Salada aiming for elusive $1b sales club, amid management succession
In the wake of the surprise resignation of its latest general manager, whose exit becomes official this month end, coffee processor Salada has tapped one of the company's executives to lead the operation.
Jerome Miles' tenure lasted 20 months.
His interim replacement, Dianna Blake Bennett, whose substantive position is commercial and corporate affairs manager, says she intends to grow annual revenues beyond the $1 billion mark, which equates to roughly 40 per cent growth, in her first year in office as acting general manager at Salada Foods Jamaica Limited.
It will require growing the existing instant coffee brand Mountain Peak while introducing new products to the market.
Salada advised on Friday that Miles will resign as general manager, effective August 31, while Blake Bennett will assume the acting position.
Miles told The Gleaner that he leaves voluntarily in order to take up another job opportunity. It's the latest management change in less than five years at the company which specialises in producing instant coffee.
In December 2011, John Rosen retired as managing director and Julian Rodney succeeded him as the general manager effective January 2, 2012. In May 2014, Keshia Nelson-Brown, then a member of the board, was tapped as acting managing director following Rodney's resignation. In January 2015, Miles replaced Nelson-Brown as the general manager.
"We recognise where we are as a company and that $1 billion in sales is the target for the next financial year," Blake Bennett, who joined the company six months ago, told Gleaner Business in an interview with her and Miles on Monday.
It would mean the highest annual sales in the company's history. The current record is $736 million in 2014. Both executives acknowledged that Salada should have hit that target sometime ago based on its trajectory, its marquee product and defensible market position. Nescafe is its largest rival.
Miles said the overall market challenge is that the tea and the cocoa markets continue to grow, but not the instant coffee market.
"A new user will drink more teas than coffees," he said.
Miles remains proud of the progress made by Salada under his leadership.
In the company's most recent financial report for the nine-month period ending June, Salada's earnings doubled from 21 cents to 48 cents per share. The size of the earnings per share signals a recovery of lost ground as 2015 was as an underperforming year. In fact, the company's annual EPS usually trends around $1 and even hit $3.55 in 2006.
"I am confident that the business is on a positive path and the results reflect that. There is a thrust in the growth of exports and innovation in the local market," said Miles.
For the nine-month period, revenue topped $540 million compared to $508 million for the 2015 period. The coffee company made a profit of $47 million, up 124 per cent from $21 million a year earlier.
Salada plans to introduce new products, including flavoured coffees.
Blake Bennett said that opportunities exist to grow exports within the Caribbean region, as well as the United States, Canada and United Kingdom. It's a slight shift from growth in new markets, such as China, which was targeted in some of the export efforts in recent years.
Salada says the improved third-quarter sales were spurred by the rebranding of flagship product Mountain Peak coffee. Salada says its top line performance led to better gross margin, some of it due to improved sales in the Roberts range of products, and more single-sachet sales of Mountain Peak coffee. Reduced prices for coffee beans also helped.
Previously, the company struggled with a large inventory of what turned out to be high-priced preordered coffee. That transaction preceded Miles.
"This is a very profitable company although the revenues have not shown remarkable growth," he said.