Carmel Mount Freight Logistics is providing its customers with high quality Kenyan teas. It seeks to fulfill the following benefits that are important to their customers:
• Quality teas
• Differentiated value added teas
• Timely, professional services.
Kenya being main blending floor of black ctc teas and the leading tea exporter in the international market and averages slightly over 65% over the last 3 years. Even as a primary tea exporter, Kenya has not fully tapped into the Chinese, Canadian, and US and new merging markets. Exports to China have grown steadily over the last few years and statistics indicate this market will continue to grow and expand. The Chinese market is also increasingly becoming a diversified consumption market as its people are introduced to new and differentiated types of teas.
Demand for teas in the North American market also continues to grow steadily as tea becomes a preferred beverage that has many health benefits.
New varieties of tea are attracting a new and more discerning customer who is looking for specialty teas to consume and also market to their customers. The growth of new types of teas such as the Rooibos tea from South Africa has increased awareness of unique tea products Carmel Mount Freight Logistics plans to invest and market the newly developed purple tea product that is uniquely grown in Kenya.
The target market for Carmel Mount Freight Logistics is the large tea wholesaler, broker, and packer. These discerning customers want the highest quality of tea. They serve the growing “gourmet” tea market and market to large retailers and many small tea retail stores.
Tea has been a growing industry for the past ten years. The most notable growth has been in the North American and Eastern European markets where imports have increased significantly and the market prices have steadily increased. The number of specialty tea retailers has increased from a handful of companies to thousands of independent entities. There is a constant struggle within this market to produce the best tea and serve one or more niches within the larger market.
The total export volume for the month of November 2018 was 44.47 Million Kgs compared to 37.29 Million Kgs recorded same period of last year, representing a 19% increase. During the month, Kenya tea was shipped to forty one (41) export destinations compared to forty four (44) destinations for the same period of last year. Amongst these markets, Pakistan was the leading export destination for Kenyan tea having imported 16.90 Million Kgs, accounting for 38% of the total export volume. Other key export destinations for Kenyan tea were Egypt (6.50 Million Kgs), UAE (4.71 Million Kgs), UK (4.09 Million Kgs), Sudan (1.96 Million Kgs), Yemen (1.53 Million Kgs), Bangladesh (1.41 Million Kgs), Afghanistan (0.93 Million kgs), Kazakhstan (0.73 Million Kgs) and Russia (0.70 million Kgs). The ten export destinations, most of which which are traditional markets for Kenyan tea accounted for 89% of Kenya tea export volume. Most the traditional markets recorded higher tea imports from Kenya except Egypt, Sudan and Russia that recorded lower imports. Emerging markets that recorded significantly higher tea imports from Kenya included Bangladesh, Nigeria, Turkey, Japan, Canada, South Africa and Germany. The total export volume for the period January-November 2018 was 439.46 Million Kgs compared to 388.87 Million Kgs recorded same period of last year.
Local tea consumption for November 2018 stood at 3.61 Million Kgs against 3.63 Million Kgs for the corresponding period of 2017 while cumulative tea consumption for the eleven-month period stood at 33.45 Million Kgs against 37.63 Million Kgs for the corresponding period of 2017.
Kenyan tea producers and exporters have made great efforts to improve agricultural techniques, processing methods, and distribution in order to better serve this growing market. Demand for quality pesticide free teas is currently greater than supply.
The following SWOT analysis captures the key strength and weaknesses within the company, and describes the opportunities and threats facing Carmel Mount Freight Logistics Kenya Ltd.
- Proven track record as a coffee exporter with a well-established organization structure
- Strong industry relationships; with tea growers, and wholesalers and retailers in Chinese and North American markets
- Ability to source and purchase highest quality teas
- Capability to invest in sophisticated technology that drives production costs down while ensuring quality
- Costs of doing business with overseas firms while Carmel Mount Freight Logistics is located in Kenya
- Availability of unique purple tea product is limited to a few producers
- Limited marketing budget, necessary for Carmel Mount Freight Logistics awareness to overseas
- Participation within a growing industry
- Opportunity to have a presence of our tea products and to create a virtual online presence to generate awareness and market products with websites such as: go4WorldBusiness, Tradekey.com, Alibaba.com very vital
- The ability to increase the profit margin through the leveraging of technology
- Tea is a universal beverage with a growing market with Europe, Middle East, Russia, Pakistan each country consuming average of 4 cups per day accounting for 3 to 4 million cups in a day.
