Why Great Tea Doesn't Come Cheap: Digging Into the High Mountain Economy

Why does this gyokuro tea cost $1000 a pound? Vicky Wasik

Tell me if this has happened to you. You're in some sort of specialty shop—an antiques dealer, maybe, or an electronics store—and you pick something up that catches your eye to take a closer look. Then you notice the price tag, which has a couple more digits than you'd ever imagined. Your heart skips a beat and you put the thing down very, very carefully, before the ceiling caves in.

As you start exploring tea shops, this happens more often than you'd think. And you may have no idea why something eye-poppingly expensive costs what it does. After all, tea is tea, all leaves from the same plant; how could one type cost five, 15, or 500 times more than one you'll find in a supermarket? And can it really taste that much better?

Most of us get that high quality, boutique things generally cost more than their lower grade commodity alternatives. But for Westerners, tea often occupies a blind spot, and people who wouldn't blink at spending $25 for a bottle of wine can't fathom spending $10 for an ounce of tea that may last them weeks.

So let's take a peek behind that blind spot. You could write a book about the weird, weird world of pricing in the global tea market, but this basic primer should help you understand just why some tea comes with hefty price tags, and how those price differences translate into what you drink.*

A blanket disclaimer: The tea industry is enormously complex, and there are exceptions to everything, so the broad brushes I'm about to paint with will invariably get something wrong. To keep things simple from the start, I'm not even going to touch on post-production vendor markups.

Big Scale vs. Small Scale

Max Falkowitz

Tea is an agricultural product, and like any other, it's all about economies of scale. The tea most Westerners are accustomed to drinking is grown, for the most part, on large plantations all over the world, from India to Kenya to Vietnam. These plantations excel at growing vast quantities of tea, harvesting it cheaply with imprecise machines or poorly paid (and often mistreated) labor, processing it to low-yet-drinkable standards, and distributing it through vertically integrated channels by the ton.

This is the best way to grow the greatest amount of tea for the cheapest price, which for most consumers is all that matters. It produces a decent cup of tea, just like cottony winter tomatoes make an acceptable salad ingredient. And if all you've ever had is those bland pink tomatoes, you wouldn't have reason to question the system that gets them to your market.

But good tea—the equivalent of a scarlet, bursting-with-juice tomato still warm from the garden—usually comes from smaller farms that hold their production methods to higher standards. With small farm size comes greater control over your plants, more regional distinctions in tea varieties, and more precise processing. It also means higher costs at every step along the way.

The Cost of Growing Good Tea

Experienced pickers pluck only the best leaves without tearing them; machine harvesters can drag in woody stems and broken, oxidized leaves. Max Falkowitz

The small scale tea farmer has their work cut out for them. Andy Kincart, the sourcing director of the Taiwan-based Eco-Cha, gave me a rundown on some of the costs small farmers have to incur. If you don't own or inherit land to grow tea, you have to buy it or lease it out. If you're in China, this is especially tricky, as the government's communist roots make owning land difficult for some small farmers.

Once you have your land, you have to sow seeds, then wait several years, earning no income, while the bushes take root and mature. You have to secure clean water—not a given in countries with poor environmental regulation. You have to pay for general maintenance: weeding, pesticides or organic pest-deterrents, and building out a space to process your leaves.

Then there's the cost of harvesting. Most good tea is picked by hand rather than machine. Machines are imprecise, harvesting low-grade leaves and bland stems while chopping up leaves; skilled pickers know how to best pluck leaves to keep them intact and flavorful. But good pickers don't come cheap, and as remote tea-growing regions in countries like China and Taiwan modernize, fewer experienced pickers are choosing to remain in the business, which has driven the cost of labor even higher.

Unskilled roasting can ruin good leaves. Tea roasters will spend eight to 10 hours a day hunched over pans like these, drying tea leaves with their hands. Max Falkowitz

After picking, you still have to process your tea. And like picking, it takes expertise to do it right. The best tea leaves in the world can be ruined by poor drying, steaming, or roasting, and some teas require such careful processing that farmers hire experts to do the job for them. Much Japanese tea and Yunnan pu-erh is made in factories with skilled workers and expensive equipment, and all those costs add up.

As the cost of tea farming rises, some farmers are giving up on old fashioned, labor-intensive processing styles like dark-roasted oolongs in favor of unroasted varieties. An unroasted oolong is easier to make, and involves far less risk of ruining a harvest, but it also tastes less complex, and the even-more limited supply of the old fashioned stuff means higher prices.

These are just a few of the baseline costs for making good tea on a small scale, and when your entire income for the year comes down to a few harvests, you have to charge a premium for your product. Too many Western consumers, used to paying bargains on cheap tea and 25¢ dumplings, have come to associate "made in Asia" with "automatically cheap." That's a prejudice we have to overcome for a lot more reasons than understanding the tea economy.

Location, Location, Location

6,000 feet above sea level in the Sri Lankan hill country. This plantation outside Nuwara Eliya produces some of the country's highest quality tea. Max Falkowitz

Beyond those baseline costs, the greatest factor in a tea's price is where it comes from. "The cost of any tea type is generally based on its region of origin and elevation," Kincart explains.

