SPUR Tree Spices Jamaica Limited has tapped into the sizzling local demand for fried chicken with its newly launched fry chicken mix as the company seeks to develop new products with reduced reliance on climate-vulnerable materials.

The fried chicken mix was introduced to the market in July as part of Spur Tree’s efforts to drive growth and diversify its offerings.

“It’s pretty new, and the demand is high, so the question that we have to answer is, ‘How [do] we meet that demand’?” CEO Albert Bailey told the Jamaica Observer in an interview. “It just reached the supermarkets in Jamaica, and based on indications over the first couple of weeks, it’s moving off the shelves pretty quickly.”

The Jamaican love affair with fried chicken continues to drive business growth, with popular fried chicken chains experiencing significant success and finding a substantial customer base, with a target of full islandwide penetration by mid-September.

“I cannot get up one day without my partner over there having 15 conversations about the fried chicken mix,” Bailey asserted at a recent annual general meeting at the Courtleigh Hotel in Kingston on Wednesday. “Because that’s where the lines are in Jamaica; if you go to any place, that’s where the lines are at, fried chicken places,” Executive Director Mohan Jagnarine chimed in.

During a showcase of the company’s recently launched products, all manufactured in-house, Bailey expressed enthusiasm for the new offerings. These include a festival mix and a range of dry spices, marking Spur Tree’s expansion into the dry seasoning market. Notably, the company is diversifying beyond its traditional wet seasoning stronghold, capitalising on the global demand for dry seasonings, which outsells wet seasonings worldwide.

The new product additions come amidst Spur Tree’s transition from a spice company to a food company and as it seeks to diversify given challenges with its core raw materials suffering from extreme weather conditions. In late 2022, raw materials used to produce spices such as pepper, scallion and thyme, were severly impacted by drought then excessive rainfall in November 2023.

“From this, we saw the cost of inputs going up significantly, and although we grew revenue by 42 per cent, there were times when we could not fulfil orders because of a lack of raw materials. And that is what affected the decline in our profit,” Bailey explained.

Spur Tree Spices reported $1.45 billion revenue in 2023, up from $1 billion in 2022, but net profit declined by approximately 31 per cent.

In response to environmental setbacks, Spur Tree’s new product lines anticipate significant benefits, with the expectation of gains materialising in the third and fourth quarters.

“Our projection is that we should see somewhere in the region of a 50 per cent increase in profit this year from increased revenue and also from reduced costs and improved gross margins,” Bailey announced.

Spur Tree Spices has set a long-term goal to expand its sauces and spices business to approximately 50 per cent of its overall portfolio, a target expected to be achieved through a 3-5-year strategic plan. To bridge the gap and ensure a steady supply of raw materials in the interim, the company plans to invest in farming, addressing the current shortfall in investment pace and meeting the growing demands for raw materials, thereby sustaining its growth.

At the recent AGM, the CEO revealed a strategic farming investment to address raw material demands and supply chain vulnerabilities. Spur Tree acquired a 240-acre farm with existing infrastructure to cultivate peppers, capitalising on a market shortage. Currently, over 35 acres are under cultivation, featuring Scotch bonnet and West Indian red pepper varieties.

“We have farming partners, and they have always been critical to our business. So this initiative is not to eliminate them but to build with them, which is key to us in terms of strategy moving forward. Because we have always used that adage, we want to keep farmers farming,” Bailey assured.

Spur Tree Spices’s farm has rebounded from initial hurricane damage, with the company revising its pepper yield estimate to 600,000 pounds, down 50,000 pounds from initial projections. Despite challenges faced by traditional sourcing areas like St Elizabeth and Manchester, Spur Tree’s farming initiative has secured the necessary raw materials for the year. The company plans to expand farming efforts in October and November, building on its recovery.