Business

Spur Tree re-positions for deeper thrust in food market

Former Island Grill trio reunites at condiments manufacturer

BY JULIAN RICHARDSON Assistant Business Co-ordinator richardsonj@jamaicaobserver.com

Wednesday, March 26, 2014    

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SPUR Tree Spices has brought together former executives of a top Jamaican restaurant chain as part of a plan to reposition the brand and push deeper into the local and international food market.

Albert Bailey, former general manager of Island Grill, joined Spur Tree in January as CEO and minority partner. He reunited with Spur Tree directors Mohan Jagnarine and Dennis Hawkins, former operations manager and general manager respectively at the fast food franchise. Bailey joined Island Grill in 1999 as financial controller and subsequently replaced Hawkins as general manager, helping to grow the restaurant into the popular 18-store chain it is today before leaving last June.

"I left Island Grill and was considering some options on the table. Mohan contacted me and wanted me to look on a business plan they had developed, and I gave him my honest opinion: I thought that the company had a whole lot of potential," said Bailey, explaining what led him to link back with his former colleagues.

The business plan for Spur Tree involves differentiating the brand in the extremely competitive food market. It will reposition the award-winning manufacturer of sauces and spices — including jerk, curry, pepper jelly and oxtail seasoning — into a more rounded player through the addition of new products and value-added services.

According to Bailey, the plan is to do this in a very personable way in order to bridge the gap between its condiments and the end product — actual meals — that people consume.

"Traditionally, most persons who are in spices are positioned towards one target customer. If you go into a supermarket, you will see a hundred different manufacturers doing the same range of spices in the same bottled format," Bailey said. "What we want people to have is a positive emotional connection with our product, which is why our particular strategy is to not just present things in bottles.

"The vision is to transition away from just spices. You will see Spur Tree expanding, using all the very unique flavours on the island and creating products to take across the world," he added, noting that the company has already added ackee and callaloo to its product line.

The new Spur Tree CEO was speaking with the Business Observer during a tour of its 9,000 square-foot Garmex Freezone factory, from where the company has been operating since last year, after moving from a facility half its size on Wood Glen Avenue in Kingston.

Spur Tree currently has market presence in Jamaica, the US, UK, Canada and Cayman Islands, with 70 per cent of revenues coming from overseas. Jamaica exported US$14.5 million ($1.6 billion) in sauces during 2012 or 16 per cent higher year on year, according to the latest Economic and Social Survey Jamaica. That amount actually beat export earnings in coffee, ackee, non-alcoholic drinks and baked products.

Among the major strategic focuses for the eight-year-old company is to expand its brand presence in existing territories, particularly the US and Jamaica.

The US is Spur Tree's biggest market and remains the number one priority, according to Bailey.

Spur Tree has established a small office in New York with one full-time worker to manage its business there, interacting with distributors and customers and implementing promotional programmes.

"That whole tri-state area is being covered for us. We realise there is a huge opportunity there, but we really needed someone on the ground," Bailey said.

Spur Tree products are currently distributed in some eight US states, primarily through ShopRite and the Jetro restaurant depot cash-and- carry chain. Its target market is not restricted to the Diaspora, having already reached mainstream customers, particularly with its jerk sauces,

"We are now in the Minnesota public school system where they are doing jerk," Jagnarine said. "Mrs (Michelle) Obama wanted to change the American students' diet so they decided to choose healthy food, and jerk was chosen as one," Jagnarine said of the US first lady's much talked about childhood obesity initiative.

Bailey interjected, "Jamaican products are not restrictive to the Diaspora anymore, there is a huge opportunity to reach the crossover market," as he prepared to reveal Spur Tree's distribution strategy to drive its presence in the US into those mainstream channels.

According to the Spur Tree CEO, the company will consolidate its distribution network in the US —  where it currently has some six distributors — through one main distributor in a move aimed at driving efficiencies and guarding against the unavailability of products in retail chains.

The distributor they have identified for the chief role is C Kenneth Imports, which will receive Spur Tree products directly from Jamaica and then send them to sub-distributors for delivery into retail channels.

"C Kenneth Imports are large, have the capacity and are well organised. Plus they have strong connections with a lot of the ethnic markets," Bailey said.

"The significant strategy point we are making here is to consolidate all our distributorship so that all our sub-distributors in the US can get products in no time because (C Kenneth Imports) will always have the product available," he added, noting that Spur Tree has its eye on introducing its products in cities such as Buffalo, Atlanta and Chicago in 2014.

Spur Tree has set a target to begin shipping two container loads of products a month to the US market this year. What's more, the company expects that its factory will become fully Hazard Analysis Critical Control Point (HACCP)- certified in 2014, against the background of efforts to comply with the US Food Safety Modernisation Act (FSMA) passed by the Food and Drug Administration.

"Every manufacturer had to look at how they operate in terms of system and infrastructure," said Hawkins.

Jagnarine added that the process to become fully HACCP-compliant has greatly improved its product quality and efficiency.

"I have to give (former industry minister) Dr Christopher Tufton credit for creating that whole hype around the FSMA because what it did was open up our eyes," Jagnarine said.

"It has been a lot of work but you are better off for it," he said.

Another strategic focus for Spur Tree is to utilise the over 50 years combined experience of Bailey, Jagnarine and Hawkins in food services to drive value- added services to businesses in the industry. This is primarily targeted towards the Jamaican market, where the company is looking to grow its presence significantly this year. The company plans to work with food service providers, including hotels, to develop products and offer consultation on best practices.

"We want to be able to look at your business and say 'Listen, this is how Spur Tree can add value to your business using our products and developing products around the idea that you have,'" Bailey said. "We think there is a huge opportunity there to be tapped into."

Added Jagnarine: "If you sell a product to a restaurant, you must be able to advise from a cost point of view on things like seasoning. A lot of restaurants don't realise one of their main problems, they use seasoning sometimes when they don't need to use so much and they don't understand the cost."

Spur Tree will aggressively innovate products based on interaction with customers. The company, which plans to spend up to $16 million in new machinery this year, has incorporated a test kitchen at its factory that will drive this effort through the facilitation of product demonstrations and development. It has hired graduates from the University of Technology (UTech) food and beverage programme — a linkage formed through another Island Grill connection, a former human resource manager turned lecturer at UTech — to work in the test kitchen as brand managers and play an integral role in the interaction process both on site and in retail spaces.

"They are bright, enthusiastic, full of energy and like trying new things," Hawkins said. "It gives us new energy and they represent the brand well."

According to Bailey, at this stage of Spur Tree's development, it reminds him of Island Grill when the three partners were there together.

"It's like the three of us coming together again to do the same thing," he said. "Seeing where Island Grill is now, I think us working together can make Spur Tree great."

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