Sun | Sep 24, 2023
COVER STORY

No to local potatoes, says fast food operator

Rejects high-price, low-quality tuber

Published:Friday | September 15, 2023 | 12:06 AMAvia Collinder - Business Writer
Chairman of Restaurant Associates Limited, Richard Lake.
Marketing Director of Restaurants of Jamaica, Tina Matalon.
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Restaurant Associates Limited Chairman Richard Lake, who operates the Burger King and Popeyes franchises, says while the fast-food or quick-service restaurant chains generally support the Jamaican economy, he has ruled out doing business with...

Restaurant Associates Limited Chairman Richard Lake, who operates the Burger King and Popeyes franchises, says while the fast-food or quick-service restaurant chains generally support the Jamaican economy, he has ruled out doing business with producers of potatoes due to unresolved quality issues.

While the company spends “billions” on local chicken supplies, its purchase of potatoes is zero.

Irish potatoes, which are used to make French fries and hash browns, are 100 per cent imported.

“Local suppliers cannot meet the quality standards or volume required. All international brands require suppliers to meet certain standards. No supplier in Jamaica or the Caribbean can meet these standards,” Lake said in an interview with the Financial Gleaner.

“All potatoes are not the same,” he asserted, explaining that the level of sugar content can make potatoes black when they come out of the fryer, and that size consistency is required to deliver a standardised meal.

He added that Jamaicans pay up to 400 per cent more than the world price for raw potatoes. Even factoring for import duties, freight and GCT paid by local fast-food providers to import the raw material, local suppliers still cannot compete on prices, he said.

Last year, Jamaica imported US$1.45 million worth of potatoes, down from US$1.8 million in 2021, primarily from the Netherlands. Other source countries were Canada and the United States.

The volumes imported in 2021 amounted to 6.1 million kilogramme, but no comparative figures were available for 2022 from the Statistical Institute of Jamaica.

Jamaica produces adequate volumes of potatoes, but not with any consistent quality. The Ministry of Agriculture in a review of local production done for the period 2013-2017, said that average annual production was 17.87 million kilogrammes, while average imports were 2.47 million kilogrammes.

“Based on those figures, Jamaica would need to plant 148.47 hectares more potatoes in order to be self-sufficient,” the ministry noted in its report.

However, imports of the tuber have tripled since then and the quality issues are unaddressed.

“We are using local suppliers where they can compete,” said Lake, listing products such as beef, ham, bacon, buns and vegetables.

“In total, approximately 70 per cent of our cost of goods in Burger King are locally purchased, and that figure is higher for Popeyes,” he added. “For both brands, chicken product purchases are over $1 billion.”

Restaurant Associates operates 29 fast-food stores nationwide that are manned by a workforce of more than 1,000 employees.

Competing fast-food company Restaurants of Jamaica operates 39 KFC restaurants and 14 Pizza Hut outlets. The company made no direct comment on the potato issue, saying it needed more time to formulate a response; but otherwise, Marketing Director Tina Myers Matalon said the company sources 100 per cent of its poultry, produce, flour, ketchup and other key ingredients from local suppliers.

“ROJ continues to import select proprietary seasonings and recipes,” she said.

Matalon is also associated with Gara Restaurants Limited, which operates the Wendy’s chain. Gara is held through an offshore company called Gara Holdings Limited, for which Companies Office of Jamaica records list Michelle Myers Mayne as the sole beneficial owner and director as at February 2023. ROJ itself is owned by the Myers family.

“We have successfully transitioned over 90 per cent of the imported poultry products the brand utilises to local sources, alongside all local vegetables,” Matalon said of Gara’s operation, which oversees a chain of eight Wendy’s stores.

“Looking ahead, ROJ seeks to expand its utilisation of local inputs as suppliers meet the global high-quality standards to do so, emphasizing adherence to the stringent GFSI standards required,” added Matalon, who on Wednesday was also said by ROJ to be a director of Gara. The comment essentially affirms the more direct statements made by Lake regarding inadequate quality.

“Local potatoes cannot qualify for use in international QSR franchises. There are less than 20 producers who qualify worldwide,” said the Restaurant Associates chairman. “We require volume, consistency, quality and price, and that can only be met by multinationals in the potato business,” he reiterated.

“Some of these producers have farms bigger than the parish of Portland, so you get some idea of their scale. A Jamaican small farmer on a hillside cannot compete with that ... not to mention the capital cost required to have a French fry plant,” Lake said.

The Jamaica Agricultural Society, JAS, has no quarrel with the level of support provided to farmers by the fast-food sector in relation to the procurement of vegetables.

“Currently, most regularly used vegetables are produced locally, so long as there is favourable weather. Vegetables like tomatoes, lettuce, carrots, and onion are produced in good supply in all parishes,” said JAS President Lenworth Fulton.

But he sees the need for more investment to deepen the import-substitution programme that Jamaica embarked on years ago, both to safeguard the country’s food security and cut back on spending on foreign goods.

Fulton said the sector is still in need of infrastructure, such as greenhouse technology as well as expanded irrigation systems, to allow for crop growth in more areas. He added that at the policy level, more incentives are needed to drive production.

The Ministry of Agriculture says that the single most important consideration for Irish potato production is climate.

It is a cool-season crop, growing best at temperatures 16º to 27º Celsius, with its best yields obtained when an average temperature of 20ºC is maintained during the growing period.

Irish potato can be cultivated in a wide range of soil types, provided the soil is sufficiently retentive of moisture and friable, or crumbly, enough for good root and tuber development.

avia.collinder@gleanerjm.com