Reaching out to the world

Marketing and Distribution

Quite apart from the freshness, quality and integrity of Dilmah tea, consumers demonstrate their love and affection for a family-owned product which is backed by its Founder by adding his face to every pack of tea. No responsible person or Founder of a company would do so unless he is committed to the finest quality of his product and is able to guarantee that personally. That is the difference between all brands around the world – faceless brands as consumers call them - and Dilmah tea, the brand with the face to it. Merrill J Fernando

There was a time in the 1890s when Ceylon tea was not widely known or appreciated, a time when the planters did what they could to introduce their product to new markets by running promotional campaigns at world fairs and exhibitions, serving it in dedicated kiosks and tea rooms, through catering contracts, and offering it as gifts to famous people and members of royal families. During those early years of tea production in Ceylon, no-one could ever really decide what should be done about advertising, and the indecision and lack of direction were compounded by two world wars, an economic slump around the world and a reduction in tea consumption because of rationing and lack of supply.

During the first years of Merrill’s tea career, The Ceylon Tea Board started its campaign to open Tea Centres in various capital cities around the world. The Ceylon Tea Centre in London’s Lower Regent Street opened in 1946

and further branches followed in Leeds, Manchester and Edinburgh in the 1950s. At their peak in the 1960s, the British centres together served over half a million cups a week. The campaign continued in other major cities and Melbourne opened in 1959, Copenhagen in 1961, Sydney in 1963, and Brisbane in1966. Then in the 1960s, came the establishment, in Denmark, Australia, France, New Zealand and Britain, of ‘Tea Councils’ whose role was the generic promotion of tea with financial support from India and Ceylon. And in Sri Lanka, the Lion Logo made its appearance.

The purpose of the application of the Lion Logo to packets of Ceylon tea, introduced in the 1980s, is to guarantee to consumers that what they are buying inside those packets is 100% quality Ceylon tea. But, as with all such quality food marks, it is impossible to know whether the packets really do contain only quality teas from Ceylon or whether the packers and blenders using the logo have added teas from other

origins to whatever Ceylon tea is in the blend. So it is difficult to quantify the benefits earned by paying a tax to the Ceylon Tea Board for the necessary quality testing and administration of the logo. Does the logo really promote Ceylon tea? Do the blenders and packers using the logo sell more Ceylon tea or do they just sell more blended tea from other origins? Merrill has remained a severe critic of the use of the Lion logo which has only assisted overseas brands to increase sales while Ceylon tea imports dwindled. He has always had his own views on how best to promote, market and sell Ceylon teas.

Dilmah’s Marketing Strategy

Early in his career, Merrill recognised the fact that, as suppliers of bulk tea, it has always been difficult for tea producing countries to successfully promote their product. Once the teas reach the consuming countries, they are blended with teas from other origins and once the tea is in the packet, the consumer cannot possibly know where the teas have come from. Advertising by individual growers is therefore pointless. And if the producing countries contribute funds to tea associations and tea councils in the consuming countries for the generic promotion of tea, their money may well help to influence overall consumption but any increase will not necessarily benefit them directly. This is especially true if tea from a particular origin is more expensive than teas from other sources because the blenders will generally buy the cheaper origins. Sri Lanka has suffered over the years because of the high prices of her teas and the comparatively low prices of teas from other tea producing countries. But Dilmah, as a branded company selling only packs of tea that contain 100% pure Ceylon tea, can advertise and promote itself not just as Dilmah but as a pure Ceylon, single origin tea. This has always been Merrill’s approach and by taking control of the bulk tea at source, by blending and packing it in Sri Lanka and sending it out into the world market as a branded product, he has been able to develop a powerful and effective marketing strategy.

