Baking company Honey Bun invested another $25 million in production machinery last year to satisfy growing demand for its products in the local and export markets.

Honey Bun’s investments in upgrading and expanding its production plant date back some two years, during which time the company converted some of its manual processes such as dough preparation and product packaging to automation.

It has been rewarded with greater efficiency and rising sales, which led to the company pulling in its highest-ever annual revenue of $3 billion for the year ended September 2023.

Still, there’s lots more business for the company to go after, co-founder and CEO of Honey Bun Michelle Chong said, particularly in the local market and in the Canadian market where Honey Bun distributes its product in large supermarket chain, Loblaws.

“We have been growing in the Canadian market, but we also want to satisfy the demand in the local market and to introduce new products. It was important for us to upgrade our machinery because we have to keep up with the demand,” Chong told the Jamaica Observer.

Honey Bun started as a mom-and-pop operation in 1982. Today, it produces several variations of over a dozen products resulting in a range of over 40 SKUs from four brands: Honey Bun, Shorty, Island Bites, and Buccaneer Jamaica Rum Cakes.

The company is looking to hit $6 billion in sales over the next three to five years.

Aside from production capacity improvements, Honey Bun is working on other aspects of its business model to hit the new sales target.

Locally, the company has increased its fleet of distribution trucks and has expanded its footprint islandwide to reach more customers. It recently opened a retail hub in Savanna-la-Mar, Westmoreland; adding to existing hubs in Morant Bay, Santa Cruz, Ocho Rios, and Old Harbour, Papine, Cross Roads, Half-Way-Tree, Retirement Road, East Street, and Princess Street in Kingston.

Honey Bun also operates a non-retail distribution hub in Montego Bay.

“The outlets are part of our distribution strategy to reach more people. We added quite a bit of outlets since the start of this financial year, and so if we add any more it would just be one or two strategic locations,” Chong said.

Aside from its business in Jamaica, the baking company exports through the Caribbean region and its products can also be found in major chains including Publix in USA, ASDA and Tesco in the UK and Loblaws in Canada, as well as small independent stores.

For the first quarter of the 2024 financial year, Honey Bun grew profit 25 per cent year on year to$86 million on revenues which also jumped 15 per cent to $941 million.

Chong said the company continues to stock higher inventory levels to mitigate against the instability in the supply chain of critical raw materials. She added that the company is also maintaining a healthy bank balance with cash and cash equivalents closing at $508.2 million, which is a 42 per cent increase when compared with the previous comparative period of $357.9 million.

Overall net current assets of the company increased by 25.5 per cent for the first quarter ending December 2023 with a closing balance of $609 million.