Honey Bun culls distribution partnerships
Marcella Scarlett, Business Reporter
Honey Bun bakery is reclaiming distribution of its products from some private contractors, mainly in eastern and central parishes, says chief marketing officer Krystal Chong.
The company has been reshaping its distribution strategy for one and a half years, but is now intensifying those efforts to drive sales, having acquired several new trucks which positions the bakery to take over the job itself.
Chong said Honey Bun's products do not reach some grocery shelves at a fast enough pace to maximise sales.
The company's annual report also points to difficulties faced by Honey Bun in collecting debt from prior contracted distributors.
"When you outsource it is really not in your control. Sometimes we see a lot of products coming back to us for whatever reason … when we do it ourselves it is cheaper to the retailers because they don't have to pay the extra margins to the distributors," said Chong, speaking on the margin of the company's annual general meeting. "They can buy it directly from us and they get it cheaper."
confined to sales routes
The marketing officer said the bakery will confine the takeover to sales routes which it believes it can service better, using discrete delivery schedules that take into consideration grocery outlets with limited shelf space, as well as those with space that can accommodate high supply volumes.
"So we see where we needed to better manage our distribution, and this was happening mostly in the east of the island and central parishes," she said.
Honey Bun's sales turnover in 2012 amounted to J$611 million, up nine per cent year on year.
Last year, Honey Bun introduced its Goldie cream-filled pastry to the market and chairman Herbert Chong said it is doing very well on the shelves.
He added that new products of similar quality will be coming to market soon, but "it will take time as we have to be testing and we won't put any product on the market until we are sure of the quality". He cited competition as reason for not relaying details on the upcoming products.
"What I can say is that at least two new products will be rolled out by the end of the year and we can expect them to be of the highest quality. Remember, we have to test the product and we won't put them out there until we are sure of the quality," Chong said.