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Merrill Fernando – making a difference

In Community and Relationship by Elizabeth Jewell StephensLeave a Comment

Merrill Fernando – making a difference with determination, passion, humility and spirit

Merrill Fernando’s story is one of determination and perseverance, belief in his people and his product, generosity of spirit and integrity, and above all, belief in Spirit as a guiding force.

 

“If you are cold, tea will warm you; if you are too heated, it will cool you; if you are depressed, it will cheer you; if you are excited, it will calm you.” – William Ewart Gladstone

Recently in Melbourne it was my very great honour to interview Mr Merrill Fernando, the founder of the Dilmah Tea organisation. I asked him what gave him the idea to branch out on his own – and when he was 58.

Mr Fernando explained that he had been working in the tea industry and learnt all about production at home in Sri Lanka (Ceylon as it was known until 1948) and went to the tea hub in London to study marketing of tea. Back then, tea was only ever supplied from Sri Lanka in bulk. It was shipped in large plywood tea-chests around the world, and then family companies, small, medium and large, would do the value addition – packaging, branding and marketing.

What he saw in London was that the bulk of money was made from this value adding. He moreover had a hunch that the plantation workers, who at the time were earning fair wages, might eventually be disadvantaged and that, moreover, his own country might lose tea sales to other countries producing an inferior product.

At the age of 24 he made a promise to himself that he would ‘bring back integrity to tea’.

Finally, 34 years later, he took the plunge and started his own company, which he was inspired to name Dilmah (from his two sons’ names, Dilhan and Malik). He had incredible opposition from people everywhere – not only from his own friends and family, but big multinational tea companies threatened to not buy their bulk tea from Sri Lanka again; so his own government didn’t want him to do it either. Mr Fernando pointed out that bulk tea sales had dropped dramatically since the multinationals were able to buy inferior tea from other countries and didn’t care about consumer tastes. Indeed, consumers had been tricked into accepting other countries’ teas as ‘Pure Ceylon Tea’, largely because of the introduction of the tea bag, and because there was no-one at the time stopping false claims on tea packets. So he saw that ultimately, seeing tea was being sold as a commodity, and the way to sell a commodity is by price-cutting, all bulk tea purchases would eventually cease from Sri Lanka because Ceylon tea is a much better quality and cannot compete on price. Therefore the government ultimately gave him space to start.

I asked him why no-one else in Sri Lanka had thought to start up their own company to take tea from growing and processing, through packaging and marketing, and he says that colonisation was the problem. The country had been colonised for 450 years – first by the Portuguese for 150 years, then by the Dutch for 150, and finally by the British. So the consciousness or mindset of the people was not aligned with the idea of entrepreneurship.

Then Mr Fernando related a very long and fascinating story about the ins and outs of doing business in the world of price-cutting, unfair trading, government lobbying, and general tricking of the public, which all started when family companies running tea businesses – you may be familiar with the names of Bushells and Tuckfields, for instance – sold their companies.

It sometimes looked like he would be muscled out, but his doggedness, and his faith in universal guidance, always kept him going.

The most fascinating thing that I heard was that Australian and New Zealand consumers created the tipping point for Dilmah in Australia. How could this have been? Mr Fernando had been successful in having his bulk tea shipped to Australasia for sale in Coles as a home brand tea, back when better prices were still being paid and consumers still remembered the taste of Pure Ceylon Tea. From there he also managed to have his tea taken up by all supermarkets as their home brands too.

Then, through his persistence over about a year, Mr Fernando managed to get the Coles buyer to take on two varieties of his Dilmah-branded packets of tea bags – and you may know that he did his own TV commercials too. Well it turns out that the consumers were so happy with the taste of the tea that they were phoning Coles to thank them!!! This turned out to be the tipping point when it looked at one stage, due to pressure from elsewhere, that Dilmah would be forced out of Australia. When it looked darkest, the Coles buyer was delighted to be able to report that consumers loved Dilmah – and interestingly, when the matter was referred upwards, Mr Whitlam said he didn’t want to interfere seeing the consumers liked the tea.

The stories told by Mr Fernando were not only fascinating but quite gripping at times. I think it would make a good plot for a novel – a very long one. His insights or hunches proved to be correct time and again throughout this long journey. As he thought, the time came when the tea plantation workers were not paid well enough.

I asked him if he was a spiritual man, if he received divine guidance, and he answered, “I owe everything to divine guidance”. He prays morning and evening and that’s how he gets his inspiration. Even the name of Dilmah, being made from his two sons’ names, turned out to be perfect because people resonated with this new company seeing it was a family company. He didn’t particularly want to do the TV commercial himself, but he was guided that it was the right thing to do – and it turned out to be a good thing that encouraged Aussies to ‘give the bloke a go’.

At the outset I told you I was honoured to interview Mr Fernando (and his second son Dilhan popped in for the last ten minutes or so). I had heard about their service to their community and the environment, and I admit that I had a question ready to test their intentions. I asked, “Would it be right to say that, with every cup of tea we drink, we help a disadvantaged child, or support a community, or help save a baby elephant?” When they answered in the affirmative and were about to say more, I cut across them and asked, “And why don’t you use those as slogans to sell the tea?”

Both father and son piped up, and Dilhan took the lead, “My father integrated into the DNA of the business the philosophy of making it a community service. His philosophy is that community service is an obligation. This is integrated into the heart of the operations of the business. We have in this one organisation the MJF Charitable Foundation, which receives 10% of Dilmah’s global earnings before tax, and Dilmah Conservation. While we work towards the growth of the Dilmah brand, we have the Foundation and Conservation organisations as part of the same priority.

“The Foundation started in 1962 but there were opponents to that work, as the thinking back then was that the only purpose of business was to make a profit.

“The minute you introduce a marketing alignment to any humanitarian or environmental objective, you mess it up. So we don’t want to corrupt it.”

I thanked them and told them that that was the answer I was hoping they’d give me.

Is it just divine guidance that has seen this man change the lives and fortunes of so many people against all odds?

Dilhan thinks there is so much more to his father: “His determination but also his humility in the face of his success. His passion drives him, but most importantly his humility.”

 

A few facts:

  • Mr. Merrill Fernando is in his mid 80s and travels the world promoting his tea. These days, and for the past 10 years, Dilmah have been the only tea marketing organisation in the world to grow their own tea.
  • Dilmah have improved the lives of over 10,000 people in Sri Lanka.
  • His community’s first two medical doctors, children of tea workers who were assisted by Dilmah, have recently graduated, the story of which brought tears to the eyes of Mr Fernando senior.
  • The Dilmah philosophy is ‘Business is a matter of human service’.

 

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