Vietnam is working to improve its reputation in tea
One of Phu Da Tea Company's tea fields in Phu Tho Province. Image courtesy of Vanessa L Facenda
Poor processing methods, low quality standards, and heavy pesticide use saddled Vietnam with a “bad tea reputation.” But with new laws, higher standards and committed producers, Vietnam’s tea industry is looking to shed that tainted image and show the quality teas the country has to offer. By Vanessa L Facenda
Tea is big business in Vietnam, but its history is a long and complicated one. With an average annual output of 180,000 metric tonnes, Vietnam now ranks sixth in global tea production (behind China, India, Kenya, Sri Lanka and Turkey, and ahead of Indonesia and Japan) according to International Tea Committee statistics.
Vietnam is considered one of the ‘cradles’ of the world’s tea plants (see Origin Highlight: Indochina in the October 2019 issue of T&CTJ). In 1960, at a conference in Paris, France, archaeologists revealed the results of a study conducted in a cave in Con Mong on Dong Son culture in Hoa Binh and Thanh Hoa. Findings showed that the fossilized tea seeds that had been discovered were 10,000 years old, per Vietnam Tea Journey, published by the Vietnam Tea Association (VITAS). These results confirmed Vietnam’s position as one of the cradles of tea.
When the French invaded Vietnam in the late 1850s (Vietnam became a French Protectorate in 1875), they introduced the first Assam tea clone, said Ms Nguyen thi Anh Hong, vice chairwoman of Hanoi-based VITAS. While occupying Vietnam, the French established research institutes to study the quality of its tea, laboratories to investigate pestilence, biological conditions and soil, and a nursery. There were three production areas, North (the largest and most long standing), Centre and South. The French grew only black tea and sold it primarily to France.
After Vietnam gained independence from France in 1945, between 1945 and 1951 tea areas became revolutionary bases, both for production and protection. Tea production was halted during this period and did not begin again until 1955 when the North was entirely liberated. Russians began entering Vietnam in 1946, and many tea factories were built with the aid of Russian technology. After 1959, tea collectives and several state-run factories were built, with the majority being commissioned by the army. Yet, from 1957 to 1975, tea production did not undergo much improvement because of war. During the war with the United States, only the North really grew tea as the South was less developed. In the North, during this period, tea production expanded to 65,000 hectares yielding 35,000 tonnes of dried tea, 18,000 of which was exported, per VITAS.
In 1975, after the war ended and Vietnam was united again, more provinces started to grow tea. More black tea was needed for the Russian market.
Since Vietnam’s liberalisation, there has been intense focus on growing the tea industry. In 1999, according to Vietnam Tea Journey, the government decided to further concentrate on tea development and determined that by 2010, the tea cultivation area for the entire country would be 104,000 hectares (ha) with an average production of 7.5 metric tonnes (mt) of green leaf per hectare, giving an output of 665,000 mt (the equivalent of 147,000 mt of dried tea). Of this, 110,000 mt would be exported.
Continued Tea Growth
By 2012, the planted tea area in Vietnam had reached 130,000 ha and the dried tea output hit 200,000 mt of which 145,000 mt was exported and the domestic consumption was 30,000 mt. According to VITAS, exports generated revenues of USD $240 million.
Today, tea plantations cover more than 130,000 hectares. There are 35 provinces and cities involved in the tea industry. Areas suitable for tea cultivation in Vietnam include Moc Chau/Son La province, Phu Tho, Lao Cai province and Cau Dat in Lam Don province. The Vietnamese government’s agricultural zoning plans through 2020 are committed to further expanding the country’s tea industry.
Tea plants contribute substantially to poverty reduction in Vietnam. Even tea growers harvesting from the ancient wild tea trees (primarily in the northern mountainous areas)can lead comfortable lives. Tea plants also help to cover bare land and hills, as well as to protect the environment. VITAS stated that as of 2013, there were approximately 455 small-scale tea production units through the country and 400,000 tea-making households.
