Caribbean Cream, which operates under the brand Kremi, could be forced to raise the prices of its products soon based on the movement of global commodities prices and the ongoing coronavirus pandemic.

Caribbean Cream CEO, Christopher Clarke

CEO Christopher Clarke told Kalilah Reynolds on Taking Stock that the company was able to maintain its prices over the last year despite the pandemic.  Kremi saw an 85% jump in net profits over the financial year ending February 2021. For the year under review, net profit rose to $100.68 from $54.57 million a year earlier.

The rise in profits could also be an indication that more people were stocking up on comfort food to get them through the pandemic.

However, the CEO said with commodities prices still rising and uncertainty lingering, Kremi may have to join other companies in passing on the inflation impact to consumers.

“We are not sure yet, we’re still working on that, gathering our information and finding out when prices will increase and things like that [but] we see all sort of companies hinting at price increases and I fear that at some point we will have to do a price increase if it keeps going this way,” said Clarke.

“Like any other time when costs have increased, you look at what the market can take and what you can handle as far as margin and you try and decide on what’s the best way forward given all these circumstances,” he added. 

Shipping prices skyrocket

Clarke said the company also stands to be impacted by the rising costs around shipping. The supply chain issue was recently highlighted by President of the Jamaica Manufacturers and Exporters Association (JMEA), RIchard Pandohie, on Twitter . Pandohie tweeted that it was now his number one concern, illustrating that a 40ft container from China valued at US$2,500 last year is now costing US$11,500 today. He added the situation was also being compounded by delays.

Clarke said the logistical challenges are likely to affect all companies involved in imports and exports.

“It’s flexible right now.  We live in a pandemic.  We have containers being stocked on one side of the world…that’s going to affect everybody and especially an island nation like us [Jamaica],” said Clarke.

At the same time, the ice cream boss said Caribbean Cream has not yet been significantly impacted from any supply chain increases as it was engaged in strategic planning even before COVID-19. The CEO said the company moved to increase the stock levels in all imports at the onset of the crisis, which positioned them to be able to still supply the market.

He said the company also secured funding recently from a new loan package to finance a number of their projects.

In the meantime, Clarke said the company’s ability to get sales has also helped their numbers over the last financial year. He reasoned that while other companies have had to pivot to get closer to the consumer, Kremi was already in that space.

A Kremi future

Going forward, he said the company will be exploring new and innovative ways to reduce operational costs and bring in more profits. That includes investments in a combined heat and power plant and cold storage room. The heat and power plant should bring down electricity and gas costs while the cold room will increase the company’s storage capacity.

The CEO said the company also has a suite of new products in the pipeline. It recently launched a one gallon tub for large wholesalers like PriceSmart.

“I can’t announce any of them now… The pandemic has hurt our ability to get new products out, we can’t fly in experts to help us.  It makes it harder to get new equipment, so our pipeline of products is a little bit backed up right now but there will be some new stuff coming to the market soon,” he disclosed.

Caribbean Cream currently controls about 55% of the market. However, the CEO said there are still areas for growth. He said the company has also set cross border expansion plans aside until more growth has been realized in the local environment.

“CARICOM will be the obvious first step [in expanding] because there are [benefits such as] duty free. Anything beyond that is hazy,” Clarke said.

Kremi listed on the Jamaica Stock Exchange in 2013 with a share price of $1.00. Today the stock has jumped almost 500%, trading mid June over $5.00. The stock price has increased over 37% since the start of 2021.

New episodes of Taking Stock with Kalilah Reynolds premiere Tuesdays at 7pm on YouTube, kalilahreynolds.com and all podcast platforms.

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