S URCE CEYLON CELEBRATIONS THE. Welcome to our new Ahlstrom-Munksjö newsletter focusing on the tea market.

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Julian Hubbard
5 years ago
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that were previously there were devastated.

railway network to service the tea industry in that process.

taken place to commemorate all of the women and men who made this industry, including a Ceylon Tea Expo, a tea

1 S URCE THE NEWS: Welcome to our new Ahlstrom-Munksjö newsletter focusing on the tea market. CEYLON CELEBRATIONS Did you know a Scotsman was actually at the root of the commercial tea industry arrival in Sri Lanka (previously Ceylon) in 1867? James Taylor was the force behind the setting up and expansion of this industry when the coffee plantations that were previously there were devastated. It took a lot of hard work and dedication and allowed the economic expansion of Sri-Lanka; also building a railway network to service the tea industry in that process. The hard work continues today and the 150 year anniversary is the occasion to recognize the labor that goes into producing this fine delicacy. Throughout the year 2017, many events hosted by the government, trade groups and the tourism department have taken place to commemorate all of the women and men who made this industry, including a Ceylon Tea Expo, a tea convention, tea festivals, tea workshops and industry seminars. We hope you will find it informative and interesting! In this first issue, we will take a look at the events which took place for the 150th anniversary of Ceylon tea and take a look at the packaged tea trends in India and Sri Lanka. Please give us your feedback and help to make this newsletter better! Your dedicated Ahlstrom-Munksjö team.

NEWS: CELEBRATING 150 YEARS OF CEYLON TEA A very eventful year 19th JANUARY A sculptured bust of James Taylor was unveiled at the Tea Board premises MARCH-JUNE Educational fairs in regions.

tic Missions worldwide, which will be held @ 5.00 p.m.

2 NEWS: CELEBRATING 150 YEARS OF CEYLON TEA A very eventful year 19th JANUARY A sculptured bust of James Taylor was unveiled at the Tea Board premises MARCH-JUNE Educational fairs in regions. 6th JULY A unique Global Ceylon Tea Party, hosted by the country s Diplomatic Missions worldwide, which will be 5.00 p.m. in each timezone around the world, serving One Ceylon Teas and a specially created biscuit for the occasion by Maliban Biscuit Manufactories, the oldest biscuit manufacturer in Sri Lanka 13th JULY A first day cover and a series of stamps was issued. 20th JULY The publication of a Commemorative Book, an authentic historical record of The 150 Years of Ceylon Tea. A Grand Chanty Auction (BMICH) The entire proceeds of which to be invested in charitable projects, benefitting the work force of the Plantation Sector. Release of a commerative Rs.10/- coin 8 11th AUGUST Colombo International Tea Convention 12th AUGUST Ceylon Tea Festival A celebration of tea, food & music, to promote amongst tourists and Sri Lankans the uniqueness of Ceylon Tea and the tea culture, through a festive atmosphere, will be held, with a focus on street events, featuring tea stalls, food stalls and entertainment, including performances depicting tea related activities. 13th AUGUST Celebratory Musical Performance To Broadway with Love

3 MARKET FRAMING: Like any consumer market, the Tea market observes trends and new formats and flavors pop up all the time. We put together a brief summary of the trends observed in our market in the past few years and months. In this section you will find information about the type and flavors of tea sold in Sri-Lanka and India. All data was extracted from Mintel. SRI LANKA F ORMAT T YPE As we can see, the loose tea market is still the biggest one although the market share of tea bags is increasing year after year. INDIA F ORMAT T YPE Tea bags are rapidly gaining market share over traditional loose tea: from 30% in 2015 to nearly 50% in the first quarter of this year! Convenience is clearly a trend for the Indian market. Market share for each format Market share for each format l Pods l Other l Soluble/Instant l Bags l Soluble/Instant l Bags l Loose l Loose TOP FL AVORS TOP FL AVORS Plain tea is still the best seller; but flavors seem to gain more and more share of mouth from consumers. A ginger flavor wave appeared in 2016 but the trend seems to be slowing down in Maybe Vanilla will take over as top flavored tea? After plain tea, the strongest flavors are lemon and mint in From the fragmentation we can see people like variety, proving that having a wide assortment is key for retail visibility AND consumer preference. Flavors (inc. blends) market share Flavors (inc. blends) market share l Citrus l Apple l Ginger/Vanilla Bourbon/ Vanilla Madagascar l Strawberry l Lemon l Coriander/ Ciltrano l Cinnamon l Ginger l Herbs/Herbal l Unflavored/ Plain Q l Other l Lemongrass l Ginger l Herbs/Herbal l Jasmine l Cardamon l Mint l Masala l Tulsi/Holy Basil l Lemon l Unflavored/ Plain

WHAT S TRENDING: In this section we will look at what new claims are popping up on product packaging and which new ingredients we can find in tea products.

