Down to a Tea - Daniel Ryan on how the Tea category is finally showing signs of development

07:15.48
fungalboy
Hello again Dan ah I'm I'm excellent. Um, so we've been chatting a little bit and we've been set this interview up. It's been something I wanted to talk about for a long time. Um, so we're gonna talk a lot about t today. But.

07:17.49
Dan Ryan
Um, good morning, good morning. How are you.

07:31.73
fungalboy
I Thought it might be helpful for people to understand. Um, first of all, what's your role and and how is it that you you came to be doing what you're doing.

07:41.23
Dan Ryan
Okay, so this are kind of a back to the future question. So let's let let's start with the current role that I find myself in which is con manager for Lipton teas and infusions which originally would have been country manager for the Unillirtico when we began the separation process back in. March Twenty Twenty one and in the in the interim it was also country manager for ecotera at teas and infusions which I think the the interesting and opportunity that presents itself when you're managing a corporate startup is something to not work and you can change it and unfortunately displayed all of the. I'm sure consultancy ares and and marketing powers that be when you decide on a company name that not a lot of people can pronounce it. It often doesn't it doesn't bear out. Well so I think the the new direction and backing one one of the largest brands within the global portfolio. Makes it a lot simpler for it for a lot of us. So that's the role that I find myself in how did I find myself here and when I left Diaggio in would have been late 2016 after almost twelve years and and in what was fascinating organization and I did have some opportunity to travel with that organization and and see. How it operated in different parts of the world which was all unique and amazing experience but took the opportunity to to try something different in 16 Leftft Leftft Unilever as and leading the or setting up what was going to be a new e-commerce and struck our function within the structure.

09:12.32
Dan Ryan
And then over the course of a number of roles including Matt leave role as as head of category and roles and leading the category and insights and team with or category and channel development team I had an opportunity to to do something entirely different which was. I guess for me and in some of the the time that I spent in Unilever working in that insights function partnering with startups in Ireland and'm getting to see a different perspective haven' come from the azju of enormous global cpg organization unilever.

09:39.26
fungalboy
Is.

09:47.63
Dan Ryan
Even Bloody bigger and global cbg organization partnering with startups in the Irish ecosystem for insight because effectively the the thread that we were pulling on as a team at that point in time was a startup is born where a consumer or.

10:05.59
fungalboy
Yeah.

10:05.60
Dan Ryan
Customer need is not being met. There are lots of these startups born all over the world almost every other day. Not all of them make it. You know, not all of them accurately size the commercial opportunity that's solving that consumer customer problem will will help them realize. But. Where you have your fingers on the pulse or where you are close to the types of startups that be that are being born even if they don't make it and even if they can't monetise the the solution that they're providing.

10:28.40
fungalboy
Oh.

10:37.54
Dan Ryan
Ultimately, that gives you insight as to the types of consumer problems and customer problems that are not being met by your global organization. So.

10:45.10
fungalboy
So on on that. Yeah, just to to drill into it for for a minute I think lots of people listening to this podcast will be. You know, maybe working behind a bar or might be have started their own business and you know there might be and you know not necessarily that into the understanding of a.

10:55.59
Dan Ryan
Act stupid.

11:03.56
fungalboy
Corporate culture but lots of people who are listening to this are working for large international companies I'm certain and cpg consumer package goods companies and Diaja would have been somewhere. We spent a lot of time together soldiering. But when you go to an even bigger beast. You know the likes of Procter and gamble and Unilever are really the largest that there are the biggest that there are did you notice a big change in the kind of culture or the the way in which the Unilever approach business ah versus your experience in Diezio. For example.

11:32.65
Dan Ryan
Um, and it's a really good question I think there were probably 3 big things that that stood out to me and the first one being that this notion that the grass is always greener so when we were in indiio we would have talked a lot about and we would have benchmarked a lot unilever we would have looked to them as. What was based in class and and how to do things be that from an innovation perspective be that from a go-to markete be that from a commercial perspective and all of a sudden you're either poacher turned gamekeeper or gamekeeper turned poacher. You're on the other side of the fence and actually.

12:01.83
fungalboy
A.

12:07.14
Dan Ryan
Unilevers of this world were were benchmarking back to the azure the unilevers of this world were benchmarking the henekens of this world and and the organizations that we would have been kind of toe to toe with so that was the first big thing that the grass maybe isn't always greener. Someone is always benchmarking someone else. The second big thing and obviously look. Growing up in the aio is is how I describe it coming in as a graduate's been so long there I do feel like that was that's that's my growing up phase or or well at least growing older maybe not growing up. But.

12:39.27
fungalboy
Ah.

