Mar 13th 2010 Issue
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The Sell-By Debate

Charles Cain - Mar 13th 2010

Adagio's new tea pouches

Adagio's organic, unsweetened Anteadote iced teas

Adagio's UV blocking visibiliTEA tins

I received an excellent question this morning from TeaChat user Herb_Master in Stockton, England. He asked how we intend to handle sell-by dating and what systems we will put in place to track and "move" aging product.

First a little background. According to a USDA Fact Sheet, "Except for infant formula and some baby food, product dating is not generally required by Federal regulations... There is no uniform or universally accepted system used for food dating in the United States. Although dating of some foods is required by more than 20 states, there are areas of the country where much of the food supply has some type of open date and other areas where almost no food is dated."

The Germans, famous and/or notorious for their quality controls on tea, have adopted an industry standard of marking tea "best used before" three years of the date it's packaged. This is startling for several reasons. First, while we know it is relatively common practice in the US to sell teas that are a couple years old, we at Adagio try to avoid stocking teas past the following year's new harvest. In practice it's not possible to perfectly predict sales volume, and so any retailer will at times be forced to sell "last year's tea" a couple months after the new harvest, but we certainly are not selling teas that are years past the new harvest. Second, you may have caught that the rule was three years after it was packaged. There's no telling how old the tea was when it was packaged. (This is not intended to pick on the Germans. At least they HAVE a standard!)

The simple truth is that tea, properly stored, will never be dangerous for human consumption. Tea doesn't spoil and won't hurt you. Freshness is all about the quality of the taste and aroma. Once a tea is processed and packaged, it slowly looses freshness from day one. Poorly packaged tea (or opened every day or two at home and re-exposed to the air) looses freshness much more quickly. When I was standing behind the counter on a daily basis I recommended that customers purchase no more tea than they were likely to consume in six months.

All of this leads to a bit of a conundrum. If we do not put any date on our packaging then neither we nor the customer have a good way of making sure that we're selling/using the oldest tea first or, which harvest a tea is even from. If we do put a packaged-on date we hold ourselves to a standard of disclosure that few else do and raise questions of freshness that other retailers side-step (and sometimes lie about - "of course that's this year's harvest"). If we put a use-by or best-before date, well I would want that to be, at most, a year from packaging. The problem is that even if we perfectly predict demand we'll have to sell some teas 11 months and 29 days after harvest because the next harvest isn't available yet. Do those teas say "use before tomorrow"? And will the customer buy a tea that's use-by date is a couple months or weeks from now when the competition doesn't even print a use-by date?

It is imperative for internal controls that we at least track packaged-on dates. Disclosing information to the consumer is a double edged sword. We like to be responsible (and appear responsible), but don't want to unnecessarily complicate things and certainly don't want to suggest that the tea is "not good" when it's 18 months old. This morning I'm drinking a First Flush Darjeeling from the 2007 harvest (the horror). I know it's odd since I have more than 100 high quality samples of much fresher teas sitting around my house, but I LIKE this tea. It was originally sold for something like $15 an ounce. It's not as fresh as it once was but it's still a lot better than most Darjeelings I've had.

OK. Enough Dithering. While a final decision hasn't been made, my current thinking is to include a "Packaged On" date on every package marked for re-sale. This will allow our staff to enforce a FIFO (first in first out) method of inventory and give the customer a sense of how old the teas in their cupboard are. It will also keep any of our re-sellers honest. We really don't want someone selling a tea under our name that is a couple years old.

It will be the responsibility of the sales staff to explain the harvest cycles of tea and the fact that while tea is best consumed quickly it never really goes bad. The good news is that, with our new zip-lock foil packaging, we'll have a strong advantage over many other tea retailers. The enemy of tea freshness is light, moisture and air. A pouch is superior to a tin because it is more air-tight and because it is easy to expel extra air from within the package (a 4-ounce tin with an ounce of tea in it is exposed to three ounces of fresh air every time you open it).

Historically Adagio has not had a problem with old teas. We've always run very lean on inventory and often are sold out of many teas at the end of the season. This is not the end of the world online, but is rather problematic in a retail store. I can't have customers driving an hour to come to my specialty tea shop and paying for parking in Chicago only to find 30% of my shelves bare. That's a great way to loose a customer. We'll have to get a little more aggressive on inventory, and consequently, will have to implement policies for discounting teas when we find ourselves overstocked with last year's tea at the start of the new season. Because there are always customers looking for a bargain and because tea never really goes bad, I don't believe we'll have trouble moving these "old" teas.

From an operational standpoint, when the new harvest is available for a tea we will check our Inventory system to check the inventory levels of this tea across each of our warehouses (NJ and CA) and stores. If we find an overstock the system will allow us to discount the tea at a single location or across all locations either for a fixed period of time or until the product is sold out. Additionally, if a store finds an older package of tea, the manager will have the right to override the corporate pricing and discount the product accordingly. This approach is basically the same thing you see at the grocery store. Big sales are sometimes planned in advance to drive traffic, but often simply an effort to adjust the balance of supply and demand before the product spoils.

There is a risk in holding ourselves to a higher standard, but someone has to start the trend and show the customers that its OK to expect a little more transparency from their local Specialty Tea Retailer.

Adagio Teas