Benlar rescued by new backer after battering by pandemic
Food company expanding product line, entering export arena
After a rocky pandemic year, food packaging company Benlar seems to have finally found the right partner to scale the operation. Founder Craslyn Benjamin thought she had found her footing in 2019 after overcoming start-up woes, ranging from high...
After a rocky pandemic year, food packaging company Benlar seems to have finally found the right partner to scale the operation.
Founder Craslyn Benjamin thought she had found her footing in 2019 after overcoming start-up woes, ranging from high overheads and an unfinished factory building to fallouts with a business partner, only to be knocked off-course again by the pandemic.
Benlar entered year 2020 bullish on plans to introduce new products, expand distribution locally and getting a toehold in markets outside of Jamaica, after securing some $45 million in investment from two new backers in exchange for a 25 per stake in the four-year-old business.
All that was left for the 35-year-old entrepreneur to do was to ensure a consistent supply of raw materials for her company’s ready-to-cook food line that included peeled bananas, peeled yams, seasoned callaloo, pumpkin soup mix, chopped stir fry vegetables and fruit plates.
But four months into the year, and a month after the coronavirus was detected in Jamaica, Benlar Foods began haemorrhaging business. Benjamin’s footing had slipped again.
“It was devastating. From January to March, our accounts were in a good position and I was excited about moving forward with the plans. But things quickly changed with the outbreak of COVID, and we were faced with losses for the last six months of 2020,” Benjamin said in an interview with the Financial Gleaner last Friday.
Heavy rains associated with Tropical Storm Zeta in October compounded the problems for the company whose core business is centred around consistent agricultural supplies.
“At least 70 per cent of our business was from the food service sector that we would do back-end prepping for, like Island Grill and Mother’s, but when they were forced to shut down restaurants our business went as well,” said Benjamin.
“What made it even worse is that we had a lot of receivables out there to collect, so we had to go on payment plans with some of these clients,” she said.
Benlars also lost its two new business partners at the end of 2020, which left Benjamin weighing a tough call on whether to wind up the business.
“I felt it to the core and locked myself away for a few weeks. Then in the same period I lost my grandfather who was my rock,” she said, her voice chocking with emotion at the loss.
Before taking the final step of locking down the business, Benjamin, who owns 100 per cent of the Benlar brand, decided to make yet another try at finding a backer. She entered negotiations with an unnamed company, described only as “a large entity also operating within the food industry”, and was able to secure a deal that not only keeps Benlar operational but will allow Benjamin to realise her pre-COVID ambition of entering the export market.
But, while Benjamin will continue to run the business, she no longer holds majority ownership. The alliance has led to the creation of Benlar International, as the holding company for the operations of Benlar Distributors Limited, in which she holds a 49 per cent stake, while the majority interest, 51 per cent, is held by the new partner.
Benjamin and her partner will continue to package and distribute the previous line of products handled by Benlar Foods, but are also researching what other products should be added to Benlar Distributors’ portfolio.
The new company has also moved from Mandeville, where the original Benlar was domiciled, but Benjamin declined to comment on the new location, because it could identify the new partner. The new facility is 10,000 square feet, and more than twice the size of the former processing plant in Mandeville that Benlar’s had leased from the Factories Corporation of Jamaica.
Come July, Benlar Distributors will be rolling out a newly developed ready-to-eat line at PriceSmart, which already carries its other products, but is also working to fulfil orders in the European market as soon as the freight industry emerges from under its COVID-19 challenges, specifically container shortages and rates that shipping interests expect to normalise around September.
Benjamin and her partner are investing $25 million in the new ready-to-eat product line, which will include ackee and salt fish with jerk yam, escoveitch fish with roast breadfruit, cassava bammy wrap and cassava tortilla wrap.
The new business is also coming to market, by early summer, with weekly supplies of conveniently packaged pre-washed and peeled foods, along with preparation guidelines, and is going after the frozen soup market with Benlar pepperpot and pumpkin soups particularly targeted at the United Kingdom market.
“Everything has changed with COVID, and how consumers buy has also changed; and so, we looked at the opportunities that we could capitalise on,” said Benjamin. “Convenience food packaging is a big product for us. We are partnering with a major company here in Jamaica to have that ready for consumers to purchase online and have it delivered to them. Aside from that, we see opportunities in vegan desserts and ice creams,” she said.
Benlar Distributors is aiming to launch its products in Europe, taking advantage of the market access afforded regional companies under the Cariforum-European Union Economic Partnership Agreement, and is in discussions with two supermarket chains. Locally, the company is also getting assistance from Derrimon Trading under Jampro’s Export Max III big brother/sister mentorship programme.
Derrimon carries Benlar products at its Select Grocers supermarket in Kingston, and plans to extend the line to its overseas supermarkets, FoodSaver New York and Good Food for Less, based in Brooklyn, New York – a plan now being worked on with Benjamin.
Other popular supermarket chains in which the Benlar Foods brand can be found include Hi-Lo, Loshusan, SuperValu and PriceSmart.