Focus on China ISSUE 165 - Finlays
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ISSUE 165
Focus on China
A M A G A Z I N E B Y F I N L AY S
I N N O VAT I O N PEOPLE PROCESS & PRODUCT S U S TA I N A B I L I T Y
Future Shaping Finlays Wolfgang Tosch Cold Brew's a Hot Ticket! Together We're Stronger
Boston Tea Party Janet Ruto Coffee Connections Doing the Right Thing
Finlays 1750 magazine is published yearly by James Finlay Limited, Swire House, 59 Buckingham Gate, London SW1E 6AJ United Kingdom. magazine@finlays.net www.finlays.net Production Team: Guy Chambers, Duncan Gilmour, Kamini Dickie Printed by 21 Colour www.21colour.co.uk Designed by GEM Creative Design www.gemcreativedesign.com Cover story: Made in China Photography by Giulio Mazzarini www.gmazzarini.com Environmental Impact Statement This magazine is printed by an ISO14001 printer using vegetable based inks on FSC accredited paper which has been carbon captured through the Woodland Trust scheme which has the following benefits: 2.64 tonne of carbon captured 8159 car miles 66.27m2 of new native woodland All contents © James Finlay Limited 2019
CONTENTS
08
Cover story:
Made in China
64 04 46 76
Welcome Innovation: Innovation: Boston Tea Party
Process & Product:
Introducing Finlays' new-look 1750 Future Shaping Finlays How tea has become increasingly
Coffee Connections magazine. important to the craft beer industry.
Innovating for a sustainable future.
08 54 88
Cover Story: Made in China Finlays' People: Wolfgang Tosch Finlays' People: Janet Ruto
All the tea in China; past, present Profiling James Finlay Kenya's Gender
An introduction to Finlays' Group
and future.
104 Innovation Director. Empowerment Manager.
Finlays' Roots:
Tea-volution
24 58 90
Cover story: Made in China Sustainability: Sustainability:
Camellia sinensis - from China Doing the Right Thing Sustainable Future
Ross MacDonald traces the historic
Our Hopton Estate in Sri Lanka. Jo Millar outlines sustainability targets
roots of China tea.
and objectives for the coming year.
76 30 62
Finlays' People: Sudath Ariyathilake 96
Innovation: Finlays' Global Footprint Finlays' Newsround
The Senior Manager of Hopton Tea
Boston Tea Party and Business Review Estate and his mission. The latest news and happenings from
Where we are, and what we do. around Finlays.
64
36 Process & Product: 104
Finlays' Fascinating Facts Coffee Connections Finlays' Roots:
88 38 Fascinating facts and figures from Sourcing supplies of sustainable coffee Tea-volution
around the business. through relationship building.
Finlays' People: Sustainability: Duncan Gilmour explains how Finlays
became a key player in the tea industry.
Janet Ruto Together We're Stronger
38 72
Sustainability: Process & Product: 116
Together We're Stronger Cold Brew's a Hot Ticket! Finlays' Spotlight
Working with Starbucks to help Exploring recent innovations in the Meet Liu Renjun (LRJ), QA Manager,
communities in Kenya and Sri Lanka. Ready to Drink/Iced Coffee market. James Finlay Guizhou.
WELCOME
W
ELCOME to our new Finlays To borrow heavily from Robert Pirsig, author of Zen and The
magazine which has been re- Art of Motorcycle Maintenance, ‘“what is new?” is an interesting
titled ‘1750’. The magazine and broadening eternal question, but one which, if pursued
has been given a thorough exclusively, results only in an endless parade of trivia and
overhaul combining both fashion, the silt of tomorrow. (We) would like, instead, to be
innovation and tradition concerned with the question “what is best?” a question which
(hence our new title ‘1750’ – cuts deeply rather than broadly, a question where answers tend
the year that Finlays started business!). So - what has changed to move the silt downstream… Some channel deepening seems
in this Finlays magazine and why? In the last few years, the called for.” In 1750, we seek to use our global coverage and
use of digital communication (email, intranets, WhatsApp industry knowledge to provide a unique perspective to readers
messaging) has grown dramatically. An increasing amount of – employees, customers and interested stakeholders alike.
company and industry news is being shared immediately. As
a result, we felt that it was time to review the purpose and Second, we have changed from semi-annual to annual. After all,
value of our printed bi-annual Finlays magazine. After seeking digital communication is a far faster means of disseminating
feedback from employees, customers, other readers and news than a printed magazine. So the content of 1750 will now
stakeholders, we have decided to make three major changes. focus on broader issues (‘what is best?’), rather than detailed
news (much of which is now shared digitally). We will publish
First, we have defined the main purpose of 1750 as to explore one slightly larger and longer magazine once a year.
‘what is best?’ in the global natural beverage industry. These
days, thanks to the internet and social media, we are all faced Third, we have committed to increasing the quality of the
with a surplus of information but a shortage of time. We are magazine – both in terms of content and imagery. We seek to
drowning in information, but often left thirsty for knowledge. reflect perspectives on the beverage industry, not just from our
5 F I N L AY S 1 7 5 0
own experience but also from others, including from industry Guizhou province). Duncan Gilmour’s article explores Finlays’
OVERVIEW
thought leaders such as Jim Koch in this issue. Furthermore, wider role in the development of the global tea industry. We
we seek to bring our articles to life with imagery from the work also feature Jim Koch, the legendary entrepreneur and founder
of leading photographers – such as our collaboration with of Boston Beer, who shares with us his insights on innovation
Giulio Mazzarini which starts in this issue. in the brewing industry which is now encompassing the use
of tea in their growing portfolio of beverages. As previously,
In this issue, we explore the broad theme of tradition and we also provide an overview of some of the interesting and
innovation in the natural beverage industry as well as exciting things that are happening around the world of Finlays
specifically in Finlays. In our main feature, we look at the – including news items and profiles of staff members driving
role of China in the tea industry – by exploring the past (and change in the industry. The team is proud to present this new
Finlays/Swire’s historical links to tea in China), the present format of the magazine – do let us know what you think.
