International Journal of Innovative Approaches in Agricultural Research
Abbreviation: IJIAAR | ISSN (Online): 2602-4772 | DOI: 10.29329/ijiaar

Original article    |    Open Access
International Journal of Innovative Approaches in Agricultural Research 2021, Vol. 5(1) 17-36

Innovative Value Addition in Tea (Camellia sinensis): A Comparative Analysis between Sri Lanka and Japan

Chamila Pilapitiya & Saliya De Silva

pp. 17 - 36   |  DOI: https://doi.org/10.29329/ijiaar.2021.339.2

Published online: March 31, 2021  |   Number of Views: 149  |  Number of Download: 457


Abstract

Sri Lanka is the third largest tea exporter in the world, but nearly 60% of its total exports are comprised of bulk tea. Bulk tea secures the lowest prices in world tea market. Sri Lanka earned an average value of US$4.83 per kilogram from 2014 to 2018 for its tea exports, compared to US$24.24 per kilogram over the same five-year period in Japan, a highly innovative tea-producing country. The objective of this study is to examine the root causes of product innovation in Sri Lanka, as compared to Japan, by conducting a historical analysis followed by a survey and key informant discussions. Sri Lanka has mainly focused on incremental innovations in blending, flavoring and packaging than radical innovations. About 98% of the tea produced in Sri Lanka is black tea, produced mainly in large scale-processing factories. The focus on economies of scale and heavy dependence on traditional product baskets and market destinations have bottlenecked product innovation capabilities in Sri Lanka. In contrast, Japan produces a large number of innovative beverage and non-non-beverage products. Their main beverage type is sencha (58%), followed by many other beverages including gyokuro, kabusecha, matcha, tamaryokucha, black tea, oolong tea, fermented teas and white tea. The Japanese produce a variety of non-beverage products including confectionaries, snacks and cosmetics made from same tea plant that beverage tea is made from. Having a large number of processing factories (4698), Japan’s product innovation capabilities are mainly attributed to firm-level factors and support services. This study recommends that Sri Lanka should link together farmer organizations, processing factories, research institutes and universities to make its tea industry more innovative and flexible and consequently more profitable and sustainable. Foreign direct investment and partnerships presumably would be instrumental in bringing in much needed funding, expertise and advanced technology to stimulate product innovation.

Keywords: Tea (Camellia sinensis), Product Innovation, Sri Lanka, Japan


How to Cite this Article

APA 6th edition
Pilapitiya, C. & Silva, S.D. (2021). Innovative Value Addition in Tea (Camellia sinensis): A Comparative Analysis between Sri Lanka and Japan . International Journal of Innovative Approaches in Agricultural Research, 5(1), 17-36. doi: 10.29329/ijiaar.2021.339.2

Harvard
Pilapitiya, C. and Silva, S. (2021). Innovative Value Addition in Tea (Camellia sinensis): A Comparative Analysis between Sri Lanka and Japan . International Journal of Innovative Approaches in Agricultural Research, 5(1), pp. 17-36.

Chicago 16th edition
Pilapitiya, Chamila and Saliya De Silva (2021). "Innovative Value Addition in Tea (Camellia sinensis): A Comparative Analysis between Sri Lanka and Japan ". International Journal of Innovative Approaches in Agricultural Research 5 (1):17-36. doi:10.29329/ijiaar.2021.339.2.

