Just about even with Tetley and catching up on
by Steve A. Morrell
Dilmah teas sell in approximately 93 countries.
If Lipton, now a global tea brand, could say they command 15 %
market share of that market and Twinings, given their in-house
assessment have 6% Dilmah, according to Fortune Magazine is just
about even with Tetley. All this would lead to the standalone
Brand Dilmah commanding third slot in that brand category.
Just as much as Lipton, the Brand, had its
origins in Ceylon, Dilmah too has its roots in Sri Lanka. But
for convenient marketing strategy it is Ceylon. And is Ceylon
Dilmah owns vast tracts of tea land in the
Central hills and apart from Brand projection its image also
portrays Dilmah teas originate from their own tea land adding
strength to the Brand and more so its market share.
Merril J. Fernando, Chairman of his company MJF
Exports with his sons Malik and Dilhan run the company, Dilmah
Teas. The company pioneered the continuous movement of Ttea
picked packed and branded at origin and supplied direct to
consumers offering guaranteed consistency quality and
They have also built on introduction of Single
Region Single Estate Tea giving rise to marketing strategy of
exclusivity of, say, a single malt, (In the ‘Scotch’, idiom).
That coupled with varied elevations of Sri Lanka’s tea land and
diversity in weather and soils, has marked Dilmah to relate to,
more appropriately, the wine industry internationally.
Dilmah the company, started its operations in
1988 with Australia its first marketing target. New Zealand
followed and in time the Dilmah Brand gained strength and is now
an internationally branded beverage.
The wine equation however has met with some
ridicule from global players notably larger conglomerates that
now see Dilmah a threat to their cozy conception that an
‘upstart’ company from a tiny Island in the Indian Ocean could
threaten their snug world which they consider their little niche
in the beverage industry.
Fortune Magazine says quoting Merril J.
"The big multinationals would say that," he
said. Merril Fernando who says he has spurned many offers to buy
him out over the years, said; "I’ve stayed true to the leaf
because I believe in its quality and not in its mass-market
Fortune Magazine also says: "The world may drink
more than a billion cups of tea a day, but big producers have
struggled to add value to the brew, while Starbucks and other
coffee brands have prospered. So the Dilmah Group, the name is
taken from the first syllables of the brothers’ names, has
positioned itself like fine wine.
Its elegant packaging is heavy with wine
iconography. Descriptive labels equating a robust black tea to a
shiraz or a fine white leaf to champagne. The aim is to present
the tea as the purest in the world, while also playing to
consumers’ health concerns and rising enviro-consciousness.
Unlike the blends in an average tea bag, which can contain
leaves from several countries. Dilmah teas, it says, are from a
single origin. "You have to regard tea in the same way as you
would an immaculate vintage," says the brothers’ 77-year-old
father, group patriarch Merrill Fernando. "People need to know
what they are drinking."
The company "my third son," as Merrill describes
it which was founded in 1988, effectively created a new market
segment that the industry now calls "curiosity teas."
According to Euromonitor, a London market
research consultancy, Dilmah is now the world’s third-largest
standalone global tea brand, about even with Tetley, which is
owned by India’s Tata Group. Merrill claims Dilmah’s innovations
have forced competitors to follow with their own speciality
brands. Starbucks, too, has caught the boutique-tea trend, with
its 1999 purchase of Tazo Tea.
"Dilmah is a very interesting company," says
William Gorman, executive chairman of Britain’s Tea Council.
"This is an industry that has been incredibly slow to innovate,
and relatively tiny Dilmah has showed it how." The company has
doubled in size since 2000. Merril Fernando got his grounding as
a tea taster when it was still a "White man’s skill", in 1950.
Since then, a working stint in Mincing Lane, the
tea buying centre of the world at that time, and then buying out
the Company he worked for after he returned and continued his
work. The surge for Dilmah identification grew to its present
The mighty Starbucks too has seen Dilmah strategy a threat
and has tried to match what it considers strong marketing.