Amid rising inflation and other supply chain challenges which have continued to negatively affect businesses, ice cream and frozen novelties company Caribbean Cream, which trades as Kremi, said it will increase its focus on icicle production as it pushes for better growth this year.

Speaking with the Jamaica Observer this week Chief Executive Officer (CEO) Christopher Clarke said that following the launch of its icicle product in the local market two years ago, sales from that segment have been very encouraging. Kremi’s introduction of icicles led a revival in the production of the products locally. This, after the company in its quest to secure more revenues from the largely untapped area mainly serviced through imports, invested approximately US$500,000 to start a new line for the production of frozen novelties. Prior to this, the company distributed Flavorite, a Trinidadian brand of frozen novelties.

“We intend to push more of our icicles out there as we continue to figure out more ways of increasing margins so our main drive for the rest of the year is to increase our output of these products. The big plus to icicles is that they are a lot simpler than ice cream and there is also less inflationary forces acting on them,” he told the Business Observer.

“Prices have been going up right across the board in particular milk prices which have been hit harder than the average,” he also said, noting other challenges including supply disruptions and high electricity cost as some of the most taxing to operations.

Inflation, which since the start of this year has been exceeding the Bank of Jamaica’s 4-6 per cent targeted range, measured 10.9 per cent over the 12 months to June, which the Statistical Institute of Jamaica (Statin) said was largely driven by increases in the heavily weighted food and beverages and transport divisions, the latter as a result of higher fuel prices.

During its last financial year ended February, the ice cream making company reported losses of $9.2 million as a result of lockdowns, reduced sales and other pandemic induced challenges which affected its bottom line during the year.

For the three-month period ended May, the company’s net profit also plunged to $1.3 million, down from the $54.2 million it earned in the previous year’s quarter despite increased revenues totalling $611.7 million.

“Operating expenses for the quarter increased by $18 million or 12 per cent due to higher cost of utilities, security, cleaning and sanitation and interest expenses. Weekly fuel increases impacted our utility cost particularly electricity which has driven up the cost of a wide range of our materials and services,” the company stated in its latest financial report.

Clarke noted that despite the company’s effort to absorb some of the rising costs brought on by harsh economic realities, they have had to, on several occasions, increase prices to push back against climbing expenses.

“We’ve been having a hard time trying to not increase our prices at the same rate as inflation but our prices have still gone up significantly over the past year and a half. Customers are complaining but hopefully it won’t get to the point where they will not be able to afford the products. As inflation continues to rise we may, however, have to deal with more price increases,” he stated.

The CEO said that even as the company works to grow sales and maintain current volumes, it will continue to adjust to external shocks.

“As we move on from the past year’s challenges, the company is investing in the right personnel while strengthening our infrastructure and operational flexibility, as we work to deliver even sweeter results for you,” the report to shareholders stated.