and the future (looking at our new tea sourcing operation in
N
OW let me turn briefly to on this transformation has been solid. Most importantly, we
Finlays. As reported in continue to receive very positive feedback from customers
previous issues of Finlays about their desire for what we offer – and this is already
magazine, we started a translating into new business in several markets. Turning
strategic transformation of to our overall performance, 2018 was a challenging year –
our company in 2017. We laid especially in China (with a softening in demand and rising
out a vision “to grow Finlays costs) and Sri Lanka Tea Estates (where prices remained weak).
profitably and sustainably 2019 has started well and we remain confident that we are well
by serving as the industry’s trusted leader in the supply of positioned for a number of our focus areas to grow profitably.
tea (in all its wonderful varieties, formats and applications),
coffee and botanical extracts to the world’s beverage brand Finally, let me close by thanking Duncan Gilmour who has
owners.” We have increased investment in the core areas of been a very knowledgeable and diligent Editor of Finlays
our beverage businesses. In the US, we have invested in a new magazine over the past few years. ‘1750’ has now been
liquid tea extract facility in Rhode Island, which completed handed over to the very capable Kamini Dickie, supported
commissioning in early 2019, and have expanded our cold by internal and external contributors. We hope you enjoy
brew coffee extract capacity in Texas with Aspen Beverage ‘1750’ and look forward to receiving your feedback.
Group, which was acquired in 2017. In China, we are opening
a wholly-owned tea facility in Guizhou (details of which
are covered in this issue). We have also divested non-core
areas, selling our non-beverage businesses in Sri Lanka and
announcing the closure of Finlay Flowers in Kericho, Kenya. At
the same time, internally, we have driven an initiative under
the banner of ‘1Finlays’ that helps us to work together globally Guy Chambers
in a more structured way. Simply put, a lot has changed in a Group Managing Director
short space of time and I am happy to report that our progress
7 F I N L AY S 1 7 5 0
Made in China
WE INVESTIGATE HOW FINLAYS’ CONNECTION WITH HUMANITY THROUGH
NATURAL BEVERAGES GOES DEEPER THAN YOU MIGHT FIRST IMAGINE.
Photography: Giulio Mazzarini
9 F I N L AY S 1 7 5 0
‘China is the world's largest tea producer, accounting
for more than 40 per cent of annual production on
an on-going basis.’
Quietly, and increasingly at speed, a revolution is taking its borders. To date a limiting factor has been agricultural
place in the supply of Chinese tea. China has now started practice. Unfortunately, the conditions under which tea is
to export quantities of qualified tea that previously had not grown in the more traditional tea producing areas of China
been thought possible. This transformation is being helped by means that only a small percentage is suitable for export.
Finlays, a tea merchant steeped in tradition, yet one proving China is also under pressure from domestic consumers to
itself capable of meeting this new challenge. The Company’s change the way in which tea is grown and manufactured.
ability to connect growers to international buyers is allowing
a new generation of Chinese tea growers, employing the best A solution to this problem is beginning to be seen in the
of agricultural practices, to obtain value from harvests that high hillsides of the southern Chinese province of Guizhou.
otherwise would have gone to waste. Here the regional government, concerned with levels of rural
unemployment, several years ago began clearing underutilised
China is the world’s largest tea producer, accounting for land for the express purpose of growing tea. Beyond providing
more than 40 per cent of annual production on an on-going employment, this initiative also offered the possibility of
basis. It is also the world’s most varied, with hundreds and introducing good agricultural practices, ones which were not
possibly thousands of varieties of tea being grown. Yet only a
small number of these are familiar to tea consumers beyond >>
1 1 F I N L AY S 1 7 5 0
>>
dependant on the overuse of plant protection products. Five
years after planting, the first teas are beginning to come to
market in some quantity. It is important to remember that in
China everything undertaken is on a scale unfathomable in
other economies.
As Guy Chambers, Finlays’ Managing Director, notes, “After
five years the tea produced in that one province is more than
in the whole of Kenya which is the third largest producer in
the world.”
‘After five years the tea produced in
that one province is more than in the
whole of Kenya which is the third
largest producer in the world.’
Finlays has been tracking developments in Guizhou for several
years noting that farmers were only able to sell the first flush
of each year’s spring tea to domestic buyers. Each season as
many as three further flushes were left unharvested due to an
inability to identify buyers.
To meet this challenge, Finlays has built a secondary
processing plant in Sinan and recruited a team of young
Chinese scientists who have been tasked with guaranteeing tea
quality by working with local tea growers to ensure that good
agricultural practices are the norm. Crucially, in connecting
growers with markets, Finlays has insisted on traceability and
transparency to ensure that international buyers can be certain
that what they’re purchasing is qualified tea. This promise is
>>
Judy Chao and husband, Hong Ding Tea.
1 3 F I N L AY S 1 7 5 0
LRJ's family home. 1 5 F I N L AY S 1 7 5 0
‘A sourcing and supply model has been introduced
which differs from that which Finlays uses in its
other key producing areas.’
being backed by independent external audits, the objective of Watene has had a busy year. His accomplishments include
which is to have all growers supplying tea to Finlays routinely building from scratch a management team with the necessary
audited, and their field practices approved, by Rainforest capabilities. “We have a very young team in Guizhou which
Alliance. is a reflection of the environment that we are in and I think
it’s very good for the future of the business.” says Watene
Creating sustainable relationships “We have a lot of very capable managers who will, I think,
As a vehicle for this project James Finlay Guizhou (JFG) was be really ‘long-termists’ provided we continue to give them
set up in the spring of 2018 having recruited Patrick Watene, opportunities and challenges.”
a New Zealander with 15 years’ experience working with agri-
businesses in China, as its Managing Director. Watene is well Part of the project involves JFG building a secondary
aware of the what is needed to ensure success. “Obviously we processing plant, which is projected to begin production
prefer to take tea that has not been subject to use of pesticide in April 2019. Perhaps most importantly, a sourcing and
or herbicide,” he says. “But the key thing for us is making sure supply model has been introduced which differs from that
that it’s qualified and meets the customer’s specification and
the requirements for market access.”