Q1 2017) New Ingredients (New ingredients appearing in this market for the first time tracked by Mintel within the last 12 months) We can see the growing claims are about quality and the naturality

4 WHAT S TRENDING: In this section we will look at what new claims are popping up on product packaging and which new ingredients we can find in tea products. SRI LANKA Trending Claims (Fastest growing and declining claims, Q vs. Q1 2017) New Ingredients (New ingredients appearing in this market for the first time tracked by Mintel within the last 12 months) We can see the growing claims are about quality and the naturality of products; which is a concern for consumers all over the world. In terms of new ingredients, the full fat milk indicates a premix for the tea, which again indicates a need for convenience. TOP GROWING CLAIMS 1. No additives/ preservatives (+500%) 2. Other (Functional) (+300%) 3. All natural product (+200%) 4. Premium (+200%) 5. Low/No/ Reduced Sugar (+200%) DECLINING CLAIMS 1. Low/No/ Reduced Calorie (-) 2. Social Media (-) 3. Caffeine Free (-) 4. Convenient Packaging (-) NEW INGREDIENTS Tea Lemongrass Full Fat Milk Vanilla Flavour Coriander Seed Flavouring Substances INDIA Trending Claims (Fastest growing and declining claims, Q vs. Q1 2017) New Ingredients (New ingredients appearing in this market for the first time tracked by Mintel within the last 12 months) We can see the growing claims are about allergies and safety of products. In terms of new ingredients, the variety of flavors suggests a very dynamic market where you need something new and exciting to stay relevant. TOP GROWING CLAIMS 1. Gluten Free (+) 2. Halal (+50%) 3. Convenient Packaging (+50%) 4. No Additives/ Preservatives (+28.6%) DECLINING CLAIMS 1. Seasonal (-) 2. Carbon Neutral (-) 3. Breath-Freshening (-) 4. Bone Health (-94.7%) 5. Diabetic (-90.9%) NEW INGREDIENTS Amia Flavour Saffron Flavour St. Thomas Lidpod Indian Bdellium Tree Chinese Cinnamon Indian Bay Leaf Steviol Glycoside Tomato Powder Khas-Khas Grass Onosma Echioides

YOUR CONTACT: Shantanu Chatterjee is here to answer any questions you may have about doing business with us. Don t hesitate to contact him! Shantanu Chatterjee shantanu.

This is my 13th year with Ahlstrom-Munksjö. I joined in 2005. I studied Literature and postgraduated in Sales and Marketing.

SEE HOW OUR IDEAS MAKE TEA BETTER: CLICK About us: At Ahlstrom-Munksjö, everything we do is geared towards making every tea bag the perfect cup and the best tea it

We offer a complete portfolio of tea bag paper including our Classic Non Heatseal, InFuse Heatseal, Compostable BioWeb (heatseal or ultrasonic) and new Robust grades

5 YOUR CONTACT: Shantanu Chatterjee is here to answer any questions you may have about doing business with us. Don t hesitate to contact him! Shantanu Chatterjee shantanu.chatterjee@ahlstrom-munksjo.com SHANTANU CHATTERJEE Sales Director My mission is to sell more, share more, learn more and earn more! This is my 13th year with Ahlstrom-Munksjö. I joined in I studied Literature and postgraduated in Sales and Marketing. I ve spend over 25 years in Sales and Marketing, of paper, board and nonwovens. SEE HOW OUR IDEAS MAKE TEA BETTER: CLICK About us: At Ahlstrom-Munksjö, everything we do is geared towards making every tea bag the perfect cup and the best tea it possibly can be. Because at Ahlstrom-Munksjö we believe our ideas shouldn t just help our clients to make better tea. We want our ideas to make tea better. We offer a complete portfolio of tea bag paper including our Classic Non Heatseal, InFuse Heatseal, Compostable BioWeb (heatseal or ultrasonic) and new Robust grades for improved machine processability. How are we doing? Can you spare 5 minutes to give us some feedback? Click the link below to answer a short survey on our service, or make suggestions for future issues of this newsletter. While you re there, you ll find a wealth of background information on our tea portfolio. HERE CLICK TO FEEDBACK

WE SEE TEA DIFFERENTLY.

WE SEE TEA DIFFERENTLY. OUR MANIFESTO Producing tea and getting it to people s homes from crop to cup takes a lot of hard work and is a journey that takes thousands of miles to complete. And yet it s the