References
  1. Ariyawardana, A. (2001). Performance of Sri Lankan Value Added Tea Producers: An Integration of Resource and Strategy Perspectives. Unpublished Doctoral Dissertation. Palmerstone North, New Zealand: Massey University. [Google Scholar]
  2. Brekell, P.O., (2018) The Book of Japanese Tea, Japan. Tankosha Publishing Co. Ltd, [Google Scholar]
  3. Capitanio, F., Coppola, A. and Pascucci, S. (2010), “Product and Process Innovation in the Italian Food Industry”, Agribusiness, Vol. 26 (4), pp. 503-18, DOI 10.1002/agr [Google Scholar]
  4. Central Bank of Sri Lanka. (2018). Annual Report of 2018. Colombo, Sri Lanka. [Google Scholar]
  5. Central Tea Association in Japan. 2018. Tea Related Documents, Tokyo, Japan. [Google Scholar]
  6. Christensen, J.L, Rama, R., and Tunzelmann, V.N. (1996). “Innovation in the European Food Products and Beverages Industry”, European Innovation Monitoring System (35) Aalborg, Denmark available online at http://aei.pitt.edu/50001/1/A9241.pdf [Google Scholar]
  7. Ranasinghe, H., (2019 October 22nd). Tea Factory Owners Say Facing Continued Pressure to Cease. Daily Mirror, available online at, http://www.dailymirror.lk/business-news/Tea-factory-owners-say-facing-continued-pressure-to-cease-operations/273-176535 [Google Scholar]
  8. Deligianni, I.,Voudouris, I., Lioukas, S. (2014). “The Relationship between Innovation and Diversification in the Case of New Ventures: Unidirectional or Bidirectional”, IEEE Transactions on Engineering Management, Vol. 61 (3), pp 642-475, DOI: 10.1109/TEM.2014.2312732 [Google Scholar]
  9. Embassy of Sri Lanka in the Russian Federation. (2015). Sri Lanka Exports to Russia. Retrieved dated 02/01/20120 from, http://www.srilankaembassy.ru/en/sri-lanka-s-exports-to-russia [Google Scholar]
  10. Florent, (2012). “When Japanese Tea Shone in the world: The Development and Export of Sencha (1853-1918)”. Japanese Tea Sommelier. Retrieved dated 02/01/2020 from, https://japaneseteasommelier.wordpress.com/2012/04/14/when-japanese-tea-shone-in-the-world-the-development-and-export-of-sencha-1853-1918/ [Google Scholar]
  11. Ganewatte, G., Waschik, R., Jayasuriya, S., Edwards, G. (2005), “Moving up the Processing Ladder in Primary Product Exports: Sri Lanka’s “Value-Added” Tea Industry”, Agricultural Economics, Vol. 33 (3): 341-350, DOI: 10.1111/j.15740864.2005.00073.x [Google Scholar]
  12. Graham, H.N. (1992), “Green Tea Composition, Consumption, and Polyphenol Chemistry”, Preventive Medicine, Vol. 21 (3), pp 334-350 [Google Scholar]
  13. Hemaratne, H.D. (2016). “The Role of the Sri Lankan Tea Producers in Tea Value Chain”. United Nations Conference on Trade and Development. Multi-year expert meeting on commodities and development. Geneva, 21-22 April 2016. Available online, https://unctad.org/meetings/en/Presentation/CI_MEM2_2016_Hemaratne.pdf [Google Scholar]
  14. International Tea Committee. (2019). Annual Bulletin of Statistics. London. United Kingdom. [Google Scholar]
  15. Japan Management Association. (2016). “Black Tea Increases Its Presence as an Everyday Beverage”. Foodex Japan 2017. Available online at, https://www.jma.or.jp/foodex/en/img/trends/today/japan_today_coffee07.pdf [Google Scholar]
  16. Kasmire, J, Korhonen, J.M., Nikolic, I. (2012), “How Radical is a Radical Innovation? An Outline for a Computational Approach”. Energy procedia, Vol.20 (2012), pp. 346 –353. DOI:10.1016/j.egypro.2012.03.034 [Google Scholar]
  17. Kelegama, S. (2003). “Sri Lanka” in Directions in Ingco, M.D. Development: Agriculture, Trade and the WTO in South Asia. Washington, D.C, World Bank. pp 114-127 [Google Scholar]
  18. Koch, W., Zagorska, J., MArzec, Z., Kukula-Koch, W. (2019). “Applications of Tea (Camellia sinensis) and Its Active Constituents in Cosmetics”, Molecules, Vol. 24 (23): 4277 available online at, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6930595/ [Google Scholar]
  19. Kuroda, Y., Hara, Y. (2004). “Food and Industrial Applications of Tea Catechins”, Health Effects of Tea and Its Catechins. Boston, MA, Springer pp 93-98 [Google Scholar]
  20. Lockett, A., Thompson, S. (2001). “The Resource Based View and Economics”. Journal of Management, Vol. 27 (6). pp 723-754. https://doi.org/10.1177/014920630102700608 [Google Scholar] [Crossref] 
  21. Martinez, M.G, Briz, J. (2000), “Innovation in the Spanish Food & Drink Industry”, International Food and Agribusiness Management Review, Vol. 3 (2000): 155–176 available online at https://www.ifama.org/resources/Documents/v3i2/Martinez-Briz.pdf [Google Scholar]
  22. Ministry of Agriculture, Forest and Fisheries. (2017). “Current outlook of Japanese Tea” Available online at, https://www.maff.go.jp/e/policies/agri/attach/pdf/index-1.pdf [Google Scholar]
  23. Minarelli, F., Raggi, M., Viaggi, D. (2015), “Innovation in European food SMEs: Determinants and Links between Types”, Bio-based and Applied Economics, Vol. 4 (1): pp 33-53, DOI: 10.13128/BAE-14705 [Google Scholar]
  24. Organization for Economic Co-operation and Development. (2005). Oslo Manual of 2005 Retrieved dated 15/01/2020, from, http://www.oecd.org/science/inno/2367614.pdf [Google Scholar]
  25. Rogers, M. (1998). “The Definition and Measurement of Innovation”. Available online at, http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.194.4269&rep=rep1&type=pdf [Google Scholar]
  26. Sledzik, K. (2013). “Schumpeter’s View on Innovation and Entrepreneurship”. SSRN Electronic journal, available online at, https://www.researchgate.net/publication/256060978_Schumpeter's_View_on_Innovation_and_Entrepreneurship [Google Scholar]
  27. Sri Lanka Tea Board. (2012, 2014, 2016 & 2018). Tea Market Update of 2012, 2014, 2016 & 2018, Colombo. Sri Lanka. [Google Scholar]
  28. Sugiyama, S. (2012). “The Development of Tea Exports” in Japan’s Industrialization in the World Economy 1859-1889. Export Trade and Overseas Competition. New York, USA. Bloomsbury academic publication, pp140-170. [Google Scholar]
  29. Takano, R., Kanama, D. (2019). “The growth of Japanese Black Tea Market: How Technological Innovation Affects the Development of a New Market”. Journal of Economic Structures, Vol. 8, Article no. 13 available online at, https://link.springer.com/article/10.1186/s40008-019-0143-5 [Google Scholar]
  30. Tea Exporters Association of Sri Lanka. (2017). Tea grade nomenclature. Available online at http://teasrilanka.org/tea-grade [Google Scholar]
  31. United Nations Conference on Trade and Development. (2016). TEA: An INFOCOMM Commodity Profile .Retrieved dated 02/01/2020 from, https://unctad.org/en/PublicationsLibrary/INFOCOMM_cp11_Tea_en.pdf [Google Scholar]
  32. Wyche, S., Sengers, P., and Grinter, R. (2006). Historical Analysis: Using the Past to Design the Future. Retrieved dated 15/01/2020 from, http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.92.7811&rep=rep1&type=pdf [Google Scholar]