 1,0

Monetary sales volume, percent December 2009January 2010

73,1 12,2 2,6 5,4 5,5 0,1 0,1 0,9

August-September 2009

60,9 17,9 4,7 5,9 8,7 0,2 0,4 1,2

Oktober-November 2009

60,8 18,1 4,7 5,9 8,6 0,2 0,4 1,2

December 2009January 2010

60,3 18,8 4,5 5,9 8,5 0,2 0,4 1,2 Source: Nielsen

25

REVIEW&STATISTICS

Share of Leaf, Granulated & Mixed Tea in Total Sales Volume of TEA sales volume,% August-September 2009

Main cities Tea in teabags Granulated Leaf Mixed (leaf + granulated)

Oktober-November 2009

69,4 1,7 28,5 0,4

67,7 1,6 30,3 0,4

fo rs ub sc rib er s

68,6 1,7 29,3 0,4

December 2009-January 2010

Source: Nielsen

sales volume,%

sales volume,%

AugustSeptember 2009

December 2009January 2010

66,4 0,8 32,5 0,4

67,4 0,7 31,6 0,4

63,7 0,7 35,3 0,3

74,5 0,6 24,9 0,1

75,3 0,5 24,1 0,1

72,0 0,4 27,5 0,1

79,4 0,9 19,3 0,7

79,8 0,9 18,9 0,3

77,9 0,8 21,1 0,3

76,6 1,2 21,8 0,5

77,6 0,9 21,2 0,4

75,7 0,8 23,1 0,4

71,4 0,7 27,7 0,1

72,2 0,9 26,8 0,1

71,1 0,8 28,0 0,1

63,8 1,1 34,6 0,5

65,8 1,1 32,6 0,5

61,9 1,0 36,6 0,4

69,5 0,7 29,6 0,2

70,9 0,8 28,1 0,2

69,0 0,8 30,0 0,2

85,4 3,8 10,6 0,2

85,9 3,4 10,6 0,2

83,9 3,2 12,7 0,2

on ly

Moscow Tea in teabags Granulated Leaf Mixed (leaf + granulated) St. Petersburg Tea in teabags Granulated Leaf Mixed (leaf + granulated) Yekaterinburg Tea in teabags Granulated Leaf Mixed (leaf + granulated) Novosibirsk Tea in teabags Granulated Leaf Mixed (leaf + granulated) Volgograd (Stalingrad) Tea in teabags Granulated Leaf Mixed (leaf + granulated) Nizhniy Novgorod Tea in teabags Granulated Leaf Mixed (leaf + granulated) Rostov-on-Don Tea in teabags Granulated Leaf Mixed (leaf + granulated) Vladivostok Tea in teabags Granulated Leaf Mixed (leaf + granulated)

OktoberNovember 2009

AugustSeptember 2009

Krasnoyarsk Tea in teabags Granulated Leaf Mixed (leaf + granulated) Samara (Kuibyshev) Tea in teabags Granulated Leaf Mixed (leaf + granulated) Chelyabinsk Tea in teabags Granulated Leaf Mixed (leaf + granulated) Voronezh Tea in teabags Granulated Leaf Mixed (leaf + granulated) Krasnodar Tea in teabags Granulated Leaf Mixed (leaf + granulated) Omsk Tea in teabags Granulated Leaf Mixed (leaf + granulated) Perm Tea in teabags Granulated Leaf Mixed (leaf + granulated) Ufa Tea in teabags Granulated Leaf Mixed (leaf + granulated)

OktoberNovember 2009

December 2009January 2010

76,7 0,6 22,5 0,2

77,7 0,6 21,6 0,2

74,5 0,6 24,7 0,2

67,4 0,8 31,4 1,50,4

68,2 0,7 30,8 0,3

65,6 0,8 33,3 0,3

74,3 3,1 22,2 0,3

73,7 2,8 23,2 0,3

74,6 2,6 22,5 0,3

70,5 0,5 28,4 0,6

71,4 0,6 27,4 0,6

71,6 0,7 27,2 0,5

70,7 0,3 28,6 0,3

72,4 0,4 27,0 0,2

71,1 0,4 28,2 0,3

74,8 1,2 23,9 0,1

76,2 1,1 22,6 0,1

74,4 1,2 24,4 0,1

80,4 1,0 18,3 0,3

81,3 1,1 17,2 0,4

80,0 1,2 18,4 0,4

54,1 1,3 44,4 0,2

56,1 1,7 42,0 0,2

55,7 1,6 42,5 0,2

Source: Nielsen

REVIEW&STATISTICS

Study of COFFEE Retail Sales in Russian Cities with the Population over 10,000. Data for August 2009 – January 2010 Share in Total Sales Volume

Sublimated instant Granulated instant Powdered instant Coffee mixes Ground coffee and coffee beans

Physical sales volume, percent AugustSeptember 2009

29,8 18,8 5,9 24,6 20,9

Oktober-November 2009

29,0 18,6 6,2 27,5 18,9

December 2009January 2010

31,3 18,8 5,6 22,9 21,3

Monetary sales volume, percent AugustSeptember 2009

56,0 20,6 5,3 7,6 10,5

Oktober-November 2009

56,8 20,7 5,1 7,7 9,8

December 2009January 2010

57,4 19,9 5,0 7,2 10,5 Source: Nielsen

26

COFFEE&TEA INTERNATIONAL # 1/2010

REVIEW&STATISTICS

Distribution of COFFEE Sales in Terms of Money. Percent August-September 2009

Oktober-November 2009

December 2009-January 2010

s r e b i r c s b u s r o f y l on

by region Central Northwestern Volga Ural Siberia Far East Southern by urban type Population of 10,000 – 50,000 population of 50,000 – 250,000 population of 250,000 – 1 million population over 1 million by distribution channel supermarkets mini-markets grocery stores kiosks and pavilions open markets

