GraceKennedy nabs Soyfresh contract
Avia Collinder, Business Reporter
GraceKennedy's World Brands Services has taken over the distribution of milk replacement product Soyfresh, with a mandate to grow market share for owners Ace Canning Corporation, a company based in Malaysia.
The partnership will be jointly announced today in Kingston by representatives of Ace and GraceKennedy.
Soyfresh has been on the Jamaican market since 1997. It was previously distributed by Palm Rose Commodity Limited, a 22-year-old company owned by Richard May.
Palm Rose operates from New Port West, Kingston, and employs about 100 workers. It distributes approximately 30 product categories, mainly food.
Soyfresh had been selling well and was widely distributed, according to Palm Rose's marketing manager, Sonia Baugh, who said her company was unable to say why Ace Canning opted to switch.
However, by partnering with GraceKennedy, which is one of Jamaica's largest companies with global tentacles, the Malaysian company would have access to the conglomerate's wider distribution network.
GK manufactures its own brands, but also handles distribution on behalf of other companies through World Brands Services, which was formed in 2002. The agreement for Soyfresh does not extend to packaging the product, just distribution.
Andrea Coy, senior general manager in charge of GK's Global Category Management unit and manager with oversight responsibility for the Hi-Lo supermarket chain and World Brands, said Soyfresh would not compete directly with any Grace product as the conglomerate does not currently manufacture or distribute a soy beverage.
The company does have a footprint in the market segment, however; it produces a line of soy-based veggie chunks and burgers under the brand Earth Chef.
"The category is not currently very developed in Jamaica but the healthy lifestyle trend suggests that this is an area of opportunity," Coy said.
Soyfresh is sold in different flavours, including vanilla, chocolate, strawberry, malt and cappuccino.
The product competes chiefly with other imported soy liquid brands, Natura, Silk, and So Good, with a price point below its rivals, according to local grocery retailers polled by the Financial Gleaner.
Prices quoted for one litre of Soyfresh at supermarkets in Kingston ranged from $300 to $350 including tax, while other brands fell in the $400 range for the one litre product.
Coy said Soyfresh "is the most competitively priced in the Tetra Pak" packaging formulation, but notes that powdered soy milk presents the biggest challenge.
Attempts by the Financial Gleaner to determine market size and get a fix on local demand for soy milk were unsuccessful. Lasco Distributors, which is believed to be the largest seller of powered soy milk in Jamaica, did not respond to queries up to press time.
A new report on the nearshore soy market titled "Soy Foods In US Retail 2014", states that flavoured milks are bestsellers, but that soy milk overall is selling at a much slower rate than snack bars made from soy.
In the United States where the overall market for foods with soy is valued at US$4.5 billion, soy milk has lost the most ground among soy products.
But, GK's Coy believes the trend is rolling in the opposite direction within Jamaica.
"Current consumer trends towards a healthy lifestyle have resulted in greater demand for milk alternatives, which includes soy. There are several brands represented on supermarket shelves today," she said.
GK's food division meanwhile has been adopting Tetrak Pak packaging for some of its products, including its coconut water, which is sold globally, and coconut milk sold in the United Kingdom.
"The current market trend in packaging is Tetra and this trend is global. It is not necessarily cheaper, as the cost of the product depends on several variables. The Tetra format is more attractive and thus stands out better on the shelf," said Coy.
The GK executive said World Brands aims to grow the Soyfresh business in Jamaica and that marketing costs will be shared between Ace Canning Corporation and World Brands.
The Malaysian company exports to 40 countries, and sells to a network of 23,000 retailers and food outlets in its home market, Coy said.