From hippies to multimillionaire bakers, Andrew Fraser tracks the rise and rise of the men behind Bakers Delight and Brumby’s
Thirty years ago today two young idealistic hippies, who were members of a yoga cult, started baking bread at a small shop in Melbourne’s eastern suburbs. The purpose of the bakery was to fund an alternative school at St Kilda on Melbourne’s bayside run by the leader of their cult – India-born yoga teacher and guru Vijayadev Yogendra.
The bakery and the school proved a huge success, so much so that the two bakers of 1975, Roger Gillespie and Michael Sherlock now head Australia’s two largest independent bread chains – Bakers Delight and Brumby’s.
Gillespie is the man behind the 600 Bakers Delight oulets. The wholly-owned private company has also expanded overseas into New Zealand and Canada, and has a turnover of about $450 million. Business Review Weekly estimates that Gillespie and his wife Lesley, who own a 70 per cent stake, are worth just less than $100 million.
The old alternative spirit of the ’70s lives on in Sherlock and his Brumby’s business. The company is listed on the Bendigo Stock Exchange. There are 300 stores and Sherlock owns about 10 per cent of the company, with his stake worth about $2 million. Sherlock also owns eight Brumby’s stores and estimates his total net worth is between $8million and $10 million. “I got divorced, Roger didn’t,” Sherlock says.
But while many Australians know of the stores, few know the shared history of Gillespie and Sherlock.
After spending most of the ’70s in Melbourne, together with the rest of the yoga cult they moved to Warwick, in south-east Queensland, where they opened a variety of businesses to support another school.
Both men left the cult – Gillespie in the early ’80s, Sherlock in the late ’80s – and returned to baking bread. These days Sherlock operates out of a small office in trendy Park Road in Brisbane’s inner west, where he has a habit of answering questions by quoting the lyrics of rock songs.
Unlike Gillespie, who is based in Melbourne, he is forthcoming about his time in the ’70s and ’80s as a follower of Yogendra, who died earlier this year in Port Douglas, Queensland.
It all began back in 1962, when Yogendra met and married a Melbourne girl on the India hippie trail. The couple settled in Melbourne, where Yogendra started several yoga centres.
The early ’70s provided fertile ground for peddlers of eastern philosophies. It was the peak of the counter-culture. Young people opposed the Vietnam War and rejected the philosophies that underpinned it. Universities provided a natural recruiting ground for yoga teachers.
Gillespie was studying economics at the University of Melbourne while Sherlock was doing the same at Monash. Both joined the yoga society at their universities, both of which were run by Yogendra who proved a charismatic guide to his willing middle-class pupils. Sherlock says the cult was top-heavy with schoolteachers and doctors.
“Think global, act local” was still 20 years away from being a bumper-bar sticker, but the cult took the slogan to heart. They set up a school in Chapel Street, St Kilda with high educational and social standards – one teacher for every five students, low fees and hot meals for students. To pursue their dream of raising a generation of children who were thoughtful, educated and well balanced, they needed a steady source of income.
Gillespie, whose family had been baking bread for generations and who had worked in a bakery on school and university holidays for 10 years, provided the answer.
“Roger knew how to do it all, but he’d turned his back on that because we were all into alternatives at the time,” Sherlock says. “So we found an old butcher’s shop, had a working bee, painted it, and got some second-hand machinery and started a bakery. That’s really how Roger and I started learning the basis of franchising – you can get people skilled up very quickly. The money from the bakery went to support the school, and we’d also run seminars and symposiums on world peace and this sort of thing.”
Sherlock was also a teacher at the school but Gillespie – who claims to have started both Brumby’s and Bakers Delight – had a far more hands-on role.
The Ashburton shop was established as the Old Style Bread Centre, but other names mushroomed throughout the ’70s, including the Bread Crop, the Bread Inn, Old Style Bakers Delight and the Colonial Bakehouse.