Black tea (both Orthodox and CTC) comprises 57 percent; green tea (including oolong, tan cuong, shan tuyet, kim tuyen ngoc thuy, duoi, sao lan, pao chung and lotus, jasmine, chloranthus, chrysanthemum etc) makes up 42 percent, and 10 percent of these teas are scented tea.
Export tea accounts for more than 80 percent of total output. VITAS reports that in recent years, Vietnam’s annual tea export surpassed 140,000 tonnes and products marked as ‘Vietnamese Tea’ are sold in 90 countries around the world. Long-term export countries include Russia, China, Taiwan, Japan, the United Kingdom, France, India, Sri Lanka, Indonesia, Malaysia, Iraq, Iran, Pakistan and Turkey.
One tea expert, who visited Vietnam (both North and South) in the early 2000s on a procurement trip with a buyer from India, said Vietnamese teas were smooth and blended well with Indian teas without adding competing characters. However, “their tea industry was not well organized, hygiene standards were low, and the buyer couldn’t find any exciting quality black tea. Most of the tea factories we visited were using Russian large-sized manufacturing machines and most of their black teas were exported to Iran (and possibly Iraq) without much concern for quality,” she said.
Ms Hong admits that for years, Vietnam’s tea has had a bad reputation, particularly relating to pesticides, chemicals (fertilizers) and high MRLs (maximum residue levels), as well as poor quality, which led to many tea containers being returned. But the country is trying to change that image. “We have been improving our processing methods and working to achieve certifications from organizations like the Rainforest Alliance,” she said, adding, “we also want to show that Vietnam is diversified – we do not have just commodity tea, we have specialty tea.”
To regulate the use of chemicals in fertilizers and pesticides, in 2016, the Ministry of Agriculture and Rural Development (the highest-level public department in the agriculture sector in Vietnam) issued a list of substances that can be used on common crops, including tea. Any substance not included on the list is banned.
“There has been good progress in specialty, terroir and organic teas, which are now gradually coming on the market here in France, but there does not seem to be much progress yet for mainstream/commodity teas as far as I know,” said Barbara Dufrêne, tea expert and long-time contributor to T&CTJ.
Industry officials agree that the north generally has always been much better than the south. “The quality for all Vietnamese teas has generally improved, but the north was always better, and some extraordinary teas are available from that part of Vietnam,” said one official, who preferred anonymity.
Several tea companies such as Moc Chau Tea Company and Phu Da Tea Company, which produce commodity teas, are working diligently to shed Vietnam’s bad reputation in tea.
Moc Chau Tea Company
The Moc Chau Tea Company, in Son La Province, was established in 1957. The land was previously a camp occupied by the Vietnamese army and was given to the company by the government. Moc Chau began planting tea trees in 1958, and opened a factory. A new factory was built in 1978. Today, the company has 593 hectares of tea.
CTC black tea was the main crop in the beginning but Moc Chau switched completely to green tea in 2002, said Mr Nguyen Van Tam, the company’s vice director. Before 2002, the primary markets were Iraq and Russia, but the market shut down due to the war between Iraq and the United States. Now, the leading export markets are Afghanistan and Pakistan.
“We switched to green tea because our two main markets – Afghanistan and Pakistan – prefer green tea,” said Van Tam. He said Moc Chau worked with Japanese tea experts between 1997-2001 to learn about farming green tea.
Moc Chau’s annual volume of fresh tea leaves is 10,000-12,000 mt, a quarter of which Van Tam said is exported to Afghanistan and Pakistan. There are six seasons, with each harvesting season 20 days apart. Moc Chau is one of the few companies in Vietnam utilising mechanised harvesting. “It’s a longer time between seasons with mechanized farming, but the volume is greater,” said Van Tam, noting that it’s a shorter time between seasons with manual harvesting but plucking takes longer.
Moc Chau’s tea is Rainforest Alliance certified. “Organic is too difficult to do,” said Van Tam. “Rainforest Alliance certification is easier and less expensive to implement.”