Different regions have their own cultivars, climate, and soil content which leave distinct impressions on tea leaves. But there's only so much of that land to go around. Consider the roasted oolongs from the Wuyi mountains of Fujian province, China. Teas grown on these steep, rocky cliffs develop an incredible funky mineral taste that, when bolstered by the leaves' honeyed sweetness, resembles a glass of single malt Scotch more than your workaday English breakfast.

Growing tea on these cliffs is kind of like cooking a 12-course banquet for 30 in a college dorm room. You can do it, but it ain't easy, and if you're charging admission, you'll need to charge enough to make it worth your while. Now in China, these Wuyi teas are among the most sought after by tea connoisseurs. Limited supply plus high demand means they're never cheap. If one is, you might have a counterfeit on your hands.

Let's get to Kincart's other point about elevation. Generally speaking, higher elevation teas cost more than those grown closer to sea level. Cool, moist mountain air and dramatic temperature fluctuations make for deeply nuanced and flavorful tea, and a really good high elevation tea should make you feel like you're standing on a mountain peak surrounded by mist and verdant trees. But there's a lot more low elevation land than high, so market demand compounds an independent producer's high production costs into an even higher price.

Remote growing regions and high mountaintops count for something else, too: They're farther away from polluted cities. Clean air is vital ingredient in good tea, and an increasingly expensive one. As Asian cities grow, tea farms near city centers face declining air quality, and in some cases, the tea grown there doesn't taste as good and clean as it did a generation ago.

Brands and the Problem of Value

Heavily roasted tie guan yin like this is harder and harder to come by these days as China's tea fashions change. Lower availability means higher prices. Vicky Wasik

The tea market isn't all misty mountaintops and proud entrepreneurs tending their pristine crops. It's also full of bullshit.

Careful farming, regional climate, and particular processing can all make one type of tea more valuable than another. I mean that both in terms of its objective quality—a tea's complexity or body or aroma or finish—as well as its price and worth to a given market. But just because a tea claims to be from a specific mountain or processed in a certain way doesn't necessarily mean it's good. There's plenty of bad tea grown in famous regions and great tea in totally obscure ones; there is life-changing tie guan yin and gross tie guan yin, with few shortcuts to discern the difference.

"As with all things, branding impacts price," Kincart points out, and certain tea regions or styles have definitely become desirable brands. With millions of consumers willing to pay for good tea, those brands easily command high prices, sometimes far in excess of any non-tea-person's conception of value or worth.

Here's an example. In China, people give fancy tea as gifts, much like fine whiskey in the States. Chinese government bureaucrats even are known to dig into their expense accounts to purchase wildly expensive teas as gifts for each other, frequently as part of favor-currying or outright bribery, Verdant Tea's David Duckler writes in an exhaustive seven-part series on pricing tea.

Jin jun mei—a black tea grown in the Wuyi mountains of Fujian province—only uses the tea bush's tiniest leaves and shoots, resulting in a lower yield and higher prices than some other teas. Vicky Wasik

Of course, not everyone giving tea gifts necessarily knows much about tea, any more than everyone in the U.S. appreciates the nuances of premium Scotch. So what do you do? You fall back on what you know. That may mean spending a couple hundred bucks on a bottle of Johnny Walker Blue because the giver and receiver recognize it as having some objective expense and quality. Or it may mean paying thousands of dollars for a kilo of pre-Qing Ming long jing that claims to be grown in the historically famous Dragon Well Village.

Some teas are so famous and prized that merchants can charge astronomical prices for them. Is the tea really worth it? Perhaps! But the tea industry has little regulation or protected origin certification, so there's not much to stop an unscrupulous merchant from selling one tea under another label to clueless customers, all for sweet, sweet profit. And even if a tea is the genuine article, whether it's worth a certain price to you is a question only you can answer.

A tea's price usually gives some hints about its depth and quality. But it also reflects the tea's production costs, intermediate shipping and merchant costs, and the market's demand for it, none of which say anything about whether you'll like it, or even if you do, if you're willing to pay for it. I chuckle every time I think about the time I served a friend some da yu ling, one of the highest elevation (read: crazy expensive) teas grown in Taiwan, that I love for its jaw-dropping floral taste and aroma. My friend took a sip and spit it right back out. Grimacing, she shouted, "This tastes like perfume!" So I switched over to brewing a toasty but simple bargain-priced roasted Japanese green; she adored it.

Once you step above commodity prices, you'll find good and bad teas at nearly every price point. And just like with wine, there are splurges and value buys for every kind of tea you could want. How do you tell the difference? The only real way is to drink more tea.

When it comes to spending your own hard-earned money on fine tea, the best thing you can do is buy from a reliable source who appreciates good farming and tasty tea over brands and buzzwords. Good vendors cut through the junk, to find both examples of the famous teas really worth drinking, and more obscure varieties that famehounds overlook. They also offer single-serving samples that let you try out pricey teas at reasonable prices, so you can see if a tea is right for you before laying out serious cash. And they'll be honest about which teas are true premium styles and which are meant as value purchases. Both kinds have their place, because at the end of the day, a tea is only worth what you're willing to pay for it.