Nerada Tea focusing on its ’health wellness infusion’ range as black tea consumption plunges

A renowned Australian tea producer is focusing on its ‘health wellness infusion’ range as demand declines for the traditional ‘cuppa’.

Nerada CEO Stewart Le Bon at Nerada production and distribution centre in Acacia Ridge.

While having a traditional cup of tea remains a daily ritual for many, a renowned third generation family company is brewing up a new range of blends to keep up with changing tastes.

Nerada Tea is expanding its herbal and wellness ranges off the back of rising sales, while also increasing its commitment to its global Rainforest Alliance-Certified tea growing partnership.

Chief executive Stewart Le Bon said the company was continuing to evolve from its black tea base as consumption of the traditional `cuppa’ declined 10 per cent in the 2022 calendar year and 8 per cent in 2023.

He said in contrast sales of Nerada’s organic’s herbal wellness teas, sleep teas and natural remedy teas are all up 6 per cent this year.

“We’re focusing on growing our health wellness infusion ranges including our popular calming Camomile, Raspberry Leaf and Pure Peppermint,” he said.

“The average consumer is changing their preferences. My parents drank loose leaf tea. I drink tea bags and my daughter drinks bubble tea and iced tea.

“It’s a pattern we’re seeing and its not changing.”

Nerada Tea CEO Stewart Le Bon at Nerada Production and Distribution Centre in Acacia Ridge.

In response to the decline in black tea sales in July 2023 Nerada put its renowned 360ha estate on the Atherton Tablelands in Far North Queensland into “hibernation” citing rising costs, a drop in demand for black tea on supermarket shelves and continued year-on-year losses.

Mr Le Bon said Nerada is injecting between $10m and $15m into its northern operations aiming to restart production at the plantation in the near future.

“The plantation is still there. We’re just not harvesting and producing black tea. At this stage we’re sourcing our black tea and our herbal tea from Rainforest Alliance certified growers from around the world,” he said.

“In saying that we’re hopeful that the plantation will be back running and producing a higher value offer. There’s still a lot of water to flow under the bridge we believe the plantation will be producing something by the end of the year, if not early next year.”

Nerada has been one of the top selling Australian-owned tea companies for decades, in the face of stiff competition from international giants

The company is named after the Nerada Valley at the foothills of the Atherton Tablelands and it was from there it released its first branded product in 1971. The Russell family – who have deep roots in the tea industry going back to the 1920s – purchased the Nerada Brand and the Brisbane packing factory in the 1990s to form a new company called Nerada Tea Pty Ltd.

Nerada’s tea’s plantation in Far North Queensland which is currently in hibernation.

Brisbane born and bred, Mr Le Bon joined Nerada 18 months ago after a 14-year career with British American Tobacco which included stints offshore and in Sydney.

The Marist College Ashgrove old boy who completed a degree in business and marketing at the University of Southern Queensland said the change suited him.

“It’s difficult not to like tea. The product sits very well. It’s socially accepted and there’s health benefits associated with it as well,” Mr Le Bon said.

“I think Nerada is a fantastic brand with a strong and loyal following. Our 50 employees at our Acacia Ridge production facility are really passionate about the product and that’s what brought me to tea. It’s what I wake up with and its what I fall asleep with as well,”

In the 2023 calendar year Nerada turned over about $20m and with more than 85 products on offer – from the classic Aussie cuppa to the organic herbal blends. Nerada is on track to notch up $24m in gross revenue.

“But the complexity is the bottom line. It’s a high volume low margin game and the Australian competitive landscape is quite difficult to negotiate,” Mr Le Bon said.

“In calendar year 2026 we have forecast $26.5m gross turnover and that’s when we’re anticipating entering the ready-to-drink category (such as iced tea).

“On the traditional side – loose leaves tea bags – we’re looking at a whole new range of products such as Australian natives blends.

“We’ve undergone rigorous research and customer testing. We don’t provide single origin teas anymore but what we do provide is a strong social and environment aspect to our teas.

“All of our teas are carefully blended by our staff who also do the packing and distribution for us. We know where our tea comes from and the high quality we deliver to our customers.

“ We just launched and English breakfast range into Coles and Woolworths and grocery independents. That blend contains Australian grown tea left over from our plantation plus Rainforest Alliance certified black tea from other parts of the world.”

Mr Le Bon said in an Australia tea market dominated by international brands Nerada has carved out a strong 6 per cent to 7 per cent niche in the market.

“We are relatively mainstream and we have opportunities to branch out into different formats. different blend compositions and different taste profiles,” he said.

“Nerada is quintessentially Queensland, with a passionate group of locals handmaking high

quality products and shipping across the country so everyone can enjoy a moment of

relaxation.”