“Grace” is the short form of what the average Jamaican calls GraceKennedy Limited (GK), the company whose 100-year-old history was the selected topic for the GraceKennedy Foundation Lecture in Kingston on October 20.

The 2022 GK Foundation lecturer chronicled the story of a company which is now spread across the globe in reach. Don Wehby, group CEO, former CEO Douglas Orane and Dr Fred Kennedy, grandson of one of GraceKennedy’s founders, were the lecturers at the event.

The 100-year history of GraceKennedy reflects the vagaries of both global and local economic conditions.

Grace, Kennedy & Company Limited was founded on February 14, 1922 by Dr John J Grace and Fred William Kennedy, who worked for Grace Limited, a wholly owned subsidiary of WR Grace & Company of New York City in New York, USA.

An economic recession between 1919 and 1921 led to the divestment of the Jamaican branch which was acquired by Dr Grace and Fred W Kennedy and who invited James Moss-Solomon, then with United Fruit Company, to join the new firm as accountant.

On February 14, 1922, on St Valentine’s Day, a new firm, GraceKennedy and Company Limited, was launched with a memorandum of association which gave the company options to carry on “a general mercantile and commercial business and any other business, manufacturing or otherwise”. The capital of the company was £25,000 divided into 250 shares of £100 each, with power from time to time for increase.

The company’s website chronicles its early history. Concerned about office accommodation and warehousing facilities, directors noted that the Grace building at 64 Harbour Street in Kingston contained room to spare, but wharfage was inadequate.

In March 1923, at a directors’ meeting, Dr Grace proposed that the company should enter into a joint agreement with the Jamaica Fruit and Shipping Company to lease the premises at 64 Harbour Street from the New York-based WR Grace & Company. Only part was already occupied and leased by Grace, Kennedy & Company. They wanted it to build a wharf among other improvements.

The early start of operations was disappointing with imports during 1924 less than expected. But the new owners persevered. In 1935, Grace, Kennedy & Company acquired Standard Soaps, a small manufacturing business, but that was soon resold.

Another brief and unsuccessful venture was made in the manufacture of cigarettes. Sadly, GK could not compete with rival goods from England such as Players, Gold Flake and Three Castles. However, these were chronicled as minor setbacks.

By the 1930s GraceKennedy and Co Ltd were representatives of 32 overseas manufacturers importing a wide variety of goods, including steel safes, liquors, rice, silks, salted and pickled fish, tonics and flour. The wharf became highly profitable and trade improved.

In 1928 the company, jointly with the Jamaica Fruit and Shipping Company, purchased adjoining premises belonging to Lindo Bros and extended the Grace Wharf by 150 ft. By January 1931, and again jointly with the Jamaica Fruit and Shipping Company, the purchase of the wharf from Grace Ltd, of New York, had been completed.

The company’s website notes that “It was on the provision of basic foodstuffs the labouring classes in general, that GraceKennedy’s later success was to be founded.”

In the mid-1930s, GK, now general importers, commissioning merchants, wharf owners, and steamship and insurance agents, was growing steadily.

In 1933 Carlton Alexander found employment with GraceKennedy as a billing clerk. He later became a notable company head and a ‘super salesman’ who would shape the direction of the company for decades.

Expansion in 1960s and 70s

It is noted how in early April 1973, Alexander pioneered the expansion of Grace Food Processors (canning division). Many mergers and acquisitions were involved.

GK’s identity as an importer-distributor changed fundamentally in the 1970s. At this time economic challenges forced many Chinese wholesalers out of business. GK and other importing firms moved into the resulting gap, taking over the wholesaling and distributing services of the departing Chinese.

The company made a name for itself in the ‘cash and carry’ business. Branches were opened in the Corporate Area and some larger rural towns representing an expansion of the food distribution group.

At the end of 1974, Alexander, as group managing director, restructured group operations into five divisions: food distribution, wharves, stevedoring & shipping services, insurance & properties and industrial.

Preparations also began to take the company public. Meanwhile, however, the food distribution group was feeling the effects of restrictions on imports and a general economic decline in the 1970s.

The wharves, stevedoring & shipping agencies group was also affected by restrictions on imports. At the end of July 1976, GK’s board of directors was informed of the Government’s decision to issue import licences for basic foods only.

Some company plans were put on hold until after the 1976 elections with the hope of better times. In early 1976, Alexander was instrumental in launching the Private Sector Organisation of Jamaica (PSOJ), a group dedicated to supporting the cause of free enterprise.

However, on Wednesday, December 15, 1976, the People’s National Party was returned to power with an overwhelming majority and the Government announced its intention to issue licences only for the importation of basic foods to the importing-distributing firms.

The Government also expressed interest in pressing for State ownership of all large and influential social and economic enterprises, and the private sector became increasingly apprehensive.

Through a nail-biting couple of years in which GK’s board developed many scenarios if the Government took over, Alexander steered the ship, until it was clear that the Government would not acquire GraceKennedy and Co or any other similar enterprise.

