Kenyan
tea market
East Africa's tea production history
Amount of tea produced in Kenya in 2021
Exported
In 2020, Kenya exported $1.2B in Tea
making it the 3rd largest exporter of Tea in the world.
In August 2021, the export value of tea in Kenya decreased to some 9.9 billion Kenyan shillings (KSh), approximately 88.7 million U.S. dollars. In the previous month, the amount was measured at 9.2 billion KSh (roughly 82 million U.S. dollars).
The commodity is a major foreign exchange for Kenya. The country is also one of the leading exporters of tea in the world.
The main destinations for Kenyan tea
The fastest growing export markets for Tea of Kenya between 2020 and 2021;
Pakistan purchased tea worth $350.9 million (Sh39.8 billion) at the Mombasa auction in the 10 months to October, cementing its position as Kenya’s leading market for the beverage.
Kenya imports tea primarily from;
Imported
In 2020, Kenya imported $59M in Tea
becoming the 36th largest importer of Tea in the world.
At the same year, Tea was the 63rd most imported product in Kenya.
The fastest growing import markets in Tea for Kenya between 2019 and 2020 were;
Auction Price
USD 2.53
/ Kilo
But the average export price of tea had stagnated at between $2.50 and $3 (Sh285 and Sh342) per kilogramme between 2011 and 2018 before suffering a decline to average between $2 and $2.20 (Sh228 and Sh285) between 2019 and 2021.
top 10 Kenyan tea exporters
Tea production
in Kenya
Tea is grown in the highlands located within the West and East of Rift and on higher altitude of between 1,500 metres and 2,700 metres above Sea Level.
Kenyas 19 tea-growing counties;
Nakuru
Narok
Kericho
Bomet
Nyamira
Kisii
Kakamega
Bungoma
Vihiga
Nandi
Elgeyo Marakwet
Trans-Nzoia
Kiambu
Murang’a
Nyeri
Kirinyaga
Embu
Tharaka-Nithi
Meru
Tea producer categories
60%
small rural farms, called smallholdings (or shambas)
The task of managing the small-scale holder lies with the Kenya Tea Development Agency (KTDA).
66
tea factories
600,000
small scale farmers
100,000 ha
of total cultivated land
large company-run plantations
Kericho Tea Plantation
It's one of the major tea plantation regions in Kenya and is home to the largest plantation in Africa. It has been grown there since 1924.
156,720 ha
cultivated area
345,817 mT
production
325,533 mT
export
40%
labour
In most tea growing regions, labor is manual
Tea plucking machines are currently being used by multinationals.
small scale tea supply chain
fresh picked tea leaves are delivered to the factory
tea processing factory
as an outgrower or member of a sacco
marketing
direct local sales
These are tea sales directly to local suppliers who buy the tea in bulk then repackage it in small
quantities.
3%
factory door sales
These are sales mostly done at the factories tea shops. The major buyers are the small-scale tea
growers who buy the tea at subsidised prices in small volumes.
2%
direct sales overseas
These sales made directly to the buyers situated in overseas countries.
14%
Mombasa
auction
The Mombasa Tea Auction is one of the eleven tea auction sites across the globe. It is held every Monday and Tuesday, with tea from up to nine East African countries available for buyers from around the world.
79%
blenders & packers
retail - consumer
Processing Black Tea
CTC tea is popular for making tea blends
Much of the tea grown in Kenya is processed using the crush, tear, curl method, making it suitable for use in blends popular in most black-tea markets, including India, Britain and North America.
CTC tea has a homogeneous taste and a strong generic, bold "tea" flavor and is the base of most tea blends as well as a significant portion of breakfast teas.
Fresh picked tea leaves
sunned wilting
indoor wilting
crushing, tea, curling of the leaf. Breaking of the leaf cells allows oxidation to start.
oxidation
bruising
rolling
CTC with full oxidation
drying
Kenyan Black Tea Grades
Higher-quality Kenyan teas are processed using traditional methods (e.g. picking of the tender leaves and bud cyclically, these being allowed to dry and oxidize), and are often highly sought after "single origin" whole-leaf teas.
Grading by size
Although grading systems vary, the size of the leaf or broken pieces is an essential quality. Size is an important factor how tea is prepared as a beverage. In general, larger leaves or pieces require a longer steeping time. Also, if measured by volume, the larger sizes need more tea to produce the same strength beverage.[4]
Grading by appearance
Some teas are graded by their appearance. Whole leaves are easier to grade by appearance than broken pieces.[5]
Leaves and granules
BP1: Broken Pekoe 1 forms about 12–14% of the total production. It has the largest size. The liquors are a bit light in body but with encouraging flavouring characteristics
PF1: Pekoe Fanning 1. This is about 58–60% and forms the bulk of the production. It is mahas traces of black tea and large amount of smallish cut fibers often sifted out of the primary grades. F1 forms about 3–4% of the production and quite useful in tea bags due to its quick brewing, strong flavor and good color.