>>
1 7 F I N L AY S 1 7 5 0>>
which Finlays uses in its other key producing areas where the
Company both owns land and buys in tea from outgrowers.
Guizhou is the first instance where a Finlays' tea processing
factory relies solely on outgrowers, rather than owning and
operating land in conjunction with a tea factory. Instead it is
partnering with a number of small to medium sized farmers.
It is hoped to nurture this new crop of tea growers, acquainting
them with Finlays’ best agricultural practices from around the
world. These include the introduction of machine harvesting,
help with deciding on the optimal use of fertilizers, herbicides
‘When you are building up this type
of business you want partners to
be in there with you, so you have to
understand their aspirations.’
and pesticides and the application of environmentally
friendly alternatives such as pest catchers. The objective is
to keep pesticide use to an absolute minimum, thus reducing
environmental impact whilst still allowing tea farming to occur
productively. This is aided by the Guizhou terrain. The tea
fields are at altitudes, high enough to ensure that the climatic
conditions help reduce or eliminate the need for pesticides.
Watene is optimistic that strong commercial partnerships can
be created and sustained with tea growers. “When you are
building up this type of business you want partners to be in
there with you, so you have to provide the right incentives and
understand their aspirations whilst we are trying to achieve
ours.”
1 9 F I N L AY S 1 7 5 0>>
JFG’s quality assurance team also monitor the tea as it grows
The here and now on their partners' farms. As an example, by using hand held
For Finlays’ customers interested in making use of qualified tea devices, real time reports can be produced which detail the
sourced from China, they have the benefit of the Company’s extent of pesticide use. Data collection is not just about
world-wide reputation further reinforced by the assurance of compliance but is intended to offer benefits for both tea
an external audit undertaken by Rainforest Alliance. grower and tea merchant. As Watene observes, “The more we
know, the more we can help. And that all comes down to data.”
JFG recently staged its first annual suppliers conference
in Sinan, which attracted 45 representatives from 27 tea Vast future potential
suppliers. Watene reports that out of this group, 21 have fully Guizhou has the potential to transform the way tea is grown,
committed to Rainforest Alliance training. The intention is processed and brought to market. Given the size of the
to have them audited by the end of April. As a result, the Chinese tea market this could have significant consequences
vast majority of made tea from Sinan, mainly green and for the way in which tea is cultivated in the country more
black fannings, will come from Rainforest Alliance accredited generally. With this in mind, JFG has made provision for a
producers. Production is expected to increase significantly possible scaling up of production. It’s modular and additional
over the next five years. To make this possible, the number processing lines can be easily added as required. Watene notes
of growers who partner with JFG are expected to increase to that Guizhou has hundreds of farmers with whom Finlays
around 60, all committed to supplying properly accredited could arrange partnerships, unlocking additional hectares
tea. All Guizhou suppliers are expected to be Rainforest of virgin land with tea-growing potential. He elaborates, “I
Alliance certified within their first year of supply. always talk about 20,000 tons plus. My own opinion is that
it could be significantly more as this type of sourcing and
The tea growers’ farms vary in size, from around 60 hectares supply model gives huge opportunities for scalability.”
up to 200 hectares. Watene observes, “These are enterprises
that are of a reasonable scale but in the broader tea industry The story of Chinese tea isn’t just about volumes it is
in Guizhou and other provinces, they are small holders.” very much about varieties of tea, many of which are, as
yet, unavailable outside the country. With a certain wry
A robust quality control function ensures that tea destined for admiration, Finlays’ Managing Director Guy Chambers notes
both foreign and domestic markets is fully tested and assured that China is centuries ahead of the rest of the world in terms
as qualified tea. “Nothing goes out the door unless it’s been of developing tea varieties. Imagine, if you will, 1,600 varieties
tested by an internationally certified laboratory. It must meet
customer specifications and market access requirements.
Those two things are non-negotiables.” says Watene. >>
Tea Researcher.
2 1 F I N L AY S 1 7 5 0>>
of oolong tea alone. He uses the analogy of a vast library, one
where because of agricultural practices the only book checked
out by the West related to black tea “The way forward is to
go back to the library and take out another book,” he says.
“You can spend a lifetime just finding out about the existing
varieties in China.” Like Watene, Chambers believes that the
potential for scaling up production in Guizhou is well beyond
the initial conservative business plan projections. He estimates
that current production in Guizhou is between 400,000 and
500,000 tons annually.
‘Traceability, transparency and
scalability of Chinese tea are all
in the offing thanks to Finlays - tea
merchant to the world.’
Imagine, if you will, Finlays not so much as a tea merchant but
as a librarian. With what’s underway in the tea-growing hills of
Guizhou there’s potential to bring to market new books, new
stories: not only about well-known black and green teas but
potentially many other varieties. Finlays has the ability to make
this happen by bringing together tea growers with otherwise
inaccessible buyers. “For farmers in Guizhou, Finlays act as a
connector,” affirms Chambers “Enabling them to access both
domestic and international markets”.
There you have it – traceability, transparency and scalability of
Chinese tea are all in the offing thanks to Finlays – tea merchant
to the world and now, a librarian of Chinese tea varieties. For
tea aficionados worldwide, potentially a very exciting future.
Su Shuibiao, Owner, Su Fu Tea.
2 3 F I N L AY S 1 7 5 0Camellia sinensis - from China
ROSS MACDONALD, IN A SERIES FOCUSING ON COUNTRIES AND THEIR LINKS TO THE
TEA TRADE, LOOKS AT CHINA WHERE THE STORY BEGAN, AND WHICH TODAY REMAINS
PRE-EMINENT NEARLY 5,000 YEARS LATER.
Words: Ross Macdonald
Knowingly or not, the Swedish taxonomist Carl Linneaus country in the world with more than 2 million hectares of
forever joined tea and China together. To honour his land under tea (that’s to imagine every inch of a country the
contribution to botany, Linneaus chose to name the genus size of Wales covered in a blanket of waist high green bushes).
of the perennial shrub after Georg Kamel, a late seventeenth China today continues to exert as much influence over tea
century missionary; Camellia being a latinised form of Kamel. production and consumption as it did at the industry’s birth.
