Price and Sustainability: What is Overpriced Tea?

One of the recent blog posts that I greatly appreciated was Lainie's post about The Price of Tea, which references a great post on the Tea Geek Blog, Whose Tea Is That?, discussing how different companies will sell the same batches of tea (often for different prices). Price is one of my favorite topics, and I think I would like to write about it more than I do, so here goes:



I also think that in the end, being price-conscious as a shopper, not just for tea, but for everything, is crucial to achieving sustainability. Our financial decisions, which include all purchases, shape the organization of labor and distribution of resources in society. When we buy goods for a fair price, we are participating in a normal, healthy economic activity. When we buy undervalued goods, we are often helping to dispose of excess goods or helping a company to regain losses if they have an overabundance of something. But when we buy overpriced goods, we are giving money (and thus power) to someone who has not provided a proportional amount of value. Buying overpriced goods thus is bad for the economy as a whole--that is my philosophy, which I know does not agree with some economists' theories. Economists who would argue otherwise probably argue that consumerism is a good thing, and spending money for the sake of spending it is somehow desirable. Who believes in that? I sure don't.

What is overpriced?

The notion of something being overpriced is necessarily subjective. There are different ways of looking at price and value, and I will outline two of them. In either way, however, the core idea is value. It does not matter so much what the price of something is. For example, with tea you might examine price per ounce, per pound, per tea bag, or even per cup. However, these prices are distinct from value, which is the more subtle and elusive concept of what you're getting for your money.

It's often worth paying more money if the product is better tasting. You might even save money if you are able to make more infusions from a set of tea leaves, or get by with using less tea leaf because the tea is so intensely flavorful.

Value as assessing the quality of good itself:

Arguably the most important aspect, or at least most immediately evident aspect of value is the quality of the good itself. In the case of tea, the quality encompasses the flavor, aroma, and to some degree, appearance and ease of brewing of the tea leaf.

However, value does not exist in a vacuum, and there are other things besides the innate qualities of the good, and its price, which influence value.

Value as relative:

If tea were a very scarce commodity, it would probably command a high price. On the other hand, if it were easy to grow and process in a temperate climate, like mint, it would probably not be as expensive in countries like the U.S. or U.K. Value also depends on possible substitute goods.

The value of a specific type or batch of tea is also dependent on the price and value of similar teas. If you can buy an identical or nearly indistinguishable tea from a different company, you will probably see the higher-priced of the two offerings as overpriced. And if you can buy a similar, but slightly different tea for a much lower price, you are also likely to see the one tea as overpriced as well. For example, the existence of inexpensive but high-quality se chung oolongs often makes me a little pickier about the quality of Tie Guan Yin, and more likely to perceive Tie Guan Yin as overpriced unless it is absolutely top-notch.

Value as holistic economic concept:

There is one more way to look at value, and that is to look at the whole supply chain from the tea growers and harvesters through all intermediate parties to the sale, purchase, and brewed cup. In this paradigm, the value depends not only on the quality of the good itself, and possible substitute goods, but also on the amount of profit taken out of various points in the supply chain, and the effect that the production of the product has on the various communities, people, and businesses along the way.

This way of thinking about value is relatively new, in part because in the past, most if not all of this information was hidden from people buying tea. But with the information age, there is greater transparency, and this holistic view of value is becoming much more popular and widespread, and I actually believe it will eventually become widely accepted in the mainstream. It is this holistic view of value that is the underpinning of the philosophy of fair trade.

The teas that one might classify as "overpriced" can differ hugely if one uses this holistic sense of value, vs. if one uses the conventional sense of value. For example, one might be comfortable paying a modest premium for a tea produced by sustainable methods by a small farmer-owned cooperative. On the other hand, one might be more likely to label a tea as overpriced if one knew that it had a high markup at the point of sale, with only a negligible portion of the sales price reaching the original producers.

What does overpriced mean to you?

How do you personally think about value, when it comes to tea? Do you look at the quality of the tea alone, or do you consider where the tea came from, and the markup involved at various steps of the sale and distribution of the tea?