- Tea is a commodity traded on the international market and is subject to fluctuating demand and supply
- Incremental costs associated with international trade
- Competition from large corporations like Starbucks who are seeking more vertical distribution channels
Carmel Mount Freight Logistics deals in the exportation and sale of tea products. There are approximately over 200 Tea firms dealing in Tea businesses in this market. However, approximately one-quarter of the companies account for approximately eighty percent of the total amount of tea exports. In addition, many of these companies prepare, export, and sell, both to the local market as well as the international market. Most of these companies are multinationals with extensive markets and distribution networks where by Carmel Mount Freight Logistics should have a share of cake .
There are several tea products currently produced in the Kenyan tea market and include black, green, orthodox, oolong, white, and purple tea products. They all are produced from the tea shrub, Camellia Sinensis, and processed in uniquely different ways. The most popular and common tea product is black CTC tea. Carmel Mount Freight Logistics intends to specialize in the export of black tea, orthodox, oolong, and purple tea products. There is a large and increasing market for these specialty teas.
By providing the finest species of teas, Carmel Mount Freight Logistics has taken the first step towards a differentiated products. To further distinguish their tea Carmel Mount Freight Logistics adheres to higher quality standards than approximately ninety-five percent of the market. Carmel Mount Freight Logistics intends to position itself as a specialized provider of these exceptional teas. The customers will recognize Carmel Mount Freight Logistics for the ability to provide the type of teas they require to market award winning tea beverages.
Carmel Mount Freight Logistics mission statement is to provide the finest quality and freshest Kenyan specialty teas available. We exist to attract and maintain customers. With strict adherence to this maxim, success will be ensured. Our products will exceed the expectations of our customers.
Keys to Success
The keys to success for Carmel Mount Freight Logistics are:
- Establishing and maintaining working relationships and contractual agreements with all importers and wholesalers globally.
- Creating a recognized and valued brand of specialty Kenyan tea. These teas will be packaged and branded in Kenya to meet international standards.
- Increasing Carmel Mount Freight Logistics profit margin with the use of improved technology in the new facility.
- Effectively communicating, to current and potential customers Carmel Mount Freight Logistics position as a differentiated provider of the highest quality Kenyan tea.
1. Acquire a core group of customers from Overseas clients.
2. Quarterly increase new customers who are turned into long-term customers and maintain positive, steady growth each quarter
3. Get Fair Trade certification.
4. Position the company as a supplier of sustainably grown, and Fair Traded teas in Kenya
5. In 3 years, sell at least 50% of all teas under own brand and packaging
1. Increase the profit margin by 15% every two quarters.
2. Hold spending, as a percentage of sales, at a specific level.
3. Decrease the overhead fixed costs as a percentage of sales.
The potential customer groups for Carmel Mount Freight Logistics are:
- All importers of Orthodox and Oolong tea, black ctc tea, purple tea, green tea,
- All importers of specialty teas close the globe
- Future potential markets include Russia and Commonwealth of Independent States, countries in the Middle East, and Western Europe.
Carmel Mount Freight Logistics marketing strategy will primarily focus on direct selling to importers and wholesalers and building strong relationships with these customers. Carmel Mount Freight Logistics will capitalize on existing relationships with importers who have stated their willingness to recommend Kenyan specialty teas.
High quality tea distributor
Carmel Mount Freight Logistics has positioned itself as a differentiated provider of the highest quality Kenyan specialty teas. The primary goal of the marketing efforts will be to communicate this to existing and potential customers.
Carmel Mount Freight Logistics will position itself as the high-end specialty tea distributor of Kenyan teas in China and North America Carmel Mount Freight Logistics will only sell the highest quality and freshest quality teas, recognizing that tea is traditionally a commodity. It will leverage this competitive edge to achieve the desired positioning.
Carmel Mount Freight Logistics competitive edge comes from the advantage of having established relationships with Chinese and North American importers, and its own tea growing estate and a large out grower’s scheme – through the parent company. Carmel Mount Freight Logistics has received affirmation of the demand for their product in the form of requests from importers for larger product shipments.
Socially responsible company
We will position the company as one that is involved in and cares about the communities in which it does business. Today’s consumer especially in the North American market wants to affiliate with and buy products from company’s that make a change in their communities. Our approach will be profile the work we do in the communities where our tea comes from and ensure that our customers and consumers of our products see the difference that their investment in our product is making. Research shows that a shift and emphasis on a stakeholder-centric approach has improved the marketability of many similar products. Most multinational companies today highlight the work they are doing on various communities. With our presence in and connection to the local communities we have a very compelling story that highlights local companies making a sustainable difference.
Sustainable agricultural practices
Tea naturally lends itself to cultivation through sustainable practices. There is shifting consumer preferences regarding the quality of the products they purchase and growing awareness and concern of climate change and consumers now want to be assured that the products they purchase are produced and processed safely. We will highlight how our teas are grown using sustainable agricultural practices that positively impact the environment.