The first campaign to promote Dilmah ran in Australia, but it was advice from New Zealand that helped shape the content of the first advertisements. Merrill’s New Zealand advertising agency told him, “If you maintain a quality product and have an honest face, then consumers identify with what you eat and drink and will want to share in that.” He was at first reluctant but eventually agreed to appear in the first adverts as himself, as the founder of the company, and as an honest farmer trying to sell an honest product to ordinary people. Once the campaign started, Dilmah’s sales and successes went from strength to strength and the commercials that go out today on Australian and New Zealand television have continued the family message and theme. Merrill speaks to viewers from the tea estates and factories, alone or with Dilhan and Malik and sometimes with the grandchildren; the workers in the background are shown plucking the tea, an elephant or two sways rhythmically along a pathway, children in smart school uniforms scamper off along the path from the village to catch their school bus. Merrill tells viewers that the workers are “partners in my business to bring you a perfect cup of tea and when you buy Dilmah, you bring smiles to their faces.” The message is simple - buy Dilmah tea, help put the money back into Sri Lanka to improve the workers’ lives, and also enjoy a really good cup of tea! Today, Australians everywhere recognise Merrill as ‘Mr Dilmah’ and stop him in the street to chat about the tea, or they write to thank him for his wonderful tea. He has become a trusted friend.

Since those pioneering adverts, Dilmah has gone on to run a comprehensive programme of promotion and advertising around the

world, adapting the message to individual markets, keeping up to date with modern developments, changing fashions and shifts in social and economic situations. But, whether the campaign is to promote everyday tea bags, the gourmet blends or the new t-Series, the underlying message is always the same and the images very often include one or other member of the family and the stunningly beautiful tea plantations where Dilmah’s teas are grown. The following are just some of the outstanding projects that Dilmah has been involved in.

Sponsorship and Support of Others

Companies all around the world use sponsorship of sport, literature, fashion, theatre, music and art as an effective way of promoting their products and Dilmah is no exception. But Dilmah’s approach is about far more than simply promoting its tea through such links. The company always seems to find a truly heart-warming way of lending support to others while at the same time telling more people about how drinking Dilmah tea can benefit the people of Ceylon. As well as giving so much back to the community through the MJF Charitable Foundation, the company has backed many campaigns over the years to raise and donate funds to charity or to events and activities that bring health and happiness to many.

In 2001, Dilmah sponsored a visit to Colombo by internationally acclaimed classical pianist Raul Sunico who performed for free to raise money for the Ceylon Breast Health Centre which cares for underprivileged women. In 2002, Dilmah sponsored a collection of teapots designed or signed by celebrities who are great tea drinkers (including actress Glenda Jackson, performer Cliff Richard and author Arthur C Clarke) and auctioned them to raise funds to help restore the clipper ship Cutty Sark, now in dry dock in Greenwich, London. Built in 1869 to carry chests of tea speedily from

China to the London docks, the vessel was diagnosed in 1997 as needing major restoration work. The teapots ranged from craft pots from small potteries to sleek porcelain pots from such major potteries as Wedgwood and Royal Doulton.

In 2006, Dilmah sponsored a photographic event to raise money for the Association for the Support of Vietnamese Handicapped and Orphans (ASVHO). Banners in the street, flyers, a website and adverts placed in local newspapers announced the project and invited young people, including those with disabilities, to take photographs of friends, family and people in the street. The theme was ‘family and people in a rapidly modernising Vietnam’ and the interest and enthusiasm was immediate. Cameras were handed out, the photos were judged by a panel of experts, prizes were awarded for the best eight shots, the prize winners gave half their winnings to the ASVHO, an exhibition of all the work was arranged and an auction of the images raised money from hundreds of visitors. A total of $6500 was presented by Dilmah and was used to purchase 75 wheelchairs. Also in 2006, Dilmah and Landcare, an Australian environmental charity that looks after and improves bushland, beaches, native plants and wildlife, worked together with schools to improve water quality and the condition of rivers, streams, wetlands and floodplains. The funds donated by Dilmah provided water quality testing kits so that 120 community groups and schools can monitor and care for the quality of their local water supply.

In 2003, ten cents from the sale of selected, specially-marked packs of tea sold in Australia raised $50,000 for the Starlight Children’s Foundation, an Australian charity that assists sick children and their families. In 2004, an on-pack promotion in New Zealand (involving the donation of 30 cents from every pack of Gourmet Earl Grey and English Breakfast tea) raised $20,000 and Merrill presented a cheque for that amount to Hospice New Zealand which runs 37 hospices. As well as raising those funds, Dilmah has also provided free tea to the hospices for the past 10 years.