On October 15, 1977, 10 members of the PSOJ, led by Alexander, left Jamaica on a 12-day mission to the United States and Canada presenting “a favourable account of Jamaica as a nation, to demonstrate the existence here of a vigorous and progressive private sector, and to meet with financiers and potential investors.”

Alexander, as it is chronicled, frequently expressed a fundamental optimism in the future of Jamaica.

But earlier that year in April 1977, following a devaluation of the Jamaican dollar, the Government announced that they would eventually become, through Nutrition Holdings Ltd, the sole importers of all basic foodstuffs.

GK received import quotas’ for the third quarter of 1977 for chicken necks and backs, pickled beef, frozen meats, and rice and counter flour. They were to have 40 per cent of the flour and over 40 per cent of the bulk rice imported. Price controls, however, meant that profit margins were reduced.

The 1980s

Between 1978 and 1982, mergers and joint ventures with other companies were predominant for GK. A company called Domestic Sales Ltd was purchased along with other deals. The company also bought the premises at 75 1/2 Harbour Street for $35,000.

GK also began its Caribbean expansion. Negotiations were concluded between the company, the Marriott Corporation and Goddards Ltd of Barbados jointly, and the Government of Jamaica for the purchase of the State-owned ‘Versair In-Flite Services Ltd.

The period saw the merger of Cecil de Cordova Ltd and GraceKennedy & Co. This merger was an attempt to consolidate to protect remaining business and profits, and to allow broader planning of strategies to alleviate a US dollar shortage.

Meanwhile, the economic and political conditions of the 1970s which led to thousands migrating, also led to the departure of many wholesalers and the disruption of the traditional chain of distribution.

This meant Grace, Kennedy and Company’s business model had to evolve. Over time, GK de-emphasised the cash and carry business and started supplying larger buyers, such as hotels and Government institutions.

In the products division, a lack of cans and bottles, bad debts, shortages of imported supplies of trading goods and raw materials and reduced sales resulted in higher prices to the consumer.

In the insurance division, a formal merger of Allied Insurance Brokers and Gamble and Davidson Insurance Brokers was completed in early 1978.

Growth continued regardless of the political climate and government policy. By 1982, GK employees numbered over 2,000, and staff ownership in the company, at widely differing individual levels, was 23 per cent.

The company reached its 60th anniversary on February 14, 1982. The diverse group now featured a merchandising division including distribution, sales and marketing. Additionally there were the export divisions — established to handle mainly GK products. There was also the insurance division with Allied Insurance Brokers Ltd and Jamaica International Insurance Co Ltd.

Brand value

The role of company leadership in engaging in what was described as “good business practices, efficient management, and involvement with the Jamaican people”, are emphasised in the company’s history as contributing to the growth of brand value during the century.

In 1983, the Jamaica Chamber of Commerce declared GraceKennedy & Co Ltd to be the company ‘which best demonstrates the human face of business.’ Meanwhile, the company continued to navigate changing Government policies on imports and foreign exchange. Total import ceilings in foreign exchange were set for broad categories of commodities. Under these ceilings individual firms were allowed amounts for which they might apply.

By the end of the 1980s, foreign exchange supply had been bolstered by an inflow of investment capital as some who had migrated in the 1970s returned home and reopened businesses. Commercial banks were given the green light by the Bank of Jamaica to begin appointing agents to purchase foreign exchange on their behalf.

With price controls, GraceKennedy’s directors set out their strategy to outwit competitors. The company would hold prices, wherever possible, ‘until the competition moves up to or above us’. In October 1987, the competition was said to be still increasing. GK lowered prices, and by so doing had protected their share of the market at the cost of lower profits. For a while the company battled informal commercial importing as well.

GraceKennedy overseas

In 1983, Grace Foods Ltd, a Bermuda-based corporation formed by B Terfloth & Co, Ltd, became the ‘owner’ of all ‘Grace’ trademarks registered in countries other than Jamaica. All users of the trademark would be required to pay a royalty to Grace Foods Ltd. The users in the first instance would be GraceKennedy & Co Ltd and B Terfloth & Co Ltd.

GraceKennedy & Co Ltd now began to expand their exports beyond supplying ‘ethnic markets’ abroad into much wider ‘volume markets.

Terfloth and Kennedy (Bermuda) acquired 100 per cent shareholding in the Terfloth Group of Companies operating in North America, Britain, and Europe. Other outlets fully owned by GraceKennedy & Co Ltd, or by them in partnership with other Caribbean-based companies, by the end of 1989, included Grace, Kennedy (Belize) Ltd, United Foods in Toronto, Atlantic and Pacific Trading Co Ltd in Miami (both now fully owned by GraceKennedy & Co., Ltd.), and Grace, Kennedy (Trinidad) Ltd, fully acquired in mid-1989.

Export sales also began in Barbados, England — where sales were expected to benefit by the agreement of the Tesco chain to market six Grace Products, Canada — where the Loblaw chain was involved, Belize, Antigua and Bahamas. In Trinidad there was some opposition from local businessmen, but decades later this has been handled.

