Key points:

Kremi to raise prices from June 1 as global costs surge: Caribbean Cream is increasing ice cream prices due to rising milk powder and shipping costs linked to Middle East tensions.

Supply disruptions hit rival Scoops amid same pressures: Retailers warn of shortages from Devon House producer Scoops Unlimited, highlighting wider strain across the market.

Margins collapse into $95.8 million loss despite steady revenue: Flat sales at $2.97 billion were outweighed by rising production costs, pushing the company into operating and net losses.

CARIBBEAN Cream Limited, operator of the Kremi brand, says it will raise ice cream prices effective June 1 as rising input and shipping costs tied to the ongoing conflict in the Middle East begin to filter through to its operations.

It comes as retailers warn customers of supply disruptions from competitor Scoops Unlimited, producer of Devon House ice cream. The company, which is also Kremi’s largest shareholder, cited production challenges linked to the same geopolitical tensions.

While acknowledging pressure on key inputs, Kremi CEO Christopher Clarke said the company has so far been able to maintain supply and does not expect immediate shortages.

“There was a shortage of supply but we were able to ride it out,” Clarke told the Jamaica Observer, noting that inventory planning and procurement have helped to stabilise output in the near term.

Even so, conditions remain uncertain. Clarke pointed to mounting challenges in sourcing milk powder — a critical ingredient — alongside rising freight costs, both of which are being driven higher by global demand and supply disruptions.

“The most notable issue is milk powder… we’ve already gotten notice of a pretty hefty price increase coming down the line,” he said, adding that demand for milk-based inputs has also been lifted by a surge in protein-focused products in the United States.

The price adjustment, he said, is largely a response to those external pressures rather than domestic policy changes, with recent tax measures playing only a limited role in the decision.

“We factored all that in and planned our price increase,” Clarke said.

The adjustment comes against a backdrop of weakening profitability, with rising costs already weighing on the company’s performance.

For the year ended February 2026, Caribbean Cream reported a net loss of $95.8 million, reversing a profit of $17.8 million a year earlier.

The reversal was driven less by demand weakness and more by a steady erosion in margins. Revenue held broadly flat at $2.97 billion, but direct production costs climbed to $2.09 billion, squeezing gross profit down to $885.7 million from just over $1.05 billion a year earlier.

That compression pushed the company from an operating profit of $118.8 million into an operating loss of $16.8 million.

While the financial statements do not break out specific input costs, management has pointed to rising raw material and logistics expenses — including milk powder and shipping — as key drivers behind the increase in production costs.

The latest results extend pressure that has been building over the past several quarters, as the company has grappled with higher operating and financing costs from recent capex projects, while keeping prices relatively stable.

Despite the decline in profitability, the business continued to generate positive operating cash flows of $223.3 million.

— Karena Bennett