Jul 2016 Financial News

GraceKennedy targets growth in import-dominated detergent market

Jul 20, 2016

Two-thirds of Jamaicans like to launder with powdered detergent during the cleaning process, providing a market valued at an estimated at $15 billion per annum by grocery giant HiLo Food Stores, a subsidiary of GraceKennedy Ltd.

GraceKennedy, with a mere two per cent of the detergent market, is hoping to quadruple its sphere of influence over a four-year horizon, moving its share of the pie up another six per cent.

Andrea Coy, CEO of GraceKennedy Foods with responsibility for supermarket chain HiLo, told the Jamaica Observer that within the island it is estimated that 74 per cent of the market use powdered detergents for doing laundry.

Product development is targeted at a demographic which also frequently washes by hand, she said.

Coy said a major cultural characteristic of the Jamaican and Caribbean market is washing by hand, which is still highly prevalent compared to washing by machine in North American households.

“For Jamaica and the Caribbean where hand-washing is prevalent, we focus more on powdered detergent and on how the hands are affected by washing manually,” she said.

GraceKennedy currently owns three brands playing in the laundry category. Included are the Spring Time range of products which includes powdered laundry detergent, liquid detergent, all-purpose cleaner/disinfectant, fabric softener, dishwashing liquid, and bleach.

Next is Big Blu, its brand of laundry detergent bars (blue soap) and finally Freshness laundry detergent powder. Budget buyers are targeted with Freshness made available in 200g, 1,000g and 4,000g packaging formats.

GK has sought to improve margins by outsourcing production. Freshness detergent is currently packaged in China.

The primary benefits of outsourcing, Coy said, “would have to be economies of scale which led to lower pricing for comparative grade of product which we originally sourced. The effect has been to allow GraceKennedy to offer a competitive price to our consumers whilst improving our volumes.

“The Freshness range is positioned to meet the needs of those consumers seeking a quality product at affordable prices,” said the Foods Manager. It is made specifically for the local market.

Distributed by Grace Foods & Services across a wide range of supermarkets and several wholesalers, the range is currently not available outside of Jamaica.

Competition for GK includes ADA, a Chinese manufacturer who set up shop in Portmore, St Catherine. It is estimated, however, that more than 90 per cent of detergent brands that hit local shelves are imported.

Source:
BY AVIA COLLINDER
collindera@jamaicaobserver.com
Business reporter
Jamaica Observer
Wednesday July 20, 2016

http://www.jamaicaobserver.com/business/GraceKennedy-targets-growth-in-import-dominated-detergent-market_67552