Why Is Tea Barely Grown in The United States?

The simple answer is: no, at least not in large quantities. While there are some small farms in the United States, they produce very little quantities.

Where is Tea Grown in the United States?

Here’s a list of tea farms in the US which are mainly based on the South East and some on the West Coast. Most farms are small in scale and are often in the beginning / experimental phase. Some produce different agricultural products while testing tea production. At last, others have a touristic function to make them economically viable.

A major question is ‘why’? What are the historical reasons why the United States barely grows any tea, while there’s plenty of land. Moreover, the South East part of the US seem to have a suitable climate on paper.

Commodity Tea is a Low Margin Product

Growing commodity tea, such as crushed tea (CTC tea), used as raw ingredients for tea bags and tea beverages, is a very low margin product. Wholesale tea prices from India and China could be just a few dollars per kilogram (2.2 lbs).

The US has already a long time ago moved much further up the value chain, producing other agricultural products that fetch more profit margin (and for which is more demand locally).

In fact, the 18th and 19th century the US as attempted to commercially grow tea, but found out that the cost was a multiple of what it would cost to make in Asia.

Artisan Tea Production & Labor

Then you have artisan tea, which does fetch very high prices (i.e. 100-500$ per kg) if you’ve the right soil conditions, and if grown and processed correctly. However, artisan tea is very labor intensive, thus it would be better to produce artisan tea in countries with suitable climate and low labor cost.

Machines can’t replace all the processing steps of artisan tea. Especially picking tea leaves based on a specific specification (e.g. 1 bud 2 leaves), can’t be done precisely by machines today.

This is why the United States produces lots of soybean and mais, because these can be produced more efficiently with less labor.

Besides, artisan tea production is more seasonal compared to commodity tea. Thus, it would require seasonal workers. Generally artisan tea is harvested during Spring time (March – May). Finding seasonal tea pickers and processors is a bigger challenge in the US relative to many Asian and African countries.

Proximity of Demand

One important factor is proximity of demand. A lot of artisan tea is produced in China and Japan, because of the large local demand. For companies that have ambition to produce premium tea, it would make a lot of sense to be closer to where the demand is.

What about the labor costs in Japan? The labor cost are similar if not higher than in the United States. Yet, Japan still produces tea, and is able to sell it good prices. The reason is simple: there’s so much demand in Japan for premium tea and the tea consumer is willing to pay more for better.

Soil Conditions

Having the right climate is just a prerequisite to make growing tea possible. One still needs to identify the right land and soil condition that can grow good tasting tea. The rocky region of Wuyishan in China for example grows wonderful tea with unique mineral notes. In the US, such regions still needs to be identified, and this is often a matter of trial and error.

Artisan Tea Production Expertise

At last, a big challenge is to find skilled labor. For some regions in China, they whole economy is focused on the tea industry. Tea gardens are more able to find employees who already know how to pick, process, blend and pack tea.

In the US, if one wants to organize this at large scale, newly hired staff would need to be first intensively trained.

The Future?

It’s of course possible to revisit this business case of commodity tea, as the production of commodity tea can today be done with lots of robots and machines. When commodity tea can be produced at reasonably low prices, it could work in the US, because there’s a lot of demand for raw ingredients for tea bags and pre-packed iced tea beverages. Moreover, with commodity you’re less reliant on soil conditions and skilled staff.

The demand for artisan tea in the US, whilst growing, is by far not large enough to make production economically viable. We expect artisan tea to be still imported from other countries in the future. This can change if artisan tea can achieve the status and demand levels of good wine or coffee, but this looks unlikely at the moment. Exceptional advancements in tea picking & processing machines, could change the outlook, but this also does not look likely in the near and medium term.

At last, an important factor that we’ve not discussed yet is environmental sustainability. This is becoming a more and more important theme, which can further support the idea of tea production in the US.