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GraceKennedy to distribute Seprod products in US

Published:Friday | March 6, 2015 | 12:00 AMNeville Graham
A packet of cookies made by Seprod under its Butterkist line.

Seprod Limited has inked an agreement with GraceKennedy Foods USA to distribute its brands through some 7,000 retail outlets in the American market, effective March 1.

The agreement gives Seprod a line to mainstream American consumers, and beyond the Caribbean diaspora. The terms were not disclosed.

Seprod's head of marketing, Roger Thompson, said only that about US$3 million to US$4 million worth of products were involved initially.

"We are cautiously reporting those numbers now, because a lot of leg work will have to be done in the coming months to ensure that we're a part of the listings of the major chains like the Wal-marts and the Costcos and so on," said Thompson.

"However, with Grace we have a serious presence in the independent operations and snack outlets," he said.

Seprod's yearend 2014 results are still pending, but in 2013 the company reported $757 million of revenue from overseas sales, amid total turnover of $13.9 billion. The estimate by Thompson would add about $345 million to $460 million to exports.

GraceKennedy Group was able to open up its reach to Hispanics and mainstream consumers through its acquisition of La Fe Foods last July - now operating as GraceKenndy Foods (USA) LLC - and the US subsidiary's new distribution partnership with AriZona Beverages that was announced last weekend.

Major retail shelves

The partnership with Seprod is expected to put the latter's brands on major retail shelves such Wal-mart, Costco, BJ's, Krogers and Sam's Club; into regional chains such as Pathmark, A&P, Giant, Publix, Winn Dixie and Shoprite; and local chains such as Western Beef, Presidente, Sedano's, Tropical and Key Foods.

Initially, Seprod will be pushing its Butterkist range of biscuits, Ovaltine biscuits, and Pronto Porridge Mix.

Seprod CEO Richard Pandohie, who took over leadership of the company last November, had immediately set his sights on export growth in the medium term and has placed a $100-million bet on Seprod's biscuits division - capital expenditure that is meant to renovate the line and expand the product range.

Pandohie told the Financial Gleaner that both the capital improvements and the deal with GraceKennedy fall right into place in advancing Seprod's stated goals.

"This deal between two iconic Jamaican companies will be a key platform for Seprod's aim to triple its export volume within the next three years," he said.

Michael Ranglin, the president and CEO of GraceKennedy Foods USA, says a key benefit of the partnership "is our enhanced ability to offer the US retailers a suite of strong Jamaican brands that allow them to better serve a diverse consumer base".

"We will both see enhanced performance as a result," he added.

neville.graham@gleanerjm.com