NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, April 26, 2016

On his first trip to Iran last June, Joseph Kamau Kiminda quickly learned that Iranians care about a few things more than tea. The CEO of Kenyan tea company, Cup of Joe, spent time with everyday Iranians who, immediately after rolling out of bed, put tea to boil, leaving it on all day. His Iranian business counterparts called him most days, including Saturdays, at six in the morning to discuss tea for three to four hours. He even received a lecture on tea quality from the secretary of an Iranian tea distributor. “They know tea,” Kiminda concluded.

Since Kiminda’s visit to the Middle Eastern nation of 75 million last year, it has become his biggest market, well ahead of Pakistan and India. He says Cup of Joe exports 200,000 kilos of high quality tea a month to Iran.

After negotiating an agreement with the international community to curb their nuclear program last July, Iran is back on the global economy in full force. Sanctions were lifted early this year and savvy business people and investors are rejoicing. Companies from the United States and Europe are doing business in the Republic and China just signed a $600 billion trade deal with Iran. Kenya and other East African nations are getting in the mix as well.

As one of the world’s largest tea exporters, Kenya is particularly excited for Iran’s economic reopening. Edward Mudibo, managing director of the East African Tea Trade Association, predicts that exports to Iran will increase five-fold in the next two years, from $3.8 million today to approximately $18 million. That’s still nowhere near their largest market, Pakistan – which imported $104 million last year – but Iranians give Kenyan manufacturers the ability to focus on higher quality tea with value added.