I. Title
Strategies of Advancing to the Foreign Market and Development of Products in Green Tea.
Ⅱ. Objectives of the Study
The purpose of this research is to establish the export market penetration strategy for green tea and suggest appropriate export items(leaf tea, tea-bag green tea and powdered green tea) for the local needs in the face of extensive international market liberalization. Recently, with a wide recognition as a healthy food, the growing interest and consumption for green tea promise bright market opportunity. It is projected that the future of green tea is highly promising. In addition, the green tea is a highly value-added economic crop that plays an important role in promoting local economies with the development of various processed products and provides opportunity for production site tourism. However, the Korean green tea industry is still at the initial stage of industrialization and future trade liberalization pose a serious threat of the market share erosion.
In this context, this research attempts to set up an export market penetration strategy by delving into problem of domestic green tea industry, the current status of major green tea exporters and importers. Further, this research suggests the directions of export product development by developing green tea cultivation and process technologies targeting foreign consumers' preference.
Ⅲ. Results
First of all, comparing with major green tea producing countries such as China and Japan, the Korean green tea industry stays behind from these countries in terms of price, quality competitiveness and product development. The tea breeding is still in an early stage and the production per acreage is comparatively lower than that of China or Japan due to slope cultivation. In cost of production, China is 27% of that of Korea while Japanese major producing centers such as Shizuoka and Kagoshima are 65% and 35%, respectively. The Korean green tea industry is mostly composed of small businesses, which means that they tend not to secure sufficient capital and technologies. As a result, the Korean industry has dull competitive edge in processing efficiency and quality control. In particular, the manufacturing process based on small scale roasting methods is disadvantageous in terms of the cost of production and product quality such as hygienic product management.
Secondly, international market structure shows that China, one of the major exporters, exports 70% of its green tea products to Asia and Islam countries and also exports oolong teas to Japan and Southeast Asia. Since the Chinese tea makers rarely export tea leaves under brand names, their competitive edge lies in price competitiveness. This implies that Chinese tea industry has inadequate investment on science, technologies, and high value added products.
Japan dominates international green tea market with its outstanding manufacturing systems of scale, mechanization and automation. Korea tea industry would face serious competition if Japanese makers export tea products from their large tea plants in China and Vietnam to Korea via Japan. However, the food safety issues from pesticide residuals and others act as a barrier to the Japanese green tea export.
One of the major exporters, Vietnam is becoming a key tea exporting country with foreign joint ventures and investments. As the country has quality natural resources and cheap labor, it is expected that the country has a promising place for direct investment and development.
The U.S. and Europe have been major green tea importing countries. With a growing interest on green tea, their consumption of tea leaves will increase in the near future. Especially, the U.S. market has a great potential for green tea. The U.S. market prefers products which are convenience orientated soft drinks and tea bags. Therefore it is necessary to improve container designs of teas for better appearance and easy handling of local consumers. Furthermore, it is required to carry out various promotional activities such as Korean tea ceremonies, regular sampling sites(tea house) and so on for lifting local awareness on the Korean green tea.
Thirdly, according to the survey on consumers in Japan and the U.S., the Japanese market is a traditional tea leaf market that prefers teas in the common price range. The Japanese market tends to favor green tea with strong taste and vivid green colors. The consumer awareness of the Korean green tea was very low, indicating more systematic promotional activities are essential in the market.
On the other hand, the U.S. market still prefers soft drinks to tea and its consumers prefer tea bag to tea leaves. Also, the U.S. consumers generally satisfy with the scant of green tea but they tend to have negative opinions on its colors and tastes.
Fourthly, for a successful introduction of the Korean green tea into international market, it is necessary to establish an export base to develop a various products and package designs that would meet local demands and secure specialty shops of the Korean green tea. At the same time, it is required to build export and information support systems, which concentrate on promising green tea importing countries and support product promotion with cultural activities.
Fifthly, the results of lab experiments for developing green teas that meet global consumers' tastes are as follows: To improve the green tea quality of green tea, it is recommended to expose green teas to sunlight so as to increase both quality and quantities. During the tea processing, it is better to dry the tea leaves after steaming than traditional drying and heating processing as it enhances the form, color, fragrance and taste. In addition, to produce high quality tea bags for export, it is ideal to mix 30～50% of unpolished rice in green tea for adding savory flavor of the unpolished rice. Mixing rice also mitigates and smooth the bitter taste of green teas. For the filter paper, high quality gauze was better than non-woven fabrics tea bags. For the high quality powdered green tea, it is better to screen the sunlight than the expose. During the second period, screening the light for 20 to 30 days increases the quantity of chlorophyll and produces better leaves in terms of form, color and tastes. The processing method for high quality powdered teas was to steaming for 40 seconds in 100℃ and drying them for 90 minutes in 80℃.
Ⅳ. Suggestions
Currently, as the Korean green tea industry is at the initial stage of international market penetration, it is recommended to seek a niche market rather than pursuing its own market expansion. With high-price & high-quality export strategy, the Korean green tea makers should focus on the establishment of specialty shops targeting middle or higher income consumer groups and induce quantitatively small but high price sales of the quality Korean green teas so as to create the premium image.
On the other hand, as there are various ranges of green teas, it is essential to develop products that meet the international consumers' preference while retaining our unique characteristics as Korean products and to accelerate global marketing efforts by continuous promotional activities. At the same time, to make an inroad to overseas mass markets of lower quality green teas, it is necessary to consider direct investments in countries like Vietnam and China where the costs of production for green tea is cheap.