PLEASE READ THE CASE STUDY AND ANSWER THE QUESTIONS AT THE END: South Africas Rooibos Tea Industry

Rooibos (pronounced Royboss and meaning red bush in Afrikaans) is an indigenous plant to the Cederberg mountains of South Africa. For this reason, the Rooibos tea, also known as Africa red tea, or simply red bush tea, is uniquely native to South Africa where it is generally consumed for medicinal purposes by the indigenous people. The history of Rooibos goes back thousands of years, with origins connected to the Khoisan who are believed to be South Africas first indigenous people in Western Cape Province.

The techniques and experience to grow and prepare Rooibos tea have been developed and refined over its estimated 5000-year agricultural history in South Africa, and to this day, Rooibos is still only grown on an estimated 20000km2 area of Suid Bokkeveld region as a uniquely localised tea industry in South Africa. In the mid-1990s, a green Rooibos method was developed with unfermented tea, resulting in a process that helps to keep Rooibos powerful anti-oxidants as well as a crisp apple and cut grass flavour that makes an incredibly healthy and tasty drink that is widely available to buy today.

Global markets for Rooibos tea Rooibos presence in global markets is believed to be a result of an historical exotic curiosity by consumers in most parts of the world. It is from such historical curiosity that Rooibos modern history is also linked to Chinese tea trade, when the Cape in South Africa became a stop-over for European traders en-route to the East. By the time tea drinking became fashionable in Europe, the Cape settlers sought to imitate the trend and so adopted the local Rooibos brew. The disruption in tea supplies to South Africa during the Second World War also contributed in boosting the popularity of Rooibos as a better alternative to what the European Cape settlers had been used to take for their breakfast tea, and staple brew in kitchens across the countrys diverse cultures.

Today, industry research draws and builds on the knowledge and experience gained from South Africas indigenous Khoisan peoples long connection with the Rooibos as a highly regarded herbal remedy with several medicinal benefits. For example, Rooibos contains a wealth of natural minerals, and is said to have properties reduce stress, help lower blood pressure, aid with digestive problems, and even help reduce the risk of cancer. Rooibos is also believed to contain antioxidants, chemical compounds, low tannins, and enzymes that help in reducing pain and inflammation, and it is also widely taken as a remedy for diabetic patients with no side-effects if taken in correct quantities.

In terms of regional demand, in Asia, and particularly in India, Sri Lanka, and China, Rooibos is the chosen brand of tea for health-related reasons, including improving fitness and promoting weight loss, and demand is increasing in America, Asia, and Europe, where the Rooibos tea is consumed primarily for hypertension, insomnia, headaches, allergies, premature aging, and asthma. In an increasingly health-conscious global marketplace, the medicinal benefits of Rooibos tea are becoming one of the key drivers in the surge in demand. The demand for Rooibos is also growing in a market where green and black teas have been popular choices. For example, most of the tea consumers in Asian countries and the Middle East look to green tea for health benefits. However, the downside to green tea is that it contains caffeine. Rooibos on the other hand is caffeine-free, and is therefore considered a better and safer alternative in comparison to consuming green or black tea.

Another reason for the surge in popularity of Rooibos tea as an alternative to green or black tea is the taste. For example, Rooibos has a sweet, delicate, and aromatic flavour, and in many global markets, it is considered an excellent base for blending. This has resulted in several brands added to all sorts of herbs, fruits, flowers and spices to create a variety of Rooibos flavours. The taste of South African Rooibos flavours are also enhanced due to climate. Research and experience in the industry has shown that the hotter and drier areas appear to accentuate the flavours and make them more robust, while cooler areas are producing softer and more delicate flavours. The naturally growing Rooibos in Western Cape mountains has more earthly and spicier flavours than the domesticated variety, which is grown by local farmers who are some of the key players in South Africas Rooibos industry. This means that, depending on the evolving tastes of its target market, Rooibos blends and flavours can be adapted in order to meet external demand.

Additionally, due to the fact that approximately 95% of the Rooibos tea exported from South Africa goes out in bulk, and considering that a large proportion of this is a blend of high and low quality, the product is consistent and reliable as a base product to adapt and blend. What is more, the way in which Rooibos tea is packaged helps enhance the taste, too, with the shortcut Rooibos in bags being the most popular amongst consumers, but the long cut variety is only available as loose leaf, which imparts a more delicate floral flavour.

