Red bush tea has become the newest development in the global tea industry. Red bush, or ‘rooibos’ as it is called locally, is only cultivated in the Western Cape Province of South Africa. Despite this, the indigenous plant has become a global sensation and has created a multi-million dollar industry in the country. Experts have, however, warned of changing regional weather patterns that put the continued cultivation of this rare herb at risk. This CAI paper discusses the opportunities within, the growth potential of and threats to the red bush tea industry. Red bush farmers’ responses to climate change in their attempts to mitigate its impact on the industry are also discussed

The opportunities

South Africa, in particular the Suid Bokkeveld in the Western Cape, enjoys the benefit of being the sole producer of red bush tea because of its distinct ecological environment. Attempts to farm the crop in other locations have been unsuccessful due to the absence elsewhere of the unique weather conditions and sandy soils, present in the Western Cape Province, that are required for the successful cultivation of red bush tea. Temperatures in the Suid Bokkeveld can fall below zero degrees Celsius in winter and hit 48 degrees Celsius in summer. Apparently because of these conditions, no other cash crop can be harvested in this area while the indigenous bush thrives in this harsh environment.

The harsh climatic and geographical conditions of the area would usually mean that the region would not be of any value in agricultural terms. The cultivation of the red bush crop, however, has managed to bring a successful industry to an area where there otherwise would be little valuable economic activity. According to the South African Department of Agriculture, red bush tea makes up about 10% of the international herbal tea market and about 0.3% of a global tea market that has an estimated value of US$ 23 billion.(2) In addition, the country exports more than 6000 tonnes of rooibos tea per year to leading foreign markets (3) and annual exports of rooibos have quadrupled in the last 13 years.(4) The leading export markets for red bush tea are Germany, the Netherlands, Japan, the United Kingdom and the United States.(5) Rooibos producers are also tapping into new markets such as China (6) and India (7) signifying the growth potential of the herbal tea industry.

The Chinese and Indian markets are peculiar and significant since China and India are massive tea consumers, producers and exporters in their own right. According to the Food and Agriculture Organisation of the United Nations (FAO),(8) total world tea consumption increased by 5.6% in 2010, the latest year for which figures were available, to 4 million tonnes. China’s total tea consumption increased by 8.2% in 2009 and 1.4% in 2010, reaching 1.06 million tonnes - the largest in the world. In India, consumption grew by 2.4% in 2009 and 1% in 2010 to reach 828,890 tonnes. China remained the world’s largest tea producing country in 2010 with an output of 1.4 million tonnes and a 33% share of the world’s total tea production. China exports tea to over 120 countries and regions and imports tea from more than 50 countries and regions.(9) The foothold exports from a small operation like the rooibos tea industry have found in these lucrative markets bears testimony to the increasing demand for the herb on the global tea market, indicating a great potential for the growth of the industry. Growth markets for rooibos include: the United Kingdom, which exhibited a 300% increase in rooibos sales between 2003 and 2007; Chile, which now contributes 3% to total rooibos exports; and Russia which has a high per capita tea consumption rate and where fruit/herbal teas are estimated to have grown by 48% between 2007 and 2012.(10)

A further indication of the massive growth potential of the rooibos tea industry is the turn toward tea consumption for health. The FAO estimates that world black tea production will grow at about 1.9% annually to reach 3.28 million tonnes by 2021. This, however, is significantly lower than the expected 7.2% growth rate of green tea production, expected to reach 2.6 million tonnes by 2021.(11) According to Paul Higgins, a tea specialist with the Canadian Mother Parkers Tea and Coffee Inc., people in the West are turning to tea for its health benefits.(12) While several factors influence the demand for tea including price, per capita income and demographics such as age, education, occupation, and cultural background, in some markets such as the United States, health benefits have a greater impact on consumption than income and demographics.(13) China and India are among the top producers of green tea, known for its healthy properties, but as the world becomes ever more health conscious, rooibos tea has gained popularity and become a fierce competitor to green tea as rooibos has even more health benefits than the former.(14)

Unlike other herbal tea, it is not necessary to blend red bush tea with other ingredients. The herb is perfectly pure and natural and is free of caffeine, additives, preservatives, calories, colourants and genetic modifications. It actually contains essential minerals such as iron, magnesium, potassium, zinc, sodium and calcium.(15) Research conducted in Japan has revealed that rooibos possesses antimutagenic, anticarcinogenic, anti-inflammatory and antiviral properties. Rooibos also appears to have anti-allergic properties.(16) Rooibos contains two comparatively rare antioxidants, aspalathin and nothofagin and is especially rich in the super-antioxidant compound quercetin.(17) Although its most popular use is as a tisane, the bush is also a versatile herb with it being used in products ranging from skincare and dye to vitamin supplements, a spice and a meat tenderiser.