12:40.33
Dan Ryan
And growing up in that organization you were well used to the notion that a corporation would have a purpose and you were well useded to the idea that a corporation would stand for and much bigger things than just a static p and l or meeting the the needs of shareholders and I think a lot of the work that deazio has done is is hugely commendable in the space of. Responsibility be that addition to advertising or consumption etc. They've they've really led the charge in that globally but in moving into Unilever and beginning to understand their uslpu Unilever sustaining ah living program that wasn't just you know that was a massive step change in. Intention and actual hardwiring within the organization that was ah, not a culture shock but the level of intensity and the level at which the uslp the sustainable living program played into every decision be that commercial be that in relation to hiring be that strategic. Be that go- to-market be that customer interaction. It wasn't just a cosmetic afterthought which that's I don't want to do derogatory to the great work that the you have done but this was something that was fundamentally hardwired into the decision making and into the Dna of a lot of the people that were within the organization. And then I think the the third kneke element would be in relation just to the complexity. You know when we were we were in the brewery when we were in James's gate we often felt that we we had ah a complex metricx structure and we had lots of different brands vying for lots of different bandwidth and we had the conundrum of a yeah uk organization that was combined and it.

14:17.93
Dan Ryan
Maybe felt like getting decisions took a little bit longer than you would have liked. Yeah, the more complexity and the more brands and the more matrix you add? you know we we had a good but issue let's say that and I like and turning.

14:20.23
fungalboy
Yeah.

14:33.50
Dan Ryan
Turning the diaggio ship to being that of of turning maybea a battle cruiser or or something that had a little bit of horsepower in it Unilever we describe as as you were turning the oil tanker you you were turning the the aircraft carrier it was everyone working together with great intent. It just takes a little bit of time.

14:38.25
fungalboy
Yeah, yeah, yeah.

14:49.72
fungalboy
But the opportunity came for for reasons that I'd love to understand to actually separate from that oil Tanker if you if you wish and and and as I understand it So you're essentially country manager for for a company which is being formed out of.

14:57.78
Dan Ryan
Maybe.

15:08.59
fungalboy
Unilever separating entirely just concentrating on on t is is that right.

15:12.44
Dan Ryan
That that is correct where we've used lots of different analogies to describe this to keep ourselves san so whether we started with the analogy of childbirth we were birthing this organization from from the belly of Unilever. We've since decided that that's a little bit too straightforward. And not to do disservice to the the magic and the the miracle of childbirth but you're only cutting one cord there this this is more has become more akin to maybe open heart surgery or open heart surgery for for multiple patients in the dark and trying to.

15:34.98
fungalboy
Yeah.

15:46.39
Dan Ryan
Unwire and rewire and lots of historic processes systems ways of working customer terms logistics even it infrastructure and it's been a fascinating process I have to say.

16:01.67
fungalboy
And why I mean you you hinted to it earlier saying that there's this opportunity for for tea and maybe t wasn't getting the commercial attention that it deserved in within Unilever or didn't have the um, ah.

16:18.62
fungalboy
Perhaps the excitement that other categories had um you know at the end of the day you know this is a particularly complicated operation that you're involved in you know is there ah is there a big enough reward is T worth the effort.

16:33.42
Dan Ryan
And so let's let's start with the kind of what we're left with once we separate from the the organization. So we're we'll be left with a global p and l in the region of $2000000000 which is still in the top 25 of global cpg. So on its own two feet post-s separationation still a relatively large um annual turnover and annual operation if we then if if we then take a step back and go okay, well how did we get to this point or how did we get to this decision process and.

16:56.99
fungalboy
Yeah, absolutely.

17:07.25
Dan Ryan
But my disclaimer before I go further and that is that I'm I'm no longer a unil leader shareholder I'm I'm ah, an objective observer on on what was an amazing or what is an amazing global organization. But you know the narrative that I've used as as we've been going through the recruitment process and for this organization locally here in Ireland. That feels like ah a 2 wo-year miracle round in and of itself recruiting people remotely entirely through the the mouth of a pandemic and asking them to come on board to a brand new organization creates a lot of its own fun. What the narrative I've used to describe it is is is the analogy of picture Unilever at the. The roulette table or the craps table in in Vegas if you analyse them as an investor over the last decade you would see that a lot of the chips. They've been placing a lot of the big bets. They've been placing a lot of the bandwidth. They've been placing has been behind a number of their key categories. Unlike deazio where you had beer and spirits within Unilever you had at that point in time 4 classifications. You had your home in hygiene. You had your beauty in personal care. You had your foods and you had refreshment within refreshment was the housing of tea and ice cream. A lot of the investment had had. A total corporate level has gone behind beauty and personal care and again if you were to ana analyze the mechanism of investment a lot of that has gone behind and so merger's purchases particularly at the higher end particularly at the more premium end of beauty and personal care.

