Kingston, Jamaica – Caribbean Cream Limited (Kremi), known for its iconic ice cream products, is shifting its business strategy to expand its co-packing services and increase its production of ice cream cakes in a bid to diversify its revenue streams and boost profitability.
CEO Christopher Clarke outlined a bold vision for the company at its recent annual general meeting, aiming to increase co-packing’s contribution to nearly 50% of Kremi’s annual revenue, up from the current 10-20%. Co-packing, which involves manufacturing products for other brands, is seen as a key growth area. While Kremi currently focuses on serving local clients, Clarke is exploring regional and international markets to expand this segment.
“Globally, co-packing accounts for up to 50% of revenue for similar companies. That’s the benchmark we’re aiming for,” Clarke said, speaking to the Jamaica Observer after the AGM.
To meet this target, Kremi plans to invest in upgrading its facilities to meet international standards. Recent upgrades have already improved its production capacity, including expanded cold storage and upgraded blast freezers, which will help the company scale operations and take on additional co-packing clients.
Alongside co-packing, Kremi is also focusing on tapping into the growing demand for its ice cream cakes. The product, which combines Kremi’s signature ice cream with moist chocolate cake, has seen strong interest from both individual consumers and bulk buyers, particularly in the hotel sector. However, production constraints have limited the company’s ability to meet the demand.
“We have a lot of untapped potential in cake. We haven’t been able to meet our cake demand,” Clarke acknowledged. The company’s recent investments in production capacity are expected to help Kremi better meet this demand as it expands into this growing market.
Kremi’s diverse product range currently includes a variety of ice cream tubs in flavours like rum and raisin, grapenut, stout, and coffee rum cream, as well as popular frozen novelties such as grape, kola champagne, and green apple pops. This varied portfolio provides a stable foundation as the company focuses on its long-term growth strategies.
With its sights set on a revenue target of $3 billion by 2025, Kremi is also looking to establish itself as a leader in the regional market. For the six months ending August 2024, the company reported a 5% increase in revenue to $1.3 billion, up from $1.2 billion during the same period in 2023. Gross profit rose to $444 million, reflecting stronger margins despite rising input costs.
The company has successfully navigated supply chain challenges, including an ammonia shortage, by diversifying its supplier base and implementing robust risk management practices. These efforts have ensured steady production despite external disruptions.
While the retail segment and hotel sector remain strong, Kremi is prioritising co-packing and ice cream cakes as primary drivers of future growth. “These moves reflect our commitment to diversification and building a business that’s competitive not just locally but regionally and internationally,” Clarke concluded.
With continued infrastructure improvements, a growing co-packing portfolio, and a diversified product range, Kremi is well-positioned to achieve its ambitious revenue targets in the coming years.
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