Spur Tree Spices’ venture into farming stabilises pepper supply
Published:Friday | August 16, 2024 | 12:08 AM
Spur Tree Spices Jamaica’s venture into farming to supply inputs for its manufacturing operation seems to be paying off, as the company now has enough pepper to meet its demand for the rest of the year.
CEO Albert Bailey said the company expects to reap 600,000 pounds of pepper from the farm located at Bernard Lodge, St Catherine, which will satisfy demand for Spur Tree’s range of products.
“In the first phase, we currently have 35 acres of pepper on the farm. From this we had expected some 650,000 pounds of pepper, but by our most recent estimate, we have downgraded that by only 50,000 pounds. So we have come out of the hurricane in a very positive way,” Bailey said at the company’s annual general meeting on Tuesday.
Bailey said the farm came out of Hurricane Beryl with minimal damage. He was optimistic about pepper supplies going forward, providing there are no other extreme weather events.
The 240-acre farm only has pepper at present, in two varieties – Scotch bonnet and West Indian red. But other crops are under consideration. Until then, the company will continue purchasing inputs from local farmers, but it has concerns about adequate supplies.
“We don’t think enough capacity is there to meet our growing demands,” Bailey said, while calling for more investment in agriculture to meet the demand of the tourism sector, exports, as well as local consumption.
“Our products come from raw materials sourced in Jamaica. That’s what gives Spur Tree its authenticity. That is something we pride ourselves in,” he added.
Jamaica is now reeling from a shortage of fresh produce as a result of Hurricane Beryl, which devastated parts of the island, in particular St Elizabeth, which is known as the breadbasket of the country because of the volumes and varieties of crops produced in that parish.
The agriculture sector incurred estimated losses of $4.73 billion from Hurricane Beryl, which hit the island on July 3. An estimated 48,852 farmers and approximately 23,040 hectares of farmland were impacted.
In 2023, Spur Tree Spices posted record-breaking revenue of $1.5 billion, an increase of 42 per cent over the previous year.
“However, rising raw material prices caused our gross profit margin to fall from 32 per cent in 2022 to 28 per cent in 2023, impacting net profit, which decreased from $115.6 million to $80 million,” Chairman Metry Seaga said in his report.
Seaga said proactive steps were taken to stabilise the raw material supply, including strengthening farming partnerships and undertaking significant investments in storage capacity.
Spur Tree Spices rebranded its look in May, and said it would launch 30 new products this year, including a range of wet and dry spices, bammy, coconut cream, fry chicken mix and festival mix.