Home » Ned Heagerty: “Tea Talk” @ Talks at Google (Full Transcript)

Ned Heagerty: “Tea Talk” @ Talks at Google (Full Transcript)

TRANSCRIPT: 

PAIGE SCHOENING (Farmers Market Specialist – ‎Guckenheimer): And first I’d like to start from the very beginning with you used to work in Silicon Valley in robotics. How did you make the switch to tea? What was it about tea that really grabbed you?

NED HEAGERTY (Silk Road Tea): Well, first let me say thank you for the opportunity to be here. I think as a tea person, we’re always pleased to have the opportunity to talk tea with an American audience. It’s an educative process, if you will. So I’ll try and make it as interesting as possible because certainly tea has been an interesting, I would call it, adventure for me. Well, like many people, I had practical constraints on my life — children in college, a home, [food] to be, and all of that I had become quite tired of business as I knew it.

And also a horrific commute every day was weighing heavily on me. So I made the decision that I would find a new business. And a mutual friend approached me and said, there’s this wonderful tea company and a very interesting man who’s looking for a partner or someone to take over his business. And that was my introduction to David Lee Hoffman, who was the founder of Silk Road Teas. And I should give David a moment here because it’s a very interesting story, as he is arguably the first American that traveled in China extensively long before the market was really open for tea.

It was actually restricted to many areas. You could not travel in China to these areas. And David took it upon himself to do that and single-handedly broke new territory for the specialty tea industry as we know it today. David left the United States as a graduate student. He didn’t finish his education.

Frustrated, he left the United States and traveled the world for close to 10 years, ending in Asia. And of course, most of that time, like the rest of the world, drank tea– but was particularly taken with the tea in China, and brought home tea of course when he eventually came back after 10 years of travel without coming back to the United States, and introduced some friends to the Chinese tea. And in a classic sort of business beginning, they said, wow, can you get some of this for me? And of course, the proverbial light bulb goes off. He starts a tea company and begins to import tea. And albeit, it was in very small increments at that point.

Again, like I said, he actually could not get into certain areas of China. It was not open yet for commerce. And the tea industry was quite protective also in China, the government.

PAIGE SCHOENING: Right. When he first went, wasn’t it kind of taboo to buy direct from tea farms?

NED HEAGERTY: Correct. Yeah. The government really liked to channel that, as did the tea– the nascent, the beginning tea companies. As it was beginning, you’re seeing the very beginnings of China beginning to decentralize certainly the tea industry. It was totally, at one time, run by the Chinese government Certainly ownership of the specialty tea farms were largely owned by– anyone that was processing the tea– the tea farmers were quite alone and separate, but the processing of the tea was being handled largely by the government.

So he had to go into that territory. And David had the good fortune to meet a couple of gentlemen early on who had studied tea in university and were working for large companies, but I think must have had a bit of the hope that they could get into the US market and so traveled with David into these back areas to buy tea. They quickly understood that it wasn’t going to be the kinds of dollar volumes. I think that they had hoped. Their management really asked them to back off and try and get David to conform more to buying in traditional channels. David didn’t want to do that.

And fortunately, a couple of those individuals decided that they would truncate their current employment and break out on their own and sort of freelance, if you will, or broker in the business. And those early on people, like Mr Song, today is my partner in China. He’s the person that handles most of my business affairs on China’s side. And it underscores in China, I think at the level when you talk about specialty teas, that it’s about relationships, like so many things in Asia.

Over time, you develop a trust and an understanding of what tea quality is or what you’re looking for. And you constantly revisit that concept. But it’s there, and it builds. And over time, you begin to understand what you’re both looking for and what works for the relationship. And you can get some very interesting tea as a result.

PAIGE SCHOENING: Right. And what was it like when you first traveled with him to China to specifically buy tea? And I’m curious because I saw– there’s a documentary “All in This Tea” that kind of went with him to buy tea in China. One of the shots was he arrives in this village, and people are just coming up to him with bags of tea, asking them to smell his tea. Were you guys getting mobbed like that when you first went to China with him?

NED HEAGERTY: Yeah, you do. You get a lot of offers, a lot of freelance offers. It depends where you are, of course. But I do remember the first few trips to China with David. It was interesting because I realized from this side, I looked at tea and I thought, well, what a wonderful product. Even back– this would be 2001, 2002 is when I’m first meeting David– I’m already looking at tea and saying, tea really has a great future. There’s an aging population here.

There’s the health benefits. There’s certainly a culture that’s looking for some diversity. People are appreciating quality increasingly. So all the trends were there. But it still is here and there. And so my concern was, how do I validate that I can do what David did? Is this a doable business model? Because I’ll qualify, I’m a tea trader. I sell tea. That’s my business. I’m not in the business of the ceremony or necessarily the cultural side of it. I sell tea.

But I recognize at the same time that that’s a relationship. It was my understanding of Asia from prior business in Asia that it was very much based on relationships. So when we went to China the first time, we actually gathered all of the key suppliers that we could identify, which was about eight people from various provinces in China, easily six different provinces. And we all gathered in the city of Fuzhou along the coast and spent a weekend together– essentially just visiting, and talking about tea, tasting tea, taking hikes, eating food. And that was sort of– that was my first introduction. And it’s a cast of characters– Mr Song, Mr [Square] Mr [Chen Fin] [Chen Lu].  So there’s a group, and that group’s pretty much remained intact with some new players always.

But that initial weekend and then travel in China was sort of– it confirmed for me that it would work, that this was a way– that model that David had could work. It needed some work on the business side. It needed to become a little more practical, if you will, a little more focused on what markets exactly we could supply and what we couldn’t do and refined. But the essential model was there. Particularly that it was specialty tea, high-grade teas, unusual teas that I really felt the US market was ready for, was interested in. And I think over time that’s proven true.

PAIGE SCHOENING: And so you spent a lot of time cultivating these relationships. What’s it like when you go now? What’s it like to work with– Mr Song, correct?

NED HEAGERTY: Mr Song.

PAIGE SCHOENING: So does he set up places and times for you to meet with folks? Or if you could just describe how that works.

NED HEAGERTY: Well, to an extent, I think because we do business in roughly six to seven provinces we’ll draw from every year, with emphasis on certain provinces for a larger share of our tea, of course– but through our specialty teas, we’ll go into a particular province to secure. So generally speaking, the way we approach it is we believe that the best teas are early spring when the plant’s fully alive. It’s coming out of the winter dormancy. And all of that vibrant growth is going up into the leaf and bud, always in that endless pursuit of procreation.

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