For Merrill J Fernando, founder of tea company Dilmah, age is just a number. This 86-year-old is still growing, innovating and fighting pessimism, he tells Mrinal Shekar
It’s not just all tea talk – read Dilmah’s founder Merrill Fernando’s interview for some life lessons.
Merrill J Fernando is tall – towering in fact. I had expected the 86-year-old to be stooping, frail even, but when I walked into Dilmah’s recently launched tea lounge in Ibn Battuta Mall and saw Merrill unfold his 1.8m (5ft 11in) frame out of the sofa, coming to stand absolutely upright in front of me, I suddenly felt short, and all the more small for my assumption.
The handshake was firm, the gait sharp and there was no visible slouch – a stalwart who looks the part. He even has a full head of hair, I note as Merrill takes his seat after ensuring I was comfortable.
‘It’s Ceylon Supreme, a black tea from Craighead Estate. One of my favourites,’ he says as he catches me staring at the steaming cup in front of him.
Is that the secret to his youthful appearance, I ask, before assumption raises its ugly head again.
‘That and the fact that my mother raised me well. She taught me to care for the community and share with the poor. I firmly believe there is a certain joy in giving and that pure joy, I think, is the secret to my health,’ explains Merrill.
But you cannot ignore the fact that this philanthropist helms a tea company that has an annual turnover of $800 million (Dh2.9 billion), which proves that he is a successful businessman too.
As founder and chairman of Dilmah, the sixth-largest branded tea company in the world, Merrill’s success has been six decades in the making. And none of it has been easy.
‘There were several occasions when I wanted to quit,’ says Merrill as we talk about work, life and everything in between. ‘But that is one thing I am not – a quitter,’ he emphasises. In the corporate orchestra of the tea industry that plays to the tunes of multinationals, Merrill was that jarring note, the one who never fitted in.
‘I have always been the odd one,’ he says. When Merrill started out in the tea industry back in the day, he was one of the first Sri Lankans selected to train as a tea taster at UK’s Darley Butler & Co, a field that was traditionally a European stronghold. ‘Until then, Sri Lankans were employed as tea pickers only and were kept away from marketing and packaging of tea – aspects of the business that had the potential to make profit. But after much protest the British colonialists agreed to open the doors to Sri Lankans in these fields and that is how I, and five others, got selected,’ he recalls.
Merrill then witnessed some disturbing practices in the tea business. Historically, major tea companies based in Europe would import superior quality tea in wholesale from their tea-producing colonies as an inexpensive raw material, mix it with cheap varieties, then package and market it to consumers at a much higher price, making huge profits. Unfortunately, neither the tea planters nor the pickers got any of that profit. Plus the quality of the tea was inferior due to the blend as the percentage of the cheap variety used was much higher.
It was this trend that bothered young Merrill. ‘My concern was that international tea companies would eventually reduce the percentage of Ceylon tea in their blend, even drop it altogether, and it could prove fatal to Sri Lanka’s fledgling tea industry, which was known for producing some of the world’s best – therefore most expensive – variety of tea,’ he recalls.
This fear and the manipulative nature of the tea industry, fuelled Merrill’s dream of starting out on his own. And in 1962, he did by selling bulk tea. Little did Merrill know at the time, that the David and Goliath battle had just begun.
In his case, his fight was on two fronts, the corporations on one side and the government on the other. While the multinationals that still monopolised the tea trade effectively slaughtered the small businesses with their cheap blends, the government’s socialist policies took away land and resources, leaving small businesses with nothing but unfulfilled dreams, he recalls.
‘At the time I was exporting bulk tea in a big way, especially in Russia, Australia and New Zealand. It was the success in these markets that gave me the confidence and the money to launch my own brand.’ Plus the fear that he, too, might get cannibalised by big corporations in the near future, compelled Merrill to think big.
And that was how Dilmah was born in 1988. A portmanteau of his sons’ names – Dilhan and Malik.
nlike the numerous multinationals, Merrill decided to own every aspect of the tea business, just so that he could control its quality. He also decided that every package of Dilmah tea should mention its origin to promote an honest relationship with the growing number of customers. ‘When I started Dilmah, I was told by retailers that “people know what they want and they definitely do not want tea that is not just more expensive but also does not taste anything like what they’ve been drinking”. My reply used to be “People don’t know what they’re missing”,’ he recalls.
