Caribbean Cream Limited, known as Kremi, is sharpening its focus on co-packing services and ice cream cake production to diversify its revenue streams and boost profitability. CEO Christopher Clarke has set a target to increase co-packing contributions to nearly 50 per cent of the company’s annual revenue, up from the current 10 to 20 per cent.

Co-packing, which involves manufacturing products for other brands, represents a significant growth area for Kremi. While the company’s current co-packing operations focus on local clients, Clarke is eyeing regional and international opportunities.

“Globally, co-packing accounts for up to 50 per cent of revenue for similar companies. That’s the benchmark we’re aiming for,” Clarke told the
Jamaica Observer following the company’s annual general meeting on Tuesday.

To meet this target, Kremi plans to upgrade its facilities to align with international standards. “We’re going to need to upgrade our qualifications,” he noted, signalling the company’s readiness to invest in compliance and quality enhancements. Recent capacity improvements, such as expanded cold storage and upgraded blast freezers, position the company to scale its operations and onboard additional co-packing clients.

While co-packing is expected to play a major role in Kremi’s future, the company is also focused on tapping into the growing demand for its ice cream cakes. The product combines Kremi’s signature ice cream with moist chocolate cake, creating a dessert option for both individual and bulk sales, particularly to the hotel sector. Despite strong interest, Kremi has faced challenges meeting orders due to production constraints.

“We have a lot of untapped potential in cake. We haven’t been able to meet our cake demand,” Clarke admitted. Recent investments in production capacity, however, are expected to help the company better serve this growing market.

Currently, Kremi offers a wide range of ice cream tubs in flavours such as rum and raisin, grapenut, stout, and coffee rum cream. It also produces frozen novelties like grape, kola champagne, and green apple pops, which are popular among both children and adults. This diverse portfolio provides a stable foundation as Kremi looks to expand into new growth areas.

With a focus on infrastructure improvements, a growing co-packing portfolio, and a diversified product range, Kremi is positioning itself to achieve its revenue target of $3 billion by 2025. It also wants to establish itself as a leader in the regional market.

For the six months ending August 2024, Kremi reported a 5 per cent increase in revenue to $1.3 billion, up from $1.2 billion in the same period last year. Gross profit rose to $444 million, reflecting stronger margins despite higher input costs.

The company has successfully navigated supply chain challenges, including an ammonia shortage, by diversifying suppliers and implementing robust risk management practices. These measures have ensured steady production even during turbulent times.

While the retail segment remains strong and the hotel trade continues to perform well, Kremi is prioritising co-packing and ice cream cakes as primary drivers of future growth. “These moves reflect our commitment to diversification and building a business that’s competitive not just locally but regionally and internationally,” Clarke said.