18:40.50
Dan Ryan
Bought out brown such as murad ran Dermologica and when I say premium I'm um, am answering or I'm narrating premium as a middle- aged kind of irish male premium for me is a moisturizer anything more than and 3 or 4 eu old this stuff is. In the 30 to 40 rty euro days I'm sure for a lot of listeners that's still middle of the road stuff. But for me that that's that's at the top end. So a lot of the a big portion of the chips available to the global Unilever team to invest have gone behind bpc beauty and personal care in the form of m and a. From a home and hygiene perspective and that's where you house your denesttos your parcel all of the stuff that sits under the sink either in the kitchen or in the bathroom. Um, what they've been doing. There is a lot around r and d a huge amount around removing fossil fuels removing plastics removing. And moving and migrating the entire portfolio to what they talk about is plant-based powerbes so. What's ultimately left at this point in time is a very modern very fit for purpose and very sustainable business entity which okay at this point in time. Perhaps. Allen is under a little bit of pressure globally to be able to realize more premalization and value from that. But ultimately they've left themselves in a really modern and future fit portfolio in in their roman hygiene and stable outside of that you've got foods and refreshment within foods.

20:11.35
Dan Ryan
Very stable, very static decent margin not doing a huge amount of dramatic things. There's been a lot of acquisition in that space as well and then you come to the refreshments portfolio within refreshments you've got 2 distinct p and ls you've got the ice cream p and l and tpn l in my last role in the azure was innovation.

20:17.58
fungalboy
Like.

20:30.65
Dan Ryan
And when I look at you know how ice cream operates it was it was fascinating to note that over almost 25% of ice cream's annual recurring revenue not just in Ireland but globally comes from innovation remember back in diaao that was a key metric. We were aspiring towards how do we get.

20:47.75
fungalboy
Ah, yeah.

20:48.95
Dan Ryan
Are you know of the the dezioan turnover. How do we eat out that 20% plus of that is coming from Npd the reality when you get to that place is perhaps somewhat less glamorous from the outside looking in it sounds hugely. Interesting. It's yeah it so intuitly exciting. But the reality is that's a huge to the expense of p and l to maintain kind of 2 three years out you've got to have your r and d in place you've got to be creating your new liquids. You've got to be creating your new flavors. You've got to creating new new concepts in year. You've got to launch, you've got to tell everyone that you've got a new variant of Ben Jerry's of magnum of hb. And then you've got to also strip out what you launched last year you've got to find a way of cycling that space because whatever we say about but the fixed infrastructure that alcohol had within the supermarket or the fixed infrastructure then any other category had the freezer isn't expandable. You know we've always said that the shelf is not expandable. Well let me tell you.

21:40.19
fungalboy
Now.

21:45.69
Dan Ryan
Freezing The frozen space is is absolutely not expandable. So you've got a huge churn. So the cost of running that sexy P and L is actually quite disproportionate relative to some of the other categories in the organization which effectively left tea a little bit like that I think we used the analogy earlier the middle child syndrome got.

22:02.60
fungalboy
Yeah.

22:04.94
Dan Ryan
Relativelyly good grades deliver it relativelyly solid margin. It was consistent. It wasn't a partying. It wasn't wasn't wast and time it was just getting on with it and as a result it maybe wasn't getting that low if it wasn't getting that investment. It wasn't center of attention which is why I think the organization. Part of the rationale for the organization to say you know what? this is a category that takes a lot of boxes. This is a category that is future fit in terms of its sustainability credentials. Its future fit in terms of its trend the ingredients that are there the the actual. Mechanism and and how natural it is the fact that it's one two ingredients max. But we're not going to give it the bandwidth and the love. So let's separate it out and and give it that opportunity or given that platform to to shame and that was effectively the the narrative that I both bought into. But also have been using and and getting other people to buy into the organization over the course of the last probably twenty four months of this stage.

23:03.71
fungalboy
So what's left then so as you describe it Lipton T company. Um, ah I think for a short period of time the the plans to call it ecatera Um, but what brands sit under that that company.

23:07.27
Dan Ryan
Yes.

23:18.50
Dan Ryan
So there are 36 brands globally and the most familiar I guess from from an irish perspective will be lon's paka from a Uk perspective. It will be pg tips and paka the largest global brand that we have will be Lipton but then there are also a number of let's call them. Artisan or super premium brands and that said in the states will be tazzle which was an acquisition from the Starbucks company and I think four or five years ago and t two which is based out of Brisbane Australia which is again super premium super on trend and is is doing some amazing things particularly. Particularly in ecommerce and gifting space in a number of key geographies around the world but those would likely be the brands that people and will will be most familiar with both from a european perspective but also from a Us perspective.

24:11.56
fungalboy
And you know I I was always fascinated I spent a lot of time in category development as as you know and you were looked at um category insights as being part of your roles and responsibility within Unilever. How do you categorize the t market because. I say t. But you know that's like saying alcohol. You know that that it's such a broad broad category. How do you subcateze it. You know is it simply you know herbals and ah black teas or you know presumably There's a much more. Um.

24:31.58
Dan Ryan
It.

24:47.41
fungalboy
Ah, much better way to categorize it than than that.

