TEA GROWER LEAVES NOTHING TO CHANCE
Written on the 2 October 2012
A CERTIFIED organic range and Fair Trade endorsement is helping a Queensland tea producer deliver on the adage: ‘While there’s tea, there’s hope’.
In an industry where multinational competition has forced many agribusinesses offshore, Nerada Tea has remained true to its Queensland roots.
The business, established in 1959 as Tea Estates of Australia, now employs 90 workers across the state and annually produces more than 1.5 million kilos of black tea.
That’s enough to make 750 million cups of tea.
Nerada, based in Acacia Ridge in Brisbane’s south, turned over $22 million in the 2011 financial year with 5 to 10 per cent revenue growth forecast for the end of FY12.
Those figures in challenging times makes the company modern-day proof to support the now famous line from English writer Arthur Pinero’s 1888 play Sweet Lavender: "While there is tea, there is hope".
Nerada’s general manager Andrew Weaver (pictured) is a little less philosophical than Pinero.
He credits innovation for bringing the tea producer’s organic growth story to full bloom.
“We have to innovate all the time as it is a fairly static market across all sub-sections of tea including black, green, herbal infusion and fruit infusion,” he says.
“It is a tough fight to maintain our market presence due to the high Australian dollar and wage discrepancy between Australian and cheaper offshore workers.
“It is a disadvantage to us as imported products can be offered at cheaper prices than five years ago.”
Nerada minimises its costs through automating tea-leaf harvesting processes.
The company has already invested $1 million in packaging machinery and $100,000 in plant equipment at its Atherton Tablelands plantation west of Cairns.
“We mechanically harvest 4000 kilos of tea leaf each hour instead of having one person harvesting each acre,” says Weaver.
“Ever since the plantation started, it was quickly understood that high-performance mechanical harvesting was the only way to go. Australia has since become the most mechanised tea industry in the world.”
The business transports produce to Brisbane where it is packed and distributed across the nation as well as to New Zealand and Japan.
However, Weaver is adamant about keeping Nerada’s main focus on the domestic market.
“Australians consume 22 million cups of tea every day. We have more potential to grow and can focus all our resources on the local market as we have a uniquely Australian-grown product,” he says.
“A lot of other brands of tea are fully imported from India, Indonesia and the Middle East.”
The retail price war has increasingly shifted support from local producers to multinationals, making it harder for stores to stock Nerada goods on shelf.
The company has responded by launching new organic and Fair Trade certified teas. Fair Trade certification assures the consumer that the product has been grown and purchased under fair conditions and prices for farmers and workers and in an environmentally sustainable manner.
“The new organic certification rules are making it harder for the fakers," says Weaver.
“We are audited by organic organisations every 12 months, do a lot of testing ourselves and only buy from organic certified producers.
“However, we cannot grow organic herbs or peppermint supplies in Australia because if we completely converted our estates to organic, our competitiveness would drop by 30 per cent.
“We are profitable because we are a high volume manufacturer of tea, so we have to import the herbs.”
Nerada suffered ‘minimal damage’ to its Far North Queensland factory during Cyclone Yasi, despite widespread devastation to coastal banana plantations.
However, the Federal Government’s new Carbon Tax will have a tangible impact on Nerada’s imports, packaging and distribution divisions.
It comes despite agribusinesses not being subject to the $23 a tonne price on carbon.
“Packaging suppliers will have to increase their prices, while distribution is done via trucks so increased costs will be passed onto us,” says Weaver.