To reflect where the plant was first discovered, the species The global nomenclature for tea continues to reflect China’s
now known as tea was named sinensis meaning, in Latin, “from indelible stamp on the industry. Around the world there are
China”. In doing so, wherever it travelled in the world, in only two commonly used words to describe the beverage: one
whatever form, tea would always be linked back to its origin. shares its derivative with the English ‘tea’ – the French thé
After more than two thousand years, tea’s largest producer, being one example. The alternative has its basis in the word
consumer and innovator, remains China. cha, such as çay in Turkish. Both have their roots in China.
The pronunciation of the Chinese character for tea, 茶, varies
To put China’s importance into some context: of the almost depending on the Chinese dialect; however, it is always written
six billion kilos of tea produced annually worldwide, over
40% is Chinese. The same country is responsible for over
80% of all green tea manufactured globally. It is the only >>
2 5 F I N L AY S 1 7 5 0‘It is a widely held belief that tea was first
consumed by the Emperor Shen Nung in the third
millenium BC when a leaf dropped into a pot
of boiling water.’
identically. In today’s Mandarin, it sounds like ‘chá’, but in and from this point cultivation and consumption would soon
the Min Nan dialect of Chinese, spoken in Fujian Province, increase on a commercial scale. As domestic demand for tea
the word is pronounced 'dei' (like 'day'). Tea products that grew, so too did its production. Cultivation spread across
were brought to the world by sea, from the coastal ports in the provinces of southern China, with each creating its own
Fujian were referred to as 'dei' which became tea, thé etc. distinctive types of tea, characteristics and reputation. Whilst
The sophisticated network of Silk Roads that bore tea to the Jiangsu and Guandong polished their processes for green
interior of Persia, Russia and Central Asia sold the product as teas, Fujian became a leader in the manufacture of white tea
‘cha’. Tea innovations that created products vastly different and oolong. Yunnan province, further south and west, and an
from a boiled leaf continue to reflect this etymology – mat- area where wild tea remains common today, was made famous
cha, kombu-cha and bōbà nǎichá (bubble-tea) being good for its black and pu’erh tea types. China’s varied climate and
examples. topography encourages a large variety of tea products. The
local terroirs allow the tea artisans to create unique processes
It is a widely held belief that tea was first consumed by the from what were often a single annual harvest resulting in
Emperor Shen Nung in the third millennium BC when a leaf a broad spectrum of teas, styles and customs. Rather than
dropped into a pot of boiling water. His reaction to the taste
and stimulus he received from its consumption, combined
with his reputation as a healer, generated a wider interest >>
2 7 F I N L AY S 1 7 5 0>> these teas being cultivated on a mass scale, an industry of smaller producers making specialised products was born. This led to competition recognised by the Imperial Court resulting in producers focusing on quality, reputation and detail exemplified in the creation of yellow and tribute teas which, if liked by the Emperor, would command a huge price and elevate the name of the teamaker to immortality. Foreigners quickly identified the opportunity to cash in on these different and exciting beverages. During the 17th century, Portuguese, Dutch and later British vessels began trading with the ports of south east China. Not only did their ships carry the produce back to Europe, they also sent botanists to the mainland to try to extract the secrets of tea making. For years the Chinese were suspicious and unwilling to give up their expertise to these unrefined outsiders. They placated their new trading partners by only offering access to lower quality seedlings and made teas that were perceived to be defective. One theory suggests that the rise in popularity of common black teas in Central Asia, Russia, and beyond was due to this being the only product the Chinese were willing to export. The over-oxidised black tea that is the basis for the English ‘cuppa’ was considered unsuitable for the highly refined domestic market. Today, China finds itself as the spiritual home, research and manufacturing centre of the global tea industry. Whilst the craft of Chinese tea making remains almost as old as the hillsides on which it still grows, innovators and tea masters continue to build on their expertise to create the next unique type. Whatever this might be and wherever it will be consumed, one thing is for certain, it will remain as it always has been, sinensis. 2 9 F I N L AY S 1 7 5 0
Finlays GLOBAL FOOTPRINT
UK
UK
Pontefract
Hull
London
Group Headquarters
Pontefract CHINA
Rhode Island Hull
New Jersey
London
USA CHINA
Group Headquarters
Nanjing
Atlanta
UAE CHINA
Rhode Island
Guizhou Xiamen
San Antonio
New Jersey Zhangzhou
Trading/ Sales Offices
USA Dubai CHINA
Nanjing
Hanoi Tea Estates
Atlanta
UAE
Colombo Ingiriya
VIETNAM Guizhou Xiamen
Manufacturing Sites
San Antonio KENYA
Zhangzhou
Kericho
Mombasa Dubai Blending
SRI LANKA Jakarta
MALAWI
Blantyre INDONESIA Hanoi Packing Facilities
Map key Colombo Ingiriya Innovation Facilities
CHILE VIETNAM
Misiones KENYA
Tier States/ Farms
Tea/ Coffee/ Botanicals: Santiago
Kericho
Buenos Aires
Mombasa SRI LANKA Jakarta
MALAWI
Trading/ Sales Offices
Blantyre INDONESIA
ARGENTINA
Tea Estates
Manufacturing Sites
CHILE
Blending Misiones
Packing Facilities
Santiago Buenos Aires
Innovation Centres ALL OUR ESTATES
100% Rainforest
Partners Alliance Certified
Trading/ Sales Offices
ARGENTINA
Tea Estates
3 1 F I N L AY S 1 7 5 0
Manufacturing Sites
BlendingFinlays BUSINESS REVIEW
UK and Europe Middle East/ Africa/ CIS
There has been an increased focus on signing extracts
Sales growth was strong in 2018 with a number of new clients
customers in line with the business’s 2022 growth strategy.
signed. As a result, Finlay Beverages produced its best result
This has necessitated increasing our resources to identify
since 2011.
new markets with potential whilst also focusing on product
diversification.