24:51.23
Dan Ryan
Um, I think if you if you'd have asked me that question two years ago our our point of departure as we've begun. The separation would have been pretty much as you've described. There's black tea and there's there's everything else and I think that's. For for rightly or wrongly. That's how the industry have viewed it. That's how the industry have narrated. It. But actually what we're trying to do is to evolve and bring that conversation forward and and when we're engaging be that with with Tesco be that done stores be that with. Hospitality channel workplace or or ah hotel venue. We're trying to talk about tea in a much broader and broader broader way we're trying to talk about it in terms of the occasions that it can meet. We're trying to talk about effectively moving the consumption of hot beverages. The analogy I think we we used with one of our key customers last year was the heart beverage lifted up just out of tea and include coffee include hot food, drinks, etc at total Subcategory almost eighty to 90% of consumption takes place between 6 am and tenion and effectively for the majority of people on this island. There's roughly two point one cups per day being consumed if we are going head-to-head and only vying to let's say move around the deck chairs or get our own little piece of space on that dance floor. That's never going to help grow the category.

26:18.80
Dan Ryan
For our customer base. It's only ever going to be moving from right pockete to left pocket. We're still dealing with the same total number of consumption occasions. 2.1 per day. Actually if we want to expand the category. We've got to and but expand the usage we've got to expand the number of locations and we feel that's where t can play an enormous role. Because outside of the 6 am to 10 am slot there's a tea and a consumption occasion right? throughout 24 hours of the clock face that we can participate in and we can help grow consumption on the island. Be that something with with mint for digestion after lunch be that something with turmeric and ginger for a. 3 pm and your three pm slump without a caffeine kick but getting you teed up in the afternoon or be that something with Kamamai Ashwaganda and phennerbri to help you sleep at night there are there are options from within our portfolio and from within the category that extend that dance floor. Much further than the 6 am to 10 am that we've dealt with so far and that's that's effectively the role that we're trying to play in bringing that life our customers both in retail but also in workplace and in hospitality.

27:29.90
fungalboy
So You're I Guess you're not looking at your competitor simply being. We need to steal a share from coffee. Yeah to to get a bigger slice of the pie essentially to put it very simply you're trying to grow the pie substantially through. Use of different occasions.

27:46.00
Dan Ryan
Correct is the the um one my old bosses in in unileverdesi used to talk a lot about and you can eat the pie and which is just you you try and do selfishly for your little piece of the category you can heat the pie which is you try and grow a little bit of a loss. Perhaps bring price up with it within that pie or you can grow the pie and and growing is is the the approach that we're trying to take how do we move? consumption. How do we build that consumption habit with consumers on this island outside of that traditional. It's 1 or 2 cups in the morning and then after that I'm shifting into an entirely different category. Or solution for my my thirst or for my consumption.

28:28.50
fungalboy
But does it also have benefits. So so let's let's take that um, heating and growing analogy and and kind of explore a little bit. Um I'm assuming that the significant majority globally not not just in Ireland ah of consumption is of black tea which. Has been really commoditized to a large extent and and if we're moving into more occasions and we're driving that through the use of um more premium ingredients more premium offerings presumably. We're moving people up through the the price ladder as well and ah up into higher value and hopefully higher margin.

28:52.79
Dan Ryan
People.

29:05.83
fungalboy
Opportunities for for companies.

29:07.60
Dan Ryan
Absolutely so it's if we take let's start with kind of Ireland as as a case in point and then let's probably expand that around because your your point on black tea. Absolutely resonates for this island. You know up to five years ago black tea would have been up to 90% of the the consumption on this island over the last 5 to 6 years fruit green an herbal you know other variations and within tea have grown disproportionately to the point now where they are roughly 30% and of total consumption if you take other markets around europe so be that France or even Germany. Black tea doesn't feature to the same extent Germany in particular would be a market dominated by coughing but what's left in tea is absolutely predominantly weighted towards the frugine and herbal category. It's not black tea to the same extent so that the consumption pattern and the consumption. Even how it's consumed be that with milk be that with sugar be that with everyone has their own personal style does vary across Europe if we look at the role we have to play here here in Ireland we've inherited a category that had a volume value disconnect. We've inherited a category that had effectively over a 6 ix-year period left approximately ten million Euros on the table by selling the same number of tea baggs more or less static year- on-year for a reduced price. We were collaborating with trade to trade everyone up to a larger pack format with a lower price per mill or lower price per cup.

30:41.22
Dan Ryan
And ultimately that was driving value out of the category. We've got to look externally for inspiration. We've got to look at be that competitors in tea or be that and collaborators in coffee and look at how they've premiumized their offering how they've brought new formats to the table. How they've brought new blends to the table. How they've. Worked hard to educate consumers on the benefits of take wine as a category twenty years ago in Ireland you had to get red and you had white then all of a sudden you had red weight and rose then all of a sudden you had veritals of sudden you had country of origin and through doing that they brought this really. That that category to life. They've brought it to a space where people know enough to help them navigate and that's that's a piece of the role that we have to play both within black team but also within fru green and herbal for green and herbal at this point in dying now it's up to nearly thirty percent consumption if I look at the average.

