SPUR Tree Spices has transcended its role as a mere spice and seasoning provider, embarking on a transformative journey towards becoming a food company. The manufacturing company is venturing into product diversification this year, listing dried products, dips, condiments, and ready-to-eat meals as products to be launched.
"I am very excited about this. We have some products coming out of this that are just going to blow your mind. They're just going to be major disruptors to the market," Chief Executive Officer Albert Bailey enthusiastically shared during Spur Tree Spices annual general meeting on Monday.
Jam, jellies, canned soup, and peas in coconut milk were also mentioned as products to be reintroduced to the market, as well as the roll-out of a Linstead Market line of seasonings and sauces. It's a strategic move that signals a significant shift in its business trajectory, catalysed by the recent acquisition of Canco Limited — more popularly known for its Linstead Market Jamaica brand of canned ackee and callaloo.
"Our interest in Canco Limited was two-fold: one, because we wanted a bigger share of the ackee-producing sector in Jamaica; the second thing for our interest in Canco is how we can capitalise on the value that we believe is there in the Linstead Market brand," Bailey asserted.
During its financial year in 2022, Spur Tree Spices saw significant sales growth of 44 per cent in the local market. However, when Spur Tree Spices acquired a 51 per cent stake in Canco Limited in October 2022, the company was in a loss-making position for the first six months. Spur Tree's earnings saw a decline of $28 million in its second quarter (Q2). However, Spur Tree's CEO revealed that there were other factors that contributed to the loss the company faced, including cash flow issues, which it has now resolved.
"In the first quarter, they [Canco] did make a profit of over $15 million. In the second quarter, they [Canco] made a loss of $21 million. So, technically, for this period, or half of the year, they are actually at a loss of about $7 million. That was during a period when there was very limited ackee supply. The ackee season began in July, and we are getting good quantities of ackee in, so we expect a very long season. Therefore, the Linstead Market, Canco brand will be showing reasonable profit in 2023," he said optimistically.
Although confident that positive results will show by the end of 2023, its revenue diversifying strategy to produce items that fit into its desire to become a full food company will fill the gap during non-ackee production seasons, with the aim to "balance out the profit results" should a similar situation repeat itself.
Additionally, shareholders were advised that although Canco is not raking in huge profits now, it's opening doors for the company with its long history and strong reputation.
"The company is now in a few Walmart stores in Florida," Metry Seaga, chairman of Spur Tree Spices, added. "It's a big opening of a door that we now have to be able to step into."
Spur Tree Spices also owns 100 per cent of an ackee-producing facility, Exotic Products Jamaica Limited in St Thomas. It is also set to upgrade another facility in Morant Bay to become a third ackee-producing facility in the group under the management of Exotic Products. Since going to market, it has upgraded its two major production areas to more than double the output of its core products – ackee and callaloo.
"We have converted over 7,500 square feet of space that were previously used for storage into three new production areas; we have a very aggressive production roll-out; we have another 10,000 square feet that we're also going to convert from storage to productive activity," Bailey said.
With the introduction of the new lines of canned products and the roll-out of a specialised Linstead Market line of seasonings and sauces, the company expects to have increased revenue streams in existing and new markets, new distribution partners in international markets, greater penetration in regional markets, and expansion in the local market.
The company also announced an increase in contract packing arrangements through a recently concluded deal with a company based in the USA, and is gearing up to send its first packed 40-foot container.