THE growing rooibos industry is investigating a number of avenues to remain sustainable and profitable, including looking at adding value for the export market.
Rooibos is the only segment of the local tea market that is growing and represents about 22 percent of the total market in terms of volume and nearly 24 percent of sales.
However, rooibos is difficult to grow. Efforts to grow the bush in the US, China and Australia have fallen flat and, on the local front, climate change remains one of the biggest challenges.
The Cederberg, where rooibos grows naturally, is expected to get hotter and drier as climate change takes hold. There are fears that this change could affect the size and quality of the crop.
Johan van den Berg, a specialised crop insurance manager with Santam, said the industry boasted a R600 million annual turnover and employed 4 500 people.
Ninety percent of harvested rooibos is exported in bulk. Germany remains the biggest export market, but the rooibos is often processed there and then re-exported to other markets. American beverage chain Starbucks sells vanilla rooibos “herbal infusion” and Nestlé sells rooibos-flavoured yoghurt.
The Netherlands government has now provided funding to explore ways for the local industry to develop new rooibos products, and the race is on to find ways of adding value to the tea-like herb.
About 14 000 tons of rooibos are produced annually and just under half of this is exported, mostly to Germany, as Hamburg is Europe’s major tea market. Exports have declined from a peak of more than 7 000 tons in 2008 to just under 6 000 tons last year. Production is cyclical and influenced by weather conditions.
Willem Engelbrecht, managing director of the Big Five rooibos company, said another factor was that while the value of exported tea increased by an average 26 percent year-on-year between 2005 and 2009, more than 90 percent was exported in bulk, with little value added.
An international study is under way, funded by the government of the Netherlands, to investigate how to improve rooibos’s export competitiveness.
At home, the rooibos industry provides thousands of jobs and is labour-intensive, with a lot of work done by hand, mainly by non or semi-skilled workers. It is a significant employer in the Cederberg area, which is recognised by the government. One of the key action points in its Industrial Policy Action Plan is to promote the export of value-added rooibos products to sustain and grow employment opportunities in the sector.
Van den Berg said a 2011 Eden Study undertaken by Santam in partnership with the CSIR, UCT and World Wide Fund for Nature outlined risk drivers, or causes, which could be influenced to reduce risk and improve the climate resilience of communities. “Rooibos is a specialised crop that only flourishes in dry and sandy soils, specifically those found in the Cederberg,” he said.
He has urged farmers to invest in genetics so they can grow resilient crops. Although he concedes that as the bush is difficult to farm, genetic selection may not be as easy as maize or wheat.
Van den Berg said conservation farming was another new avenue that could improve the water-holding capacity of the very sandy soils where rooibos is produced.
Locally, according to AMPS, most rooibos is consumed by the 15 to 24 age category, although consumers over 50 buy much of it. Women comprise 60 percent of the market and sales tend to emulate population demographics, with black consumers drinking more than any other group. About 33 percent is sold in Gauteng. Together, North West, Limpopo and Mpumalanga account for 27 percent of sales and KwaZulu-Natal 11 percent. The Western Cape and other provinces account for 29 percent of rooibos sales.
A new taste wheel available means that, like wine, rooibos can now be categorised according to smell and taste notes.