Honey Bun doubling down after milestone year
After setting its sights on a top line of $3 billion, Honey Bun Limited shot past the target at the end of its 2023 financial year. The baking company pulled in its highest-ever annual revenue since starting as a mom-and-pop operation in 1982.
Financial Controller Paula Cameron now says, in an upbeat forecast, that Honey Bun is projecting to double revenue to $6 billion in three to five years.
“We definitely think this is attainable, simply from the sheer number of plans to be executed over that time,” Cameron told the Financial Gleaner following the release of the company’s audited financial report for year ending September 2023.
The baking company surpassed the three-billion mark for the first time, with total revenue climbing by $459 million, or 15.5 per cent, to $3.41 billion. Except for 2020, Honey Bun has consistently delivered double-digit increases in revenue since 2018.
Cameron cites cost containment and automation as critical elements of Honey Bun’s performance, in a year that delivered 14 per cent profit growth.
Automation allowed the company to ramp up production levels at existing facilities, and is looking to grow capacity through further mechanisation.
The adjustments to date have automated processes such as dough preparation and product packaging, she said.
“The key consideration is that when there is not enough space, then the natural place to look is in the direction of technology and automation to do more,” Cameron said, adding that automation has even been introduced at even the basic level of cleaning baking pans and utensils, an area that used to be labour-intensive.
However, she also said, no jobs were cut during the process.
Instead, the company has redeployed workers to other areas of the company, and has even grown its workforce, she added. The permanent staff count was said to be 302, up from an average of 225 persons on the payroll during the pandemic.
The numbers do not include contract and temporary workers, she said.
For the year, the baking company, which operates from Retirement Crescent in Kingston, grew its net profit from $203 million to $232 million, which Cameron said exceeded expectations.
The company will be capitalising on the windfall to increase its range of products in the present financial year.
On the distribution side, the company has doubled down on its hub expansion strategy. Distribution hubs now number 12, up from eight in 2022. Cameron says Honey Bun is convinced that putting distribution centres in major towns is an effective way to deliver products to the so-called last-mile consumer.
Honey Bun has hubs in Morant Bay, Santa Cruz, Savanna-la-Mar, Ocho Rios and Old Harbour, alongside locations in Papine, Cross Roads, Half-Way Tree, Retirement Road, East Street and Princess Street in Kingston. Montego Bay operates as a non-retail distribution hub.
In early 2023, the company also appointed its first independent agency distributor operating out of Spanish Town, St Catherine, and is mulling arrangements with other independent distributors in major towns not presently covered in the network.
“What we want to do is to get the products out,” said Cameron. “We’ve brought on contract carriers, leased vehicles, and widened the network by adding outlets. We’re also partnering with a merchandising company to ensure that supermarkets are always well stocked,” she said.