Q&A: Hong Peng

by

Jiangxi Wuyuan Dazhangshan Organic Food Co.

By Janis Hashe

Hong Peng is responsible for one of the largest Fair Trade certified tea cooperatives in China. A graduate of the Wuyuan Tea School and an expert on organic agriculture, Peng was the first person in China to export organic certified Chinese tea to the West.

Under the “New China” of 1949, Wuyuan green tea could not be sold domestically, only through an external seller and only if labeled simply “China green tea.”  The absence of branding meant that Wuyuan tea was unable to compete with other, better-known brands. 

That changed in the early 1990s. As China moved to export more and more of its products globally, it also adopted the concept of “green foods.” After the inspection of the country’s Agricultural Department Food Quality Inspection Center in 1993, and then successive three years’ detection by the State Green Food Development Center, 53 hectares of tea-growing areas in Wuyuan Dazhangshan were given the “green food trademark, the first of its kind in China’s tea industry,” according to China Daily.

Recognizing the importance of organic certification Hong’s company, Jiangxi Wuyuan Dazhangshan Organic Food Co., Ltd. (JWDOFC), organized a collective tea farm of approximately 800 hectares. In 1996, the company’s teas were certified Class AA Green Food by the Chinese government. In 1997, the company’s teas were certified organic by the European Union and in 2001, by the US Department of Agriculture. The company continues to work with its farmers to ensure organic standards are being met. It has also constructed the 14-hectare Dazhangshan Tea Eco-Industrial Park, which contains tea primary production and refining facilities, technology, research and development facilities, and provides eco-tourism opportunities.

Mr. Hong recently traveled for the first time to the United States to visit the Oakland, Calif. offices of Numi Organic Tea where STiR coffee and tea, speaking through an interpreter, discussed his role in the development of organic, Fair Trade certified tea.

STiR: For more than 1,200 years, the county containing the city of Wuyuan, nestled between the Chinese provinces of Jiangxi, Zhejiang, and Anhui, has reigned as the “golden triangle of green tea.” In the 1990s Wuyuan’s tea farmers were still growing tea in much the same way as their ancestors did: free of pesticides and chemical enhancements. In fact, their system was a naturally organic one. However, the farmers themselves had no idea of a global market for their tea. According to a 2013 article in China Daily Asia, classic teas from Wuyi along with other teas like Longjing in Hangzhou, Zhejiang Province, and Tieguanyin in Anxi, Fujian Province, were known to few outside their traditional growing region.

Explain to our readers how your leadership at Dazhangshan has helped re-establish China as a producer of premium tea.

Hong: Before 1997, all our teas were sold as blends. After 1997, we were able to begin exporting to Europe as single, pure teas. Also, we were now able to label and sell it as our own brand. The quantity exported has increased exponentially, from 200 kgs in that first year, to more than 1,000 metric tons currently. Of this total, 80% is exported to Europe, and 10% to the US These exports are no longer just the original ‘green tea,’ but include Dazhangshan Xianzhi, Chunyun, Ming Mei, Jian Feng, Yun Cui, Extra grade, 1-5 grade, green fannings, gunpowder, half gunpowder, jasmine tea, Sencha tea, and black tea. He said that the company also exports organic herbs, dried flowers and dried mushrooms.

STiR: In 2000, the company established the Dazhangshan Organic Farmers Association, and in 2001, the association joined the Fair Trade Label Organization (FLO), becoming the first Chinese member. Chinese tea laborers are well-paid by international standards and Chinese tea sells at high prices in both the domestic and overseas markets, why then seek Fair Trade price support at levels far below that paid for fine teas?

Hong: Our farms are small. They range from 20 to 100 hectares each, and average 30 to 40 hectares. All are at elevations above 600 meters. They are still family farms. We realized that a cooperative system was very similar to a fair trade model.

It is not just about profit. There is democracy and transparency. They can decide as a group where [profit proceeds] can be used. There has been a big change in living and working conditions. For example, the association has helped build schools, and offered partial scholarships to more than 5,000 children.

Since adopting the fair trade guidelines, the company refunds some of proceeds realized to improve education, production and living conditions for its member farmers. Fair trade practices are being adhered to both on the farms and in the tea processing plants.

Implementation of Fair Trade is possibly also having an influence on whether the new generation chooses to stay on their family farms. In addition to maintaining centuries-old traditions, “there is the possibility of much more income,” he said. “Fair Trade is still a new concept in China.”

STiR: Where will future growth come from?

Hong: In the European and American markets I believe that increasing consumer sophistication about different types of teas, the subtleties of flavor, and correct preparation will help drive increased consumption. Currently, the most popular teas for Dazhangshan in both markets are its gunpowder and jasmine tea varieties.

People are now being exposed to many more choices which means they will buy more tea. Hong was skeptical about the future of pu-erh teas in these markets, indicating he felt it was more of a fad than a long-term trend, and calling some of the teas over-valued. However, he commented, The market can change.

STiR: As you’ve explained that China’s domestic tea market will remain only a minor percentage of JWDOFC’s business, what will it take to expand consumption in overseas markets?

Hong: Marketing is currently dependent on exposure at tea shows and from media coverage, which has boosted tourism.  In 2013, the Chinese government announced an initiative popularly referred to as ‘One Belt, One Road’ (OBOR).  Proposed by leader Xi Jinping, its two components, the Silk Road Economic Belt and the Maritime Silk Road, would combine to increase trade between China and the rest of Eurasia, Oceania and perhaps parts of Africa.

It is primarily a political initiative. This road still exists, and [the OBOR] could potentially result in reopening markets.

The direction I will lead the company is west, to please the palates of Europe and the US.