31:22.59
fungalboy
Yes.

31:37.45
Dan Ryan
Sk you count a product count in a supermarket in Ireland at this point in time still 70% of the the revenue is being generated from black tea but almost 80% of the sk you count is sitting in fruit green and herbal if we don't address this and help bring consumers with us through education.

31:45.22
fungalboy
Um, yeah.

31:57.50
Dan Ryan
We're in danger of creating craft beer 2.0 Circa ireland 2016 2017 where we had a category that became so intimidating for people that became so confusing for people. It was also it was ultimately presenting itself as a barrier to purchase. I know a number of of companies took a key leading opportunity to help define and categorise what the subcategories were and help people navigate that that what was becoming a very crowded, very complex space. We need to do something similar on t.

32:31.47
fungalboy
Um, we've seen that in lots of markets I think the the craft beer analogy is a very good one I remember standing in in a craft beer um section of a supermarket in the us and this is going back at least sort of fifteen years ago and being. Overwhelmed by choice and having no category navigation and I was a brewer who was you know, really into beer and I remember just thinking oh my god what am what am I going to do um you know and eventually actually you know ah reorientating myself to I found a group of belgian beers and then from there I was able to go. Okay.

32:53.58
Dan Ryan
I.

33:08.30
fungalboy
Here's the Belgt section now I can start to Navigate. So So even just the the the shopper navigation within the store. Um, you know I hadn't heard the expression that you used there a few minutes ago where all of a sudden. It's making more sense you you're saying fruit green and herbble ah because to me. I Thought it was all herbal t everything that wasn't you know a lions or barrs you know or own brand version or Pg tips or um, you know the English breakfast tea is sometimes it might be described in other our markets anything that wasn't a familiar black tea I thought was herbal tea. Can you can you help me understand a little bit about. What what is out there in terms of sitting under those umbrellas that you described you know fruit green and herbal.

33:53.39
Dan Ryan
Um, well I could scare you first of all to say that some of the some of our customers on this island alone which is a relatively underdeveloped and fruit green and herbal subcategory would have up to 45 decision notes.

34:08.11
fungalboy
Um.

34:11.62
Dan Ryan
Within a a conversation on on black tea analyzing our conversation on totalty so I'll not go the full full full length of sub categorizing at at that level of depth but I will say what we're trying to. We take start with black tea. What you tend to have are 2 or 3 simplistic categorizations First level be in caffeine or caffeine free second level be in premium mainstream or private level or own brown. Let's call it so within black tea. The level of. Your your standard everyday black t the level of categorization or decision makingking notes is relatively shallow within black tea then you do have a speciality branch. So within that you'd have your breakfast. You'd have your Roy Buss you'd have your Earl Greys you'd have your and english teas etc. That's another. 4 to 5 nodes within a particular decision-ma tree and within each of those you'd have perhaps a premium offering you'd have a mainstream offering and you'd have a private label offering you then move into the fruit herbal and green or fruit green and herbal space within green alone. You'd maybe have 10 to 12 different subcategozizations. So with flavor some and enhanced remember green is this but like green includes caffeine and for a lot of people. It seemingly a lot of people that will be a surprise a lot of people would narrate religiously that green is healthier because there's no caffeine in it.

35:32.66
fungalboy
S.

35:43.63
Dan Ryan
Green and um and black tea are the same ingredients treated slightly differently and there is no chemical process used in in the the maturing of a lot of tea. It's It's ultimately dried and cut and packaged green is just dried for less time. It's the same ingredient. So.

35:57.98
fungalboy
Um, yeah.

36:01.37
Dan Ryan
Doesn't include it Sorry sorry to break that to you I hope I'm not breaking your heart on that one but within green tea then.

36:04.17
fungalboy
These listeners all over the world who are putting down their tea going. Oh oh, that's why it gives me that little bit of a kick.

36:11.69
Dan Ryan
And then within your your and fruit and herbal space. This is the the piece where we're trying to collaborate most with our retailers because this is the you know we green. There's lots of different flavors within it. Ultimately, they all tie back to to a green tea umbrella. Um, people will choose a flavor of choice or choose something that they like on their palate to access some of the the benefits of green tea particularly around the detox and and high and high health benefit and high health yield within fruit and herbal. That's when it starts to get and a little bit more complicated. Um, what we've been trying to do here is to work with our our key customers to codify and to simplify this and to move it from rather than brand led move it into needs state live. So we've been working to say okay, you've got lots of different teas and you've lots of different ingredients that help relaxation or sleep. Things like Kamamai things like ashrigant gua things like fenegrig categorising those and creating a destination shelf within a retail environment that is these are the ts you should default to if you want help sleeping. Are other elements of these are the teas that you should default to if you want to detox. These are the ts that are good for metabolism these are the good tea's that are good for female health or time in the month these are the teas that are good for a caffeine-free energy boost these are the teas that are good for after lunch for digestion etc. So we're trying to work to.

