Dec 2, 2008
From ship to chips: Snacks replacing banana exports at Jamaica Producers
Jamaica Gleaner - Kingston,Jamaica
Carl Gilchrist, Gleaner Writer, November 30, 2008
Jamaica Producers (JP) Group says it is already seeing weekly sales of 900,000 bags of banana chips locally and is looking to build out similar markets for its cassava chips, launched on Wednesday. (photo by Carl Gilchrist)
The company, just months ago, decided to make a strategic shift from exporting bananas, on which its business was originally built, to tropical snacks.
The cassava chips are being marketed under the 'St Mary's' brand. JP says it will be adding new lines for plantain, breadfruit and sweet potato chips as it expands its snack business.
"We expect it (cassava chips) to perform very well. We're satisfied the pro-duct is competitively priced. It is consistent with the taste profile that the Jamaican consumer loves," chief executive officer Jeffrey Hall told Sunday Business following the product launch at the company's Agualta Vale office in St Mary.
The company's banana crops were wiped out by five hurricanes over a four-year period between 2004 and 2008. The results are stark on the company's bottom line, with its most recent earnings report indicating losses of $1.5 billion over three quarters of this year.
Government, for now, has lost the battle to keep JP in banana export, but evidence that there were no hard feelings has come from agriculture minister Christopher Tufton.
Tufton, who participated in the launch, congratulated JP on its new plans, saying it was a good example of an investor willing to change with the times.
JP decided in September to refocus its business, giving rise to JP Tropical Foods, which was also launched Wednesday.
"It's a new name for a division that handles the combined banana production, other tropical production, the snack-food business and the produce selling to the local market," said Hall.
"The emphasis of Jamaica Producers has shifted from commodity banana export to value-added tropical snacks and domestic banana production, and so, Jamaica Producers Tropical Foods, we think, correctly represents our current focus."
He said the St Mary's brand is already recognised because of the banana chips, a product, he said, that was doing well on the market, based on its sales.
Hall was quite upbeat about the prospects for cassava chips on the local market, saying the product is high on calcium and vitamin C and contains no cholesterol or trans fats.
The product is already on the market and available in regular and barbecue flavours.
Hall said over the years, JP had not spent any money on advertising and promotion of the St Mary's brand, launched over six years ago, but that this would change.
"I think you're going to see a significant transformation. We have on board a team that has deep experience in the marketing side of the snack-food business," he said.
"JP has started to focus on the production side of business and now what we're trying to do is to integrate our strength in production with market opportunities that exist for our products. We're also exporting now into the United States and we see that as a growth opportunity for us."
Hall shied away from disclosing how much money the company had pumped into the snack side of its operations, saying only that it was significant.
"The way we are doing our business now is we see it as a vertically integrated agro-business, and by that we mean we're investing in growing, manufacturing and in selling, and the total investment in that is quite significant," he explained.