Tea and Sport

Sport is another favourite of Dilmah’s sponsorship programme. And cricket is top of the list! The British brought cricket to the island in the 19th century and established British style cricket clubs with their own grounds and pavilions amongst the tea estates. Today cricket is very much a local sport and there is a natural link between Sri Lanka’s number one team and Sri Lanka’s number one tea. The tea company’s sponsorship of the national team began in October 2001 and during their first season together, the team won the ICC Champions Trophy and reached the semi-finals in South Africa where they eventually lost to Australia.

Former Australian wicket-keeper, Ian Healy, once said of the connection between his favourite game and Dilmah Tea, “A game with so many tea breaks in it deserves Dilmah! It makes perfect sense…” And Tony Greig, former captain of the English cricket team agreed: “Sri Lanka’s cricketers came of age on tour in Australia and went on to win the coveted World

The British brought cricket to the island in the 19th century and established British style cricket clubs with their own grounds and pavilions amongst the tea estates. Today cricket is very much a local sport and there is a natural link between Sri Lanka’s number one team and Sri Lanka’s number one tea. The tea company’s sponsorship of the national team began in October 2001.

Cup….. Dilmah Tea has become the Sri Lankan cricket sponsor and in so doing has embraced the great love that Sri Lanka and Australia have for the game of cricket and tea.”

Visiting players and officials from all over the world are often invited to the Dilmah factory to meet Merrill and sample the teas, and spectators are also rewarded for their loyalty as customers. In 2003, Dilmah organised an online auction of four autographed cricket bats, three of which were signed by the members of the international teams of Australia, India and Sri Lanka, and one that was signed by past cricketing heroes. The money raised paid for a day of cricket for one hundred underprivileged or orphaned Sri Lankan children at Colombo’s P Sara Stadium. The children, aged between 10 and 12 years old, were organised into teams and tutored by experienced cricket umpires and managers before playing four matches each and then meeting with some of the players from the national side.

In 2004, a lucky father and son won special hospitality tickets to the Asia Cup and, so that they could enjoy every single minute of all the matches, were hosted for the nine day series at Colombo’s five star Galadari Hotel. So they got to meet the players, collected autographs, and even managed to have their photograph taken with their cricketing heroes. Memories for a young boy and his father to cherish! The competition was organised through the Dilmah Cricket Network website (launched in 2002) and part of the prize was a visit to Dilmah to taste the teas and understand a little more about how the beverage that keeps the cricketers going is bulked and packed.

In early 2005, Dilmah also backed the National Cricket of the Blind (NCAB) tournament which involved nine teams from around the island in a series of matches held in different regions. Very sadly, one of the teams had to withdraw because several cricketers from the Blind School in Tangalle on the south coast had lost their lives in the Tsunami that struck Sri Lanka on December 26th 2004. The team was travelling to Colombo when the cruel wave hit the coast and washed its bus away. Dilmah’s sponsorship

of the Blind Cricket Team continues and, as they bat and field using a special ball containing bells to help players locate it on the field, the skill of the players brings amazed admiration from supporters and spectators.

The link between Dilmah and the annual national tournament was strengthened when the MJF Foundation organised a special cricketing day in 2007 for two of its beneficiary organisations – School for Visual and Hearing Impaired, Moneragala and the School for the Visual Impaired at Ratmalana.The teams were invited to play against each other at the Mercantile Cricket Association grounds in Colombo watched by all the pupils and staff from the two schools. The highlight of the day for the teams was meeting Merrill J Fernando and the Guest of Honour, former World Cup winning captain and Chairman of Sri Lanka Cricket, Arjuna Ranatunga. During the lunch break, they also met Sri Lankan international cricketers, Michael Vandort, Jehan Mubarak and Kaushalya Weeraratne. The event coincided with Merrill’s 78th birthday and later that evening, the two school groups were hosted to a celebratory dinner and an awards ceremony at which Merrill was presented with a surprise birthday cake. Before returning home, the children from Moneragala spent the following day at Dehiwela Zoo.