During the year, continued strong competition between UK
retailers resulted in customers focusing on price rather than
New customers have been brought on board from Sudan and
quality. From an overall market perspective, core black tea
Egypt, where Indian teas were introduced to the market by the
continues to be flat, although there was some growth in fruit
Dubai team. Currency devaluation remains a key challenge for
& herbal and speciality teas. Coffee remains in growth, with
our markets in Russia, Kazakhstan and Pakistan.
small gains in standard roast and ground along with stronger
demand for single serve coffee pods.
Further market and product developments are planned for 2019.
The following pages provide a brief overview of Finlay Beverages has purchased a new £3 million coffee
roaster, which will be installed and commissioned in mid-year
recent performance and some of the company's 2019. £1 million has also been invested in improving tea bag
Asia
current initiatives. manufacture by upgrading six IMA machines.
It was a challenging year for the region with increasing
competition in China from other natural extract companies.
Raw material pricing in China was also an issue as demand
far exceeded supply of certain teas, resulting in double-digit
Americas increases in price in some instances.
Revenues from coffee, tea extracts and leaf tea all increased
The strategic response has been centred on Research &
during 2018. Cold brew coffee continues to evolve with new
Development, with Damin launching a number of new
iterations in nitro, sparkling and citrus infused. With health
products including a new cold brew coffee extract. Damin has
more of a focus for brands, there is an increased interest
also won a major contract from a leading global food service
in natural ingredients and trendy superfood formulations.
business to supply teas in mainland China and Asia
Kombucha, which is a fermented drink made from sweetened
tea and a specific culture known as a scoby, has spread from
Local brand owners are looking to respond to consumers’
a West Coast health food phenomenon to a broader audience
increasing awareness of health issues and the resultant
looking for a health edge.
imposition of a sugar tax in several countries. This is leading
to new product development or reformulation, a trend which
The business continues to introduce new environmental
is providing opportunities for Damin as well as Finlays Asia.
initiatives, some large, some small but all of them important.
For example, the Rhode Island office now uses 6,300 fewer
As part of their environment policy, Damin completed the
plastic bottles annually following the installation of a new
installation of new five gas boilers during 2018.
water dispenser.
3 3 F I N L AY S 1 7 5 0Finlays BUSINESS REVIEW
Tea Estates - Kenya Finlay Flowers
Climatic challenges proved problematic for performance Project Ongeza, the expansion of Lemotit Farm alongside the
in 2018. Rainfall during Q4 2017 was well below average, closure of two farms in Kericho, is progressing smoothly and
resulting in a reduction of crop during Q1 2018. This was is on schedule to complete by the end of 2020. The support
reflected in Mombasa tea prices, which were well above budget given by the employees in Kericho in these uncertain times is
during Q1, before declining during the remainder of the year. much appreciated.
The 2018 situation was reversed at the start of 2019 with An important sustainability initiative is underway at Lemotit
record volumes of tea on the Mombasa auction during Q1 involving a 180,000 cubic metre dam which, when completed,
causing a collapse in prices to levels last seen over 10 years will collect rain run-off from 60 hectares of green houses.
ago. A self-propelled Valiant harvester acquired from Japan Other projects include doubling the size of the existing
was put into service in August. packhouse, building nine management houses and planting
another nine hectares of roses.
In collaboration with partners, the rehabilitation of the
Kipchobos spring was completed as part of the IDH Experiments have begun with 100% bio degradable sleeves.
Tea Estates - Sri Lanka (Sustainable Trade Initiative) South West Mau Landscapes This is the plastic packaging which most customers now insist
Project. As a result, the population now served by the spring surround each bouquet of flowers. If these new sleeves became
The decision to focus on core tea-related businesses in Sri Lanka has risen from 5,000 to 12,000. the norm, the environmental benefit will be important.
is paying dividends, following the merger of Finlays Colombo’s
beverage packing operations with Finlays Tea Estates during Trends in lost time injuries continue to head in the right
the latter part of 2018. direction although one of the largest risks remains third party Tea Estates - Argentina
road accidents within the farms.
Beverage packaging, which encompasses value added tea In the face of a number of operating challenges, Casa Fuentes
exports, continues to deliver solid results. In order to increase has made some valuable improvements to its operating
the Company’s presence in the value-added market, two model and to productivity. The company has also undertaken
state-of-the-art, automated tea bagging machines have been a project with Harada Company to manufacture a range of
commissioned at the Welisara factory. These are the first of Japanese-style green teas. Trials have been successful to date.
their kind in Sri Lanka.
In December, three Casa Fuentes plants achieved FSSC 22000
In another significant milestone the evaluation and buying Food Safety System Certification in three plants – Campo
operations of one of the country’s largest tea businesses has Grande, Acaragua and the Italia blending plant, providing
been outsourced to Finlays Colombo. As a result, Finlays are a framework for effectively managing the Company’s food
now a major player in the Colombo Tea Auctions and is its safety responsibilities.
third largest buyer.
Casa Fuentes is the first tea company in Argentina to achieve
During 2018 a CSR programme was launched with one of its this standard.
key initiatives being the refurbishment of crèches throughout
Finlays Tea Estates.
3 5 F I N L AY S 1 7 5 0Finlays FASCINATING FACTS
12 bn 90%
of RTD/Iced tea was of Finlays waste from business
consumed in China, operations is recovered, reused
making it the largest or recycled.
litres consuming market
globally. Finlays/
Damin extracts went
into more than 3
billion litres of this.
27,000 the total land
attributable
to Finlays
4.7 bn of tea are consumed daily
globally, compared to hot
coffee at 2.4 bn cups daily
hectares tea-growing
operations,
cups making tea the second
most consumed beverage
equivalent to after water.
more than 44,000
football pitches.
7.3 bn 6.6 m
of RTD/Iced tea of coffee sold by Finlay
consumed by Beverages, equating to
Americans, nearly almost a billion cups of
litres a quarter of which
was made with
kilos coffee
15% 78%
Finlays tea. of tea manufactured in Kenya of global consumers believe
was exported by Finlays, that green tea has a positive
equating to nearly 30 billion impact on their health.
cups of tea.
62% The combined market
share of the top ten owners
of RTD/Iced tea brands by
3 bn
of tea & infusions -
produced by Finlay
Beverages, from
volume; approximately
15% of which was supplied
cups black and green to
specialty tea and
by Finlays/Damin. herbal infusions.