In 1985, for the first time since 1972, the half-yearly returns showed that Grace, Kennedy & Co Ltd had traded at a loss. In response, the factories and the merchandise division were reorganised into general and bulk, cosmetics, paper, cards, drugs, meat and cold storage.

After reviewing performance for the first quarter of the year and comparing it with the same period in 1985, Alexander then announced the intention to have GraceKennedy & Co Ltd listed on the Jamaica Stock Exchange. He also said that in going public, the board of directors would have to ‘identify succession’.

In May 1986, Orane was appointed a co-managing director with EG Muschett. At the same meeting, the board gave its seal of approval to the proposed listing on the stock exchange. The necessary resolution was passed on June 27. On September 5 the decision was made public, and on September 11, 1986, the listing was made.

On January 1, 1988, a joint arrangement between GraceKennedy & Co Ltd and UNISYS, the second-largest computer firm in the United States, came into effect under which GraceKennedy would market the wide range of UNISYS computers to begin with and, later, other equipment including their FAX machines.

In the same month, Alexander tabled a paper reorganising the managerial portfolios of the group. He had also agreed on the choice of the next chief executive officer. Two days after his death, the board met and Rafael Diaz was appointed chairman and chief executive officer. His place as finance director was filled by Peter Moss-Solomon.

By this time, the trading division comprised 28 subsidiaries and associated companies located in Jamaica and abroad. Peter Moss-Solomon was placed in charge of group finances.

Foreign exchange challenges continued and company directors, noting that shipping provided a source of, rather than a drain on foreign exchange, entered into two joint ventures in October 1990 with the Arawak Caribbean Line, to provide service between South Florida and Kingston; and GraceKennedy Shipping (USA) Inc to provide similar services between Kingston and Miami.

There was a projected earning of US$1.8 million net in the first year. In same period also the Grace financial division was launched to include the insurance companies. Grace Remittance Service was also established to facilitate transfers of foreign exchange through a partnership with Western Union in 1990.

In the early 90s, the leaders of the group spoke of “continuing scarcity of foreign exchange; of the intense competition still faced by the merchandise or trading division, especially from non-traditional traders and illicit imports; and of the products of the GraceKennedy factories encountering increased competition from imported products entering under the Structural Adjustment Programme.”

In 1982 the GK Foundation was established after the idea of a development foundation had also formed among the staff, set up to assist income-producing efforts, training, sports, and community service in general. To continue to steer the company which was now the size of leviathan, in 1998 Orane was appointed chairman and CEO.

Modern landmarks

On July 1, 2011, Don Wehby was appointed group chief executive officer of GraceKennedy Limited, after holding the position of group chief operating officer from October 5, 2009. During his tenure as chief operating officer of the financial services division, the division’s pre-tax profit rose from $280 million in 2000 to $1.417 billion in 2005, an increase of 406 per cent.

Wehby as group CEO was charged with the responsibility for leading the group’s local and international expansion, especially as this relates to banking, investments and insurance services.

He directed the listing of the company in Trinidad & Tobago, Barbados and the Eastern Caribbean Securities Exchange sited in St Kitts, and under his leadership, GraceKennedy acquired 100 per cent ownership of First Global Bank Ltd, now a wholly owned subsidiary of the company.

As GK moved towards its 100th anniversary, the company rebranded itself and redefined its vision as moving towards becoming a “global consumer group”, with a target of 60 per cent of revenue coming from overseas by 2025.

Wehby said in the latest report that the company’s international food business recorded improvement in revenue over prior year; however, record inflation in all territories, as well as elevated distribution costs, resulted in mixed performance results. GraceKennedy Foods (USA) LLC (GK Foods USA) delivered good revenue growth over prior year.

The company’s financial report for the second quarter ended June 2022 records revenues of $72.59 billion, representing an increase of 14.6 per cent or $9.24 billion over the corresponding period in 2021.

Group profit before tax (PBT) was $5.46 billion or $12.6 million higher than the corresponding period in 2021. Net profit attributable to stockholders was $3.70 billion, $111.6 million higher than the corresponding period in 2021. Earnings per stock unit for the period was $3.73 (2021: $3.62).

The GraceKennedy Financial Group (GKFG) reported a positive performance for the period, as the group reported the continuation of expanding its regional footprint.

Wehby said GK’s jointly owned merchant banking business in Barbados continues to show significant growth in retail loan and non-interest income revenue over the corresponding period of 2021. As a result, profitability over the period has doubled when compared to prior year.

GraceKennedy Money Services (GKMS) reported a decline in revenue and profit before tax for the period, primarily attributed to lower remittance flows and the volatility of the Jamaican dollar against the US dollar.

Over time, subsidiaries and business units have come and gone, but growth of the multifaceted company continues. The GK Foundation lecture was one of many events this year which have commemorated the 100th anniversary of the company with each speaker looking at different phases of the company’s evolution.

Dr Fred Kennedy discussed the period of the company’s history when it was a family-owned business, Orane, who assumed leadership of GraceKennedy in the 1990s, spoke about the evolution into a public company, while Wehby discussed the expansion of the group in the 21st century, entering more hard currency markets and the company’s vision for the future.