The benefits of rooibos tea are not limited to those who drink it. Rooibos farms and processing plants are the main source of employment for the people of the semi-desert Suid Bokkeveld region, which is poverty-stricken and where unemployment is rife. An estimated 12,000 tonnes of rooibos tea is produced annually in the region.(18) The rooibos tea industry employs about 5,000 people and generates an estimated income of ZAR 5000 million (US$ 63 million) a year.(19)
 

Threats to the industry

The red bush tea-producing region of the Suid Bokkeveld has seen some economic development as rooibos tea exports increase.(20) However, climate change poses a serious threat to agriculture in sub- Saharan Africa(21) and the booming tea industry is not spared as both temperatures and possibilities of drought continue to rise. Government-commissioned research has shown that temperatures in South Africa may rise by 3% and rainfall may decrease as much as 10% by mid-century and the rooibos-growing area is considered among the most vulnerable to these changes.(22) These conditions will cause yields to decline, potentially pushing the price of the novel tea upwards as supply is threatened. Consequently, the demand for the much loved herbal tea may plummet. Thus, the changing weather patterns threaten the livelihoods of the people and the economy of this region heavily dependent on the plant.

A further threat to the success of the rooibos tea industry and the livelihoods of the local people is that, although South Africa is the monopoly producer of the tea, unlike in other industries, it has not been able to dictate the price of rooibos. The tea is pegged against the price of black tea and is relatively undervalued for a product that cannot be produced anywhere else in the world.(23) If this were not the case, the price of rooibos would signal its rarity in the market and therefore be relatively higher. The rooibos tea industry is susceptible to the volatility of local and export rooibos tea prices. The price volatility is due to producer prices being based on perceptions of supply and demand and set at a predetermined annual rate. Prices in the rooibos industry are prone to great variations depending on the harvest.(24) For example the producer price of rooibos has dropped dramatically since 2004 due to an overplanting of rooibos in response to earlier high prices. A sustainable price would be more beneficial to the various players as it would promote stability in the industry.(25) The Fairtrade Labelling Organisation (FLO) International introduced a minimum price for rooibos tea in 2008, setting the minimum price paid to producers at ZAR 30.35 (US$ 3.00) per kilogram.(26)
 

The way forward

Farmers do not have an alternative to adapting to the harsher conditions and devising measures in their farming techniques to counter the unfavourable conditions. The South African Rooibos Council is “combining all its efforts to create a more sustainable industry”(27) under the looming peril and will spend about ZAR 2 million (US$ 250,000) on scientific research into the health properties of rooibos tea.(28) The findings are expected to further boost the production and export of this popular and versatile herb. Furthermore, with the support of the Departments of Agriculture and Trade and Industry, in March 2012 rooibos tea industry leaders devised a strategic plan to “facilitate a more coordinated and cohesive approach to markets”(29) in order to promote the export of the product.

According to Noel Oettle of the Environmental Monitoring Group (EMG), the long-term prosperity of rooibos farmers will depend greatly upon their ability to change their farming practices to accommodate changing weather conditions.(30) “EMG is helping rooibos farmers adapt to the changing weather patterns through natural resource management, monitoring the climate and soil and water conservation.”(31) The sowing season has also changed from June-July to November to make cultivation easier.(32) Farmers have planted windbreaks with indigenous plants to stop soil erosion, built water catchments and, perhaps most importantly, started to plant seeds (which are less sensitive to the lack of rain) instead of seedlings.(33)

Recent research has shown that wild red bush is better able to withstand harsh drought conditions compared to the cultivated red bush. Thus, farmers are encouraged to plant this variety to respond to the dwindling rains. The wild red bush tea, with its stronger taste, fetches a higher price on the markets. The drawback of the wild red bush, however, is that it grows slower than the cultivated variety and consequently can only be harvested every two years. Alternatively, scientists have also advised that seed banks be created to protect the continued existence of this plant.
 

Concluding remarks

South Africa’s red bush tea industry is a unique industry with great growth potential but also many risks. The danger climate change poses to red bush cultivation should be taken seriously as the “entire global supply is from one single production area,”(34) the South African Suid Bokkeveld, and damage to the red bush tea industry would have far-reaching negative effects. The geographically limited nature of the cultivation opportunities of the herb and the existence of only one species of rooibos calls for a collaborative effort by Government, farmers and research organisations to conserve this indigenous herb.

Furthermore, the rooibos tea industry not only contributes in a small but significant way to South Africa’s economy but also to the development of an impoverished region. As global tea consumption is set to increase over the coming decade, there is great growth potential for the red bush tea industry in South Africa. The trend toward the increase in the consumption of tea for its health benefits further underlies the rooibos tea industry’s growth potential. The ripple effects of the growth in global tea consumption, particularly for health, will eventually stream down to the indigenous Khoisan people of the Suid Bokkeveld region in the form of increased job security, higher standards of living and improved infrastructure and economic development.

