Salada to spray-dry fruits, vegetables as new income stream
Published:Sunday | May 17, 2020 | 12:07 AMKarena Bennett - Business Reporter
Salada Foods Jamaica’s recent success from a spray-drying test on tomatoes has given the company insight into a new line of revenue – offering fruits and vegetable-preservation services on a commercial scale to offset a portion of the losses it is now facing from the outbreak of COVID-19.
The coffee processor’s test on tomatoes was recently completed in partnership with the Government of Jamaica, which has, through the Ministry of Industry, Commerce, Agriculture & Fisheries (MICA), initiated programmes to assist farmers across Jamaica who are now faced with excess supply following the closure of hotels and restaurants.
Salada itself utilises spray-drying in its production of instant coffee and instant ginger.
“We are using the opportunity to look at how we can innovate using our interim capabilities of spray-drying. We have successfully done a test with the Government, and, going forward, we see it as a huge opportunity for people to have access to natural fruits and vegetables in a way that preserves the life,” said General Manager Dianna Blake-Bennett.
The coffee company is still tallying the extent of the losses in sales stemming from tightening restrictions to limit the spread of the coronavirus. What is clear, Blake-Bennett said, is that Salada has seen most of the fall-off from the domestic side of its business.
“The factors that we do know are that there is decline in job availability, and that is impacting disposal income. The lockdown means people have less time to shop, and our coffee products are relatively higher-priced goods and are not seen necessarily as a commodity. So that will affect it as well,” she said.
At the same time, fear of looting in the wholesale trade, particularly in downtown Kingston, has also placed a dent in sales for the coffee processor.
For the quarter ending March, Salada reported a 14 per cent decline in sales amid a 21 per cent increase in administrative, selling, and promotional expenses. It left the company with just $6.2 million of profit for the quarter, a 91 per cent drop from $76 million for the three months ending March 2019.
Over six months, Salada’s net profit dropped 78 per cent to $11.7 million, a performance it has blamed on higher-priced Jamaican Blue Mountain green beans in the manufacturing of instant coffee.
COVID-19 began spreading in Jamaica in early March, and like other businesses impacted by the policies put in place to contain the virus, Salada is forecasting further decline in earnings for the June quarter. Still, up to this point, Blake-Bennett told the Financial Gleaner that the company has not laid off any of its workers and continues to operate at “almost normal” levels.
“We are still producing. We are, like everybody else, seeing declining sales, but we are producing instant coffee and ginger as we speak. What we have seen is that ginger demand has been increasing, and that stems from the fact that ginger boosts immunity,” the coffee boss said.