36,0 13,4 16,6 8,6 11,1 3,1 11,2

36,6 13,1 16,8 8,0 11,0 3,0 11,3

36,9 13,1 17,1 8,2 10,4 3,3 11,0

13,9 24,7 25,5 35,9

13,4 23,7 26,4 36,5

13,5 23,4 26,1 37,0

39,7 17,3 25,4 2,5 15,1

42,2 18,1 23,6 2,2 13,9

42,3 18,3 23,0 2,2 14,1

Source: Nielsen

Share of Various Packaging Types in Total Sales Volume of Instant Coffee Physical sales volume, percent

AugustSeptember 2009

metal can glass jar brick packet other

28,9 42,4 26,1 1,1 1,6

Monetary sales volume, percent

Oktober-November 2009

December 2009January 2010

28,6 41,6 27,3 0,9 1,5

27,9 42,3 27,3 0,9 1,6

AugustSeptember 2009

19,0 54,4 23,5 1,7 1,3

Oktober-November 2009

19,0 53,7 24,3 1,6 1,3

December 2009January 2010

18,1 54,8 24,2 1,5 1,4

Source: Nielsen

27

REVIEW&STATISTICS

Alena Velichko

ABSURD SUSPICIONS Investigation cooperation topic: with GMO Investigation subject:

COFFEE and TEA

Verdict suspicions of the international are community: groundless nly five countries are absolutely GMO-free zones: Austria, Venezuela, Greece, Poland, and Switzerland. This means that import of GMO-containing agricultural products into them is prohibited. Other countries allow such imports, but strongly recommend that GMO-containing products be labeled accordingly. The most common products which contain a modified genome are soya beans, corn, rapeseed, cotton, rice, and potatoes.

They are imported into the CIS countries, but production of GM cultures within the CIS is prohibited. Although Russia is not a GMOfree zone, food products are tightly controlled, and the list of products checked for GMO content includes many other crops in addition to the six listed above. Most surprisingly, tea and coffee are on this list.

There should be serious reasons for checking them for GMO presence, which surely must be known to: a) tea and coffee producing countries; and b) international tea and coffee associations and committees monitoring product quality. It was they who spoke up to protect tea and coffee.

Dr. Monika Beutgen, Secretary General of the European Tea Committee, says no genetically modified tea has so far been registered in the course of EU monitoring.

"However, from time to time we see certain misunderstanding connected with ‘development’ of new tea plants, which are more resistant to pesticides, droughts, and other hardships. Such misunderstanding is further incited by tea producers themselves as they use the term ’cloning1 of tea plants.’

As far as we know, this phrase is used to

O

1

28

describe usual work processes, the resulting products of which may not be considered genetically modified in accordance with EU Regulation 1829/2003 on all genetically modified food and feed."

According to this Regulation, all European companies shall underline it in their contracts that the tea they trade must not be genetically modified.

Another piece of evidence against existence of genetically modified tea is that investing in research and development of such products is unprofitable. "Expenses on developing a genetically modified product are sure to exceed any profits thereon," Monika Beutgen says.

Even if such research began, experts would immediately hear of it. Mr.Tim Bond, Chairman of the UK Tea Council Technology Commission, admits that, as far as they know, "no R&D institute undertook research in genetic engineering of tea plants."

Bill Gorman, Executive Chairman of the Council, says research is under way to breed new drought-resistant plants by crossbreeding normal tea plants, which is different from genetic engineering.

Mr. Michael Bunston, Chairman of the International Tea Committee, has not heard of genetically modified tea either: "The only explanation I can think of regarding the issue of tea and GMO is a somewhat unhappy use of the term ’cloning,’ which is at present actively employed in genetic engineering but used to mean vegetative propagation."

Biswajit Bera, Director at the Tea Board of India, says no tea is produced from GM tea plants. He believes that tea as a health drink is

incompatible with GMO. John Wanjoko from the Tea Board of Kenya shares his point of view and strongly denies any use of GMO technologies, as well as pesticides, in tea industry. "We study in depth all issues related to tea, its quality, and land productivity. We do not need to develop GM tea as we do not have any serious problems with drought, pesticides, or other tea-specific issues. We do crossbreeding, but it has nothing in common with genetic engineering."

The situation in the coffee industry is very much the same, but with a twist. Research to produce genetically modified coffee began in the mid-90-ies, and in 2005 a seminar took place in London where the results of such research were presented. "However, GM coffee is still in its development stages, and not a single gram of such coffee has entered the market," Martin Wattam, International Coffee Organisation expert, says.

Summing up the experts' opinions, one can say they are unanimous that the customers' concerns are obviously groundless. They believe that the main piece of evidence – the word "cloning" – is but an unhappy term which tea specialists have long used to describe the development of new breeds and which has nothing to do with genetic engineering.

The case of coffee, where research began many years ago but has so far yielded no results, shows that production of GM coffee is not at all a quick process, and at present it is a clear no-win in many respects.

One would hope that the money spent on GMO certification of tea and coffee will be invested in tea and coffee industry development.

A clone in plant selection means any descendant of a single plant, produced by saplings, propagules, root tubers, bulbs, underground stems, and other parts. – Ed.

COFFEE&TEA INTERNATIONAL # 1/2010

REVIEW&STATISTICS

NO GMOs IN

the Tea Sector

By Christine Lauber, Food Chemist

INTRODUCTION – WHAT ARE GMOS? Genetically modified organisms (GMOs) are defined as organisms, in which the genetic information is altered in a way that does not occur naturally.

This technology can be used to transfer individual genes with certain characteristics from one organism to another, even between non-related species.

Genetic modification pursues different objectives. It can be used to cre-

ate insect-resistant plants, offering a means of reducing the use of insecticides, or make plants tolerant to certain herbicides. Any weeds growing among such crops can be controlled with a broad-spectrum herbicide without affecting the GMO plant.

Important crops in this sector are: • Maize • Soy • Rape • Cotton • Potato • Sugar cane • Sugar beet • Rice.

The six main GM crop producing countries:

• USA • Argentina • Brazil • India • Canada • China.

Another aspect ofgenetic engineering involves the direct modification of certain characteristics in foodstuffs. In many cases, the aim is to delay the ripening process of fruit and vegetables, e.g. tomatoes, or enrich food plants with certain nutrients.

