JP Group finds opportunity in adversity - Invests heavily in snacks

Deika Morrison, Guest Writer.  Email: deika@jamaicacatalogue.com

Since 1929, Jamaica Producers Group has been primarily a commodity banana exporter. When quality bananas did not meet export requirements - look, size, etc - the tropical snack food business was born.

Facing the removal of the favourable treatment of bananas under the European import rules and battered by several hurricanes and tropical storms - Ivan (2004), Dennis and Emily (2005), Dean (2007) and Gustav (2008) - the company found an opportunity in these difficulties to deliberately shift into value-added agro-processing.

In 2008, the tropical snack business was rebranded and repackaged as JP Tropical Foods with an investment of some J$280 million to date in this business.

But it has been investment in knowledge through research and analysis that has driven the JP Tropical Foods strategy.

Managing Director Jeffrey Hall says the strategy was clear: be at the vanguard in banana chips locally and internationally and then evolve into other types of chips.

That is exactly what they have done. Premium banana chips made way for flavoured banana chips, then other chips - sweet potato, plantain and cassava - joined the line.

In so doing, acres of banana plants have been displaced to enable root crop farming.

These diversified needs brought opportunities for small farmers to supply root crops for processing as well as to the market.

The breadfruit orchard has been resuscitated and the St Mary line will include breadfruit chips before the end of the year.

St Mary Foundation

Indeed, in its commitment to St Mary, JP Tropical Foods established a non-governmental organisation - the St Mary Foundation - that has, with a European Union grant, put 400 acres into small and medium farm production enabling 30 farmers to set up their own farms generating employment for a total of 85 people.

Other than farmers, opportunities have been created for those who sell products - from large retailers to streetside vendors.

Exports are made to Panama, the United States and United Kingdom. And in taking exporting to a new level, Hall proudly notes that the company manufactures in the Dominican Republic in a plant set up by the team flown into that country from our very own St Mary.

Hall believes in the investment in knowledge of the consumer and the application of scientific principles of marketing.

As the world moves towards nutritional labelling, JP Tropical Foods was the first local company to provide healthy facts about its fresh pineapples and bananas as tags and stickers on the produce.

In a deliberate move, contemporary marketing techniques have been employed to drive consumption of healthy food.

Through regular consultation with focus groups, the company is able to create and deliver to satisfy the preferences of the local and international markets as articulated by the consumers.

Both markets expect high quality world class standards - but each has specific individual preferences. While Jamaicans prefer an authentic Jamaican product from St Mary; the international markets have their own preferences for the cut of the chip, flavouring and packaging.

As is to be expected, JP Tropical Foods will soon release a line just for the international markets. Thanks to the skills of the food technologists and marketing team, both lines come from the same plant.

What other knowledge of the consumer has JP Tropical Foods invested in? Consumer needs in a difficult recessionary environment. Recognising the value of convenience and the affordability of smaller portions, JP Tropical Foods will soon launch meal time already peeled and cut sweet potato and pumpkin soup packs, as well as bammies - flavoured at that - and even fresh cut pineapple.

high standards

Investment in knowledge has been accompanied by investment in equipment as the company is now in the process of commissioning a state-of-the-art factory to make these products.

Expect high standards, as with a focus on quality processes and environmental standards, JP Tropical Foods is the only company to have won the Bureau of Standard's National Quality Award for Excellence in Manufacturing for three consecutive years.

JP Tropical Foods employs 300 people - about half in agriculture and half in manufacturing.

In this recessionary environment, there has been nothing but growth. With no cutback in production, there has been no redundancy exercise since the reorganisation in 2008.

JP Tropical Foods is even hiring.

And the reward for all this investment? The company has moved from losses in 2008 to an increase in sales of 17 per cent and profits of 65 per cent at mid-2010 as compared to the previous period.

Deika Morrison is managing director of Mdk Advisory & Consulting Ltd. She is compiling a catalogue of products made in Jamaica as well as services offered by Jamaican companies.See: jamaicacatalogue.comFollow Deika on Twitter.

JP facts to note:

Employment: 300 people - about half in manufacturing, half in agriculture. Created St Mary Foundation for small farmers to start and develop businesses generating employment.

Current Products:

St Mary's: sweet potato chips, original banana, barbecue banana, original cassava, barbecue cassava, plantain;

Fresh produce with nutritional labelling: pineapple and bananas.

Export: Panama, US and UK. Manufacturing in Dominican Republic set up by St Mary team.