Feb 2013 Financial News

Kremi aiming for 100% of market

Feb 27, 2013

WHEN Caribbean Cream goes public this year it may get the capital it needs to meet Jamaica's demand for ice cream in entirety.

The manufacturer of the Kremi brand's capacity now falls short of demand, but its expansion plan aims to near triple its output.

We don't make much, because we don't have much space to store it," said Christopher Clarke, the company's CEO. The ice cream maker is limited by its storage capacity, but the buildout should make it more efficient and its ice cream even cheaper.

Currently, the company's cold room (storage area) can hold 7,500 hundred boxes and the plan is to increase that number to over 20,000.

"It's a big jump, because we are behind the ball now," said Christopher Clarke. "The capacity restricts what we can do in terms of making ice cream."

Listing on the Jamaica Stock Exchange (JSE) should provide Caribbean Cream with the platform from which it hopes to springboard into a new growth phase.

The company's prospectus is now being reviewed.

Since it started in 2006, Clarke said his company has had tremendous growth, and he now figures that it controls 50 per cent of the market share against its main competitor, the makers of Crazy Jim.

Once that bigger freezing storeroom, which is the last point before distribution, is built, a new factory will be constructed.

The plan also aims to expand the warehouse that will replace the old production area.

"One (larger) warehouse will reduce the back and forth movement," he said. Currently, the company uses warehouses at a number of different locations.

Caribbean Cream primarily generates its income from mobile vendors, namely "creamies" and "fudgies".

Those staple entrepreneurs have been around for decades.

"The over 200 vendors are an active sales force, they drive the market," the CEO said. "They go in the rain, whatever the condition may be and

push sales."

Kremi products also end up on supermarket shelves, but "you can't downplay the power of the horn," according to Clarke. "When the "creamies" pass you are bound to buy

ice cream."

Its distributors gather at the Kremi ice cream production hub at South Road, in the Kencot area of St Andrew, and other depots.

The company controls two additional depots in Montego Bay and Half-Way-Tree.

Beyond that, they sell to about 20 independent depots.

Caribbean Cream is open everyday, but Clarke describes the weekends as the highest selling points.

"We also get a huge crowd from churchgoers," he said.

The ice-cream maker currently has four product offerings -- three and one-and-a-half gallon boxes, quart buckets and an ice cream cake.

Clarke is the son of the founder of Scoops Unlimited, the maker of Devon House ice cream. But, his ability to do his job also stems from his training as an engineer.

"I know about the colours and the taste growing up," he said. "But the science of the freezing points, how the sugar interacts with fat, was through my schooling."

The company is constantly reinventing its menu of flavours, and ideas for the 20 flavours that are available at any given time come from anywhere -- workers and customers alike.

Caribbean Cream's Chief Operating Officer Paulette Brown, who is a trained baker, pushed the black forest ice cream, which is now being tested.

A few top-selling flavours are coffee rum-cream, grape nut, hot fudge, and stout, while Clarke drops the lowest performing flavour for each quarter, which is replaced by a new flavour.

Once a flavour is dropped it isn't re-added. According to Clarke, there's a reason it didn't sell.

Though Clarke loves innovation, he said healthier versions of the treats aren't being considered any time soon.

"Ice cream and health conscious don't mix," he said.

There could be sugar-free, but it wouldn't taste good, and there could be frozen yogurt, which isn't as healthy as people think, according to the third-generation ice cream maker.


Source:
BY SHAMILLE SCOTT Business reporter scotts@jamaicaobserver.com
Jamaica Observer
Wednesday February 27, 2013

http://www.jamaicaobserver.com/business/Kremi-aiming-for-100--of-market_13733345#ixzz2M7wz2Ywl