Introduction

Rooibos is a broom-like member of the family of the Fabaceae plant which is mainly growing in South Africa. The leaves of this plant are used for the purpose of making herbal tea, commonly known by the names of rooibos (in South Africa) and redbush tea (in Great Britain). In South Africa, this tea is mainly consumed for medicinal purposes by the native people. The present report is based on the case study of South Africa’s Rooibos Tea Industry, with reference to which importance of this sector for the indigenous people over there will be discussed along with providing advantages and disadvantages. Also, Pestle analysis and Porter’s five forces model will the applied.
1. a) Importance of Rooibos to the indigenous people in South Africa

For the indigenous people in South Africa, Rooibos involves a huge importance wherein, mainly the Khoisan people use it as making several medicines. The fact behind the same is that Rooibos contains plenty of natural minerals along with many benefits like it has the property of reducing stress and risk of cancer along with lowering blood pressure and proving to be an aid for the digestive problems (Wynberg, 2017). This industry is playing a significant role in helping people with reducing pain and inflammation also as Rooibos has numerous antioxidants, low tannins, chemical compounds, and enzymes that help in doing the same. Further, it serves as the remedy to get rid of diabetes if a person takes it in a correct quantity with having no side effects. This is the reason; this is called as herbal tea which has a very high importance for the native people in South Africa (Farris, 2020).

1. b) Advantages and disadvantages of industry’s establishment of benefit-sharing with the indigenous people
Earlier, there were many issues associated with the industrialization of Rooibos tea and many improvements were required to be made to faster the flow of work, especially with respect to maintaining strong relations with distinct ethnic groups. For the same, an attempt to establish a benefit-sharing agreement was made with the indigenous Khoisan people. It ensured a long way promise to provide profits by making the Rooibos tea industry meet all set standards of CSR (corporate social responsibility) and offer materialistic benefits to the Khoisan communities who still do not have enough money for living and are poverty-stricken (Nordling, 2019). However, according to some campaigners associated with human rights and environment claim that this agreement has an issue of dignity and recognition of the intellectual property of indigenous Khoisan communities who in actual are the original holders of knowledge regarding the use of Rooibos.
2. Macro-environmental trends and key drivers behind the growth of Rooibos tea globally
Pestle analysis is one of the best ways through which macro-environmental trends and key drivers can be analyzed that helped Rooibus tea industry to grow in the global markets and its broad ecosystem which is as follows:

Figure 1: Pestle Analysis
Political – Rooibus is operating in all nations with ease and no political restrictions. It has maintained good relations in every country it is operating like, with China. When the Cape in South Africa stopped its European trading route, Rooibus got linked with the Chinese tea trade (Shilubane, 2018). Further, it also made supplies at the time of Second World War which shows its political friendliness with other nations.

Economical – This industry is offering the products as per the demand of respective nation like in Asian countries and the Middle East, people used to prefer green and black teas which were having caffeine (Matome, 2019). As Rooibus is free of caffeine, it is growing there. The demand and supply of Rooibus tea are mainly affected by medicinal, social and cultural factors.
Social – Rooibus is the chosen brand of tea over others as per the demand in many regions like India, China and Sri Lanka. As it takes care of the health of people, so for their betterment, they prefer this tea. It helps in improving their fitness and weight loss. Majorly, in America, Europe, and Asia, the demand of Rooibus tea is majorly for curing allergies, insomnia, hypertension, premature aging, headaches, and asthma (Priilaid, 2019). The medicinal benefits of Rooibus can be termed as one of the main key drivers for increasing its demand.
Technological – Rooibus uses the advanced and latest techniques to make their tea products like other than health benefits; it has a sweet, delicate, and aromatic flavor which is being preferred by many nations that take it as an excellent base for blending.

Legal – Rooibus is functioning transparently and systematically with other nations, keeping in mind the legal factors (Brink and et.al., 2020). It is being exported in countries like USA, UK, Netherlands, Japan and Germany which demand it not because it is an herbal tea but for the reason that now, it is a brand of choice. However, US once featured it in some legal drama suits.
Ethical – With establishing the benefit-sharing agreement for indigenous people in South Africa, Rooibus tea industry has maintained ethics as it ensured to share the material benefits to poor Khoisan communities along with meeting the standards of CSR (Wynberg, 2017).
3. Competitive forces influencing the profitability of Rooibos tea industry in South Africa
For identifying the competitive forces that are leading the Rooibus tea industry to earn higher profits in South Africa, one of the best ways is to use Porter’s five force framework which is given as below:

Figure 2: Porter’s Five Forces Framework
Competitive Rivalry – In South Africa, the intensity of rivalry in the Rooibus tea industry is low as according to the competition commission of South Africa, Rooibus is the leading and dominant player producing its herbal tea. It is inheriting the assets and having monopoly with the support of the Rooibus Tea Control Board (Xinhua, 2017).
Supplier’s power to bargain – The supplier power in the Rooibus tea industry is very high as there are plenty of suppliers available like Sunbird, SA Rooibus, The Tea Spot, Herbes del Moli, SA Tea, etc. However, the most preferable among all is Sunbird Rooibus Ltd.
Buyer’s power to bargain – The buyer’s power in the Rooibus tea industry to bargain is low in South Africa as the company is committed to maintaining its brand image from a humble stable drink with which many South Africans grew, to a different and nuanced one that can easily be compared with special coffee and the traditional teas (Muller and et.al., 2020).
Threat of substitution – The level of threat from substitute products is also low in Rooibus tea industry as it offers unique natural products to South Africans without any blending or adding flavors. Further, it provides very high quality products with stylish packaging in teabags and tins that promote the reusability, recyclability and compostability which no other rivalry brand offers.
Threat of new entry – In Rooibus tea industry of South Africa, the threat of new entrants is very low as it is the place of origin of this herbal tea. In this nation, Sunbird Rooibus is the first company that provided a range of organically grown Rooibus tea from single-origin sources. Thus, people over there have high trust on it and they are loyal towards this brand (Elisha and Viljoen, 2018).
Conclusion
From the above study, it can be said that Rooibus Tea Industry in Africa is on the leading position with having high goodwill and brand loyalty of its customers. It is maintaining a strong position in both; local and international markets by offering high-quality products with differentiation and innovation along with fulfilling CSR responsibilities in comparison to competitive brands. This is the reason; the company is gaining competitive advantages over others, leading it to survive with sustainability.

References

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Priilaid, D., 2019. Exploring Blue Ocean Innovation in the Wine Industry. In Management and Marketing of Wine Tourism Business (pp. 241-259). Palgrave Macmillan, Cham.

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Wynberg, R., 2017. Making sense of access and benefit-sharing in the rooibos industry: Towards a holistic, just and sustainable framing. South African Journal of Botany. 110. pp. 39-51.

Xinhua., 2017. Rooibos South Africa faces a heavy fine for uncompetitive behavior. [Online]. Available through: <http://www.xinhuanet.com/english/2017-06/20/c_136378596.htm>.