Spur Tree Spices opened the 2024/25 financial year on the same pattern of declining profits from 2023 but has sought to reassure shareholders that it’s better positioned for growth this year, owing to new product launches and factory upgrades.

The company, which posted profit of $28 million for the first quarter that ended March 31, down from $47 million a year earlier, said it is set to increase its pepper cultivation significantly. It also recently launched 37 SKUs across several product lines, including dry seasonings, fried chicken mix, BBQ sauces, and a range of condiments such as dips.

To keep up with the growth of its product lines, Spur Tree said it will plant an additional 18 acres of Scotch bonnet pepper in the coming weeks, bringing the total acreage of pepper under cultivation to 43, with an anticipated output of over 650,000 pounds for the first reaping cycle up to September.

“This level of output, supplemented by supplies from our farming partners, will guarantee adequate quantities of pepper for the remainder of 2024. The next phase of the plan is to put into production other raw material inputs to supplement current supplies from our farming partners,” CEO of Spur Tree Albert Bailey told shareholders in the preamble to the financial results that was released on Monday.

Bailey however told the Jamaica Observer that the recent Hurricane Beryl will challenge that projection along with other issues the company faced.

Still, Spur Tree Spices is working on bringing more new products to market by later this month. According to Bailey, the “high-demand, high-usage items” are expected to positively impact revenue and profit and generate a strong brand response.

“Many of these formulations are first to market and based on market research and customer engagement, it is expected that these new items will gain significant traction in all current markets, locally and internationally. Along with these launches, the company used the opportunity to refresh our brand’s aesthetic to reflect our creativity and to create a compelling brand identity that resonates with both local and global audiences,” the CEO said.

To meet the growing demand for ackee, Spur Tree Spices is upgrading the capacity at both its ackee factories. These upgrades are aimed at driving production and output during the next current ackee crop.

“We are excited about the future and the opportunities these expansions and new product launches present. Our goal is to continue to provide exceptional products to our customers while exploring new markets and avenues for growth,” Bailey said in the release.

Amid the dip in bottom line earnings, Spur Tree reported marginal growth in revenues for the quarter. The CEO reasoned that higher raw material input costs over the March quarter, relative to the similar quarter of the previous year, impacted its bottom line. Cost of sales for the quarter rose from $259.5 million to $287.6 million, an increase of 10.8 per cent.

“There are positive signs that raw material supplies are gradually returning to normal levels, and associated costs are also coming down. We expect to see a continued movement in this direction, and a full return to normal raw material prices in the coming months.

“The roll-out of a wide range of new products to market, that do not use these primary raw material inputs, is a part of the company’s strategic initiatives to reduce the risk and vulnerability associated with this area of our business,” Bailey said.

Albert Bailey, CEO of Spur Tree Spices.