With such an obvious link between tea as a healthy drink and sport, cricket is not alone in enjoying the benefits of Dilmah’s generosity and support. On 28th September 2003, The Dilmah Football Cup was inaugurated in Vietnam and involves Hanoi High Schools in an annual football competition. Dilmah tea is offered free to the players, organisers and guests during the competition and Dilmah awards bonuses to the top four teams and prizes to the best player, the best style team and the school with the highest number of supporters. Similar competitions in Norway and Georgia were also supported during the World Cup in 2006. In 2004, Dilmah tea refreshed tennis players and spectators during the Federation Cup, the International Tennis Federation’s international competition for women. With Russia an important customer of Dilmah, it was gratifying to watch the Russian team win for the first time. And in 2006, Russian ice skating champion, Evgeny Plyuschenko became the sporting face of Dilmah tea.

Tea, Food and Spice

At last people are beginning to understand that tea offers the same wonderful range of taste experiences as fine wines, and for some time, Dilmah has been leading the market in raising awareness of tea’s connoisseur qualities. In 2005, Merrill invited Sri Lanka’s finest chefs to join him in bringing unusual and exciting flavours to the consumer. They were each challenged to devise a ’Menu Dégustation’ featuring speciality teas from the Dilmah range as ingredients in marinades, sauces and reductions, flavoured sorbets and petit-fours. Judges included food industry professionals, and prizes were awarded for composition, creativity, preparation, appearance, service, practicality and, of course, taste. In March that year, a similar ‘Thé Culinaire’ contest took place in Warsaw and chefs from the city’s top seven restaurants stunned guests with their innovative and creative menus. The teas that featured in the winning menu included Dilmah’s Ceylon Orange Pekoe, Jasmine Green, Ginger Spice, Mediterranean Mandarin, Earl Grey, Lapsang Souchong and Ceylon Cinnamon. Indonesia enjoyed its Thé Culinaire in 2006 at Jakarta’s Ritz-Carlton hotel and the weeklong adventure in tea offered visitors the opportunity to view and taste rare and unique teas such as the First Ceylon Souchong and the First Ceylon Camellia Flower Tea. Guests were served hot tea and iced tea cocktails such as Dilmah Sencha with Chivas and Cointreau, and Dilmah Earl Grey Ice Cream t-Shake. Chef William Wongso’s imaginative menu demonstrated perfectly how speciality teas can be used as a gourmet ingredient in culinary treats such as ‘puff pastry baked essence of Kampung chicken’ and ‘Foie Gras and Morel with Dilmah Ceylon ‘Young Hyson’ green tea’.

In February 2007, with the cooperation of the Chefs’ Guild of Lanka and World Association of Chefs’ Societies (WACS), Dilmah inaugurated the first National Tea Sommelier competition. Held at Waters Edge Country Club in Colombo, 28 participants from top hotels around the world competed to create tea based cocktails and mocktails. The winner, Jeewanthi Adhikari from the Taj Samudra Hotel, Colombo went

on to represent Sri Lanka at the Asia Pacific Dilmah Tea Sommelier Competition in March 2007. Judged by a panel of distinguished restaurateurs, chefs and wine sommeliers, each contestant was asked to create a tea based beverage that was assessed for its taste, utilisation of tea, creativity, innovation, presentation, technique and timing. The winner was once again Jeewanthi Adhikari and she went on to represent Sri Lanka at the Dilmah Tea Sommelier World Championship in Poland. To sum up the philosophy behind these exciting competitions, Merrill explained, “Dilmah represents authenticity, ethics and genuine innovation in tea, and the Tea Sommelier championship reflects those values by promoting excellence in the art of preparing tea and tea based beverages. It also brings the skill of the world’s finest culinary professionals to tea. That combination of culinary skill and the finest tea on earth will only help develop the image of Ceylon tea.” And Dilhan added, “The Dilmah Tea Sommelier programme is our tribute to nature’s healing herb. It is also

a manifestation of our belief that tea is the beverage for the 21st century – as much for its healing and protective properties as for its variety, range of indulgent taste, flavour and aroma experiences.”

Sri Lanka was once the world’s largest exporter of cinnamon and was also famed for its ginger and black pepper. So what better location for a Spice Festival at which visitors could sample some of those famous flavours. The first such event in October 2005, held in Colombo, was sponsored by Dilmah and combined music, dance and spiced dishes from all around the world in a spectacular celebration of colour, flavour and fun. A competition to create the best Chai using Dilmah’s variety of spice-flavoured teas produced the winning recipe of ‘Ginger and Cinnamon Sp’Ice’. Meanwhile, in New Zealand, celebrity chef Jo Seager met Dilmah’s challenge to involve the New Zealand public in creating a delicious tea bread or fruit cake recipe that included Dilmah tea. The cookery contest was part of World Hospice and Palliative Care Day in 2006 and ran alongside an on-pack fund raiser which resulted in a donation of $25,000 to Hospice New Zealand’s 37 hospices.

