Founders Diaries: English Tea Shop CEO Suranga Herath on the power of creating shared value
10 min read
29 May 2018
Suranga Herath believes the success of his business, English Tea Shop, is about creating win-win situations for his team of 400 factory workers in Sri Lanka and its global customers.
Founder: Suranga Herath
Company: English Tea Shop
In a sentence
We are an independent, 100% organic, speciality and premium tea company.
We are based out of a small farmer platform offering arguably the most unique range of products to retail, gifting and food service markets in over 50 countries.
We are the fastest growing organic tea brand in the UK and one of the fastest growing organic brands in a number of countries worldwide. We launched in 2010 and have grown our revenues in the UK to £10m with a compound annual growth rate of 63%.
Our unique products are available in premium retailers such as Selfridges, Debenhams as well as organic and natural speciality food retailers around the UK. We’re also stocked in luxury hotels such as The Grange.
Our global turnover is £20m and we have grown into more than 50 countries during this period. We are in premium retail market places such as Galeries Lafayatte (France), Mitsukoshi (Japan), Isetan (Singapore) and in hundreds of premier food service clients such as Pizza Express, Bloomberg and Google Singapore.
What do you want to be remembered for?
As a brand we want to be remembered for our unique approach to business which is based on the concept of Creating Shared Value (CSV) and really making a difference where it matters.
CSV is about finding opportunities for growth in sustainable development through a commitment to generating economic value in a way that also produces value for society by addressing its challenges.
In short, it’s about creating win-win situations for our farmers, our team of 400 factory workers in Sri Lanka and our global customers.
Whereas CSR (Corporate Social Responsibility) is only about giving back, CSV is a two-way street making business much more sustainable and meaningful in the long-run. In turn stimulating incredible growth.
Turnover: £20m (globally); £10m (UK)
Describe your business model
Our Love, Care, Change business initiative puts our employees and suppliers’ livelihoods first by adopting the principles of value sharing.
This philosophy manifests itself in a wide variety of social, financial and environmental initiatives, all of which have a positive effect on our farmers and their communities and our factory workers.
We source organic teas, herbs, flowers, fruits and spices from small organic farmers in Sri Lanka and around 20 other countries.
We masterfully create blends in over 400 different packs, in our own manufacturing facility in Colombo, Sri Lanka before shipping them out to over 50 countries.
Around 400 permanent employees work in our Colombo based factory, while we also have a full office in the USA in addition to our headquarters based in London.
Biggest marker of success
We measure success on the outcomes we deliver to our small organic farmers and their communities and to our factory workers.
We have clearly laid out measures and processes that describe the metrics we use in determining the success of our farming communities.
When it comes to our own employees, they are part of something we call The Big Game initiative which is all about paying them a considerable share of the profits each quarter.
We involve them in programmes such as open book management, knowledge sharing and budget games with the goal of making English Tea Ship a significantly employee owned business.
This ultimately drives employee engagement and increases productivity too – there has now been a 31% increase in value added per employee since The Big Game initiative was introduced.
Since inception we’ve grown tremendously, we aim to expand into 80 markets by 2021 and to double our global turnover by then. In the next 12 months alone we intend to grow by 20%.
How did you fund your business?
We started off by setting up a small manufacturing facility in the beautiful country of Sri Lanka in 2001 that packed for premium specialty tea brands in Europe.
In 2010 we launched English Tea Shop in the UK. Our growth has been sustained through the reinvestment of profits with no third-party equity partnership, meaning we have developed a very strong balance sheet organically.
Your biggest technology boost
The most impactful is the investment into automating our tea bag production lines. We’ve now got over 30 state-of-the-art tea bagging machines in our Sri Lankan manufacturing facility.
In five years
By 2023 we expect English Tea Shop to be the world’s leading premium organic brand.
The natural and organic hot beverages industry, especially the tea and herbal drinks market, is set to grow considerably due to health and wellbeing benefits of our product. Changing consumer habits will also see trade steer towards small and organic agriculture.
Your highest point
From a recognition point of view, winning the UK’s Lloyds Bank National Business Award for Sustainability in 2017.
The award recognized our dedication to sustainability of organic farmers and our own employees in our manufacturing facility.
Your lowest point
There’s been a considerable number of mistakes over the last 20 years of my professional life. But I believe I’ve learnt from them and have applied them meaningfully to different facets of business and life.
Our investments in factory modernisation and adopting novel technology came in late. We lost significant opportunity for growth because of this.
However, we have since developed our tea manufacturing facility in Sri Lanka which spans over 120,000 square feet, consisting of latest technology and a great team of 400 people.
What would you tell your younger self
Create win-win situations in every negotiation. Shared value can be achieved in every situation of life or business.
Your policy wish list
Support organic agriculture in the UK and in developing nations. Help fund research into organic farming.
Your biggest piece of advice to other entrepreneurs
Your strategy statement, usually in one sentence should spell out clearly as to why your customers should come to you.
It’s important to build your systems and resources to deliver that strategy. If your strategy is similar to your competitors, there’s no point being in that business.
What would make you a better leader?
Continuous feedback. I’ve just read a feedback report from my colleagues and employees on my performance as CEO. The scores are positive – but there’s definitely room for improvement in a few areas!
The one app you use the most
A day in your life
For a good part of the month I am travelling to different international markets, manufacturing facilities and to our organic farms. As a result a big part of my routine is packing and unpacking suitcases!
Apart from that I spend quite a lot of time with my family and our great team in Sri Lanka. We make sure we facilitate a great work life balance to our people from Sri Lanka to the UK, so it’s important that we lead the way!
On your reading list right now
Discover Your True North by Bill George is a great book that discusses authentic leadership.
I should also mention a second one; Great Game of Business by Jack Stack. It is a must read for business leaders who want to create shared value with their employees.
Both these books have played an important role in shaping me into the leader I am today and also our business as a whole.