Select Brands weighs market float
In the five years that Select Brands has been in business, the company has tripled its wine list and nearly quadrupled its operating space.
Now, the wine distributor, co-managed by Andrew Desnoes and David McConnell, is pursuing plans to potentially float the business on the junior market of the Jamaica Stock Exchange, which would give it capital to spread even further.
McConnell told Gleaner Business that he and Desnoes are to present the proposal for listing to Select's board of directors in coming weeks, but as for deciding the time table to go public, "we are in the middle of that process right now", he said.
When Select Brands launched in November 2011, their ambition was to hit a turnover of $1 billion somewhere between year three and year five. But it seems that they are not quite there as yet.
"We're running close to five-year targets for sales volume and market share," said McConnell. "We're very happy with our progress and we've exceeded most of our targets," he said, but held back on figures.
In five years, the company has grown from 12 employees to 50, plus contractors for trucking and IT services.
Space at its Spanish Town Road distribution hub, which started out at 8,000 square feet, has been expanded over the years to about 30,000 square feet.
And: "In our first Christmas, we had a price list that was about three pages long. Now, it's about 12-13 pages," McConnell said.
Desnoes and McConnell were well-versed in the wine and spirits market given their track record with the former Lascelles deMercado group. So they felt well-positioned to execute a growth strategy centred on "punching above (their) weight class", even with an unknown start-up company.
Their more formidable rivals include Caribbean Producers Jamaica (CPJ), which has a strong presence in the hospitality sector; and Harbour Wines, which is owned by the heavy-hitting GraceKennedy conglomerate.
"When you look at our portfolio, it is more diversified than what obtains at, say, CPJ or Harbour Wines," McConnell insists.
"What you'll find with us is that we are very good servicing all customers," he said.
Select Brands has also pursued a disruptive strategy, snapping up key brands such as the Demerara line of rums, select foods, and a popular ginger wine. McConnell believes this strategy differentiates them from near rivals.
"What really sets us apart is the way we actually represent local producers. You will, therefore, find us doing well with Stones Ginger Wine and Tortuga Rum Cake. We also have a distribution channel for the products out of Worthy Park Estates with the Rum Bar line of products," he said.
Stones Ginger wine was formerly distributed by J. Wray and Nephew Limited; Tortuga Rum Cake was distributed by Country Traders; while Demerara Rums was once marketed by CPJ.
McConnell feels particularly pleased about the Stones distributorship. He says it has allowed Select to deepen market penetration and tackle other market segments.
"It has given us the opportunity to grow our distribution coverage. Over the last 12 months, we have been selling to a lot more customers that we never used to simply because we didn't have a brand that was relevant to those customers. We have been building on the relationship by serving those customers to the best of our ability," McConnell said of the dynamic introduced by the addition of Stones Ginger Wine to its distribution portfolio.
Looking ahead, McConnell sees greater opportunities for sales to both the hospitality sector, as well as Jamaicans.
"We're looking to grow from our Jamaican consumers who have more disposable income as the economy continues to grow and they benefit from tax breaks," he said.
"We will also see growth from the numbers of tourists that are coming and a noticeable 'premiumisation' of the tourist industry. Jamaica demands a premium, and we are looking to have a brand that can fit into each of those consumer segments," McConnell said.