Rum cake market on the rise
More companies are seeking a slice of the rum cake market dominated by Tortuga International, which makes roughly US$18 million in sales, regionally.
The makers of Kiss cakes launched a rum fruitcake for Christmas, while coffee company Country Traders Limited expanded its line of cakes to include a coffee rum cake, which also made its market debut this month.
"The industry needs excitement," said Jeffrey Hall, CEO of Jamaica Producers Group, which owns Tortuga. "We welcome competition, but we are the market leader," he asserted.
Rum cakes are mainly gift items that appeal to locals, especially during Christmas, but are year-round purchases for cruise passengers.
Mark and Wendy Fletcher formed the Sweet and Simply line of cakes three years ago and now sell it in original, coffee, butter rum, and chocolate flavours. But they acknowledge that their operation pales in comparison to Tortuga.
"Tortuga already has a name, and their volumes and advertising budget is huge. We cannot do that yet," said Mark Fletcher.
Best sold coffee
The Fletchers started the line to complement Country Traders' main coffee business, which already held a wide reach in the retail and souvenir trade. Country Traders makes the Coffee Roasters brand, which is one of the best-sold coffees in Jamaica.
"It is an add-on line for us and supports the main business. Sales of cakes do not exceed 10 per cent of overall sales," Fletcher told Gleaner Business. The Sweet and Simply four-ounce cakes retail for about $500.
Country Traders previously distributed Tortuga cakes in the local market, but that contract came to a halt amid two acquisition deals sealed by Jamaica Producers six years ago, which essentially made Tortuga a rival brand.
In October 2011, the conglomerate, whose main business lines are food and logistics, partnered with property conglomerate PanJam Investments Limited to acquire Mavis Bank Coffee Factory, the maker of Jablum products.
Then in December 2011, Jamaica Producers bought 62 per cent of Tortuga International Holdings, which was founded by Carlene and Captain Robert Hamaty.
Subsequently, in January 2014, Jamaica Producers tapped Select Brands Limited as distributor for the Tortuga line of products.
Sweet and Simply Jamaican makes its cakes at an inhouse bakery, which generally operates with excess capacity outside of the busy Christmas period.
"The baking facility usually operates one to two days a week to meet orders, but now, we are baking a lot - almost every day - to keep up with orders during Christmas," said Fletcher.
Another major player, Honey Bun bakery, makers of Buccaneer rum cake, declined to comment for this story, and Kiss cakes distributor Jamaica Biscuit Company did not respond to calls.
The rum-infused fruitcake sold by Kiss retails in three sizes for about $500 for the four-once, 1 pound for $1,000, and 1.8 pounds at $1,500, according to advertisements. Kiss also indicates that its fruitcakes are made with Jamaican rum.
The overall expansion into rum cakes marks a push by companies to earn more foreign exchange.
Hall said that increased tourist arrivals within Jamaica, along with a strong economy in the United States, the region's main tourist source market, resulted in a "very strong" year for Tortuga. Additionally, the company has increased its "penetration" into the US with increased distribution channels, while sales in souvenir stores, within attractions, and on cruise ships are good.
In 2016, Tortuga international made sales of $2.3 billion. In that year, the company invested US$2 million in a new bakery in Kingston, which allowed Tortuga to consolidate its Jamaican operations into one location, Hall said. The bakery received international SQF Level 2 certification, allowing Tortuga to meet US customs requirements and catapult its cakes into that market.
The Jamaica Tourist Board found that cruise passengers, after buying in-bond items, coffee, alcohol, and spices, are likely to spend as much as US$5.50 or 6.1 per cent of the US$90 daily spend on some other shopping item, which could easily include cakes. That equates to about US$9 million of the US$150 million spend by cruise passengers per annum.
Passengers who arrive by plane and stay overnight are spending about 5.4 per cent, or US$140 million, annually, on shopping items. But that figure has not been broken down further by the tourist board.