The Health Message

Like all tea companies, Dilmah enjoys telling its customers how good tea is for all of us. We now know from epidemiological and animal studies that all types of tea can help protect us against certain forms of cancer, especially oesophageal, oral, lung, stomach, liver, colon and skin cancers. Tea may also help to protect our hearts and circulatory systems, inhibit the development of cavities in teeth and gum disease, boost the immune system, reduce the harmful effects of some bacteria, help to ward off the effects of Alzheimer’s disease, offer beneficial effects to diabetics, and help our bodies fight other agerelated diseases. It seems that tea can also help us sleep better since

one of the amino acids in tea, theanine, appears to improve the quality of sleep and the mental state upon waking. On-going studies are bringing us more and more good news about how just beneficial tea can be to our health and well-being and this is helping to increase consumption.

However, because of government regulations and controls, tea companies have to be quite reticent in their use of on-pack messages about tea and its health benefits. Dilmah strengthens the health message by using words such as ‘goodness’, ‘pure’ and ‘natural’ on its packaging, in its publicity and when talking directly to customers. It is obviously important that Dilmah’s marketing team and its agents and distributors around the world know about and understand the latest findings resulting from tea and health research. To ensure that relevant information is passed on, articles on tea and health appear regularly in Talking Tea, Dilmah’s in house magazine, the most recent findings are posted on the Dilmah website, and when the Dilmah team comes together for conferences, specialist speakers are invited to bring everyone up to date.

When talking about tea and health, the message needs to be conveyed in everyday terms that ordinary people can understand, and so the healthgiving benefits of tea are often compared to the beneficial properties of the foods we eat on a daily basis. Fruit and vegetables provide a clear point of comparison and we can now tell consumers that tea has a higher antioxidant content than many fruits and vegetables. The benefit of consuming plants that contain antioxidants is that they encourage new growth of tissue in the human body, they are a source of energy, and they provoke the detoxification of bad chemicals generated by our bodies or absorbed, eaten and drunk by us. But to gain the maximum from the consumption of antioxidant-rich foods, those foods must be fresh or the antioxidant activity begins to diminish. Tea is no exception and the fresher the tea, the more powerful the antioxidants when the tea is drunk. Most teas consumed by the average tea drinker are at least

10-12 months old, having been stored in warehouses in India, Sri Lanka, Africa, Indonesia, etc, then transported by container ship from warehouses in the country of origin to warehouses in the consuming country, from the warehouses to the blending facilities, and then, once inside packets, cartons and tins, back to the warehouse to await delivery to the customer. Dilmah teas, in contrast, are picked in the morning, bulked and transported within a day or two, packed into tea bags and packets of loose tea in Colombo a couple of days later and shipped within the week. The longest part of the journey is the sea voyage, which varies according to destination, but the cartons, tins and packets reach the supermarket shelf within 2 months, bringing to the customer tea that tastes fresher because it is fresher!

The Marketing Team

In Sri Lanka, the sales and marketing team at head office are constantly driving and co-ordinating the work of Dilmah around the world - creating new advertising campaigns, writing the script for television adverts, arranging sponsorship deals, setting up partnerships with charities, and co-ordinating radio, television and press interviews. And the Fernandos themselves keep in very close contact with their customers by phone calls and visits to supermarkets, events, promotions, sponsorship activities to chat, answer questions and show support. They have a policy of talking to ordinary people, keeping in touch with latest trends, trying to understand what the consumer really wants. This is what Dilmah’s Director Sales, Roshan Tissaaratchy calls “walking the markets”. He says, “Each market is a challenge with its own peculiarities and specialties and it is always a refreshing and motivating experience to work with teams of professionals in establishing a direction and plan for the brand…. Advertising campaigns and excessive ‘above the line’ budgets are the quick fix solutions of new breeds of data-based marketing managers. Have they walked the markets? Have they dwelled in-depth on traders’ issues? Have they identified regional differences? Have they observed consumers at stores? Have they studied the store and the shelf?” If the answer to those questions is “no” how can a company understand its individual markets? Dilmah team members know they must ‘walk the markets’ and stay in touch with the consumer.