According to the aforementioned rules for the

Special for the C&T International Chairman of EHIA’s Scientific and Technical Committee, Martin Bauer Group expert Dr. Adolf Kler gave his comments on GMO: ccording to the aforementioned rules for the European Union, which are among the most stringent regulations world-wide, food manufacturers are obliged to confirm the absence of GMOs in their products. If genetically modified organisms or GMO derivatives are used in a food manufacturer's products, their use must be authorised and the products must be clearly labelled.

All of the pertinent information must be passed on to the subsequent party in the supply chain.

At present, no GM varieties of tea or herbal raw materials are authorised within the European Union. Therefore, no genetically modified tea or herbal ingredients are traded.

Nevertheless, Martin Bauer Group, the world-wide leadinggroup of companies in Teas, Extracts and Botanicals with its business unit Martin Bauer, is putting all of its suppliers under obligation to sign a non-GMO declaration for all raw materials.

According to the declarations received from our suppliers so far, no genetically modified botanical raw materials have been used.

This means that Martin Bauer products are not subject to any GMO labelling requirements imposed by the European Union or any other countries.

According to the definition laid down in European Food Labelling Directive 2000/13/EC, additives and flavourings are regarded as being regular food ingredients and they are therefore also subject to EU regulations concerning GMOs when genetic modification is used in their production.

The declarations received from our suppliers confirm that none of the additives and flavourings used at Martin Bauer either contain or consist of GMOs or GMO ingredients. This being the case, they do not need to be labelled in accordance with EU regulations.

A

30

COFFEE&TEA INTERNATIONAL # 1/2010

However, carrier substances for flavourings and additives arenot defined as being ingredients of final food products as long as only the necessary amounts are used. In this case they are not subject to GMO labelling requirements according to the terms of Regulation (EC) 1829/2003 or Regulation (EC) 1830/2003. This could be of interest with respect to carrier materials derived from maize starch, e.g. maltodextrins.

Where maize maltodextrins are used as carrier materials for flavourings or additives, Martin Bauer only purchases products that originate from conventional raw materials. Reliable supplier declarations and additional random analyses of incoming raw materials are particularly essential for these products.

Another aspect associated with using starch derivatives like maltodextrins as carrier materials is their respective manufacturing processes. Maltodextrins are usually manufactured with the aid of starch decomposition enzymes. While enzymes are predominantly prepared from genetically modified microorganisms today, enzymes made from conventional microorganisms are no longer available for many applications.It is important to know that the enzyme preparations mentioned above are not GMO derivatives and are not subject to any GM labelling requirements.

Furthermore, they are used as processing aids for the production of maltodextrin and are therefore not regarded as being ingredients of maltodextrin or subsequent products. No modified DNA can be detected in the enzymes or maltodextrins.

Because genetic engineering is used for the production of a processing aid in the maltodextrin manufacturing process, we cannot recommend that our customers make use of any declarations confirming the absence of any GM processes for products containing starch derivatives, such as maltodextrin as carriers.

In conclusion I would like to note: - all raw material suppliers undertake not to use any GMOs or GMO derivatives as ingredients in the products supplied to Martin Bauer. Additional spot check analyses are carried out on critical materials, e.g. maize maltodextrin; - labelling regarding the absence of GMOs in tea blends supplied by Martin Bauer is possible in accordance with the EU regulations mentioned above.

REVIEW&STATISTICS

European Union, which are among the most stringent regulations tial risks to world-wide, food manufacturers are obliged to confirm the absence human health and of GMOs in their products. If genetically modified organisms or the environment GMO derivatives are used in a food manufacturer's products, their associated with use must be authorised and the products must be clearly labelled. All of the GMOs. Regulation (EC) pertinent information must be passed on to the subsequent party in the 1829/2003 and Directive supply chain.

2001/18/EC cover the proceAt present, no GM varieties of tea or herbal dures for the assessment and raw materials are authorised within the European authorisation of GM foods.

Union. Therefore, no genetically modified tea or All EFSA-approved GMOs, herbal ingredients are traded. which have been authorised for Nevertheless, Martin Bauer Group, the world-wide use in food or feed within the leading European Union are published on Genetically modified microorganisms are used in the European Commission web site. many biotechnological food manufacturing processes, Traceability and labelling issues are including the production of vitamins, flavourings, and subject to the requirements of enzymes. Many of these formerly conventional Regulation (EC) 1830/2003. Labelling rules processes have now been almost completely supercover the labelling of GMOs (e.g. GM maize), seded by GM processes. as well as food ingredients and feed materials Concerning tea plants (Camellia sinensis) made from GMOs (e.g. starch from GMmaize, oil and other herbal raw materials used for from GM soy). In these cases, the list of ingredients herbal and fruit teas, hardmust contain the words «genetically modified» or ly anything is known «produced from genetically modified [name of the about GMO trials organism]». However, these labelling requirements with any of the do not apply to food or feed containing less than the effects menthreshold value of 0.9 % of the individual food or tioned above. feed ingredients in case the traces are adventitious or No genetically technically unavoidable. modified tea or GMO traceability means that GMOs and food or herbs are being feed produced from GMOs must be traceable at all traded at present. stages in the supply chain. Each party throughout the entire chain must therefore supply specific information regarding GMOs to the next party in writing and keep all of LEGISLATION the pertinent files for a fiveyear retention period. This Legislation on ensures that GMOs can be traced back to their origins in GMOs has been in the event of an incident. effect for many years within the European Union (EU). Genetically modified

32

foods have to pass a stringent safety assessment before they can be approved. The European Food Safety Authority (EFSA) is the EU authority responsible for the assessment and approval of genetically modified organisms. The EFSA is responsible for making an independent assessment of any poten-

COFFEE&TEA INTERNATIONAL # 1/2010

GMO INGREDIENTS IN FOOD AND FEED While the USA and Canada do not require any labelling for genetically modified foods or food ingredients, other regions, particularly including the European Union, Japan and Australia, have strict rules regarding such ingredients.

In the European Union, only a few products containing GM plants or ingredients made from GMOs can be found on the market. Feed ingredients are frequently produced from GM crops, however, as labelling of the resulting animal products, such as milk or meat, is not mandatory.

