Avia Collinder, Business Reporter
Jammin Java Corp, which trades as Marley Coffee, has spent the last few months moving headquarters, negotiating the purchase of a beverage distribution subsidiary and securing an advertising agreement with the Denver Broncos.
On August 1, the company said it signed a letter of intent to acquire the assets of Black Rock Beverage Services (BRB), a boutique coffee and food service provider, which serves the greater Denver market.
Marley Coffee bought the business from Jeff Krumtum, but the price was not disclosed. Alongside the equipment and truck in the deal, it will also absorb BRB's employees.
Marley Coffee senior vice-president of partnerships, Balram Vaswani, said BRB could contribute US$100,000 to group revenues.
"The initial revenues, based on current sales, will amount to over US$100,000 for the first year in the Denver area," said Vaswani, who is also the head of Marley Coffee Jamaica.
"The deal was financed in cash and stock, and yes we did acquire 100 per cent," he said.
The acquisition will expand the company's business into the office coffee and food service markets, said Marley Coffee, which described the purchase as part of a larger national strategy being rolled out initially in its new hometown.
Jammin Java/Marley Coffee has moved its corporate headquarters to Denver from Beverly Hills, California. It also announced an agreement with the Denver Broncos Football Club to advertise its brand at every Broncos home game during the 2013-2014 NFL season.
The company's push to grow organically and through acquisition comes behind a more favourable quarterly earnings report, which shows revenue on the rise and losses on the decline.
"We are extremely pleased with the traction that Marley Coffee has made in the marketplace and the improved brand awareness that has increased our footprint with some of the largest and most successful retail grocery chains and consumer electronics chains in North America," said Rohan Marley, founder and chairman of Marley Coffee.
Last week, Marley Coffee reported that its sales grew 187 per cent, year on year, for the second quarter ending July 2013, to US$1.6 million, compared to the US$559,000 turnover reported in the 2012 quarter. Half-year revenue was up 179 per cent to US$2.4 million from US$869,000.
The company also reported that its net losses shrank to US$715,000 in the quarter and to US$1.1 million at half year. That compares to a quarterly loss of US$986,000 and six-month losses of US$1.9 million in the 2012 periods.
Rohan Marley said in the earnings report that the company aims to grow through new and innovative products and by increasing the number of products distributed by its retail partners into FY2015.
Marley Coffee, the release stated, now has US$3.7 million available, in two tranches, through Ironridge Global IV Limited, for the settlement of trade payables and to help finance its product rollout to national and regional chains.
The company also announced increased retail penetration to 7,500 locations, compared with 500 locations at the end of the second quarter last year. Distribution points now include supermarket chains and retail outlets, such as Kroger, Safeway, Shaw's, Star Market, Winn-Dixie, Market Basket and Best Buy/Future Shop of Canada, it said .
Marley Coffee said, at the announcement of the BRB transaction, it was open to other partnerships and acquisitions.