Why should we be creating value networks, rather than linear supply chains?
To address the multiple problems within the tea sector, or within any sector for that matter, we need more networked solutions.
A million pounds - that’s what Seb’s taste buds are insured for. Seb (or Sebastian) is Tetley’s master taster and blender, and so unique are his tasting skills that they have been insured for a cool million. Now, that’s a lot of money in anyone’s books. I mean, we tea drinkers mustreally value the taste and quality of our favourite hot drink if Tetley place such a high price on a tongue, right?
Well, not exactly….
Despite the long-held belief that the British can’t get enough of their tea, the figures show that we have actually been steadily falling out of love with traditional black tea. Forum for the Future’s research for Tea 2030 has highlighted that the UK black tea market is in decline, with sales decreasing year on year. These falling volumes are coupled with a low retail price and a consumer image of tea that conveys complacency rather than excitement. So, why should we care?
The problem is that at the other end of the supply chain, the tea industry faces some serious challenges around climate change, resource scarcity, the livelihoods of workers and other issues. It will not be able to tackle these mounting difficulties if it doesn’t create a market pull by encouraging consumers to demand better quality, sustainable tea.
But how do we do this and who should be involved?
To address the multiple problems within the tea sector, or within any sector for that matter, we need more networked solutions; we need to be creating value networks, rather than linear supply chains.
But what is a value network, and how do we approach it?
- The first step in a value network approach is understanding the challenges and what you want as a network. The first phase of Tea 2030 did just that, using a scenarios approach to explore what the future for tea might hold and what might be needed to make it a hero crop for 2030 – a crop that delivers more than just tea and is a force for social and environmental good. That helped us to identify three challenges that we are taking forward as collaboration platforms:engaging consumers,sustainable landscapes, and market mechanisms.
- The second step is to involve the right people. Each of these challenges is unique and needs a different set of skills and expertise. To explore consumer engagement, for example, we need to talk to brand and marketing people; to talk about market mechanisms we need to involve tea producers and traders, and so on. Don’t underestimate the time this stage takes, the right people make or break a network.
- Step three is to understand where you are now, and to identify where the value is being created or undermined and who are the resulting loser and winners. Our landscapes group, for instance, is examining the sustainability issues critical to particular tea growing regions: in Malawi, its low wages and low grade tea; in Kenya, it’s deforestation and land use pressure; and in Assam, the chief problem areas are around soil degradation and pesticides.
- The next stage is to model the new network, and is where the Tea 2030 project is now. This will look different for each of the platforms; so, for the consumers group it might mean a campaign, while for the markets groups a system for managing price fluctuations. For the landscapes platform, it is about understanding what interventions are needed in each locality, their cost and return on investment.
But for all of these challenges, a networked approach is the only way the tea sector will become a hero crop by 2030. Just ask Seb, a key member of our steering group and a man with expensive tastes.