In more liberal markets, e.g. in the USA, numerous food products containing ingredients made from GMOs are on the market. Main ingredients may include GM maize starch derivatives, for example, or GM soy derivatives.

MYCOTOXINS in Tea and Tea Products WHAT DO WE KNOW ABOUT RESTRICTIONS? Today, more than 100 countries have imposed restrictions on the permissible content of mycotoxins – substances evolving during development of microscopic fungi – in food products. The content of aflatoxins B1, B2, G1 and G2, ochratoxin A, and patulin is controlled in most industrially developed countries [1].

The overall maximum permissible concentration of aflatoxins B1+B2+G1+G2 varies in the range 1–35 μg/kg in different countries, amounting to 20 μg/kg in the USA and 4 μg/kg in European countries.

Aflatoxin B1, which is usually found in higher concentrations than other aflatoxins, is considered the most dangerous contaminant among the mycotoxins mentioned above. The probability of finding aflatoxin B1 in food products is 4 times higher than that of aflatoxin B2 and 1.25 times higher than that of aflatoxins G1 and G2 [2]. For this reason, the maximum permissible concentration of aflatoxin B1 is regulated in a number of countries varying in the range 2–20 μg/kg, being limited to 2 μg/kg in European Community and not controlled in the USA. The probability of contamination of tea and tea products with aflatoxins is fairly low, and the high content of caffeine and polyphenols in tea inhibits synthesis of mycotoxins [3]. Nevertheless, tea and tea products are subject to the same regulations and restrictions as other food products. In Russia, the maximum permissible concentration of aflatoxins is 5 μg/kg [4].

AFLATOXINS – MAIN SOURCE OF ANXIETY Aflatoxins fall into the group of polyketide mycotoxins and are produced

by different types of mold fungi.

Aflatoxins were discovered approximately 50 years ago, when derivatives of coumarin were extracted from bird seeds contaminated with the mold fungus Aspergillus Flavus and were called aflatoxins (Aspergillus Flavus toxins – Aflatoxins).

Four types of aflatoxins were studied then and denoted as B1, B2, G1, and G2 according to their ability to fluoresce blue (B) or green (G) light when irradiated with ultraviolet light. Many similar compounds were discovered afterwards and classified into the group of aflatoxins.

The most toxic and widespread of the currently known 17 aflatoxins is aflatoxin B1 (C17H1206) [5]. The toxicity of other widespread aflatoxins decreases as B1>M1>G1>B2>M2, G2.

Aflatoxins are mostly produced by two mold fungi groups – Aspergillus Flavus and Aspergillus Parasiticus. Aspergillus fungi are very common in nature and can evolve as mold practically on any substrates rich in mono- and poly-saccharides in aerobic conditions. In certain conditions, mold of this kind easily grows in food products and can also grow on plants and trees. Aspergillus fungi are quite resistant to environmental impacts, and some of them, such as, for example, A. Niger, may proliferate on substrates with low contents of nutrient substances.

Humid and warm subtropical and tropical conditions are most favorable for mold growth.

Aflatoxins represent only one group of food-contaminant mycotoxins produced by mold fungi. Another group is ochratoxins, the most dangerous of which is ochratoxin A. Like aflatoxins, ochratoxins are also produced by various Aspergillus mold fungi, such as

Grigory Andreev, Ph. D.

A. Ochraceus, A. Niger, etc. Other mycotoxins are patulin, citrinin, fumonisin, zearalenone, cyclopiazonic acid, etc.

MYCOTOXINS – WHAT, WHERE AND WHEN Despite the great diversity of mold fungi, not all of them are capable of producing mycotoxins. Mycotoxins are lowmolecular secondary metabolites, that is, products of metabolic processes in microorganisms, and, unlike primary metabolites, are not vital for microorganisms. Several hundreds of secondary metabolites produced by various microorganisms are known currently, but only few of them are mycotoxins.

The set of produced secondary metabolites depends on the microorganism and the conditions of its development.

For instance, the same type of mold fungi may produce large amounts of mycotoxins on one substrate and none on another.

Many mycotoxins may easily be produced by microorganisms in laboratory conditions, but will not always be produced in food products or in plantations.

There are different points of view on the role of secondary metabolites, mycotoxins among them, in metabolic processes of microorganisms. For a long time, mycotoxins were believed to be produced in the final stage of exponential growth and in the stationary phase of development of mold fungi. In other words, synthesis of mycotoxins begins with depletion of nutrient substances.

At the same time, it was shown that strains of A. Flavus may produce mycotoxins during the entire phase of exponential growth in natural conditions [6].

This phenomenon may be explained by the role of mycotoxins in the competition of mold fungi with other microor-

33

REVIEW&STATISTICS

Strawberry mould (Mucoraceae)

ganisms, including other types of mold fungi.

MOLD=MYCOTOXINS Mold grows in food products at different stages of their cultivation and production – growth on plantations, harvesting, processing, and storage.

Growth of mold depends on many factors, such as humidity, temperature, acidity and chemical composition of substrate, presence of other microorganisms, etc. Mold fungi are much more tolerant to ambient conditions than other microorganisms. Mold can grow in a fairly wide range of pH. Every type of mold has its optimal temperature and humidity. The moisture content of food products is measured using the parameter of water activity Aw, which is the ratio between water vapor pressure over the sample surface and water vapor pressure over the water surface under the same conditions [7].

Lower water activity results in longer lag phases, slower growth, and smaller

fungi colonies. Lower temperatures have approximately the same effect. Higher temperatures inactivate vegetative cells and conidia. Conditions promoting the growth of mold fungi often differ from conditions facilitating production synthesis of mycotoxins [8]. Mycotoxins are produced in a much narrower range of parameters than growth and development of mold. For example, for growth of A. Flavus, the optimal temperature is 35°C and the optimal water activity is 0.95. Mold growth is possible at water activities Aw as low as 0.75 and temperatures ranging from 10°C to 45°C. Mycotoxins are produced at temperatures lower than 40°C and Aw higher than 0.84. For synthesis of aflatoxins in A. Flavus mold, the optimal temperature is 33°C and the optimal water activity Aw is 0.99. Water activities typical for tea leaves are much lower, for which reason growth of mold and contamination of tea products with mycotoxins are unlikely.

tamination with mycotoxins. The reason is that mycotoxins are rather tolerant to ambient conditions and even heat treatment and do survive even after destruction or inactivation of mold.

