Crazy Jim testing new distribution channel
Published:Wednesday | July 27, 2011 | 12:00 AM
Marcella Scarlett, Business Reporter
Smith & Stewart Distributors Limited, the owner of Crazy Jim, is testing a new business strategy aimed at growing sales under which it will assist multiple micro enterprises secure loans to buy and distribute its branded ice cream.
The ice cream maker has got buy-in from Jamaica National Small Business Loans Limited (JNSBL) to lend J$60,000 to J$150,000 to individual small operators already in business for the acquisition of freezers, as well as ice cream and other frozen products made by Crazy Jim.
The credit terms are no different than other loans offered by JNSBL. They are priced at one per cent per week and repayable over 10-25 weeks, said Donna Irving, JNSBL marketing supervisor. Household appliances - such as refrigerators, stoves, and televisions - are acceptable as collateral.
"It is an opportunity to allow people to expand what they are doing; so you could be a hairdresser and decide you want to expand," said Faith Palmer, manager of marketing and sales at Smith & Stewart.
"The person has to be in business - not necessarily ice cream. They could be shoemakers and feel like they want to expand what they are currently doing."
JNSBL, which confirmed the partnership, said recruitment of borrowers is entirely up to Smith & Stewart. The ice cream company will do the preliminary vetting of potential distribution partners, but final approval of the loan is up to JNSBL.
Smith & Stewart is yet to recommend any loan applicants, JNSBL said yesterday.
Palmer said the businesses will not be required to continue the relationship with Smith & Stewart after the initial loan is paid off; nor is the company seeking to impose conditions on sales. However, the micro partners will be required to buy a minimum amount of Crazy Jim products at an unspecified discounted price over the life of the loan, and paid for from the loan proceeds.
"There is a minimum, but it is not set in stone. We are here to assist them but we know they should not buy less than J$30,000 worth of products per month," said Palmer.
"They will need to do enough business to pay back the loan though."
Special arrangement
Through the agreement, business owners can acquire either glass top or hard top freezers, which Smith & Stewart will service at no cost to owners for the duration of the loan. The freezers will belong to the business operators but branded with removable Crazy Jim wrappings.
"The freezers will carry our branding and ads like the ones you see around to help the customer with marketing," said Palmer.
"They will get produce to match whichever market they are in. We have high- end product, low-end product, sugar-free; we have whatever products to suit customers' needs."
Each approved loan will be distributed to Smith & Stewart, which will handle the acquisition of the freezers and stock it on behalf of the micro businesses.
The weekly loan repayments, however, will be remitted directly by the businesses to JNSBL.
"Our customers will be able to expand their enterprises and meet customer demand. Many of them want to increase their supplies, but do not have capital to purchase critical equipment, such as freezers, to keep goods in the best condition," said chairman of Smith & Stewart, James Smith.
Smith & Stewart churns 27 ice cream flavours and produces novelties such as icicles and fudges from its plant in Kingston. The company operates 10 sales depots nationwide, according to Palmer, but also distributes through grocery retailers and other channels.
Smith and Palmer were elusive about the volume of business that Crazy Jim does, while noting that market share was difficult to pin down as there was limited data on the ice-cream sector.