3 7 F I N L AY S 1 7 5 0Together we’re Stronger
LONG-TERM PARTNERS, FINLAYS AND STARBUCKS COLLABORATE ON
EMPOWERMENT AND DEVELOPMENT WITH COMMUNITIES
IN KENYA AND SRI LANKA.
Words: Jo Millar Images: Finlays archives
3 9 F I N L AY S 1 7 5 0‘Their mission is to ‘inspire and nurture the
human spirit - one person, one cup and one
neighbourhood at a time’ an aim which applies
throughout their supply chain.’
Starbucks has been a customer of Finlays for many years, and best from bush to cup.’ In pursuit of this, Finlays is committed
recently the relationship has been strengthened to include to creating a Sustainable Future supported by the adoption
projects designed to empower and develop the potential of of, and a commitment to, six strategic objectives and targets
communities in Kenya and Sri Lanka. as explained on page 76. These include Finlays’ belief in
providing local communities with help to empower them to
Like Finlays, encouraging sustainable business and developing make a positive impact on the issues which affect them. This
people are two of Starbucks’ core values. Their mission is includes a commitment to gender equality in the workplace.
to ‘inspire and nurture the human spirit – one person, one Finlays currently supply Starbucks with tea from six different
cup and one neighborhood at a time’ an aim which applies tea growing regions and has recently started sustainability
throughout their supply chain from suppliers to customers. related projects in two of these, Kenya and Sri Lanka, both of
As one of these suppliers, Finlays wholeheartedly buys into which are being supported by Starbucks. The projects have
this mission and Starbucks’ ‘pursuit of doing good’. been designed in collaboration with Starbucks and targets
issues which are important to the communities concerned.
At Finlays our mission is to ‘connect humanity through
natural beverages. Combining tradition and innovation to
create a healthier, happier and better world by bringing the >>
4 1 F I N L AY S 1 7 5 0>>
Crucially, funding is coming directly from the sale of tea,
providing further opportunities for the projects to grow and
the people involved to prosper.
In Kenya, a project has been set up with two separate
components; management training and entrepreneurship
training. Management training seeks to address gender
inequality through the development and empowerment of
young women to enable them to take on management positions
or more responsibility. Entrepreneurship and vocational skills
training is being provided for disadvantaged people living
‘Crucially, funding is coming from
the sale of tea, providing further
opportunities for the projects to grow
and the people involved to prosper.’
and working on James Finlay Kenya’s tea estates with the aim
of giving them the necessary skills to allow them to become
economically independent.
The management training module was launched in Kenya in
February 2019, during a visit from Starbucks to Finlays’ tea
estates in Kericho. Speaking during the launch, James Finlay
Kenya’s Managing Director, Simeon Hutchinson reiterated
the Company’s commitment to an inclusive workplace and
an increase in women representation in the Company’s
management team noting that this had risen from 2% in the
1990s to the current 25% and rising.
The event was attended by representatives from Starbucks
including Starbucks’ Mattea Fleischner, Head of Sustainability,
Starbucks visit to Kericho in February 2019.
4 3 F I N L AY S 1 7 5 0>>
‘By focusing on young women, we also hope
to further address issues of gender discrimination
and inequality as well as skills development.’
Zoe King, Tea Buyer (East Africa, Argentina) and Doug which will train and develop the skills of 58 volunteers to
Langworthy, Quality Assurance Manager Tea and Botanicals. be ‘change agents’ in their communities to address issues
Finlays’ attendees included Rachel Jones, Global Accounts such as waste and water management, health, hygiene, and
Director and Michael Thiongo, Leaf Tea Operations Manager. community cohesion. By focussing on young women, we also
Also present were representatives from the Kenya Institute of hope to further address issues of gender discrimination and
Management who also helped with the project and members inequality as well as skills development. This project is due to
of James Finlay Kenya’s management. run throughout 2019.
In Sri Lanka, our partnered project focuses on community We very much value what we hope will be an enduring
development where Finlays has a long and successful history relationship with Starbucks.
of implementing impactful sustainability initiatives as well as
fostering positive community relations. The Company was the
first in Sri Lanka to have one its tea estates receive Rainforest
Alliance certification; now all our estates are accredited.
Youth volunteer groups are being set up as part of a project
4 5 F I N L AY S 1 7 5 0Future Shaping Finlays
WOLFGANG TOSCH IDENTIFIES THE FORCES SHAPING THE FUTURE OF BEVERAGES
INDUSTRY AND FINLAYS' ROLE IN LEADING THIS CHANGE.
Words: Kamini Dickie Images: Finlays archive
“If you have always done it that way, it is probably wrong.” Chambers. Since his arrival in the autumn of 2015, he has
- American inventor Charles F Kettering been redefining the business as one where innovation is not
only a mindset, but also a driver that differentiates Finlays
“We need to innovate.” from its peer group. “If you look across the beverage industry
- Finlays’ Managing Director Guy Chambers in the last 20 to 30 years, the structure of beer, wine and
dairy has changed significantly,” says Guy. “But tea; if we
take you into a tea factory, our fathers and our grandfathers
Tea, it can be agreed with some conviction, is an industry would recognise it. It hasn’t changed; it hasn’t changed at all,
rooted in tradition. After all, it is cultivated, harvested and so there’s a disconnect there. What has driven the change in
processed using well established and widely understood these other industries is basically the application of science.”
methods that date back decades, in some cases, centuries.
We understand how to ‘make’ tea. While such certainty is To that end Finlays have created a new role and function, that
a strength, in an era where change and innovation are the of Group Innovation Director, leading a Group Innovation
defining constants, it is also increasingly a weakness. It’s
certainly a conviction held by Finlays’ Managing Director, Guy
>>
4 7 F I N L AY S 1 7 5 0>> categories. It’s worth noting that Finlays has never lost touch
with its past. The lessons of two centuries feel more relevant
Organisation. As his first appointee Guy found an ideal today than ever. The Company is drawing on these long-held
candidate in Wolfgang Tosch. With an impressive career values to create a better future for beverages. That means
to-date in product and process innovation in the brewing harnessing new technologies in a responsible, sustainable
industry, Wolfgang joined the world of tea in 2017; his track way to ensure future innovations drive the industry to new
record for innovation was exactly what Finlays was looking heights, delivering healthy products to the world.
for.