Thus, objective control of the content of mycotoxins in tea plantations, raw materials, and final products may be ensured only by continuous monitoring of mold formation. Such monitoring is not easy at all stages of tea growing, production and storage and, for this reason, is economically inexpedient. Actual safety of tea and tea products may and should be ensured by • controlling the content of mycotoxins (first of all aflatoxin B1) in final tea products; • maintaining low water activity prior to packaging of final products; • using appropriate packaging materials, and • observing all transportation and storage conditions and requirements.

REFERENCES TEA AND MYCOTOXINS

Blue mould

34

Grain mould

COFFEE&TEA INTERNATIONAL # 1/2010

Synthesis of mycotoxins depends on many different factors, and presence of mycotoxin – producing mold fungi in food products does not always result in presence of mycotoxins in these products. For example, presence of A. Niger mold fungi is necessary for production of Puerh tea, but neither ochratoxin A nor fumonisin B2 and B4 are found in final products [9]. Mycotoxins are not produced in black tea [10]. This means that there is no direct correlation between presence of mold in raw materials and contamination of final products with mycotoxin.

At the same time, absence of mold fungi fragments in products and crops does not guarantee that there is no con-

1. Mycotoxins in Fruits and Vegetables.

Eds. R. Barkai-Golan, N. Paster. Elsevier, 2008.

2. Aflatoxin and Food Safety. Ed. H. Abbas. CRC Press, 2005.

3. Antimicrobials in Food. Eds. P. Davidson, J. Sofos. CRC Press, 2005.

4. Sanitary-epidemiological rules and norms 2.3.2.1078-01.

5. Food Microbiology. M. Adams, M. Moss. RSC, 2005.

6. E. H. Gendloff, T. J. Leonard. Experientia, 1992, 48, 84.

7. Modern Food Microbiology. J. M. Jay, M. J. Loessner, D. A. Golden. Springer, 2005.

8. Fundamental Food Microbiology.

B. Ray, A. Bhunia. CRC Press, 2008.

9. J. Mogensen, J. Varga. International Journal of Food Microbiology, 2008, 132, 141.

10.V. Ostry, J. Ruprich, J. Skarkova, A. Kubatova. Mycotoxin Research, 2001, 17, 188.

REVIEW&STATISTICS

CRISIS not stop DOES

THE BREAKTHROUGH OF COFFEE SHOP CHAINS IN BALTIC STATES

The article is prepared by Euromonitor Internation al Senior Research Analyst for Baltic States Rusne Naujokaityte

According to Euromonitor International, inhabitants from the Baltic States (Lithuania, Latvia and Estonia) have been passionate coffee admirers since the Soviet times. Their coffee drinking habits and consumption levels are much closer to the Western than Eastern European standards. An average consumer in Baltic States consumes from 2.8 kg to 4.8 kg of coffee per year; in Western Europe - 3.4 kg and Eastern Europe – 1.6 kg per year respectively. Black coffee was the most popular drink in the cafes of Vilnius, Riga and Tallinn, but the situation changed a lot after the year 2000, when people started traveling more and discovering new tastes and types of coffee.

2008 2013 Annual Growth, %

Coffee Consumption in Baltic States Total Volume – kg Per Capita – 2008

Eastern Europe Lithuania Estonia

Western Europe

2003 2008 Annual Growth, %

Latvia

Note: Bubble size indicates consumption of coffee in country kg Per Capita in 2008

WHO IS THE CONSUMER? Expanding number of takeaway coffee lovers influenced rapid development of coffee shop chains in the Baltics. The boom has started in 2007.

Other important reasons are the development of takeaway food concept and smoking ban, which had a positive impact on drinking coffee outside alongside with cigarette. The regular takeaway coffee consumer lives in the capital or bigger city, is young/middle age, have middle/higher income, lives fast pace of life, usually is a student or business person, open minded and desirous for novelties and good quality fresh coffee. The coffee aficionados

Source: Euromonitor International, 2009

fter entering the European Union (EU), the economic situation has changed in Estonia, Latvia and Lithuania. Traveling in other EU countries gave a huge impact on whole lifestyle change for people living in the biggest cities of Baltics. The pace of life became faster, business areas – bigger. Income were growing rapidly and pushing for higher quality products. These factors influenced development of coffee shop chains and created opportunities to offer coffee to take away. First coffee shop chain was Double Coffee opened in Riga in 2002. Nowadays, Double Coffee is available in all Baltic States owning 21 cafes in Latvia, 7 in Lithuania and 3 in Estonia.

A

Coffee Shops in Baltic States, 2009 Number of Outlets

Source: Euromonitor International, 2009

36

COFFEE&TEA INTERNATIONAL # 1/2010

REVIEW&STATISTICS

target groups develop further and can be described as coffee gourmands appreciating good quality fresh coffee. They also love to experiment with different coffee mixes and syrup tastes.

Another significant target group is teenagers and students, who like to gather at “a cool place” with nice lounge music, cozy environment, and wireless internet connection. Some of the most popular coffee shops e.g. Coffee Inn are trying to adjust to the latest trends of on-line social networking by communicating with their clients via Facebook or Twitter, reporting about novelties in cafй’s life or new coffees in the menu.

COMPETITION BETWEEN CHAINED SPECIALIST COFFEE SHOPS IS GOING TO INCREASE Currently each country has 2-3 regional chains and 4-5 local coffee shop chains. At the moment, the most developing is Coffee Inn owning 20 coffee shops in Lithuania and Estonia and their next step should be in Latvia. The company works under franchise principle and is considered as the most successful and expanding coffee shop chain in the Baltics. Another important chain is Double Coffee owned by DC Holding. Although Coffee Inn and Double Coffee cannot be compared equally as Double Coffee is also oriented to food and drinks service, it is worth to mention, that Double Coffee was the cafй which actually gave a sign of demand for good quality takeaway coffee to other market entrants. Currently there are 31 coffee restaurants as mentioned above in the region. Other popular coffee shop chains in Lithuania are: Vero Cafй, Љvieћia Kava, ILI Kava; in Latvia: Double Coffee, Coffee Nation; In Estonia: Coffee Inn, Wayne‘s Coffee. What is more, McDonalds is opening three new coffee shops (McCafe) in Lithuania and one in Latvia showing a potential in coffee shop business.

