GraceKennedy is setting itself up to dominate Jamaica’s spring water industry, so let’s talk about it.

GraceKennedy is probably one of the most recognisable and popular brands in Jamaica. 

And they have their hands in a lot of different sectors. Of course, we know foods with Grace Foods and Hi-Lo Supermarkets, banking and finance, remittance and payments services etc. But one area they’ve been slowly creeping up in is the spring water market. 

Back in February, GK became the majority stakeholder in Catherine’s Peak Bottling Company, upping its stake from 35% to 70%.

And last year, they acquired 876 Spring Water from bottling company, Unibev Limited and Bliss Limited. Now, GK is looking to buy Unibev.

According to their website, UniBev is a beverage contract manufacturer.  They’re involved in all aspects of the beverage manufacturing process, including sourcing raw materials and packaging. 

The company has a manufacturing facility in Portland, which was certified by the International Bottled Water Association, and is located near a Blue Mountain spring water source.

Some of you are probably thinking, ‘water? how random of GK’.  But FYI the spring water market is very much a growing industry. One estimate said that the global spring water market was worth US$210 billion in 2021 and is expected to grow to US$465 billion by 2031. 

Also, do you guys remember that “fly-by-night coconut water” problem we had in Jamaica a few years ago? There is a similar problem with spring water but on a smaller scale. Have you ever just seen some random bottled waters and you’re wondering,  ‘which company is this and which spring them get the water from’?

Exactly. So GK getting in on this industry now seems like a great move. They have decades of experience in manufacturing and distribution, a recognisable, and most importantly, trusted brand! So, they could easily dominate this industry. 

GK hasn’t disclosed the cost of the transaction yet.  The deal is still subject to the customary closing approvals.

Now what will this mean for you and your money?

Well, according to GK’s six-month results, the group recorded four billion dollars in net profits, which is 14% more than the same period last year. 

Additionally, this company pays out dividends regularly.  The next one is expected in September. That payout will be the third one this year and will bring the total dividends payout to about $1.5 billion for the year so far.

The stock has been trading around the $76 to $78 range for the past three months and is down 8% since the start of the year.

So, with this new company, GK will be able to boost its presence in the local spring water market.  And, having another manufacturing space could also mean a boost in export. 

And that’s the bottom line.