Salada to go after youth market, revitalise cocoa line
Salada Foods Jamaica Limited admitted it is a bit conservative, maybe even old-fashioned, but wants to change that in order to connect with younger consumers.
Salada recognised that the future of its core instant coffee business remains strong, with coffee on the path to outsell bottled water globally. However, it also needs to satisfy younger consumers, who want gourmet coffees.
"We have been steadfast, prudent and conservative in our approach and maybe a little reluctant to embracing change. We have been fortunate as many organisations, both locally and globally, have not survived as long as we have without some form of metamorphosis," said Salada Chairman Patrick Williams in a statement to shareholders published with the company's annual report.
"Today's global economy dictates that change we must," Williams said.
In the second quarter of 2017, Salada plans to develop and produce several new coffees, but it avoided giving details. It will also revitalise its cocoa line and similarly target the youth market with those products.
Williams indicated that consumption patterns have evolved with healthier lifestyles and consumers embracing organic products, which are closer to their natural state.
"Natural or organic foods will continue to lead the growth of the food and beverage industry," he said.
Salada, which makes Mountain Peak Coffee, reported annual sales of $761 million last year, up from $600 million a year earlier.
The company earned its highest profit of $143 million in 2012. It earned $81.8 million in 2016.
'STRONGER PLATFORM FOR GROWTH'
Its joint marketing effort with Lasco Distributors Limited resulted in a reduction in its inventory from an average of five months' supply to roughly one and a half months. That performance provides "a stronger platform for domestic sales growth in 2017", Williams said. Lasco was appointed exclusive distributor of all Salada products in January 2014.
The company sees the 18-35 age demographic as a ripe target.
General Manager Dianna Blake-Bennett was not reached for comment, but she said in the report that increasing demand for gourmet and fresh coffee beans are the drivers for growth.
"Jamaica mirrors the global trend with one addition, the increasing demand for cocoa-based products," she said.
Blake-Bennett previously revealed plans to grow exports within the Caribbean region, as well as the United States, Canada and United Kingdom.