May 2013 Financial News

GK, Wisynco deal. GraceKennedy to take over Bigga distribution in UK

May 29, 2013

WISYNCO Group and GraceKennedy are now finalising an agreement that will see Grace take over the distribution of Wisynco's soda brand in the United Kingdom.

William Mahfood, chief executive officer of Wisynco Group, said Grace subsidiary Enco Foods will begin to distribute the Bigga range of sodas throughout the UK and Europe in June.

"UK has always been a big market for Bigga and it's just a matter of cementing because of the foothold that Grace has in the UK market," Mahfood told the Business Observer.

He and other senior executives of Wisynco were guests at the weekly Jamaica Observer Monday Exchange.

With the second-largest Jamaican diaspora and a growing West Indian population, the UK is an attractive market for local businesses.

GraceKennedy has been in the UK market for over a decade, and until 2007 appointed distributors to handle its products there. But a major boost for the company came when it spent US$50 million to buy UK-based food distribution company WT Foods, since renamed GK UK. With the acquisition, Grace not only brought on stream its own distribution network in the UK, but also strong recognisable brands, such as Encona and Dunn's River, which allowed it to better penetrate the country's retail market.

"Grace undertstands the Jamaican brand and it is a great opportunity for us to expand with them as they grow in the UK," said Wisynco export manager, Stephen Dawkins, who is in the UK working on the final details of the agreement with Grace's management team in the country.

Grace will take over the distribution of Wisynco's products in the UK from Wanis Limited.

"GraceKennedy is very pleased to be working with Wisynco, a company that we have admired for their innovation in growing their brands," Don Wehby, the company's group CEO told the Business Observer yesterday.

Wehby noted that Grace's UK operations have been extremely successful with products in Sainsbury (803 stores), Asda (198 stores), Tesco (837 stores) and Coop (1500 stores). In 2012 Grace Foods UK was awarded Tesco World Foods Supplier of the year. The conglomerate, which intends to earn a half of its profit from outside of Jamaica as it moves to become a global consumer group within the next seven years, posted total sales of $61.3 billion in 2012.

White Marl, St Catherine-based Wisynco is a manufacturer, distributor and exporter of a wide range of goods, from drinks and plastic products, to ice cream and pizza. For the financial year ended June 30, 2012, the firm posted $13 billion in gross turnover.

Wisynco has been aggressively pushing its Bigga soft drink brand into overseas markets. The company signed a distribution deal with Golden Krust Caribbean Bakery & Grill -- the largest Jamaican franchise chain in North America -- last year, saying it was using a "forced consumption strategy", including the packaging of 20 oz bottles of Bigga in value meals to expose the product to the two million customers estimated to patronise the restaurant network weekly.

Golden Krust has over 120 branches across nine US states. Mahfood said the success realised from the Golden Krust deal has opened the door to more opportunities in the US North East.

"We are now having a situation where other distributors in New England, New Jersey and New York want to take the product beyond just Golden Krust," Mahfood said.

"So we are looking at partnerships there now and hopefully we will sign off with a couple of people in the next few weeks."


Source:
BY JULIAN RICHARDSON Assistant Business Co-ordinator richardsonj@jamaicaobserver.com
Jamaica Observer
Wednesday May 29, 2013

http://www.jamaicaobserver.com/business/GK--Wisynco-deal_14354081#ixzz2Ui6dTmh7