Media, especially international media, profile and have raised concern about land degradation and deforestation in Kenya. With our parent company embarking on a project to plant trees both as a fuel resource and to add value to the landscape, there is an opportunity to further highlight the sustainable agricultural practices the companies are pursuing.
Long term the companies will pursue certification from the Rainforest Alliance. Rainforest Alliance certification encourages farmers to grow crops and manage ranchlands sustainably. The certification system is built on the three pillars of sustainability — environmental protection, social equity and economic viability. The Rainforest Alliance seal is a prestigious and recognized badge that can be used to market products.
Fair trade principles seek to ensure farmers get a better deal – this includes better prices and longer term more meaningful trading relationships. Fair trade label signifies to “conscious consumers” in developed nations – those who care about the environment, health and fair labour standards, that farmers in developing countries receive a fair price for their crops. Products sold under the fair trade label help these consumers identify products that meet their values so they can make choices that have a positive impact on the world and they are happy to pay more for the products.
Awareness for fair trade products is increasing in North America with at least 40% now aware of the fair trade label. Big chains like Starbucks, McDonalds, and Dunkin’ Donuts now offer fair traded coffee.
Research shows that adding a fair trade label on packages and products can boost sales. As a company we will seek fair trade certification as one of our marketing strategies that will differentiate our products from those of other Kenyan tea suppliers.
The import market largely determines the price of the tea product by the process offered at the tea auction in Mombasa. We will offer our customers competitive pricing.
Our pricing will focus on penetration pricing with a pricing objective that seeks to maximize long-term profits and revenues for the company. The company will do this by increasing its market share and lowering costs.
Our sales objective is to ensure our customers recognize Carmel Mount Freight Logistics as the premier supplier of Kenyan specialty tea globally, sales and marketing strategy will seek to first create customer awareness regarding the products offered, develop the customer base, and work towards building customer loyalty.
The message that Carmel Mount Freight Logistics seeks to communicate is that our name is synonymous with the highest quality specialty Kenyan teas available. This message will be communicated through a variety of methods. The first method will be the development of strategic relationships with buyers and sellers of Carmel Mount Freight Logistics products. We recognize that developing close, communicative relationships with clients is very important to maintaining a high quality, sustainable business. We will make sales inquiries to many potential customers and understand what products they are looking for and then offer them products that will help their business succeed.
Tradeshows & Exhibitions
Trade shows are a great source for developing business-to-business contact in the tea industry. They are ideal to show case products and also an opportunity to generate sales leads with potential customers and help generate a customer database. They are also a great way to advertise to a target market and create brand awareness; are cost effective as one can reach a many customers at relatively low cost, and are a direct medium for face-to-face interaction to collect feedback on a new product or company.
We will attend tradeshows in key strategic markets and utilize these opportunities to better understand the potential customer needs. In 2103, we plan to attend the following tradeshows:
• World Tea Expo in Las Vegas, Nevada, USA
• The Canadian Coffee & Tea Show, Vancouver BC, Canada
• Tea & Coffee World Cup Europe, Warsaw, Poland
Joining trade associations is another strategy that we will use to ensure that we connect with a broad cross section of potential customers. Trade associations and trade publications are excellent sources for industry specific data and contact information.
We will ensure we are active participants in these associations and are regular contributors to publications and other opportunities.
We have a focused and well defined digital strategy that will include a robust website which allows interested parties from around the world to view a wealth of information regarding Carmel Mount Freight Logistics our products, the production methods, and other information.
Our website will be a key tool to position our company and build awareness of the company and products.
Carmel Mount Freight Logistics Will also use advertisements placed in industry journals to increase brand awareness.
Another method will be the use of printed sales material. The material will detail all of the different products that Carmel Mount Freight Logistics sells.
Distribution- the following flow chart illustrates the overall industry surrounding the distribution patterns of Tea and specialty beverages. Our strategy falls into the level highlighted in yellow. Brokers, exporters, and master distributors who in turn provide the product to direct distributors and other wholesale suppliers in the different markets source their product from producers or manufacturers. Other manufacturers allow distributors and suppliers to purchase product direct – depending on the quantity of product being purchased. Product is then distributed or sold through cash and carry wholesale stores to retail businesses as illustrated below.
To ensure that we can offer a vaLue added product we will export our product and set up distribution outlets or form distribution partnerships in our target markets. This will be the only way to ensure that our products is uniquely marketed to the consumers as a pure Kenyan tea and that we can successfully promote.