Fri | Sep 22, 2017

Jammin Java cuts off expensive Jamaican coffee

Published:Friday | January 6, 2017 | 1:00 AMSteven Jackson

Coffee company Jammin Java, based in the United States, says it won't sell Jamaican beans in its new line of products.

The company bought up to US$3 million of Jamaican coffee over the medium term up to last year. It got a foothold in the largest retail chains in the US and Canada with the Marley Coffee brand, which included mainly commodity beans but also beans from the Jamaica Blue Mountains (JBM).

"No Jamaica Blue Mountain coffee [in the line-up]. It is too expensive and in limited supply," said Jammin Java CEO Brent Toevs in response to Financial Gleaner queries on his new product line.

The new line will include the popular single-serve coffee capsules, which are compatible with Keurig, Nespresso and Dolce Gusto machines.

The challenges faced by Jammin Java include suits and countersuits with the children of the late reggae singer Bob Marley, who yanked the Marley Coffee US distributorship from Jammin Java last year.

Jammin Java will challenge that in court early this year.

At half-year ending July 2016, Jammin Java made no purchases of JBM compared with some US$360,000 over the same period in 2015, its financial report indicates.

From 2011 to January 2016, the company made purchases totally US$2.9 million after credits and rebates from Marley Coffee.

"Marley Coffee was created in order to have a licence to buy and sell JBM coffee," stated the financials, which explained that it buys JBM coffee at the most favourable market rate.

For the most part, Jammin Java bought green beans from Marley Coffee and then resold them to customers around the world. At other times, it was more economical for Jammin Java to allow Marley Coffee to sell directly to customers.

Over three months ending July 2016, Jammin Java tripled its net loss to US$2.9 million from a net loss of US$968,500 a year earlier.

Jason Sharp, a director of Coffee Traders Limited, which holds an interest in the Jamaican arm of Marley Coffee, described the fallout as temporary.

"Once the legal positions are finalised, a new distributor will pick up where Jammin Java left off," says Sharp, who describes Coffee Traders as the largest coffee exporter in Jamaica.

Jamaican coffee sells for some US$60 per pound or more than six times that of quality commodity beans. The local industry exported coffee valued at US$25.2 million or 87 per cent higher year-on-year, according to the 2015 edition of the Economic and Social Survey Jamaica, published by the Planning Institute of Jamaica. That equates to the highest earnings in at least five years. Three-quarters of the entire crop goes to Japan, followed by Europe, with small amounts going the US.

In 2016, coffee traders were expecting record earnings for the crop year ending June, with production at some 240,000 boxes up to May, already outpacing the total production in 2015.

steven.jackson@gleanerjm.com