According to Guy Midgley, head of the South African National Biodiversity Institute’s climate and bio-adaptation unit, the risk of climate change would definitely rise in the longer term but that it is two decades out.(35) While this gives some relief to the worried farmers and tea producers, the threat of climate change still exists and it is just a matter of time before its full effects are felt. Truth be told, there is no easy solution to this predicament, however, if the conservative measures are put to practice, then this unique product has the ability to transform a poverty-stricken area with little other promise into a prosperous and productive region and perhaps even serve to elevate South Africa to a major player in the global tea trade.

Written by Rutendo Dhliwayo ⁽¹⁾

NOTES:

(1) Rutendo Dhliwayo is an External Consultant for Consultancy Africa Intelligence's Industry and Business Unit ( industry.business@consultancyafrica.com).
(2) A profile of the South African rooibos tea market value chain’, South African Department of Agriculture, Forestry and Fisheries, 2011, http://www.nda.agric.za.
(3) Ibid.
(4) Price, C., ‘Climate change threat to rooibos’, Mail & Guardian, 28 February 2012, http://mg.co.za.
(5) Fihlani, P., ‘Could drought threaten South Africa’s rooibos tea’, BBC News Africa, 4 February 2012, http://www.bbc.co.uk.
(6) Khoisan, Z., ‘Rooibos causing a stir in China’, IOL News, 18 February 2004, http://www.iol.co.za.
(7) ‘Blue Africa Rooibos Tea enters India; likely to join hands with Tata Tetley’, F nBnews.com, 26 March 2012, http://www.fnbnews.com.
(8) ‘Firm tea prices set to continue’, FAO, 29 February 2012, http://www.fao.org.
(9) Woke, Li., ‘Tea exports rise but domestic consumption on the decline’, China Daily USA, 21 November 2011, http://usa.chinadaily.com.cn.
(10) A profile of the South African rooibos tea market value chain’, South African Department of Agriculture, Forestry and Fisheries, 2011, http://www.nda.agric.za.
(11) Firm tea prices set to continue’, FAO, 29 February 2012, http://www.fao.org.
(12) Woke, Li., ‘Tea exports rise but domestic consumption on the decline’, China Daily USA, 21 November 2011, http://usa.chinadaily.com.cn.
(13) ‘A demand analysis for the tea market’, Intergovernmental group on tea twentieth session, Colombo, Sri Lanka, Food and Agriculture Organisation of the United Nations, 30 January to 1 February 2012, http://www.fao.org.
(14) Kilham, C., ‘Red tea: Even better for you than green tea?’, Fox News, 27 March 2012, http://www.foxnews.com.
(15) Palitza, K., Climate change: Making a hot cup of rooibos tea unaffordable’, Inter Press Service online, 24 November 2011, http://www.ipsnews.net.
(16) Kilham, C., ‘Red tea: Even better for you than green tea?’, Fox News, 27 March 2012, http://www.foxnews.com.
(17) Ibid.
(18) A profile of the South African rooibos tea market value chain’, South African Department of Agriculture, Forestry and Fisheries, 2011, http://www.nda.agric.za.
(19) Leiter, M., ‘Protecting rooibos tea’, Cape Chameleon Issue No. 8 2011, http://www.capechameleon.co.za.
(20) Palitza, K., ‘Climate change: Making a hot cup of rooibos tea unaffordable’, Inter Press Service online, 24 November 2011, http://www.ipsnews.net.
(21) Ibid.
(22) Cohen, M., ‘Taste for South Africa’s Rooibos Tea Attracts Starbuck’, Bloomberg, 17 April 2012, http://www.bloomberg.com.
(23) Donnelly, L., ‘A treasure traded as a commodity’, Mail & Guardian, 20 April 2012, http://mg.co.za.
(24) A profile of the South African rooibos tea market value chain’, South African Department of Agriculture, Forestry and Fisheries, 2011, http://www.nda.agric.za.
(25) Donnelly, L., ‘A treasure traded as a commodity’, Mail & Guardian, 20 April 2012, http://mg.co.za.
(26) Ibid.
(27) ‘Climate change threatens red bush tea production’, 4 May 2012, Both Ends Organisation, http://www.bothends.org
(28) ‘Rooibos is good for you, and we've got R2m to prove it’, Mail & Guardian, 25 January 2012, http://mg.co.za.
(29) ’Rooibos tea producers set strategic plan in motion – March 2012’, International Trade Centre, 1 April 2012, http://www.intracen.org.
(30) Fihlani, P., ‘Could drought threaten South Africa’s rooibos tea’, BBC News Africa, 4 February 2012, http://www.bbc.co.uk.
(31) Ibid.
(32) Ibid.
(33) Climate change threatens Rooibos tea: Price spike warning’, he Big Issue, 8 December 2011, http://www.bigissue.org.
(34) Ibid.
(35) Cohen, M., ‘Taste for South Africa’s Rooibos Tea Attracts Starbuck’, Bloomberg, 17 April 2012, http://www.bloomberg.com.