37:45.10
Dan Ryan
Simplify those needs states and and each of those different decision-making notes into 5 or 6 key sub-classifications that we can use both in a retail environment but also in a hospitality and workplace environment. We go back to the analogy at the start of the clock. Picture the working day a picture your you're 9 am you've just arrived in the office you've had your cup of coffee and maybe a cup of black tea. You've now got 8 rs in the building we have a tea for each of those hourss that you're there be that something post launch to help digestion. Be that something at three o'clock to help with that slump. You need a boost but you don't want to fill yourself with caffeine because you've got an evening to to attend to etc. That's how we if we can get the codification correct and simplify it in such a way that consumers can engage. We can have a lot fun of it.

38:31.17
fungalboy
But is that kind of scary for a market leader and you know a 2000000000? Yeah dollar tea company is is market leader in many many countries around the world and you're talking about putting needs state or occasion. First. Um, not brand but yet your brands are the things that retain the value for for you is you know I'm guessing. That's a very brave decision to say no no, no guys we we need to prioritize how the shopper and the the consumer. Is able to navigate the category before we start to build our brands up.

39:09.59
Dan Ryan
Um, the rising tide lifts all ships and and and if if you don't take that responsibility as the market leader who's going to do that for you ultimately t is the number 2 most consumed beverage globally, but there are still lots of markets and lots of occasions that are not. Accessing or defaulting to a but to a t beverage. It goes back to a lot of that consumption happens at a particular time of day or a particular day of week if we can collaborate with our key partners to extend out that wrong way or to expand that downstaur then collectively locally and globally. We can have a lot of crack grow in this category over the over the next five years

39:50.32
fungalboy
Absolutely I I'm you're starting to convince me. Um I have to say um 1 thing I'm curious about is if we look beyond the traditional. Um, let's call them dispense methodologies. Um, you know so at the moment people buy tea. Predominantly in tea bags single serve t bags and and you know the biggest if you if you've put a gun to my head said give you know give me the biggest innovation in um, tea dispense in the last twenty years ah you know was it the time that we moved from square tea bags to rounds tea bags like I I jesus I du't know. It seems quite moribon in terms of dispense if I look at coffee I have um, you know all sorts of George Clooneys inspired um you know dispense solutions I have you know ritualistic coffee houses I have the most amazing convoluted historical and modern. Methods from arroweropress through to um, other the the vacuum um systems so that's kind of exciting you know round t bags don't really do it for me is there more that the category can do there.

41:00.28
Dan Ryan
Absolutely I'm I'm laughing here in the background I think I think we all have to recognize coffee have done an amazing job in romanticizing and and adding theater to the dispense and in doing that they've created an emotional connection. They've created ah a series of occasions where it's much bigger than just the actual beverage. It's the social element. It's the conversational element. It's the congregation element that they've done such a fantastic job and doing within t that that is an opportunity for us and we have to view it as such we have to view it as how do we take. And there's there's a lot to be said for being able to see feel and touch some of the ingredients that that are and that we're putting into our bodies being able to think that the my recent Mars acquisition in kind had ah had a beautiful strap plane which was ingredients. You can see. And pronounce and I think that applies actually really well into the t category. So I don't think we lose the essence of the tea bag because people like being able to see actually what goes into it and particularly as we we migrate people into more fruitg green and herbal occasions being able to see what's being infused. And through through that through their water through the cup and what's going into the bodies will be something I think we can unlock a little bit more but there are other trends that we need to get better at and that element of theatre that element of improving extraction that element of fun is something that and we can learn a lot from now.

42:34.11
Dan Ryan
If we look around globally there are massive trends coming out of Asia Taiwan Southeast asia around things like bubble tea which is this tea consumed with the tapioca pearls and you'll be the Instagram Friendly nature the the recruitment friendly nature the gen z friendly nature of that Subcategory.

42:40.40
fungalboy
Yes.

42:53.50
Dan Ryan
It's something that we as a global leader need to look at and okay, how do we? How do we turbocharge this without making it too corporate. How do we accelerate this without codifying and making it on co anymore. So that's that's going to be something we have to figure out.

43:04.90
fungalboy
Ah.

43:12.40
Dan Ryan
And lead for over the course of the next few years

43:15.13
fungalboy
Ah I think Bubble T I Just don't understand I have to say I'm I'm excited to to be educated. Let's put it that way I'll get it.

43:22.74
Dan Ryan
Yeah, it's it's one for me like have you tasted. It's probably the the first up question no have you seen any of the bubble tea shops that are popping up around Dublin and and and urban centers. Yeah.

43:29.93
fungalboy
Ah, no.

