Who Gets Paid, Tea and Coffee Compared

Goal: After this lesson you can compare how value is split for tea versus coffee, and explain sequential steeping and protected origin. Subject: Economics | Run time: about 7 minutes

Quick recall

Last time we covered how one leaf becomes many teas. Two quick questions. One: the same fresh leaf can be worth around two hundred dollars a kilogram as white tea or around four as black. What drives that gap? Value-added processing, the work done after picking, not the origin (International Tea Committee, 2023). Two: what step separates a light green tea from a full black tea? Oxidation, how far the maker lets the leaf oxidize (Specialty Coffee Association, 2024).

Why this matters

Follow the money down to the farm. In the ordinary commodity tea system, the farmer who grew the leaf keeps only about ten to fifteen percent of what you pay at retail (International Tea Committee, 2023; Food and Agriculture Organization of the United Nations, 2023). That's lower than coffee, where the farmer captures something closer to thirty percent (International Tea Committee, 2023). For most tea, the grower is at the bottom of the pile.

The idea

But that's only one kind of tea. Move to premium tea, the kind where the farmer also does the skilled processing, and the share flips. Now the farmer can capture about forty to sixty percent of the retail price (International Tea Committee, 2023; Rappaport, 2017). Same crop, very different paycheck, and the difference is who controls the valuable step. Tea has a second trick that coffee doesn't. Call it sequential extraction. One purchase of good leaf gives you many cups, not one. A fine oolong can be steeped six to eight times, and each steeping tastes a little different. A good pu-erh can go ten to twenty times or more (International Tea Committee, 2023; Specialty Coffee Association, 2024). So when you buy quality tea, you're buying a whole afternoon of cups, not a single shot. Then there's the law. Some tea names are legally protected by where they come from. Darjeeling is guarded the same way Champagne is, so a tea can only be called Darjeeling if it truly comes from that place (Rappaport, 2017). The name itself carries value, and the protection keeps imitators from cashing in on it.

Picture it

Picture two farmers side by side. The first grows commodity black tea and keeps maybe twelve cents of your dollar. The second grows and skillfully processes a premium oolong, and keeps fifty cents of your dollar (International Tea Committee, 2023; Rappaport, 2017). Now picture your own cup. With coffee you grind it, brew it once, and it's spent. With that oolong you steep the same leaves six, seven, eight times, and each cup is a little different (International Tea Committee, 2023; Specialty Coffee Association, 2024).

Remember this

The fact to carry out, the headline of this whole episode. Coffee's value is driven mostly by origin and terroir, the place it grew. Tea's value is driven mostly by the processing method, the work after the harvest (International Tea Committee, 2023; Rappaport, 2017; Food and Agriculture Organization of the United Nations, 2023). That single difference explains who gets paid, why premium farmers earn more, and why one purchase of tea can pour cup after cup.

Quick check

Quick check. In commodity tea, does the farmer keep more or less of the retail price than a coffee farmer does? Less, about ten to fifteen percent for tea against roughly thirty percent for coffee (International Tea Committee, 2023; Food and Agriculture Organization of the United Nations, 2023).

Key Takeaways

In commodity tea the farmer keeps about ten to fifteen percent of retail, lower than coffee's roughly thirty percent; in premium tea the farmer can keep forty to sixty percent (International Tea Committee, 2023; Food and Agriculture Organization of the United Nations, 2023).
Sequential extraction means one purchase yields many cups: a good oolong steeps six to eight times, pu-erh ten to twenty or more (International Tea Committee, 2023; Specialty Coffee Association, 2024).
Protected designation of origin guards names like Darjeeling the way Champagne is protected (Rappaport, 2017).
Coffee's value comes mostly from origin and terroir; tea's comes mostly from the processing method (International Tea Committee, 2023; Rappaport, 2017).

Sources

Food and Agriculture Organization of the United Nations. (2023). Tea market report 2023. https://www.fao.org
International Tea Committee. (2023). Annual bulletin of statistics 2023. https://www.inttea.com
Rappaport, E. (2017). A thirst for empire: How tea shaped the modern world. Princeton University Press.