Coffee shop chains have also started to develop new concept of „added value coffee“ when the cafй offers its customers a nice reading while having the drink. Retailers started to combine bookstores with coffee shops where customers are offered to enjoy a cup of fresh coffee during their shopping.

Petrol station shops and press kiosks serving coffee to go seem to be also very successful channels in Baltics. The coffee shop chains do not consider these channels as significant competitors because of their focus on different target groups and usually on lower income population. Vending machines in stations, universities and shopping malls are also increasing their popularity in hot drinks retail sector in Latvia, Lithuania and Estonia.

FUTURE SEEMS TO BE BRIGHT Coffee shop chains will be performing well in spite of the difficulties in economic situation. According to Euromonitor International, coffee shops market in the Baltic States is not saturated yet. Majority of chains admit that they do not even plan to suspend their expansion. Retailers are looking for the opportunities in smaller cities and expect investments to return in 2-3 years. Coffee shop representatives are also going to provide more novelties, increase quality of products and service, introduce special offers to fight with current economic situation.

According to Euromonitor International, coffee shop business is going to develop fast in the next five years – in Lithuania 7%, in Latvia 17% and in Estonia 15% in on trade volume terms over the 2008-2013 year period.

37

HOT

drinks in China

In 2009, Asia Pacific is set to consume a total, on- and offtrade, of over 395 billion litres of commercial packaged beverages, the per capita equivalent of 2 litres per week. Hot tea accounts for one in every five litres of branded beverages consumed in Asia Pacific, fuelled by India, Pakistan, Indonesia and China.

Spectacular economic growth over the past decade, above all in China and India, has strengthened purchasing power and expanded the urban middle class. Many people who were formally exiled from consumer goods markets have been brought into the fold, dramatically increasing the core base. Tea consumption will continue to be driven by convenient products like tea bags that will contribute to the sector's healthy performance, especially in urban areas.

HEALTHY GROWTH IN HOT DRINKS IN ECONOMIC RECESSION The article is prepared

by Euromonitor International experts

According to Euromonitor International, during the global economic recession, hot drinks in China maintained healthy 6% retail value growth in 2009 and reached US$ 5.5 bn. With global financial turmoil in late 2008, China’s economy also suffered shock. However, Chinese consumers did not reduce consumption of hot drinks, because of its low prices and healthy and nutritional attributes. Tea and coffee even experienced a boost: consumers considered them functional in maintaining energy in order to struggle through

the hard times.

MELAMINE EVENT DRIVES HOT DRINKS In 2009, the melamine event shocked China’s dairy industry and shook the confidence of consumers in dairy related products. Consumers became wary of dairy products and dairy related products. Most of these products were investigated and proved to contain the melamine ingredient that causes kidney stones. With this opportunity created by the turbulence in dairy, hot drinks benefited. It was consumed as a substitute for dairy products in supplying the necessary daily nutrition. Middle class consumers in particular will continue to seek healthier drinks such as tea and soy beverages as safe alternatives. The high difficulty factor of distribution in China is the biggest obstacle to maximising growth potential across all the main sectors.

Consolidated coffee versus fragmented tea and other hot drinks The competitive landscape showed contradiction within Chinese hot drinks. The two multinational giants, Nestlй (China) Ltd and Guangzhou Kraft Food Co Ltd, as the pioneers in coffee remained dominant in China occupying more than 83% share of the market. Meanwhile, tea and other hot drinks were highly fragmented. As the Chinese traditional hot drinks, tea and other hot drinks had a low entry barrier. As a result, a huge number of players competed for shares and no single company was strong enough to dominate.

Supermarkets/hypermarkets and chained specialists increase in importance Supermarkets/hypermarkets and chained specialist tea stores played increasingly important roles in the distribution of hot drinks in 2009. In China, hot drinks was not commonly purchased for instant consumption. Consumers preferred instead to choose hot drinks in supermarkets/hypermarkets or in chained specialist tea stores, where multiple brands and products were displayed. The rapid expansion of supermarkets/hypermarkets and chained specialists also adversely affected the share of small grocery retailers that could not compete in either price or product variety.

Demographic changes will spur sales of hot drinks As the main consumption group in hot drinks – especially tea and other hot drinks – the increasing number of the older generation will drive growth in hot drinks. However, with the current middle-aged people stepping into the older generation over the next five years, the consumption preference of the older generation will also continue to change. Consumers will gradually not be so price-sensitive and will also be acceptable to new products and new flavours.

In coffee, the increasing number of young grown-ups is expected to continue motivating sales. Foodservice sales of fresh coffee are also expected to increase, as young consumers will choose improved quality of life rather than being price sensitive. However, convenience will play an increasingly important role in young consumers’ lives, and RTD coffee will fiercely compete for sales.

38

COFFEE&TEA INTERNATIONAL # 1/2010

ECONOMICS

Hot drinks in Asia Pacific Retail Value RSP – USS bn

Hot drinks market breakdown by category China – Retail – ‘000 Tonnes

Source: Euromonitor International, 2010

Source: Euromonitor International, 2010

HOT DRINKS WILL NOT BE STIMULATED WITHOUT INNOVATION

Hot drinks sector in China Retail value and growth, 2009–2014

Source: Euromonitor International, 2010

Unlike the fierce competition in soft drinks in China, hot drinks was flat as it was without innovation in both product R&D and marketing methods. Hot drinks is expected to retain unexciting but healthy growth over the 20092014 year period if no leading manufacturer will try to upset the balance in the category.

Euromonitor International forecasts 15% retail volume and 24% retail value growth of the Chinese hot drinks market over the upcoming five years. Euromonitor also indicate that there are no imminent innovative product launches and leading manufacturers are also not placing high emphasis on product marketing and promotion. As a result, without any stimulation hot drinks is expected to gradually head to saturation over the 20092014 year period.

