GK plans new marketing strategy for some products, repatriation still on the cards
GraceKennedy has handpicked a few export products that it sees as having the potential to double sales and is devising a market plan around that goal.
It aims. in the first instance, to get GraceKennedy’s Tropical Rhythm, Grace Jerk Seasoning and Encona Hot Pepper Sauce out of the ethnic grocery aisles and position them as mainstream items for foreign shoppers.
It will next tackle Grace Hot Pepper Sauce, which is currently sold in three-ounce bottles, under a second phase of the project which will include expanding its range of sizes.
“Our vision for GK is way beyond the Caribbean people living outside of their country. Based on strategic initiatives and intent, the question was asked, ‘What products can we expand and cross over into the mainstream market, including Hispanic market?'” Wehby said during GK’s third-quarter 2022 investor briefing on Monday.
“Tropical Rhythms came out as the number one item. We are partnering with large beverage company Arizona to distribute Tropical Rhythm in the northeast and they are very positive about the product. We had challenges in 2022 from the supply of glass bottles, but we believe that we can double the sale of Tropical Rhythm within three years,” he said.
GK does not disclose product sales, but its food services business turned $85 billion of the $107 billion of revenue generated by the food and financial services group from January to September.
Within a few weeks, Wehby hopes to have on his desk a detailed strategy, devised by his team, on how to double the sales of the selected products – inclusive of production, marketing and distribution plans.
Much attention has been on the blended fruit and vegetable drink Tropical Rhythm over the past few months. Earlier this year, Wehby also named it as one of the products being considered for the repatriation of production in Jamaica amid back-to-back catastrophic global events, including COVID-19, that continue to pressure logistics and supply chains, causing frequent price adjustments.
Tropical Rhythms is produced in Canada.
The other products likely to be brought home include frozen vegetables, sauces and marinades.
On Monday, Wehby said plans to integrate more of GK’s international manufacturing processes into its five Jamaican plants are still on the cards, but that he awaits the completion of the Grace Food Processors (Canning) complex merger with National Processors, also known as Nalpro, before providing details on the expected output. The reorganised plant, on which GK is spending US$3 million, is scheduled to be fully integrated by year end.
“We are going to be seeing significant efficiencies from the merger of those two plants,” Wehby asserted.
National Processors has produced drink crystals, cereals and dry mixes for soups for about 40 years. Canning produces canned vegetables, sauces, and beverages, including Grace Tomato Ketchup and a portion of the company’s Tropical Rhythms drinks.
Still, growth within the food manufacturing division is just one of several businesses the food and financial conglomerate will be focusing on over the coming months. It includes money services, an area in which business was down eight per cent at the end of September.
The conglomerate, which reported a decline of 9.4 per cent in earnings to $5.6 billion, despite a 12 per cent jump in revenue for the nine-month period, said in its preamble to the financial results that due to high global inflation, the disposable income of remittance customers in the sending markets has been negatively impacted, which led to reduced foreign currency inflows to Jamaica and, by extension, impacted the remittance business.
Third-quarter profit also declined from $2.26 billion to $1.66 billion.
In response, GK says it has redoubled its cost-containment efforts and implemented strategies to grow revenues and profits sustainably.
“In all my career at GK, which is over 25 years, I have never seen remittances down in our country. So we now need to see what is within our control to grow the remittance market again,” Wehby said.
Remittance companies experienced a record year for money transfers at US$3 billion in 2021, but is poised to underperform that number this year. As exclusive agent for Western Union, GK is considered the leader in the remittance market.
The GK CEO says he will be heading into a meeting with top executives at Western Union today, Wednesday, to discuss strategies to reboot money transfers.
“Our plan is to improve on the marketing throughout the diaspora. We have two country consultants in New York and in Florida; they are going to be beating the pavement to see how we can stimulate growth,” Wehby said.
GK will also be looking at more competitive pricing for remittances and reviewing its agent network in Jamaica as part of those efforts.