Ceylon tea has long been one of Sri Lanka’s strongest export identities. Yet the challenge today is not limited to name recognition, as staying competitive in a world where consumers, investors and regulators expect more transparency, sustainability and innovation from every supply chain has become critically important.
The tea industry, once defined by tradition, is now being reshaped by technology and finance. For Sri Lankan tea producers, the next phase of growth depends on whether they can modernise operations, attract investment and deliver value in markets that reward traceability and ethical sourcing.
‘Wellness teas sell for over double the price of conventional teas’
From heritage to high value
Darshana Gunasekera FCCA, group FD of Dilmah Tea parent company MJF Group, believes the sector must invest strategically to capture the growing global wellness market, where consumers pay a premium for purity and functionality. ‘The industry will require substantial investment to establish the critical infrastructure necessary for international certification, to advance research and development into functional blends incorporating botanicals and adaptogens, and to implement sophisticated digital traceability systems,’ he says.
He points out that wellness-oriented teas already sell for more than double the price of conventional exports, giving Sri Lanka a clear opportunity to improve margins. But capital allocation and financial discipline are key. To compete globally, he says, tea companies need to manage research, product diversification and supply chain upgrades with the same rigour as large-scale manufacturers.
He adds: ‘Technology offers another edge, which is QR-code type traceability that allows buyers to follow their tea from estate to cup, building the trust modern consumers demand. Unlike the countries which compete on scale, Sri Lanka’s strength lies in authenticity.’
Blockchain-based traceability could become a major differentiator if the industry adopts it widely. It would allow exporters to provide verified proof of origin, carbon footprint and ethical labour practices, features that are increasingly tied to market access and financing in Europe and North America.
‘Achieving full digital readiness can be complex and resource-intensive’
Barriers to blockchain
Rajeev Samarasinghe, managing director of Mabroc Teas, says that blockchain traceability offers strong potential for transparency, but foresees significant practical challenges for many Sri Lankan exporters.
‘The main cost lies in building the digital infrastructure and ensuring consistent data input across all supply chain points, from estates to export level,’ he explains. ‘Many partners still rely on manual records, so achieving full digital readiness can be complex and resource-intensive.
‘At Mabroc, our current traceability system is not blockchain-based but operates through controlled data entry. This approach allows us to maintain transparency and accuracy without the high investment or complexity of blockchain while still meeting the expectations of wellness-driven and ethical markets.’
‘Climate-smart and regenerative practices help secure yields’
He sees the skills requirement as a further challenge. Blockchain systems need people trained in data integrity and digital systems management, which are still emerging capabilities within the tea sector. Investing in training or external partnerships can therefore increase initial costs.
Gunasekera says the sector also needs to move away from its dependence on bulk exports and towards branded or ready-to-drink formats that deliver higher returns and lower exposure to commodity price fluctuations. ‘Diversifying into ready-to-drink and other formats can reduce exposure to commodity swings, while climate-smart farming and regenerative practices will help secure yields,’ he explains.
Sustainability the strategy
Sustainability has become integral to business success, according to Samarasinghe. ‘At Mabroc, sustainability defines our identity. As the world’s first ethical tea brand, we believe long-term business success is inseparable from environmental responsibility, social impact and strong governance. Certifications such as Rainforest Alliance assure our partners that our teas are grown and processed to the highest sustainability standards.’
Buying decisions are increasingly linked to ESG performance
Retailers in Europe and the US are tightening standards for ethical sourcing, and buyers increasingly link purchasing decisions to measurable ESG (environmental, social and governance) performance.
‘Wellness-driven markets demand more than quality,’ Samarasinghe says. ‘Consumers seek products aligned with their values of health, fairness and environmental care. Demonstrating measurable sustainability actions is therefore essential for credibility and market access.’
Embedding ESG into the financial core of operations also improves long-term viability. Companies with strong traceability and environmental reporting can access better financing terms through sustainability-linked loans and impact investment funds.
Samarasinghe says Mabroc’s TeaForward 2030 initiative was designed to strengthen trust with buyers who view ESG as a measure of quality. ‘By embedding ESG into our operations through the TeaForward 2030 roadmap, we strengthen trust with buyers who view sustainability as a marker of quality, while opening doors to high-value markets.’
A taste for ESG
Suresh Perera, tax and regulatory principal at KPMG in Sri Lanka, says sustainability in the tea industry directly boosts profitability and investor confidence. Exporters with strong ESG performance often reduce operational costs and qualify for green financing with lower interest rates.
‘ESG integration is a strategic asset for growth and capital access’
‘Sustainability-linked loans reward eco-conscious practices such as carbon reduction and ethical labour,’ Perera says. ‘Transparent ESG reporting improves valuation by signalling resilience and reducing risk. Certified sustainable tea estates gain better access to premium international markets.’
He adds that social and environmental stewardship enhances brand reputation and regulatory compliance. Overall, that makes ESG integration a strategic asset for growth, capital access and global relevance.
Leadership challenge
The path ahead is not only about branding or promotion but also how boards, finance directors and operational leaders adapt to new market realities. Investors now evaluate exporters not just by production volumes, but by carbon metrics, digital traceability and resilience to climate risk.
As Gunasekera and Samarasinghe both suggest, the industry’s transformation requires leadership that understands both finance and sustainability. Building new value chains will demand investment in technology, greater collaboration between the public and private sectors, and a mindset that treats innovation as part of the core business.
More information
Considering a move to the global food and beverage (F&B) sector? Read our specialise in article, with insights on what it’s like to work for a popular and well-known F&B company.