The Cold War and the increasingly tense world situation in the early ’80s, worried the cult. Colonel David Hackworth, America’s most decorated living soldier until he died earlier this year and said to be the role model for Colonel Kurtz in Apocalypse Now, had become disillusioned with military life and wanted out.
Before he left, he claimed to have cleaned out US military intelligence, which showed the safest place in the event of the coming nuclear war was south-east Queensland.
Yogendra and the rest of the cult took note and settled in the south-east Queensland town of Warwick. Yogendra set up a property at Spicers Gap in the Border Ranges and the School of Total Education was transferred from Melbourne to Freestone Hill on the northern outskirts of Warwick. The school is still in existence and has been cited by former education minister David Kemp as the type that should be supported by government. It is also the only school in Australia with a nuclear fallout shelter.
Both Gillespie and Sherlock left Melbourne for Warwick because, as Sherlock says, it “was where the action was for all of us”.
“The idea was to set up a utopian society, with environmentally aware businesses, a good school you could send your kids to, living in a good environment.”
Following the success of the bread shops in Melbourne, the first bread store with the name Brumby’s opened in Warwick in 1982. They also set up other businesses – Mediherb, which manufactures herbal extracts in liquid rather than tablet form, and EnvironData, which measures the quality of drinking water. Both were new-age businesses: measures such as quality assurance were introduced and both had impressive web sites at a time when the internet was still the preserve of academics.
But while business thrived, there was less growth on the spiritual side. Gillespie and his wife Lesley left the cult in the early ’80s, heading back to Melbourne with the name Bakers Delight and a desire to build a business portfolio. Gillespie says he fell out with Yogendra. “The guy turned out to be a liar and a cheat,” he says.
Brumby’s, meanwhile, was listed on the second board of the Melbourne Stock Exchange in ’85. When the stockmarket crashed in ’87, so too did the fortunes of the cult. “My pager went off when I was at the Brisbane Expo, saying the receivers were in here,” Sherlock says. “Then all the guru’s inner circle were corrupted by this bankruptcy, so I was brought in to rescue the whole thing.”
For Sherlock, this was the beginning of the end. He rationalised the activities of the school, bumping up student/teacher ratios to 10 students for each teacher instead of five. An after-hours surgery in Toowoomba, which was supposed to be another cash cow for the cult, failed to deliver the money.
Sherlock came to the same conclusion about Yogendra as Gillespie did, only several years later. “I saw how the whole foundation was working, or not working,” he says. “I thought it crashed because he had bad advice. But then I found out he wasn’t getting bad advice, it was just that he had a black heart. So that’s when I fell out with him and I left.”
But as part of the restructuring of the cult, several businesses were sold off. One of these was Brumby’s. Two tenderers were consortiums headed by Sherlock and Gillespie. “It was one of the few times we’ve been in direct competition with each other,” says Sherlock, who won the tender.
Gillespie was well established in the business world by the early ’90s. For Sherlock, leaving the cult was traumatic but he had little time to dwell on it as he had to rebuild his business career.
Sherlock and Gillespie both turned Brumby’s and Bakers Delight into franchise operations. Sherlock says he and Gillespie learned the basic principles of franchising when they had to open a lot of bakeries and get them running at a profit very quickly for the cult.
The two men remain competitive in business and maintain a personal but distant relationship. “We still get on, but we just don’t see each other that much,” Sherlock says.
Gillespie is still married to Lesley, but Sherlock’s marriage failed to survive the cult, which broke up in the early ’90s, changing the direction of his life. “I haven’t seen Michael for a year,” Gillespie says. “There’s no personal animosity – we play phone tag with each other a fair bit – but we treat all of our competition seriously.”
Despite wanting to focus on the now, Gillespie can’t resist a dig at his old mate. “They [Brumby’s] do tend to copy everything we do,” he says. “They try to be all things to all people whereas we’re bread specialists.”
Sherlock remains nostalgic about his hippie days when he and Gillespie were trying to create world peace. “The other day I pulled out a book and there was a card from Roger on my birthday in 1981, when we were all living together in a house in St Kilda. It all seemed so much simpler back then.”