The low availability of coffee in the domestic market continues to affect inventory levels for local manufacturer Salada Foods Jamaica, which at the end of the third quarter saw its supplies reduced to $425 million – 24 per cent below that of the corresponding period last year.

The low availability of coffee, the company said, has consequently hindered its production output and operational efficiency.

As part of plans to combat the challenges, the company’s directors said it has been partnering with “key stakeholders within the coffee industry to help remedy the low and inconsistent supply of the crucial raw material.”

According to Salada’s General Manager Tamii Brown, a pioneering partnership with the Jamaica Coffee Growers Association (JCGA) through the ‘Grounds for Growth Initiative’ is aimed at improving the quantity and quality of local coffee. The initiative focuses on repurposing Salada’s manufacturing by-products into optimal organic fertilising material to cost-effectively improve the yield of local coffee farmers.

“The collaboration with JCGA on Grounds for Growth was natural given our shared commitment to the development of the local coffee industry. Brewing since January, the project included training workshops and other capacity-building activities directly with our local coffee farmers. The project educates farmers on ways to make environmentally friendly, organic and sustainable fertiliser using the coffee grounds which can potentially increase the yield. The viability of our industry requires action, innovation and collaboration,” she said in response to queries from the Jamaica Observer on what the remedial actions entails.

“We have also continued to deepen the relationship with our local stakeholders to include additional activities geared towards improving production yield and we anticipate tangible results,” she added.

Further commenting on the low availability of coffee, JCGA President Donald Salmon said the low supply of particularly the High Mountain coffee, which is predominantly used by Salada, stems from issues related to the low prices paid to farmers for the crop, which ultimately led to lower productions.

He told the Caribbean Business Report on Thursday that with the High Mountain coffee over the last 20 years moving from a production high of 300,000 boxes to approximately 12,000 boxes at present, this is what has been fuelling the challenges with which Salada and others now face.

“The price went down so low, and with there being no incentive for farmers to go into High Mountain production, they left their farms as, for them, it is making no sense to plant it.

“Another issue stems from government policy, which led to the divestment of Wallenford’s assets to [Michael] Lee-Chin, who became a large supplier of the product along with [Jamaica] Standard Products. However, after Wallenford’s departure from the trade it has left a significant impact on the production of High Mountain coffee over the last 10 years,” Salmon also said, pointing to current prices which, he said, now averages some $5,000 per box.

He said that with a High Mountain Coffee Project expected to get underway, the intention is to revive growth in the area and to see how best the industry with the support of Government can normalise supply of the product to the local market.

“We are now in discussions with the Government to provide some level of assistance to restart the High Mountain production so that we can earn more foreign exchange, reduce import substitution, provide more jobs for locals, and earn more income for our farmers.

“As it stands, we believe Salada can purchase a significant quantity of what is to be produced in the High Mountain,” Salmon said.

Salada at the end of the nine-month period ended June reported revenues of $965 million, barely adding to the $964 million it saw for the similar period last year. During the period profit and earnings per share also marginally declined moving from $111 million last year to $99.6 million at the end of the nine months and from $0.11 to $0.10.

Quarterly out-turns also saw reduced revenues and profit of $276.9 million and $24.7 million for the three months.

“Gross profit margin decreased by 2 per cent while operating profit for the period decreased by 16 per cent from $141.1 million to $118.4 million,” notes accompanying the company’s latest financial statements also stated.

After copping a nomination in the best new food category at the recent Jamaica Observer Food Awards for its Jamaica Mountain Peak 3-in-1 flavoured coffee products, the company said it hopes to move forward with a product diversification strategy that will see it “including non-coffee products” to its line of offerings.

Brown in highlighting some of plans said it will involve the company expanding to offer its unique services as a spray drying facility to local and Caribbean manufacturers.

“We are also expanding our line of indigenous crops that can be brought to market as products similar to what we successfully did with our popular Jamaica Mountain Peak Instant Ginger and Ginger Turmeric Teas,” she stated.