39

HOT

drinks in Georgia The article is prepared

by Euromonitor International Research Analyst Katia Lysoniak

HOT DRINKS MARKET GROWTH WILL REMAIN STABLE According to Euromonitor International, hot drinks sales in Georgia grew by 1.6% in volume terms and by 12.9% in value terms over 2007-2008 year period. Over the 2009-2010, coffee market growth rates both in volume and value terms will slow down but stay positive, which can be attributed to the resilience of the FMCG categories and beverages to the global economic slowdown. However, in the light of potentially growing prices, the speed and depth of the contraction could be faster than originally expected, particularly if the recession continues to deepen. In the present-day economic environment hot drinks producers are forced to cover any rising costs themselves. This, however, is neither profitable nor secures their position in the market as costs reach record heights. Given the high level of dollarization of Georgian economy and the large share of imported goods in the Georgian hot drinks market, prices are especially sensitive to the exchange rate fluctuations. According to Euromonitor International, retail prices on mainstream brands will keep rising over the course of 2009.

COMPETITION BETWEEN COFFEE AND TEA INCREASES According to Euromonitor International, the main trends in the market are strong off-trade tea culture, fashion for black specialty tea, increasing interest for green/herbal tea, and raising quality demands. In 2008, 91% of tea was sold in off-trade outlets in volume terms. Low on-trade tea consumption is the result of cultural and marketing factors, among which the winning position of coffee as out drink plays an essential role. The growth in cafй culture is perceived as a threat for tea players. Whereas instead, the tea industry could connect this evolving consumption culture to promote its own new products, using the on-trade as a platform for sophisticated, speciality tea formats.

Black and green teas are well-known products to Georgian consumers because of the long local history of tea manufacturing. However, new products will need to respond to an increasingly demanding consumer base or risk losing ground to more dynamic beverage sectors. Georgians seem to find the answer to their developing taste for high-quality tea in black specialty teas.

This explains the high growth of tea bags black specialty in 2008 and also underlines increasing importance of convenience products.

Green tea is becoming increasingly popular among younger generations.

Therefore, green tea will remain one of the most dynamic segments in tea for the next few years, both in value and volume terms. Fruit/herbal tea, although not as popular as green tea, is gaining its share in Georgia because of the active advertising on the part of producers. This is expected to continue in the near future as well. As increasing number of new flavors, (such as earl gray, exotic flowers, vanilla, summer flavor bouquet) are introduced, product penetration and on-trade sales are expected to increase over the next five years. With this in mind, fruit/herbal teas have very optimistic prospects ahead. Herbal, fruit and green teas should be viewed as important value-enhancing niche markets going forward. However, these categories are not going to overcome black tea consumption in the country over the next few years.

Euromonitor International’s latest research shows, that Georgian tea industry needs to be more innovative and creative in its development of mature markets. A clearer marketing distinction as well as strategic objective between gourmet and economy brands is an important factor. Worsening global macroeconomic conditions will intensify the competition between other hot drinks sectors. 2009 was going to be a rising struggle for the tea industry. As current situation causes supply to slow and prices to rise, potentially to the highest levels, the challenges ahead could expand into something much more striking.

COFFEE DRINKING CULTURE IS GAINING ITS POPULARITY BETWEEN GEORGIAN CONSUMERS According to Euromonitor International, average coffee unit price in current value terms rose by 16% in 2008. This growth was greater than any of the price increases seen during the 2004-2007 year period. Local unit prices were affected by global price increase of coffee beans, raising logistics/ distribution costs and the overall rate of inflation.

Fresh coffee market is influenced by increasing popularity of coffee bar culture. Cafй culture is growing in Georgia, characterised most clearly by the expansion of fashionable coffee parlours or local imitations of Starbucks. As a result, there is a new urban generation of cappuccino and espresso aficionados that

40

COFFEE&TEA INTERNATIONAL # 1/2010

ECONOMICS

Hot drinks market growth in Georgia, % Retail Value RSP - US$ mn - Fixed 2008 Exchange Rates Value at Current Prices

Source: Euromonitor International, 2009

Coffee consumption in Georgia Total Cups Volume - cups Per Capita

Source: Euromonitor International, 2009

Tea market volume shares by subsector, 2008 Retail Volume – Tonnes

Source: Euromonitor International, 2009

ucts is made from fresh ground beans and is targeted to consumers who have developed a taste for quality coffee. The increase of volume sales through specialty coffee shops did not have a significant impact on total volume sales of coffee in 2008.

Changing consumer lifestyles in Georgia will gain more opportunities for coffee market in the future. Strategic promotional investment is therefore needed to align coffee consumption with fastevolving lifestyle choices. Hot coffee can use its strengths, such as image, premium on-trade positioning, sociability and trend-setting, energising, multi-occasional format, from breakfast to after-dinner.

Premium brands, focused mainly on young adults, could generate strong returns in Georgian market where Western-style cafй culture is growing. Smart promotional activity will be very important in Georgian market. Novelty formats, with added ingredients or health profile formulas, need to have a very clear consumer target. Flavour innovation is difficult in coffee and could undermine the overall profile of a brand if it goes too far from what consumers expect.

should be seen as key targets for new product developments in the near future.

Recently new cafй chains such as “Coffee.ge” and the “Coffee House” appeared in the market. These new outlets offer freshly prepared Cappuccinos, Lattes, Espressos and Americanos.

Instant decaffeinated coffee is providing added volumes to the instant coffee category and moves it forward. As the retail volumes begin to slow down in the mature instant coffee sector it will be important to focus on the added-value niche decaffeinated category.

The number of specialty coffee shops increases slowly but steadily. Such outlets offer a very wide variety of “premium” products mostly, which tend to be more expensive than regular hot drinks.

Also, the majority of prod-

41

WHO IS WHO?