Without giving away too much, Wolfgang notes that work is
“The recognition was that we needed someone who knows underway on late stage customisation of tea, as well as new
about innovation and ideally not from the tea industry. You ways of serving cold brew coffees. Of interest is that all of
want someone who’s close enough that they’re not considered this work is being accelerated by looking for guidance not
completely alien. You don’t want to get someone from Apple just from Finlays’ direct customers. Wolfgang elaborates, “We
or Microsoft,” explains Chambers. “If you get someone from made a conscious decision that we want to understand not
inside the tea industry the chances are they’re not going to only our customer, but also our customers’ customers: the
be challenging enough, they’re not going to be disruptive consumer – because only then, at least from an innovations
enough.” side, can we anticipate both the new trends in the market and
the needs of our customers a lot quicker.”
Innovating at Finlays
Now 18 months at Finlays, Wolfgang Tosch says that what he On the technical side, Wolfgang’s team is working from ‘bush
loves about the tea industry is its scope and the opportunities to cup’, looking to technology and process innovations that
it presents. “The difficulty is deciding what to do first,” he improve quality, reduce cost and drive sustainability. The
says. “There’s so much you can do. There’s so much that’s work starts in the field, looking at how plant breeding can
completely unexplored. And that excites me.” Wolfgang be done differently; how new initiatives and technologies
has made ambition statements, a strategic framework that in agricultural science can drive a step-change in breeding,
looks to both market-facing and technical advances. Looking growing and land stewardship practices. Wolfgang notes that
outward, the goal is to drive top-line growth though innovation for tea it can take up to 20 years for a breeding programme
that premiumises and expands the tea, coffee and botanical to produce a commercial proposition. In other agricultural
Arisha Ramparsad (Beverage Applications Specialist).
4 9 F I N L AY S 1 7 5 0>>
industries advances in modern breeding processes have sped
this up considerably.
Process research will also be taking place with Wolfgang and
his team given a green light to pull apart and put back together
how tea is made. This will not only be a consideration of
mechanical processes, but also bioprocesses.
In the field of analytical and sensory science Wolfgang and
his researchers have made great strides, linking naturally
occurring chemical properties in tea with their sensory
attributes. A greater understanding of the flavour lexicon is
‘Can you create a tea factory where
you run things more efficiently and
deliver a better quality product...that
really would be the Holy Grail.’
helping everyone across Finlays, from operations to sales,
speak the same language about tea and to understand its taste
benefits. It’s something that Wolfgang has seen the value of in
the brewing industry: “It is essential to have uniformity on how
we taste and conduct sensory evaluation across Finlays.”
Underway is research in nutritional science. What will be under
the microscope is a search for links between the functional
ingredients in tea, coffee and botanicals to human health
benefits. Consumer tastes, demographics and values are
reshaping purchasing decisions; consumers today are the most
clued up on their health than any before.
Influencing Innovation
Looking to the future, Wolfgang says that in five to 10 years
Nitro cold brew coffee.
5 1 F I N L AY S 1 7 5 0‘Everybody talks about Westernisation, I'm talking
about 'Easternisation'. There's a lot of positive
trends, a lot of great influence coming from Asia.’
current trends suggest substantive shifts in the varieties of the question: “How can you create a tea factory where you
tea available. “Hot black tea is subject to fierce competition actually run things more efficiently and deliver a better-
from products such as green tea, fruit and herbal infusions, quality product at the other end? If you could do that, that
specialty tea, coffee and other soft drinks, which are expected really would be the Holy Grail.”
to become new growth points. I think black tea will continue
to shrink as it struggles to maintain consumer interest and
it will shift to other varieties of tea. We will see what I call
‘Easternisation.’ Everybody talks about Westernisation, I’m
talking about ‘Easternisation.’ There’s a lot of positive trends,
a lot of great influence coming from Asia.”
This is to come. In the here and now Wolfgang’s ambition is
to bring tea – its production and application - into the 21st
Century and to apply these advances to its the premiumisation.
As Guy Chambers concludes, one of the ideal outcomes of
this investment in innovation will be finding the answer to
5 3 F I N L AY S 1 7 5 0Finlays PEOPLE
WOLFGANG TOSCH
‘In his time in brewing Wolfgang repeatedly
demonstrated an ability to think outside the
norms of the industry.’
Wolfgang Tosch learnt his craft at one of the world’s most and was the Global Director Exploratory Product Innovation
demanding schools, becoming a brewmaster at the Technical for what is the world's largest brewing company. In his time in
University of Munich (Weihenstephan). He continued his brewing Wolfgang repeatedly demonstrated an ability to think
studies at the University of Manchester and was awarded outside the norms of the industry.
a PhD in Microbiology in 2006. Wolfgang has over 20 years
of global experience in the beer, beverage, food ingredient One such technical innovation was the development of beer
and biotech industries, developing technologies and growth- brewed using alternative carbohydrate sources. A novel
led innovations. He has developed his career with highly process produced a beer that tasted like beer but was from
innovative and globally profitable companies. a non-traditional brewing ingredient. Using locally grown raw
materials, such as cassava and sorghum, brewers in Africa
He put his education to use first at Genencor International (later play a vital role in bolstering local economies whilst reducing
Danisco, which was then acquired by DuPont), researching the carbon footprint of production systems – local farmers
solutions for the brewing, distilling, fruit juice and wine see increased outputs and profits while businesses limit costs
industries. He subsequently joined SABMiller and finished his of importing raw materials.