It was this modus operandi – to be conscious of quality, not price – that proved to be the game changer for Dilmah. ‘By doing so, we broke the age-old
MERRILL decided to own every aspect of the tea business, just so that he could control its QUALITY. He also decided every PACKAGE should mention its ORIGIN to promote an honest relationship with customers
monopoly the Western world had on the tea trade,’ Merrill adds. A sweet victory, but one that had severe repercussions. Soon after Dilmah found itself in the midst of a price war as major tea companies began slashing their retail prices to levels that Dilmah could not match. Afraid that his dream run was about to have a tragic end, Merrill was surprised when he was told by retailers that the single origin tea that he was selling had many fans and their number was growing.
‘The biggest revelation for me was the fact that in spite of being more expensive than the cheap commercial blends that ruled the market, Dilmah’s market share continued to grow as people were convinced of its better quality,’ says Merrill.
So, I ask, is it this hard-fought success that makes him happy, or is it being recognised through awards? This is especially pertinent as he was bestowed with the Business for Peace Award in 2015 – an award that has Nobel laureates in Peace and Economics on its selection panel and is given ‘to support, inspire, and recognise the global business leaders who are positively changing the face of business’. Past winners include Sir Richard Branson and Ratan Tata.
‘What I am most proud of is the work we have done for our employees,’ he answers. Through its MJF Foundation, the company
Merrill wants to be known as a PHILANTHROPIST, rather than a businessman. But his business acumen is STRONG, considering he is always in search of INNOVATIVE ideas to further a passion for tea
provides medical and educational support to all its 30,000-plus employees and their families. ‘Some of the kids have scholarships for higher education and two of them have just become doctors,’ says Merrill with immense pride.
ver the years, the Foundation has set up hospitals giving access to those who are unable to afford decent medical care, has built facilities for kids with disabilities, has launched empowerment programmes for disenfranchised women, and has contributed towards the reconstruction of areas in north Sri Lanka that suffered from civil war and the 2004 tsunami that destroyed everything that came in its way. ‘It gives me great joy and satisfaction to know that I have been able to bring about positive change in the lives of all those who lacked opportunities earlier,’ he says.
Clearly Merrill wants to be known as a philanthropist, rather than a businessman. But his business acumen is still strong, considering he’s constantly in search of innovative ideas to further a passion for tea. ‘Once the civil war was over, we saw an opportunity to showcase our plantations to tea aficionados from across the world and to tourists in general,’ remembers Merrill. And as this interest continued to grow, Merrill and his sons decided to diversify into hospitality by launching Resplendent Ceylon in 2011. The company now has two luxury boutique hotels – one in Sri Lanka’s Cape Weligama and another in Bogawantalawa Valley, and is planning on opening two more by next year, all of them set right in the midst of tea plantations educating guests about tea and its benefits.
The steaming cup of black tea that is in front of him has gone tepid, but not Merrill’s enthusiasm to build and expand his business. The tea lounge, for instance, Dilmah’s first in the UAE, is another venture that Merrill hopes will spread the word about tea’s benefits. ‘Apart from creating an extensive menu offering the wide variety of tea that we produce, our food menu is equally exciting as we’ve tried to showcase tea’s gourmet versatility by infusing our dishes with a hint of the brew,’ adds Merrill.
Having fought constricted mindsets all his life, Merrill is all the more appreciative of the fact that his kids are on his side and like him they, too, believe that ethics and economics can coexist. ‘I am fortunate that they have the same values as me when it comes to doing business,’ he says as he leans back reflecting on what he considers is his true wealth, his family. Talking of his hopes, he says, ‘Oh, I have dreams. For example, I wish the Sri Lankan government would get involved in increasing the productivity of the tea plantations so that it becomes profitable.’
And when I prodded him to impart some advice, he says ‘I wish the youth of today understood that the gadgets they hold are not their achievements, but mere distractions. There is no substitute to passion, hard work and single-minded focus.’ Strong in personality, robust in outlook and clear in thought, Merrill is a metaphor for the pure brew he produces.
Dilmah’s single-origin tea is a showcase for Sri Lanka’s estates 31
From helping women to be independent to looking after the needs of the employees’ kids, Dilmah’s MJF Foundation has made a difference to the community