April 3, 2006
South Africa’s Herbal Tea Causes a Stir in New Markets
By Anton Ferreira
CLANWILLIAM, South Africa (Reuters) - The normally tranquil country roads of South Africa's Cederberg district are resounding to the rumble of trucks packed to overflowing with bales of reedy herbs. It's harvest time for rooibos, a health tea that is winning fans from Berlin to Tokyo.
South African suppliers say the tea, grown nowhere else, is poised for a dramatic expansion in the U.S. market following their victory in a trademark dispute in American courts last year.
The tea, whose Afrikaans name (pronounced "royboss") translates as "red bush," has a strong, almost pungent flavor that some say is an acquired taste.
However, it has a growing following among health-conscious consumers, many of whom say they would never go back to black tea.
"It's all about health. Rooibos contains no caffeine, so it's the caffeine-free buzz, and it has very little tannin," Martin Bergh, managing director of Rooibos Ltd, the major supplier, said in an interview.
"Then of course rooibos is high in antioxidants...it's a proven anti-carcinogenic, but again together with a whole lot of other things -- most vegetables. People are just becoming a lot more aware of what's good for you and what's bad for you."
Rooibos has long been popular in South Africa and exports, particularly to Germany, took off in the early 1990s.
"Japan used to be a good market but it's absolutely stable and other markets have grown way past it," Bergh said. "In the early 90s total exports were 700 to 800 tonnes, virtually split 50-50 between Germany and Japan. Well, Germany is now 4,000 tonnes and Japan is 400 tonnes. So there's been tremendous growth but it hasn't been in Japan."
He said growth was particularly strong in Eastern Europe.
"Rooibos fits in very well with the culture of the central and eastern Europeans who are used to drinking and consuming herbs...they don't even drink that much black tea, they drink mostly herbal teas. So rooibos is doing very well in Eastern Europe, it's doing well and growing in the U.S."
USE OF NAME RESTRICTED
Sales in the United States have in the past been hampered by the fact that a U.S.-based company, Forever Young, registered the word "rooibos" as a trademark in 1994. This restricted the use of the name to those willing to do business with the company.
The company sold the registration to a woman based in Dallas, Texas, in 2001 but last year she gave up rights to the name in the face of litigation brought by Rooibos Ltd, which has about 75 percent of the world market.
"That victory was hugely important," Bergh said. "If we hadn't won it we would have been in big trouble, almost worldwide...We are saying rooibos is not only generic but it's also a geographic indicator because rooibos is unique to this area."
A geographic indicator is a name such as champagne or port which, under international trade rules, can be applied only to a product from a specific region.
Rooibos is indigenous to the mountainous Cederberg region inland from South Africa's West Coast and about 200 km (125 miles) north of Cape Town. It is a dryland crop that needs deep, sandy, acidic soils and a Mediterranean climate.
"There are other parts of the world where it may grow but it's an extremely extensive crop and labor intensive...so it wouldn't be of economic interest to anyone else," Bergh said.
Exports to the United States were 400 to 500 tonnes a year now but could grow to 3,000 tonnes or more, he said.
"The U.S. is not a huge market yet but it's potentially a very big market and it's growing very quickly."
This prospect is alarming for some conservationists in South Africa who lament that pristine tracts of fynbos -- a vegetation type including the protea and rooibos itself -- are being plowed up to make way for more rooibos plantations.
LAWS NOT ENFORCED
The Cape Floristic Region where fynbos occurs is internationally recognized as a biodiversity hotspot. The area under rooibos cultivation has expanded by 7,000 hectares (17,000 acres) in recent years to 37,000 hectares, although some of the increase has been a result of grain farmers switching to tea.
"I by no means condone the stripping of fynbos," Bergh said. "But the blame doesn't lie squarely at the door of the farmers. Law enforcement is where the whole thing breaks down."
He said South Africa had a comprehensive set of laws aimed at protecting natural habitat from the plow but they were not enforced. "It's ludicrous to say to a farmer, you must conserve'. If you do nothing about it, he's going to do whatever is best for him."
Rooibos Ltd, an unlisted company largely owned by farmers, employs about 150 people in season and 100 people during the rest of the year -- a significant number in a region that has no industry or manufacturing to speak of.
Bergh said the region had suffered three dry years in a row, resulting in reduced harvests. "The market will only really be able to grow when this dry cycle is broken."
Other setbacks include the strength of the rand and a series of power blackouts in January and February -- the start of the harvest season -- that affected the entire Western Cape province.
"The rand, as strong as it is now, is having a negative impact on our business...Rooibos in foreign currencies is now an expensive product," Bergh said. He described the power blackouts, caused partly by generator problems at South Africa's Koeberg nuclear power plant, as a "disaster."
"The whole factory just comes to a standstill."