Consolidated Bakeries Jamaica, which trades as Purity, will add a snack bar to its lineup, one of the new product innovations the company is attempting to reinforce its recent sales growth.
By tapping into market preferences, the baked-goods company is trying to maintain the sales momentum achieved last year when it delivered its all-time best sales turnover.
“We are looking for product development to introduce things that are different. We working on some snack bars, and things like that, and they should come out in a couple of weeks,” said Executive Chairman and Managing Director Anthony Chang.
The product would serve the fitness and affiliated markets, which Chang described as “not huge”, but would serve to give Purity Bakery entry into a new segment.
The company’s snack bar is similar to a granola bar made from oats, nuts, seeds, and sweetened. Purity is still finalising the packaging and product-marketing plans ahead of the rollout.
Purity will also improve its ‘cheese trix’ or cheese-flavoured products later in the year.
The improvements follow $60 million of capital expenditure in the previous year. Part of that spend involved a down payment on new equipment set for delivery later this year that focuses on making cheese snacks.
“We are launching products that are different, unique, and can compete, said Chang.
The company made a profit of $20.5 million for its first quarter March 2023 on $458 million in revenue. That’s a 32 per cent rise in profit from $15.5 million and a 21 per cent rise in revenue year on year.”
For all of 2022, sales grew by 26 per cent, from $1.08 billion to $1.36 billion. And the company spun from a loss of $17 million to profit of $13 million.
Chang remains optimistic about the sales outlook for the rest of 2023.
“This quarter is tight, but we expect the growth of the top line to continue,” he said. “We are working hard for [growth], but it is hard to get talent. That is one of the challenges,” he added.
The bakery’s sales benefited from new grocery sales distribution points, especially at midsized grocery stores and smaller mom-and-pop stores across the island. It also benefited from new products and sales to the growing tourism sector and exports in the run-up to Easter, which is a traditional period of high demand for buns.
In fact, Chang said the growth in exports outpaced the performance of total annual sales. He added, however, that exports still contribute just a small portion of overall sales, without disclosing the ratios.
The company remains on a short-term path towards $1.5 billion in annual sales from its current record of $1.3 billion in 2022, based on its seven quarters of continuous double-digit growth, ranging between 10 per cent and 30 per cent since mid-2021.
Chang said that the pandemic forced the company to find new distribution channels since people were at home or movement was restricted by lockdowns. It led the company to broaden its reach towards smaller stores.
Purity Bakery first hit $1 billion in sales in 2019 but fell back to $994 million in 2020 amid a general decline in business under the pandemic. The company recovered to set a new record in 2021.
“Not every product was growing, but those that did, carried us through,” Chang said.
Its profit, however, remains less consistent, with the company posting quarterly losses in between profit. Since December 2022, however, costs appeared more streamlined, allowing the company to post its highest-ever cash generated from operations at $118 million compared to negative $29 million in 2021, $22 million in 2020, $18 million in 2019, and $46 million in 2018. Chang, however, downplayed that metric, focusing instead on traditional net profit and gross profit. In that realm, the company still vacillates.