43:33.32
fungalboy
Yes, and and and each of them have they all seem to operate off that it just reminds me of of being on a holiday as a child in in Spain where the restaurant to avoid was the one that showed you the photograph of its food. Um you know? Ah so so. They all seem to advertise the bubble tea by actually putting pictures of these bizarrely colored cups with the with the with the balls. The pearls in them and it just it looks odd to me.

44:05.92
Dan Ryan
But perhaps um, it's maybe it's maybe ah I'm going to say the same because from a generational perspective. We're not a million miles apart and we we certainly would have been raised to you know the the restaurant with all the photographs outside it was the wanted to be nervous of but I guess.

44:12.97
fungalboy
Um, not target markets.

44:22.98
Dan Ryan
Ultimately, this is something that that that next generation coming through jandz are and are getting behind and a key part of that and pattern of consumption being driven throughout Southeast Asia has been social platforms be that Instagram be that Facebook and people sharing their experience. Their communal experience. Coming together going out for bubble t has become something there. There was talk in in markets like Taiwan of there's no longer an ice cream van. It's a bubble tvvan that's doing the rounds and and people are congreg getting towards it. So I think as that trend scales. It will also premiumize as it premiumizes it will perhaps move away from the photograph on the window and and it becomes more familiar to people that are able to to either brand call or call out a particular variant that they want at the moment it. It's so early. It's it's still in that phase of.

45:03.52
fungalboy
Okay.

45:16.80
Dan Ryan
We've got to make it simple for people to know that what they've seen on Instagram or Facebook is now available here in this store and in this location but I would encourage you to test it now I would I would also I'd also warn you that the sugar content and the calorie content of the same is. Kind of in line with some of the the coffee company's great Christmas collections and great winter collections and great seasonal collections. So if you're having your bubble to perhaps miss the the scone or the the quasant you would normally have going with it that that will do you.

45:46.81
fungalboy
Um, so there but there are opportunities so there are exciting things happening in the category. There are trends to plug into globally there is There is a a universal trend that we see in Health and well-being. Um, there is also universal trend in terms of. Sustainability and and tea is very well positioned to demonstrate its credentials if the work has been done properly had are you confident the work has been done properly or you're doing the work properly to to make tea more sustainable to make it fairer for for everybody as you say from farm to fork.

46:18.80
Dan Ryan
I think I think the fairness piece is probably the the one or the the aspect that excites me most about the journey that we're on at the moment because at this point in time the supply chain that we've inherited needs a lot of work needs. A lot of support. We need to find ways to flush. More value into the markets where tea is growing and t is picked not uniquely and the core ingredient for the category is often sourced from economically suppressed geographies around the world all situated around the equatorial belt. What comes with that. Perhaps no different from coffees. Perhaps no different from coca's but certainly closest to our heart is how do we ensure that the people that are working in our plantations are being supported are being provided for and that we're creating as much value locally as possible and that's something where we we haven't codified yet. We haven't. Got our our playbook finalized and written. But that's something where a lot of time effort and energy is going into because what we've inherited needs a lot of work and um, like if I if I call it out what we've inherited is possibly based in class particularly the kind of Unilever own plantations globally have some of the the. Best facilities be that local housing be that the the living wage cetera that's being offered but still needs a lot of support a lot of work and a lot of oxygen and you know recently we've we've been supported. Let's call it by by the Bbc and the panorama investigation into.

47:54.15
Dan Ryan
And some of the the scandals and some of the the mistreatment of workers across those plantations globally and that is something we have to to step in if we're going to lead for forming consumption occasions emotional connections with consumers and driving the category. We've got a lead in with ensuring that and and lead for the industry. With ensuring that our employees right? the way through the value ecosystem are benefiting from this as we grow.

48:21.30
fungalboy
And is is that part of what drives the opportunity then to say well if we if we need ultimately, we need to drive more value into the chain so that it can be more evenly dispersed and um, more fairly dispersed. Um, I guess that provides a huge impetus to increasing the the value and and the um driving people away from I think you you gave me an example of the kind of typical cost per serveve of black tea. You know it. It. It really shocked me it was kind of almost negligible in in terms of if I'm going into a hotel and I'm paying what would what would? what would I pay for a cup of tea in a hotel at this stage three Euros ah yeah and and the cost of the tea.

49:07.42
Dan Ryan
Um, anything from between 3 3 Euro and four fifty

49:15.61
fungalboy
In my T I understand obviously that there's There's so much else that goes into it. Um, ah no more than any other category but it just shocked me how fractional that cost really is.

49:26.60
Dan Ryan
Um, so average cost per cup now this is ah a statistic from retail. But that's retail post servicing a retail margin but the average cost per cup on black tea on this island as a 2021 would have been in the region of one point three cent and that has migrated upwards marginally to about 1.5 but the what you touched on there is this notion of the virtuous cycle. How do we ensure that we create enough value in the value chain to give back and to to invest in and the most important people that are part of this chain. And those are the the individuals working in the plantations. We've got to to grow value for all which is that is the the vision or the the guiding north star for the organization. How do we collaborate with our key customers with consumers. Um, with our channel partners to create that value for all.