N E W S

R E L E A S E Corporate Headquarters 96 South George Street York, Pennsylvania 17401 U.S.A. www.glatfelter.com

For Immediate Release

CONTACTS: Investors: John P. Jacunski (717) 225-2794 john.jacunski@glatfelter.com

Media: William T. Yanavitch (717) 225-2747 william.yanavitch@glatfelter.com

GLATFELTER OPENS NEW SALES AND DISTRIBUTION OFFICE IN RUSSIA York, PA, January 19, 2010: Glatfelter (NYSE: GLT), a global manufacturer of specialty papers and engineered paper products, today announced that it recently opened a new sales and distribution center in Russia.

Located in Moscow, the new office will serve Glatfelter’s Composite Fibers Business Unit (CFBU) customers in Russia and the Commonwealth of Independent States (CIS) including Ukraine, Kazakhstan, Azerbaijan, Georgia and Belarus. These areas were previously served through agents and traders. In conjunction with the establishment of this operation, Glatfelter acquired certain customer relationships and an existing sales platform from distributors of metallized products.

The new center provides a local focus for all CFBU products and services, with a concentration on the food and beverage and metallized products market sectors. With a staff of local and experienced people, the center will provide responsive local support and carry paper stocks that reflect local market demand.

“This opportunity to expand our global footprint better positions us to serve an important growing market and supports our vision to become the global supplier of choice in specialty papers and engineered products,” commented Martin Rapp, Vice President and General Manager of Glatfelter CFBU. “It further demonstrates our commitment to provide excellent customer service as a strong local presence in these markets will allow us to work closely with our strategic customer partners to strengthen and grow their businesses.”

ABOUT COMPOSITE FIBERS BUSINESS UNIT (CFBU) A major innovator with worldwide customer support in 80 countries, CFBU utilizes specialized fibers to create highly specific papers for a multitude of end-use applications in the food and beverage, metallized products, technical specialties and composite laminates market sectors. From food infusion to medical diagnostics, from composite structures to thermal barrier materials, leading marketers and industrial specialists use Glatfelter paper to meet their challenging and unique requirements.

ABOUT GLATFELTER Headquartered in York, PA, Glatfelter is a global manufacturer of specialty papers and engineered products, offering over a century of experience, technical expertise and world-class service. U.S. operations include facilities in Spring Grove, PA and Chillicothe and Fremont, OH. International operations include facilities in Germany, France, the United Kingdom and the Philippines and representative office in China and a sales and distribution office in Russia. Glatfelter’s sales exceed $1 billion annually and its common stock is traded on the New York Stock Exchange under the ticker symbol GLT. Additional information is available at www.glatfelter.com.

42

COFFEE&TEA INTERNATIONAL # 1/2010

ADVERTISER INDEX

MAI S.A.

AHMAD TEA LTD.

AHMAD TEA LTD. Tel: +44(0)23 8027 8900 Fax: +44(0)23 8025 5867 www.ahmadtea.com Official distributor in Russia: «SDC-FOODS» Ltd. www.ahmadtea.ru report@ahmadtea.ru Moscow: Tel: +7(495) 234 69 91 Fax: +7 (495) 234 69 95 HAMBURG MESSE UND CONGRESS GmbH

ELISENTAL

MAI S.A. SOLIS 8250 B7608FLR - Mar del Plata, Argentina Tel.: (54-223) 482-1817 Fax: (54-223) 481-0234 mdp@maisa.com.ar, www.maisa.com.ar

ZWIRNEREI A.D. WUTACH GmbH

Hamburg Messe und Congress GmbH Claudia Jeske Messeplatz 1 20357 Hamburg Germany Phone: 0049 (0) 40 3569 2434 Fax: 0049 (0) 40 3569 2771 www.coteca-hamburg.com info@coteca-hamburg.com

GLATFELTER COMPOSITE FIBERS BUSINESS UNIT

..

P.O. Box 1163, 79780 Stuhlingen/ Germany Phone +49 7744 9396-0 Fax +49 7744 9396-20 info@zwirnerei-wutach.com www.zwirnerei-wutach.com

ORIMI TRADE, Llc.

:

TEAMAC S.r.L.

HALSSEN & LYON GMBH Pickhuben 9 20457 Hamburg • Germany Phone: +49 (0)40 361 43-0 Fax: +49 (0)40 361 43-117 info@haelssen-lyon.de www.haelssen-lyon.de

KLD COFFEE IMPORTERS

TEAMAC S.r.L. ViaMenghini,1 - 40054Budrio(BO), Italy Tel.: +390516926276 Fax: +390516926277 info.teamac@marchesini.it Agent in Russia: TEA HOUSE TONUS St. Dubininskays – 90 Office #402, 115093, Moscow Tel.: 007 (495) 9527154 Fax: 007 (495) 2379908 tonus@teahousetonus.ru MARTIN BAUER GROUP

Martin Bauer GmbH & Co. KG

44

KLD COFFEE IMPORTERS 9 Pushkarev Pereulok Moscow, 107045, Russia Tel.: +7 (495) 223 0347 Fax: +7 (495) 223 0349 office@kld-coffee.ru www.kld-coffee.ru

Worldwide contact: GLATFELTER Gernsbach GmbH & Co. KG Phone: +49 7224 66 0 composite.fibers@glatfelter.com Russian contact: GLATFELTER Russia Phone: +7 495 775 69 22 service.russia@glatfelter.com www.glatfelter.com

Zwirnerei a. d. Wutach GmbH

:

HALSSEN & LYON GMBH

DRAHTWERK ELISENTAL W. Erdmann GmbH & Co Werdohler Str. 40, 58809 Neuenrade P.O. Box 1260, 58804, Neuenrade, Germany Phone: +49 2392 697-31 Fax: +49 2392 697-39 teabag@elisental.de, www. elisental.de

Worldwide Contact: Tel.: +49 9163 88-0 welcome@martin-bauer.com www.martin-bauer-group.com Russian Contact: Tel.: +7 (495) 777 5429 welcome@martin-bauer.ru www.martin-bauer.ru

ORIMI TRADE, Llc. 3, Tobolskaya str., St. Petersburg, 194044, Russia Tel: (812) 346 82 40 Fax: (812) 542 15 01 market@orimitrade.ru www.orimitrade.ru