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Salada using coffee brand to test spice market

Published:Wednesday | October 1, 2014 | 10:00 AM

Tameka Gordon, Business Reporter

Salada Foods Jamaica Limited is weighing whether its popular Jamaica Mountain Peak coffee brand can deliver sales in a new food segment - condiments.

Its first experiment is with ginger, from which it developed the food seasoning, as well as a new tea.

The Jamaica Mountain Peak ginger tea extends the company's range of teas already produced under its Salada brand.

To support its new products, Salada Foods grows its own ginger under a one-acre shade house on the border of Portland and St Mary, ensuring consistent supply, said the company's financial controller, Kevin Price.

The shade house, which sits on a five-acre property leased by the company, produces enough for Salada to sell ginger to the Ministry of Agriculture, he said.

"We are looking for other market segments that can sustain revenue growth. Not just revenue, but also to provide us with some amount of growth and to have some form of diversification, instead of basically sticking to coffee, which has been our bread and butter for some time," Price said.

SALES FALL-OFF

The company's search for additional revenue comes amid its fall from peak turnover of $715 million in 2012 to $634 million last year. Its nine-month results ending June indicates a continued fall-off in sales by 10 per cent.

The company's new ginger seasoning is aimed at the export market, said Price, while the ginger tea - which comes in sweetened and unsweetened varieties - is mainly sold locally.

"We have the tea, both with and without sugar - one with just the pure ginger and one with the ginger powder and sugar in separate packets," Price said.

But, "the tea has definitely outpaced the seasoning," he said, noting the health conscious pull of ginger teas.

The tea was initially exported to Asia, but reorders of the product "has been pretty low", Price said.

The ginger seasoning is packaged in sachets and sold in powdered form.

"What we did was to take a liquid extract and utilise our spray dry equipment to spray dry it back into a powder. So if you're seasoning, for example, your pork, you just pull the pack and sprinkle it along with your other seasonings," he said.

The product is aimed mainly at North America, but Price said the company has also seen contract packing offers from the Eastern Caribbean.

The company also does contract packing of ginger products for an overseas third party company "which is also another revenue stream," he said.

Contract packing has been a mainstay for the coffee-producing company.

"It is something we do with coffee as well," said Price.

Price declined to say whether Salada is making a bigger play for the condiments market, only noting "it's an interest for the company".

"It is something that we are looking at, but we are still a little distance off," he said.

PIMORA

Still, the company did acquire a majority stake in a three-year-old spice maker in June, known as Pimora. That company will be manufacturing pimento briquettes for the local and export markets, and Salada's $26 million investment helped to capitalise the operation.

Salada also expanded in 2013 with the $34.6 million acquisition of Roberts Products Company Limited through newly created subsidiary Mountain Peak Food Processors Limited. In 2013, Mountain Peak contributed $4.4 million to total sales, according to a breakout in Salada's annual report.

The Roberts line includes baked beans, syrups, canned juices, jams and jellies, sauces, and spices.

Price said Salada is "sorting out the paper work" and glitches in distribution around the Roberts line, whose products will be pitched at local and export markets at reintroduction.

"We have started, but we have had several hiccups on the whole distribution of Roberts. We are presently working on something, in terms of actually getting distribution locally going, as we would like it, but it has not started out as we had originally planned," he said.

He said the company hopes to get the issues resolved between October and November.

tameka.gordon@gleanerjm.com