Troubled Times: The Tale of Tea and Two Families
The early eighties was full of hope and optimism for the tea industry in Australia. The vision of growing world-class tea in Australia was very much alive and the Nerada brand had started to gain traction despite a period of challenging agricultural conditions in 1980. Tea continued to be grown on plantations in Innisfail, and the nascent industry looked like it might be starting to find its feet after a turbulent start.
Tea was still being grown, processed and marketed from Nerada’s plantation and factory in Innisfail – and the brand’s presence was starting to grow interstate, penetrating the NSW market. There were fertiliser trials on the tea plantation that were helping to accelerate production, and the vision of the ‘magic million’ kilograms of black tea in production (equating to approx. 0.05% of world tea production) was looking quite possible. The year 1982 saw record production and the addition of innovative packaging equipment to the Innisfail factory. A high-speed IMA C51 automatic teabag packing and cartoning machine, enabled the small factory to start to compete with some of the larger international tea brands on the supermarket shelves. This machine is still in use today and proved to be a game changer to continue to allow innovation. The Nerada brand appeared to be gaining traction.
The Tea Industry in QLD Expands
Further south of Innisfail, in an area known as the food bowl of Queensland, others were beginning to consider tea as an alternative source of income to traditional farming crops such as sugar cane and dairy farms. Don Soley, Frank Darveniza, Bob Barclay, Fred Meluish, Sybbie Nucifora and Les Burton all individually started planting small plots of tea on their land during the 80s. These enterprising dairy farmers had well over 100 acres between them and were hopeful for the future of tea in Australia.
In 1984, two internationally renowned tea growers, JA Russell and James Finlay & Co, commenced tea plantings near Malanda on the Atherton Tablelands. This represented the single biggest tea expansion of tea growing in Australia. Both companies came from international tea growing lineage and both were determined to make the most of the remarkable growing conditions in Australia.
Tristan Russell, followed in his father John Archibald’s footsteps having learnt the ropes of the family’s BOH Tea business which was founded in Malaysia. Tristan was very much was a visionary, a passionate second-generation tea grower, who in 1960, travelled to Australia and fell in love and married Joan Broadfoot. He saw the potential for tea here in Australia and was passionately committed to making the new project a world-class success.
Land was purchased at Glen Allyn. As you’ll read in other pieces on the history of Nerada and tea growing in Australia, The Russell family brought local farmer Bill Benson to Queensland from Perth and tasked him with determining how to plant the tea and make the most of this new venture.
The Russell’s plantation at Glen Allyn was planted differently to other plantations in the area. Unlike the Tea Estates of Australia plantation in nearby Innisfail, it was planted on a contour in an attempt to prevent water collecting and running down the rows and causing soil erosion. This was an innovation that would prove to be a good decision many years later on.
By 1988, there was need for further industry collaboration to gain economies of scale and so JA Russell and James Finlay had entered a joint venture together (called the Finlay Russell partnership) and simultaneously they invested into Tea Estates of Australia (TEA). It was not the first time that the two companies had worked alongside each other, having previously formed a tea trading company in Singapore that had ultimately been unsuccessful. Operational efficiencies were paramount and there was a desperate need to build a new larger factory locally to process the increasing amount of tea being grown in Far North Queensland as it did not make sense to send the tea to Innisfail to process because of the cost to transport.
Australia’s Largest Tea Factory is Born
Building a tea factory of the scale that was required to process the amount of tea being harvested was never going to be an easy feat. While similar factories existed overseas, this one needed to be built with a realisation that the efficiencies of labour were of primary consideration with Australia’s higher cost of labour compared to other tea growing markets.
A relative of the Finlay family, a chap by the name of Hugh Muir, was also starting out on the Tablelands and was determined to build his own factory. The team at Daintree further north also was considering how to solve their supply chain challenges, but quickly realised that a five-hour drive to bring the tea leaf down to the Tablelands was not viable. So, the Finlays, who had started nearby Taraqwet Estate in 1982, and the Russells, who were gaining traction in Glen Allyn, decided to form a partnership named Finlay Russells. In 1995, Tristan’s son John Russell, still in his twenties and having moved to the Tablelands with his wife Robyn a few years earlier, was named CEO of Tea Estates of Australia (which held the Nerada brand) and was tasked with the mission to build the new factory.
The engineering process was unlike anything achieved elsewhere in the world. Local engineer Roy Garden was tasked to design a factory that could withstand the strength of a cyclone. The anticipated cost looked to be around $1 million initially but came in much higher as the project began to be realised. The single biggest cost was the boiler (costing over $1 million alone), built in Brisbane by Maxi Therm and transported to the Glen Allyn site to be installed. The concrete work, coal pit and machinery was all built locally and a global search was undertaken to find the right components to make the factory work efficiently. Much of the tea processing equipment came from India, but experience had demonstrated that this was often unreliable and needed much labour to maintain, so the Cut Tear Curl (CTC) rollers and main dryer were built in the UK and a pre-dryer was developed locally with a local engineer named Ulrich on the Tablelands. There was much trial and error in the process of making elements unique for the Australian conditions. And this came at a considerable expense, which put even more pressure on the project. However, the longevity of the investment is notable, and many of these processes and innovative locally designed features continue to be used today.