eight years with the multinational brewer as Global Manager
for Brewing Innovation Development. Wolfgang went to
Anheuser-Busch InBev following its acquisition of SABMiller >>
5 5 F I N L AY S 1 7 5 0As for market facing innovations, imagine for a moment Finlays Innovation Logo
that the classic ingredients of beer purity weren’t defined in
16th Century Bavaria but rather on the Indian subcontinent. Finlays’ systemisation of its innovation processes has been
Working with teams at head office in England and locally in represented in an especially designed logo. Innovation is art
India, Wolfgang created a series of beers that swapped out and as such the innovation logo highlights the five areas of
the bittering properties of hops for local ingredients such as research interests, namely Agricultural Science, Processing
cinnamon and coriander. The beers, branded as Indus Pride, Research, Nutritional Science, Analytical Science and Sensory
were something very much out of the ordinary and well received & Applications.
by beer enthusiasts. Then came the development of ‘Hopcraft’
– an innovative Hop Finishing system – a new and different way It reflects how Innovation at Finlays is structured, with the
to drink beer. Two years in development, the ‘Hop Finishing mandate to innovate tea, coffee and botanicals. The logo is
Tap’ infuses beer with hops as it is being poured at the bar, to designed to appear in combination with the main Finlays’ logo.
bring you the freshest possible hop aroma and flavour.
On joining Finlays Wolfgang’s passion for brewing beer has
become the inspiration for developing brewing themes in
relation to tea. It may seem that there’s a natural technical
progression from beer to tea; however, Wolfgang views his role
at Finlays as much, much more.
5 7 F I N L AY S 1 7 5 0Doing the Right Thing
MIKE KEATING IDENTIFIES A PROJECT IN SRI LANKA WHICH DEMONSTRATES
THE GROUP’S COMMITMENT TO SOCIAL RESPONSIBILITY, SUSTAINABILITY
AND GREAT LOCAL LEADERSHIP.
Words: Mike Keating Images: Finlays archive
‘A manager ensures we do things right, whilst a leader he made it his mission to find a way of providing potable
ensures we do the right thing.’ water for the community, starting with finding a source
of suitable water, a huge challenge given that the area is
I always liked this as a simple means of defining the mountainous and not easily accessible. As explained on page
difference between a manager and a leader but wondered 62 this was not the first time Sudath had taken on a project of
how this might apply in Finlays. Take for example Sudath this kind but the challenges were nevertheless considerable.
Ariyathilake, Senior Manager of Hopton Estate in Sri After much searching Sudath found the Milla Oya stream high
Lanka. Situated in the Badulla District of Uva Province in the mountains, with a natural and sustainable supply of
and growing tea and rubber, Hopton has a population of unpolluted water. This brought the next challenge - obtaining
circa 10,000, with 565 directly employed on the Estate. the funding required to capture and pipe the water 2.2
Shortly after taking over the Hopton role, Sudath encountered kilometres to the villages ready for final treatment and supply.
a large group of villagers by the roadside waiting for a water After much lobbying of Government and Non-Government
bowser so they could collect fresh water for their families. organisations, and engagement with the local community,
He was dismayed to find that 11 villages, supporting 750
families, had no ready access to potable water. As a result,
>>
5 9 F I N L AY S 1 7 5 0>>
including them agreeing to pay for metered water to provide for
ongoing maintenance, the necessary funding and permissions
were granted, and the project started in late 2017. To date it
is almost complete and due to open shortly with all pipework
in place together with two holding tanks with a capacity of
140,000 litres, and the associated filtering/treatment tanks.
Additional funding was found for the provision of over 230
toilet facilities resulting in the initiative being adopted by the
Sri Lanka-wide Water and Sanitation Improvement Project.
The impact on the quality of life on the Hopton community
is immense, and its success testament to the foresight,
‘Its success is testament to the foresight,
determination and sheer hard work
of Sudath, which in turn directly
impacts on the villagers that work on
the Hopton Estate.’
determination and sheer hard work of Sudath, which in
turn directly impacts on the villagers that work on the
Hopton Estate. Having a manager who demonstrates such
levels of social responsibility drives a culture of loyalty,
teamwork and productivity that many leaders would envy!
This is but one example of Finlays' people who are tangibly
practising and delivering our values of ‘Trusted, Sustainable
and Innovative’ every day. Whether manager or leader they are
great role models who go above and beyond the call of duty,
and we’re very proud that they are part of the Finlays' Family.
Hopton Tea Factory.
6 1 F I N L AY S 1 7 5 0Finlays PEOPLE
SUDATH ARIYATHILAKE
‘He has made it his mission to find ways
of improving the drinking water quality of
those communities living near to the estates
on which he worked.’
Sudath Ariyathilake graduated from the University of the project, he had to overcome various challenges before the
Sri Jayawardhanapura Sri Lanka with a BSc Business Ministry of Water Resources agreed to pay 75% of the cost with
Administration (Special) degree in 1996. He joinied the balance being met by Finlays. This resulted in a Community
Udapussellawa Plantations as a tea planter in 1996 Based Watershed Management pilot project at Gamewela in
before the Company was taken over by Finlays in 1998. 2009 which benefited 289 local families. Having established
Having completed his training, Sudath was appointed a precedent, similar projects were then undertaken on the
to Court Lodge Estate in Nuwara Eliya as an Assistant Hanipha and Polgahalanda Divisions of Dammeria B. Helped
Superintendent. Since then he has been posted to a number by Government funding totalling SLR 2.1 Million a further
of different Estates as his career has progressed before he 458 families were able to enjoy clean unpolluted water. As
took over his current role as Senior Manager of Hopton Estate. explained on page 58 the mission then continued at Hopton.
Sudath is a member of China Agricultural Service
Throughout his time with Finlays he has made it his mission Extension Programme and of the Global Land
to find ways of improving the drinking water quality of those Stewardship Forum. In his spare time, he likes to read
communities living on, and near to, the estates on which he worked agriculture journals to broaden his education and find
When on Dammeria B Estate, he first tackled the problem ideas which he can be put into practice on his Estate.
of polluted drinking water by arranging for the estate and Outside work, Sudath looks forward to spending time with his
villagers to be supplied from a water bowser before looking family in Kandy once every two weeks. Working so far from
for a clean source of supply. Eventually this was found in a home would be difficult without the great support which Sudath
village adjoining the Gamewela division of the Estate. To fund receives from his wife Chandi who looks after their two children.
6 3 F I N L AY S 1 7 5 0You can also read
