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Fresh off an outsized year in revenues and profits, instant coffee manufacturing company, Salada Foods Jamaica Limited, is sounding a note of caution about the likely impact of supply challenges in both raw material and packaging.
General Manager Tamii Brown says the full effects of hurricane Beryl on the supply of Jamaican coffee and a general shortage of coffee on the world market are yet to be felt but could affect the company in the periods ahead.
Salada Foods is required by Jamaican law to have at least 30 per cent Jamaican coffee in its blend that produces both instant and ground coffees. Jamaican coffee, particularly Blue Mountain coffee, generally sell at premium prices. A fall in supply can drive up prices further, placing Salada in a bind.
Speaking at Salada’ s annual general meeting last Thursday, Brown told shareholders that the Ministry of Agriculture and commodities regulator JACRA, short for Jamaica Agricultural Commodities Regulation Authority, are both working with Salada to ensure the coffee company has the raw materials it needs to keep its Kingston-based factory humming.
Despite the expected boost from the Crop Restoration and Establishment Programme, CREP, its benefit won’t be felt until the next crop year, Brown indicated.
CREP is an initiative aimed at benefiting over 5,000 coffee farmers across Jamaica while boosting production and export of Jamaican coffee. Salada is relying on CREP and other initiatives to deliver more sustainable and stable supplies of coffee beans.
“There are projections of less stable supply; however, we are working very closely with the regulators to ensure that Salada continues to have the raw materials that are required to stay in operation,” Brown said.
Meanwhile Salada has been forward purchasing coffee beans, locking in contracts with suppliers so that the company can mitigate the effect of fluctuations in the supply as well as price volatility.
“We look at the risks, but we position Salada first. We’re nimble, adaptive, and well-prepared to deal with the risks that are facing us and the uncertainties of 2025,” Brown told shareholders.
Salada reported record revenues of $1.48 billion for the financial year ended September 2024. And net profit was at a five-year high of $189.88 million. The coffee processor’s earnings trend continued into the first quarter ended December 2024, with a 63 per cent gain in net profit from $30.9 million to $50.4 million. This was on the back of total revenue of $398.2 million, which was up by 33 per cent over the nearly $300 million of sales reported in the corresponding period in 2023.
Salada says the growth was driven by heightened demand across both domestic and export markets, and was supported by the company’s strategic marketing initiatives and distribution expansion efforts.
The company, which is going after even greater growth, has hinged its future and outlook on three growth pillars, namely the expansion of its market footprint, increasing operational efficiency and portfolio diversification.
“We want to ensure access to our products in more markets, more channels, and to a more diverse consumer base than in previous years. We want to achieve operational efficiency through the upskilling of our team, ensuring that our team has the skills that they require to navigate this ever-changing industry,” Brown said, adding that operational efficiency can also be achieved by changing practices and processes along with the upgrading of equipment and technology.
Portfolio diversification will be driven by consumer and market preferences, she added, while indicating that several new products were likely to be launched during the current financial year.
Salada’s last new product, the Golden Turmeric Latte, was launched in April 2024. Market receptivity has been well beyond expectations, according to Brown.
On the export front, she also reported that Salada shipped its first container loads to Trinidad & Tobago in 2024. Jamaica Mountain Peak products are now available in the twin-island’s stores through a partnership with Alstons Marketing Company Limited, a subsidiary of the ANSA McAL conglomerate.
This year, Salada is aiming to deepen the distribution of its products in its push for organic growth.
“We’re not just trying to put our products on shelves. We want our products to go on shelves and to be taken off shelves by our consumers. We want sustainable growth,” she said.
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