Export markets can drive growth

By Tameka Gordon Assistant Business co-ordinator

Wednesday, January 16, 2013

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Expanding into regional markets is one clear way to grow a business, according to John Mahfood.

The similarities in the culinary tastes of Caribbean countries have provided a warm and refreshing market for Jamaica's leading tea producer, said the CEO of Jamaican Teas, themaker of Caribbean Dreams and Tetley

The Jamaican Diaspora's need to maintain a taste of the island has also led his company's steady growth in the United States (US) market.

Though Mahfood concedes that the father-and-son-owned company holds a small share of the market in the US and UK, he affirms that the creation of new avenues for exports is a chief stimulant to growth.

"It is harder to export than it is to sell locally, but if you are serious about growing your business you cannot look at Jamaica alone, you have to export if you want to grow" Mahfood told the Business Observer.

He described the local market as "limiting" in its potential to drive growth and advised a keen exploration of the open markets of the world.

"The world is open and opportunities are there for business success," he said, although the bureaucratic nature of local export mechanisms does impede growth in this regard.

The company, which was re-launched in 1995 with an expanded product line, now offers a blend of teas, hot chocolate and the newly added Jamaica Blue spring water.

With his sights set on expansion, the company laments the "inconsistent supply" of the herbs needed for its range of products.

"One of our biggest problems is that we can't get enough peppermint," Mahfood said, adding that the company looks to Africa and Egypt for supplies of peppermint and sorrel.

With a palate for traditional herbal flavours, the sorrel ginger blend, added some seven years ago has fast become a favourite of Jamaicans, Mahfood noted.

The lemon grass and ginger products have also been warmly received.

Locals also consume most of the peppermint teas produced by the company, but the company's black tea finds its strongest support in the overseas markets

A diabetic's brew is also among the company's latest additions to increase its market presence.

The mixture of cinnamon, peppermint and stevia leaves contains a natural sweeter, which Mahfood describes as a healthy choice for those so afflicted.

"Barbados is our single biggest market and we do very well there," he said noting the 'Bajan' affinity for the ginger blend.

The Trinidadian market has seen increasing sales of their preferred lemon grass and ginger blends, Mahfood added.

With a 50 per cent share of the local market, the company sees the Caribbean as a prime market for its line of forty products.

"Each island seems to have its own tradition," the tea maker said noting their presence in all the English speaking Caribbean territories.

The CEO explained that the winter seasons of its US and UK markets demand greater production, which is assured by, increased man-hours.

Operating from an 18,000 square feet facility, the Mahfoods, (Adeeb and John) are set to expand to 34,000 square feet facility to boosts its production.

The tea company's 30 employees, operate on a four-day a week single shift producing an annual 100 million bags of tea.

When the Business Observer visited its plant, employees of the were deeply engrossed in their various tasks of packing, coding and sorting as Betty Wright's No Pain floated on the airwaves.

Describing the production process as a "very simple operation" Mahfood explained that dried ginger is sourced through the Ministry of Agriculture with other partners supplying the lemon grass the company needs.

The tea packaging commences with dried ingredients, which are shunted through a hopper then fed into a tea-packing machine.

The simultaneous fusion of strings, filter paper and produce are then ushered to a waiting employee who then stacks them into a box.

Covered with plastic to ensure freshness and stamped with production date and batch number, the boxes of 24 teabags are then packed into cases to be distributed.

"We believe we have the right number of products we just need to increase the number of people who use these products," Mahfood said when pressed for plans to increase production.

He noted the devaluation of the Jamaican dollar against the pound and US dollar, as a chief concern for last year.

The company however, compensated for its loss in local unit sales by bolstering its export sales prospects.

"Because we sell almost half of our products overseas, we have some protection from the uncertainties of the local economy and that's one of the reasons we are able to do relatively well," Mahfood noted in outlining the company's success for 2012.

The company has diversified its asset holdings through the addition of three supermarkets, located in Kingston, Savanna- la-mar and Montego Bay and a line of 18 apartments set for completion in April of this year.




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