Meanwhile, back in Innisfail, Nerada (Tea Estates of Australia) continued to face financial challenges. More money was needed to be invested to help keep the company afloat. It was still a publicly listed company, listed on the second board, but with a 30% share each, the Finlays and Russells together had a controlling interest.
John Russell recalls that at the time of taking over, the company was bleeding approximately $50k a month to keep the doors open. Recollecting discussions with his father Tristan, he explains how even more money was invested while the decisions were made about how the company could be capitalised. The new visitor centre on the Innisfail estate was not delivering as a tourism stream, as per the intended vision, and was placing further strain on the company in running costs.
The Tea Factory is Finally Opened
The new processing factory came in well above budget at $6 million, and was opened in 1991 by the then Premier of Queensland, Wayne Goss.
Even after this success, Mother Nature continued to present challenges. In 1992 the industry was struck by a severe drought, which created significant shortages of tea that led to empty shelves at the retail level. Once again, the business was under immense financial strain. The drought finally broke in 1993 and as tea production picked up, so did the costly exercise of rebuilding the Nerada brand. A key strategy for Nerada was to build awareness of the unique proposition of Australian-grown tea among a sea of international brands that dominated the retail space here.
Tea Processing in Brisbane
The cost of packing and distributing tea from Innisfail was becoming crippling, and in 1990 the realisation was that business could not continue as usual. Nerada had been operating for almost thirty years without ever making a profit, and it was time to make some hard business decisions if the company was going to continue to exist. John Russell engaged a local transport consultant in Cairns, who advised that the company needed to find a better alternative to service the local market. With the packing factory located in Innisfail, one truckload of tea was costing five truckloads of product, so in 1992, the decision was made to move operations to Brisbane (Acacia Ridge) to be closer to key supermarket customers.
The tea bag machines in Innisfail were getting old and decrepit and this was an opportunity to upgrade and try something new. Everyone who worked with Nerada in Innisfail was offered the chance to relocate to Brisbane with their role, and five staff members made the move. One of these staff members is the current Nerada Managing Director, Andrew Weavers. Others who continue to work there today include Andrew Benakic and John Melville.
The relocation from Innisfail to Brisbane was not without intense pressure from the Australian Workers Union, but new enterprise bargaining agreements were forged. Another innovation was the implementation of a new C2000 machine that no one else was using at the time. This allowed the tea bags with a string to be introduced, making Nerada one of the first brands in the Australian market to do so.
In 1994, when the new packaging factory opened its doors, the decision proved fruitful and for the first time in the history of the brand, Nerada made a tiny profit. This hallelujah moment provided a glimmer of hope that Nerada would be able to compete with the international big players that had very deep pockets.
A fork in the road
The Russell family and Finlays both had very different visions for Nerada. The Russells believed in the marketing of a brand, while the Finlays were most interested in the assets and production.
In 1995, a split in the partnership emerged. John Russell had taken a short trip to Glasgow to meet with the Finlay board and requested $1 million to continue to invest in the Nerada brand to grow the brand awareness. Permission was granted and the campaign execution commenced immediately. Sadly though, the board changed their mind a few weeks later, but the money had already been invested with the campaign well underway. A difference of opinion could not be resolved.
The Russells passionately believed in the opportunity for the Nerada brand, whereas Finlays were more focused on the farming and production elements. What happened next was a split with the Russell family taking ownership of the Nerada brand, the Brisbane factory and the Glen Allyn estate, while Finlay took the Taraqwet plantation, the Innisfail plantation and the new Nerada Tea factory. It was becoming very clear that it was very difficult to make money growing tea in Australia and the pressure continued to build on the business to make operations profitable.
Not long after, the Finlays lost stamina in the face of hard growing conditions Down Under. They subsequently sold the tea factory to the Russell family and sold their Taraqwet plantation to a Dutch sugarcane farmer. The cane farmer also soon realised how difficult it was to grow tea, and a few years later the Russell family bought back the Taraqwet estate. From this moment, the Nerada brand of today was under the Russell family custodianship.
A new chapter
The Nerada brand has continued to expand as the market evolved. Black tea remains at the heart, but in 1995 a range of organic infusion products were launched bringing new flavours to the Australian market. These products have included many popular blends, such as lemon and ginger, camomile, peppermint, rooibos and green tea.
In 2019 Nerada was given Rainforest Alliance certification for the estate, a landmark as it is the only agricultural entity in Australia to be awarded such a seal.
Proudly, the Nerada brand remains under private ownership of the Russell family to this day, and in 2021, the brand celebrates 50 years of growing tea in Australia. Profits continue to be negligible, but the commitment to preserving the 360 hectares of tea plantations, grown pesticide-free on the Atherton Tablelands, remains an inspired part of our vision.
As any Australian farmer or producer will know only too well, Mother Nature continues to throw challenges in the form of cyclones, frost and drought. This is all part of the romance of making tea right here in Australia and we wouldn’t have it any other way as there’s no fresher tea made anywhere in the country!
As we celebrate 50 years of Australian-grown tea, we urge you to continue to support locally grown products to encourage Aussie farmers and celebrate Australian innovation.
Stay tuned for the next chapter as we look to the exciting future of Nerada.