To improve its processing methods, Moc Chau established an agri-team to monitor the use of fertilizers and pesticides. “Farmers must report to the agri-team and ask what type of fertilizers and pesticides can be used,” said Van Tam, adding that Moc Chau purchases the fertilizers and pesticides in bulk to distribute to the farmers. “The farmers cannot make decisions about fertilizers and pesticides on their own – everything must be run by the company first so we can control the maximum residue levels.” He proudly claimed that Moc Chau’s supply chain is completely transparent and traceable, “from farmer to ship.”
Along with Afghanistan and Pakistan, Moc Chau’s other leading export markets are the Czech Republic, Uzbekistan and France. While most customers are private label brands, some are large companies like Unilever.
“Our goals are to penetrate the European market,” said Mr Vu Hong Khanh, Moc Chau’s vice director of agricultural practices. “We’ve been improving our processing methods and culture since 2017 in order to achieve Rain-forest Alliance certification, which we now have. We are also working to modernise our facilities.” He said Moc Chau is building a new factory with new technology. “We believe that to grow and penetrate the European market we must modernize our facilities while continuing to improve. It’s part of our five-year plan.”
Phu Da Tea Company
While Moc Chau produces green tea, Phu Da Tea Company in Phu Tho Province is primarily a black tea producer. Iraq is its main export country, but it also sells to China and India. (India imports tea when the country has problems with its domestic production such as weather or the tea worker strike in 2018.)
Phu Da Tea Company was established in 1958. It was state-owned as were the other three tea factories Phu Da eventually merged with before becoming a private company in 2000. Now, 51 percent of Phu Da is owned by an Iraqi company and the other 49 percent is owned by the GTN Group of Vietnam, which purchased the shares from the government of Vietnam.
“We’re much more efficient as a private company. We can make our own decisions and react quicker,” said Mr Nguyen Chau Long, director of the Phu Son factory, one of Phu Da’s factories. “When we were state-owned, we were less efficient because we moved slower, it took a long time to make decisions and there was less production.” He added that as a private company, Phu Da has been able to invest in more production lines. “That would have been too difficult to do when we were state owned.”
Today, Phu Da Tea Company has 1,500 hectares, of which approximately 1,460 are tea. Phu Da also operates four factories (one was built in 1958, the other in the 1970s, a third in 1989 and the fourth in 2000) – each one has a specialty, but all use the same processing methods – and one blending centre. There are five to six harvesting seasons, with each season lasting one to two days. Phu Da must wait 40-45 days between harvests because black tea takes longer to fully ripen. According to Long, Phu Da was to begin mechanised harvesting this past July.
Phu Da has been working hard to improve its standards and quality. “We passed ISO certification in 2014 and became Rainforest Alliance certified in 2017,” said Long. “With these certifications, we have interest from new trading partners in new markets.”
Phu Da is also beginning to test the green tea market. “We’re just starting to produce green tea this year because we have a tea garden that is highly suitable for growing it,” said Long, adding that green tea is more challenging to produce than black tea. “Growing green tea is different than growing black tea because it takes more time, the machinery is different, and it produces less volume.” However, the opportunity for new export markets is strong. “We want to be able to export to China, Taiwan and Pakistan – all which demand green tea – and serve consumers in our domestic market, who also prefer green tea.”
With new export market opportunities, as well as continued domestic potential, Vietnam’s tea industry has strong reasons to stay focused on upgrading its tea quality, standards and processing methods. In doing so, Vietnam is certain to shed its “bad reputation” in tea, but whether coveted Western markets like Europe and the US will give Vietnamese commodity tea a chance, remains to be seen.
- Vanessa L Facenda joined T&CTJ as editor in 2012. She previously worked for Brandweek and Retail Merchandiser magazines, and has written for numerous publications including Consumer Digest, Adweek, Mediaweek, The Hollywood Reporter, Specialty Food Magazine, Convenience Store News, Beverage World and License Book. She may be reached at: [email protected].