Saturday, April 3, 2010

Bagging some extra $$$

Let’s talk tea bags.
It’s an interesting study in teaconomics.
The first tea-bags were patented around 1903. Interestingly, the first real purveyor, Thomas Sullivan from New York, conceived that by putting the right amount of tea in a silk muslin bag, customers could empty it into their pot, and save all that measuring.
Customers, though, had a different idea, and simply threw the whole bags in.
In places like the UK, tea bags didn’t really take off until the ‘50’s. During post-war rationing, the idea of a measured amount of tea made sense.
These days, commercial machines push out tea bags by the hundreds. A machine by Tecnomeccanica of Italy produces 250 per minute in the so-called, though clearly not, “pyramid” shape. (A pyramid should have a square base, but I guess ‘tetrahedronical tea bags’ is a bit too much to say!)
So, here’s a little idea I’m interested in.
When you buy loose leaf tea, it’s tea. In some sort of container. That’s it.
If it’s a tea bag, then you’ve got to pay for some farmer in the Philippines or Colombia to grow abaca hemp, which is mixed with wood to make the paper, and then you need polypropylene or PVC (yes, really) and then possibly a staple and some string, and a paper tag. On top of said tea and said container.
So, let’s take Dilmah. They grow their own tea, and offer both tea leaf (CTC) and tea bag versions.
So, I log onto my local grocery store to check their prices on both. And I find that 100 grams of Dilmah loose leaf tea, in a 200g pack is $2.68 per 100g.
And I find that that 100 grams of Dilmah tea bag tea, in 2g bags, in a 200g pack is $2.06 per 100g.
WHAT? So I did the comparison again, with Twinings Irish Breakfast. For very similar results.
So adding wood, paper, vegetable fibres, extra packaging, plastic, metal and string to my tea with an extremely expensive machine actually REDUCES the price by 20%.
How can this be?
Perhaps the sheer volume of tea bags versus loose leaf tea offers economies of scale? But the tea comes from the same place, goes to the same place, and is bought by the same consumers!
Perhaps it’s the quality of the tea? But allegedly, it’s the exact same tea!
You could argue that there are brands they only make tea bags, and that these are extremely cheap, and that companies who make both have to compete at their level. But if that’s the case, why not sell ALL their tea in all its forms at that price. As a loose leaf drinker, I don’t want to subsidise tea-baggers (that’s tea-baggers in a strictly beverage sense, see Wikipedia for tea-baggers of the sexual or political varieties).
How about the theory that loose leaf tea consumers are simply willing to pay more?
Bingo! That’s the one that makes sense to me.
I’m being charged too much for my tea.
And I imagine that largesse does not flow back to the person who picked the tea.


  1. This is a great question, and I've often wondered why it seemed I was paying more for loose leaf tea.

    Thanks for confirming my suspicions.

  2. I've also seen many low quality teabags that cost more than high quality loose tea. One way or another, I guess the common truth is, tea is very often over-priced!
    Very interesting article!

  3. Oh, just thought of this- probably it's also because loose tea has smaller consumer population that sometimes it's more expensive than teabags. It's like unsweetened cereal is often more expensive than sweetened version.