It is evident that Rooibos is increasingly becoming popular around the world; no longer as an obscure herbal tea but as a brand of choice for many consumers in major export markets including the UK, USA, Germany, Japan, and the Netherlands. The US has been a trend setter for health products, and is buying ever more Rooibos. It is even getting mentions in pop cultureRooibos featured in a Marvel comic and then again in the legal drama Suits. Another way this type of tea is increasing in popularity in the global market is thanks to world events, such as in Japan, where the South Africa Rugby national team (the Springboks) won the Rugby World Cup in 2019. As a result of this sort of cultural exchange, and especially in Japan where tea-drinking and an appreciation for nature is deeply embedded in the culture, Rooibos tea brand popularity is expected to increase in leaps and bounds within the Japanese market.

The medicinal, social, and cultural environmental factors are influencing the supply and demand of Rooibos tea in different countries and regions around the world, and so far, most of the consumers of Rooibos tea are in Africa and the Middle East.

Key players in the Rooibos industry The major suppliers in the Rooibos tea industry include Sunbird, Rooibos Ltd, SA Rooibos, SA Tea, Serengeti Teas and Spices, The Tea Spot, Lady Bonins Tea, Herbes del Moli, Only Natural Products English Tea Shop USA Corp and many more brands in India, Greece, and China. However, it is Sunbird Rooibos Ltd that is one of the key players in South Africas Rooibos tea industry.

Sunbird Rooibos was founded in 2016 by husband and wife team, Anton and Laura Louw, as a family business in South Africas Western Cape Province. Anton grew up on a vineyard outside of Cape Town and used to work as a winemaker. He established the company on his return from a short stay in Nepal and adopted the colourful and boisterous sunbird as the mascot for his quality Rooibos tea brand. The iconic nectar-drinking sunbirds are found in large numbers in the Cederberg Mountains where Rooibos naturally grows. The founders love for both fine flavours and the natural world is the foundation of Sunbird Rooibos. The company is committed to elevating the brand image of Rooibos from a humble staple drink that many South Africans grew up with, to a discerning and nuanced drink that is comparable to acclaimed speciality coffee and traditional teas.

Today, Sunbird Rooibos is proudly the first company in South Africa to offer a range of organically grown Rooibos tea from single-origin sources. Without blending or adding flavourings, these teas represent suppliers unique natural product of just pure Rooibos made distinct by climate, soil, and biodiversity. They are building on this success with a range of blended brands using only natural ingredients. The quality of Sunbird Rooibos is enhanced by their stylish packaging in compostable teabags and sold in beautiful reusable tins or cardboard boxes with a gold filigree border. The packaging has strong focus on promoting reusability, recyclability, and compostability of their products.

Sunbird Superior is a new range of blended Rooibos teas, inspired by the history of the Cape along the Maritime Spice Route. The company is utilising their unique capabilities in establishing strategic partnerships in the Rooibos global value chain. This enables them to source the best international and local spices that help to complement their premium organically grown Rooibos tea.

Rooibos industry benefit-sharing agreement with the Khoisan indigenous people The industrialisation of Rooibos tea has historically been problematic, and change to improve the way the industry works has been slow, particularly in terms of relations between different ethnic groups. The R300 million industry, unique to South Africa, is still largely in hands of approximately 300 white commercial farmers, who cultivate about 93% of the planted areas. For a long period of time, the industry has been controlled by the government during the troubling apartheid years. The indigenous communities, including the San people and the Khoi people, were deeply and tragically persecuted during this time in the regions where Rooibos was grown, including being subjected to genocide and enslavement.

Today, although the past cannot, and should not, be forgotten, efforts to improve relations between communities linked to the Rooibos region are slowly making progress. By November 2019, South Africas Rooibos industry agreed to establish a benefit-sharing arrangement with the indigenous Khoisan people who are credited with the original knowledge of Rooibos before it was industrialized. The key players and stakeholders including South Africas Environment Minister, the National Khoisan Council, the San Council of South Africa, and the South African Rooibos Council, have all signed the agreement to pay the Khoisan communities 1.5% of the value farmers get from their sales, which equates to around R10 million a year (estimated to be over 500,000). The landmark compensation agreement championed by the Department of Agriculture and the Heiveld Co-operative in South Africa acknowledges the indisputable contribution made by local traditional knowledge holders to the establishment of the Rooibos industry. This gesture goes a long way to ensure that the profitable Rooibos industry meets expected and essential standards of corporate social responsibility, and it is anticipated to bring significant material benefits to the Khoisan communities who are still largely marginalised and poverty-stricken. Some environmental and human rights campaigners also argue that the benefit-sharing agreement addresses an issue of dignity and recognition of the intellectual property of the Khoisan as the rightful original knowledge holders of the uses of Rooibos. 1) Why is Rooibos tea so important to the indigenous people in South Africa? (2 Paragraphs) 2) Using PESTEL analysis, discuss the macro-environmental trends and key drivers for the growth of the Rooibos tea in global markets and its broad ecosystem (3-4 Paragraphs).