Tastee Limited expands in recession-resistant patty market

Published: Wednesday | August 12, 2009

Sabrina Gordon, Business Reporter

Tastee Patties is expanding into the hills of St Andrew. The outlet shown here will open officially on August 20 in Stony Hill. - Contributed

Patty and pastry company Tastee Limited has set up a new store in Stony Hill, St Andrew, and says that at least three more outlets in urban centres across Jamaica will be added to the chain in 15 to 18-month intervals.

"Even with the recession, we do have an expansion plan in place," said Paul Smith, regional manager for Tastee.

"There is a plan for one in Barbican, Linstead, and there is also out of town branches such as Ocho Rios," added Smith.

The latter will be more of a relaunch of a store the company said it was forced to close in the resort community due to what it described as management issues.

Anecdotal evidence

Patties have, according to anecdotal evidence, been outperforming other fast-food operations because they are cheaper at about $100 for a meat-filled pastry, which is often consumed as a midday meal.

The Stony Hill outlet is Tastee's 13th managed directly by the Vincent Chang-owned patty company, but the chain has 28 shops - 15 of which are operated under franchise.

The new branch was a $60 million investment, excluding land acquisition, said Smith, but he was unable to put a price tag on the three to come.

Tastee Stony Hill, a 4,350-square foot facility which is able to seat approximately 75 customers, became the second branch to be opened within the last year. The other was in the residential Patrick City community in St Andrew, which was opened in June and has about 40 to 45 staff members, the average working corps for most Tastee outlets.

Tastee Ltd, which predominantly deals in the sale of patties until recently when it started diversifying its meal offering to include a breakfast and lunch menu, fried chicken, soup, and sandwiches, operates in a market with three major players - the other two being Juici Patties and Mother's - along with a few small operators.

Size of the patty market

Data on the size of the patty market was not immediately available, but Smith contends that Tastee has well over 50 per cent of the market.

The company, said Smith, chooses locations for its stores so that they do not rival each other, but are accessible by patty buyers.

"The strategy that directors employ is to open stores so as not to be in competition but close to built-up areas where there is large gatherings and terminuses, and also to make sure the size of the company is right for the chosen location," said Smith.

"The majority of our client are walk-ins so we have to put in locations where those persons can be reached."

Tastee also exports patty to other Caribbean neighbours such as the Cayman Island, Belize, St Lucia, Antigua and, most recently, Trinidad and Tobago.

The company is now seeking to exploit the export markets even more as opportunities arise.

"There are always request being made in the Caribbean and outside for Tastee patty. (We're) not sure what the next step is but with the opening up of CARICOM there are opportunities," said Smith.

"An inspection has been done of our plant and it has passed the test. We have met all the CARICOM requirements and are now seeking to widen our footprint," Smith further said.

Tastee is also in advanced stages of becoming HACCP compliant to export to the US and European markets.

Its patties are made at two plants - at Ironshore, Montego Bay, which serves the western end of the island, and at Half-Way Tree in St Andrew. The latter churns out some 250,000 patties per day, but has the capacity to exceed this figure.

The Ironshore plant has similar capacity, but Smith could not comment immediately on its actual production.

The company's expansion plans do not include a boost to installed capacity, which Smith said is already sufficient to satisfy another 25 outlets, and would potentially only require additional shifts to cover demand.

"The patty market is a viable one ... it is the most economical meal you can get at this time," said Smith.

Patty combo

A Tastee patty combo costs an estimated $210, two pastries and soda included.

Smith said that while other businesses are reporting a decline in sales, Tastee is actually reflecting the reverse.

He declined to comment on current sales data, but information posted on the company's website puts its annual turnover at $800 million.