Outside Sri Lanka, in over 100 countries where Dilmah teas are sold, there is a vast network of sales agents and distributors who drive the business, visiting existing customers, finding new markets, extending and perpetuating the family oriented, reliable and honest ethic of Dilmah teas. There is a very close bond between the team at head office in Colombo and the vast extended family of partners, agents and sales staff who sell the teas abroad. In some markets, distributors have taken the initiative and developed their own way of reaching more customers. In Poland, for example, Dilmah’s long-term distributor Tomasz Witomski took on the challenge of bringing high quality tea to the Poles shortly after communism ended and, in 2002, with his wife Julita, introduced the Fine Tea Lovers’ Club. They felt that advertising alone was not enough to attract new customers and wanted to try and raise the profile of Dilmah in the media. But it is illegal in Poland to mention brand names outside of advertising. So they set up the Fine Tea Lovers’ Club, “patronised by Dilmah”, and it succeeded in attracting a wide-ranging group of tea lovers, while at the same time enabling them to promote quality and variety, and also allowing the media to talk about Dilmah as patron. The Club is now active in several cities and club members enjoy regular meetings, presentations given by special guests, tea tastings, discussions about the health benefits of tea, and events that link tea to art, literature and music. As the Club has grown, it has added electronic membership cards, computer access, a website, a library of books on tea, and special benefits and offers to Club members in Dilmah Boutiques.

In 2003, Dilmah brought together representatives of this strong team at its first ever Dilmah Global Partner Conference at the Trans Asia Hotel in Colombo. After a tour of the factory and tea tasting room, and a colourful opening ceremony of welcome speeches, dance and traditional music, the two day conference worked through all the crucial issues of guiding principles, global trends in tea drinking, marketing issues and campaigns, the product range, what makes Ceylon and Dilmah tea special, the charity work of the MJF Foundation and all the aspects of trading, promotion and business that make Dilmah what it is. At the second Distributor Conference in 2005, Dilmah introduced a new reward scheme for distributors - the Founder’s ‘3R Global Distributor Award’. This is presented for Results, Recognition and Rewards and consists of prizes such as free holidays in Sri Lanka at the company’s new Tea Trails luxury bungalows, rebates on sales and free stock. The awards are judged in various categories – Achievement of Purpose, Import Value over US$ 1 million, Best Performance in Emerging Markets, Best Performance for New Products, Innovative Marketing, Special Achievements and Innovative Merchandising.

The message that Dilmah wants Dilmah global partners to take back home with them from conferences and to remember in every single moment of their work is that Merrill, Dilhan, Malik and the staff are all working to one goal – to offer the customer what he or she wants but also, in Merrill’s word “to get the wealth rightfully back to our country. We do not need aid, we need fair trade from developed nations”. To remind everyone working for the company of the principles that underpin the work of Dilmah, the company’s Five Pillars of Dilmah were announced at the 2005 conference. The family pledged to follow principles of Quality, Tradition, Ethics, Customer and Integrity. It is this philosophy that is bringing Dilmah recognition as a company with a conscience all around the world.

In 2009, Dilmah turned ‘21 years young’ and the celebrations began in New Zealand and Australia – Dilmah’s first two market in 1988 - with a series of consumer events and visits by Merrill during which he travelled around the countries to meet customers. His main objective was to thank consumers for giving his fledging company (and what was then such an audacious idea) a chance. It was consumers in Australia who helped establish Dilmah there by writing to Coles Supermarket buyers shortly after the launch of the new company to express their appreciation of the quality of Dilmah teas. At a time when Merrill faced extinction due to aggressive discounting by his multi-national competitors, those letters ensured the survival and growth of Dilmah. During his visits, Merrill also took the opportunity of restating the founding values of Dilmah that are embodied in the Six Pillars. And an exhibition of images shared the Dilmah story with photos of the tea business from plant nursery to tea tasting, of the work of the MJF Foundation, of Dilmah Conservation projects and the various concepts in tea innovated by Dilmah.