GraceKennedy (GK) banking on bargain brand to boost sales
Published:Wednesday | May 26, 2010 | 12:00 AM
GraceKennedy Limited will this year be pushing locally a low-cost food brand, Caribbean Choice, that was formerly sold only in the company's overseas markets.
The marketing push comes in the midst of flat domestic sales for GK Foods, which says the brand will be a cheaper alternative to the premium Grace line.
Anthony Lawrence, global brand manager for GK Foods, says Caribbean Choice "seeks to satisfy those consumers who would love to buy Grace but just cannot afford to at this time."
He said the new low-cost line would be used as the primary means of stimulating local demand and growing sales for GK Foods in a recessionary environment.
Caribbean Choice has been available in the United States and other Caribbean countries for some time, he said, but was only introduced locally in 2009.
The new line is GK's second attempt at moving down market.
secondary brand
Years ago, it introduced 'Manor House' as the low-cost complement to its flagship premium brand, Grace, but withdrew the product after a disappointing performance.
"Manor House was intended to be a secondary brand which was withdrawn when we decided to put our energies behind the Grace brand and other strategic brands in our portfolio," said Lawrence.
"Caribbean Choice is a strategic brand designed to compete within the price sensitive segment of the market."
For now, the brand is barely visible on grocery shelves.
Lawrence says it will be distributed through retail and wholesale channels and that GK Foods has "a specific plan-o-gram that will drive the in-store merchandising strategy."
Some of the products under the Caribbean Choice brand are made in Jamaica while others are sourced elsewhere in the world, Lawrence said.
The product price, he said, will vary "depending on the outlet" but will hit the shelves at a cost lower than the comparative Grace products.
"The products under this brand are very good and can compete effectively with brands within the category," he added, avoiding direct answers about the price differential between the cheaper line and existing Grace products.
pricey items
On local supermarket shelves, GK products tend to be among the pricier items available.
But since late 2008, when the financial crisis exposed deeper economic problems across the globe and in Jamaica, premium products, including high-priced foods have taken a hit as disposable incomes faltered.
But even in that environment GK Foods has grown nominal sales — from J$32 billion in 2008 to J$34 billion in 2009; and from J$8.7 billion to J$9.1 billion in the first quarter of 2010.
GraceKennedy says, however, that growth in the food segment is driven by its North American market which is performing above 2009 levels, while performance of domestic and Caribbean sales is constrained by the recession.
It sees product innovation as one way to re-energise demand.
"Diversification is important as it offers us the opportunity to grow our brand and keep our consumers interested," said Lawrence.
In the March quarter, the company launched a new range of Grace beans in curry, hot and spicy and barbecue flavours, as well as a new flavoured water called Chillin'.