50:19.73
fungalboy
Um, great and I'm I'm hoping and expecting to see great things in in the coming years as you say the coming decade will be an exciting one for tea. Um, at lastly are there any sort of other opportunities that you think exist for tea beyond the Kaha beverage.

50:20.41
Dan Ryan
Great walking time helping expect secret.

50:36.42
fungalboy
Um, even even allowing for everything that you've described today in terms of you know, ultimately giving more occasions giving more functionality. Um that all seem mostly to be driven around this idea of hot beverage consumption. You know, even for that you know 3 P M slump or the. The mint tea for the digestive effects. Um, you know? Ah, we recently had a conversation with um Gary Lavin from Vititt. Um, so where where they're using tea. Um, as part of their their drinks and also as part of read that that signaling to consumers. About the benefits of of consuming these drinks. Do you think that there's a big opportunity for ultimately the category and and and your company ultimately to um, drive consumption beyond hot.

51:26.62
Dan Ryan
Absolutely yeah, absolutely if if you look at some of the markets and the shape of their p and l a large majority of in in certain markets. Perhaps the us would be a good example. Cold infusions and cold mixes are are already driving or out punching a disproportionate contribution to to pnls in those markets. There is a huge amount of opportunity I look at europe I look at Asia and say or or look at the adjacent categories for and beverages. Um, and would conclude quite strongly that getting into cold getting into and on the on the go style infusion or something that's really convenient and sustainable for people to bring with them be that to add to their refill but the water in the office or be that an infusion that. To be for some of the trials. We've actually done in hospitality and in in spa settings and in some of the 4 and 5 star hotels on the island have involved cold infusions that you will have a coal infusion that features for example, a 3 mint prior to your treatment. And then you would have a hot beverage to continue the benefit of your treatment after the fact. So absolutely I think I think extending our reach and ambition beyond just that closet or that swimmling and of hot beverage is it is a huge opportunity have we have we cracked it yet. No.

52:48.77
fungalboy
Food.

52:50.84
Dan Ryan
Have we have we got and or do we look at that as another one of those opportunities or another reason to believe another reason to be here get out of bed in the morning. Absolutely.

53:00.41
fungalboy
Um, exit went to to finish up I'm just curious. You mentioned towards the start the opportunity of having essentially ah a corporate startup. So you're a startup style but you're a well-established company. There's no. Um, getting over the fact that you have huge advantages and also all the challenges of starting new business at the same time. But you said 1 of the opportunities was to to fix things quickly if if you solve it was a problem so I'm curious a little bit about the name change because ah we had a conversation last week even I got the name the original name wrong. Um, so you were at a point in time.

53:30.66
Dan Ryan
But.

53:33.52
fungalboy
Gonna be called Ecoterra Um, am I right.

53:37.48
Dan Ryan
Um, correct correct so that was the um I don't want to dismiss the the Brian's trust that pulled that together because I'm sure it was done with with absolutely the best of intent and probably involved lots of consultants and lots of marketeers and lots of people in a room somewhere and to be fair, the the. Ambition or the the vision borrowed heavily from some global based and and class examples. The az you being being one but the idea of of ecaterra eca was sanskrit for one and and terra being earth. So you know the idea of a sustainably formed organization. That is setting itself up to give back and to do more for for people in the planet had had a lot of merit and I still believe a is is merit that we can bring with us into the new and b is is something I think the the new ceo natalie rus has doubled down on in her recent announcement of. The ambition statement for the organization to become a fully certified b corp from from end to end over the course of the next few years but the ambition can sometimes get lost in the in the translation and you know yourself being a perfect example in ah in an english speakinging market and you know. That was a symptom of the problem that we've seen over the course of the last couple of years and and in dealing with all kinds of people customers consumers globally that that couldn't pronounce it or couldn't connect with it using the.

55:09.31
Dan Ryan
Biggest brand that we have in the portfolio. Globally it is another Well-trodden path by by global fmcg and be that Moy hennessy be that the known etc back your biggest brand and one that's easy to spell um and doesn't require. Multiple phonetic sounding out when you're you're giving your email address or or your credentials to someone and if it's not working change it if it's not working fix it and and move on and that's that's kind of the attitude that we've had to adopt which coming from a ah long history in. Large established organizations that have all their playbooks written have all of their strategies codified and are super clear about what tomorrow will look like and that does add a little bit of excitement and it does add a little bit of flavor to the mix where every day is certainly different.

55:57.94
fungalboy
Well flavor is certainly something that t abounds in and opportunity abounds as well. Dan Ryan thank you so much for your time.

56:09.52
Dan Ryan
Um, and worries. Well thank you so much good to talk to you.

56:14.10
fungalboy
Excellent happy days. Ah I'm gonna click.

56:15.67
Dan Ryan
Um, we we we never even got to go into the John Walker example