Fine particles
Fine particles
PD: Pekoe Dust. It forms 10–12% of the production, often black and finer than the PF1 often with thick liquors and aroma.
Dust: Made up of tiny bits of broken leaf often used to brew strong tea quickly and popular for the tea bags.
Dust 1: This is made up of the smallest particles and form about 4–6% of the total production.
Kenya's Domestic Tea Market
The local consumption of tea in Kenya accumulated to 11.3 million kilograms from January to April 2021.
In 2020, a total of 40 million kilograms were sold domestically. That represented a significant increase from 2010, when local sales reached nearly 19 million kilograms.
Most popular beverages among Kenyans
Tea is by far the most consumed beverage by households in the sample, beating water and dairy of tea.
Hot Beverages Market Retail Value Share
Local manufacturers, such as Kenya Tea Packers (Ketepa), reign over the tea, while Nestlé is the overwhelming leader within coffee in Kenya thanks to its popular instant coffee brand Nescafé
Leading Local Tea Brands in Kenya
Loose tea is notably cheaper than tea bags on average but 62% of consumers surveyed, particularly younger age groups, reach for tea bags when buying their favourite hot drink.
Consumer preferences and shopping habits
74% of Kenyans drinking at least three cups of tea a day
an average of 4.6 cups per day
most tea drinkers consume one to two cups in the morning
2/3 of tea consumers prefer other dinks, including water, soft drinks and others during lunch
household consumption
Kenyan consumers replenish tea supplies several times a month or more often
retail
Supermarkets and hypermarkets are key destinations for hot beverages purchases
Tea and coffee are the most common hot drinks consumed by both foodservice, including restaurants and hotels, as well as institutional and corporate organisations
Institutions and corporate organisations consume locally produced black tea bags, but prefer imported instant coffee for use in their premises with powdered hot drinks not universally offered. Ketepa for tea and Nescafé for instant coffee were most frequently mentioned as the brands of choice.
Corporates spend around KSh380
(US$3.70) monthly - more per person per month than public institutions.
Breakfast (7-11am) and early evening after work (4-8pm) are prime times for the consumption of hot beverages in both foodservice and hospitality establishments surveyed in Kenya.
Market leading tea brands Ketepa and Kericho Gold along with Nescafé instant coffee dominate foodservice.
Kenya is the major tea and coffee trading hub in East Africa but even here little processing occurs and trade
flows remain overwhelmingly oriented towards bulk exports of semi-processed tea and green coffee
key developments
Innovation through packaging and branding
product diversification into other high quality teas by private labels
Innovation by local players, who also maximise on trade relations to export their products, is expected to
create a new pool of consumers. Fierce competition within the market is also foreseen to push local and
international leaders, among them Nestlé Foods Kenya, to add value in packaging and taste.
“Made in Kenya” claims are quite prominent on several tea and coffee packages. However, the absence of
a standard label for claims on provenance across locally produced brands suggests it is not a major factor
for brand differentiation used by manufacturers. “Coffee Kenya”, a trademark for Kenya Arabica coffee
registered by the Coffee Directorate in Kenya and globally, is the exception. Consumers also did not rank
buying local in their top five purchasing criteria for hot drinks.
social-economic factors impacting growth of Kenyan tea
innovaton
49+
varieties so far have been developed by the Tea Research Foundation of Kenya (TRFK).
No chemicals are used.
Fertilizers are regularly added to replenish soil nutrients.
factors restraining
growth
TBK says 10 markets — Pakistan, Egypt, UK, UAE, Sudan, Russia, Yemen, Afghanistan, Kazakhstan and Saudi Arabia currently take up 85 per cent of Kenya’s tea exports, exposing farmers to concentration risk.
“One of the key contributory factors to lower earnings is over-reliance on a few export markets. Kenyan tea has a narrow market base as almost 85 per cent of the exports are destined to these 10 markets,” says TBK.
factors driving
growth
Product Diversity
Kenya produces over 450 million kilogrammes of tea annually, out of which 91 per cent is exported and nine per cent is consumed in the local market. The cut, tear and curl (CTC) is the most dominant method of tea processing in Kenya.
Depending on the fermentation process, CTC teas are categorised as black, oolong or green.
Kenya’s production of Oolong and Green teas is very small, with CTC black tea accounting for 99 per cent of the speciality teas.
“The main reason for lower earnings from tea exports by Kenya is less export value attributed to selling in bulk as opposed to value-added form,” says TBK.
Kenya will face challenges breaking into these new markets without adding value to the tea it exports.
Kenya’s tea market share, outside the top 10 markets, is low and mostly dominated by competitors mainly Sri Lanka, India and China.
While these markets mainly prefer the orthodox and green teas, the market penetration of the Kenyan orthodox and green teas is low.
market opportnities
how do you categorize and structure market opportunities
Demand for More Sustainably Produced Tea Is Growing and Could Help Address the Sector’s Challenges
Insights