Select Brands weighs mar­ket f loat

Jamaica Gleaner - - BUSINESS - Neville Gra­ham Busi­ness Reporter neville.gra­ham@glean­erjm.com

IN THE five years that Select Brands has been in busi­ness, the com­pany has tripled its wine list and nearly quadru­pled its op­er­at­ing space.

Now, the wine dis­trib­u­tor, co­man­aged by Andrew Des­noes and David McCon­nell, is pur­su­ing plans to po­ten­tially float the busi­ness on the ju­nior mar­ket of the Ja­maica Stock Ex­change, which would give it cap­i­tal to spread even fur­ther.

McCon­nell told Gleaner Busi­ness that he and Des­noes are to present the pro­posal for list­ing to Select’s board of di­rec­tors in com­ing weeks, but as for de­cid­ing the time ta­ble to go pub­lic, “we are in the mid­dle of that process right now”, he said.

When Select Brands launched in Novem­ber 2011, their am­bi­tion was to hit a turnover of $1 bil­lion some­where be­tween year three and year five. But it seems that they are not quite there as yet.

“We’re run­ning close to fiveyear tar­gets for sales vol­ume and mar­ket share,” said McCon­nell. “We’re very happy with our progress and we’ve ex­ceeded most of our tar­gets,” he said, but held back on fig­ures.

In five years, the com­pany has grown from 12 em­ploy­ees to 50, plus con­trac­tors for truck­ing and IT ser­vices.

Space at its Span­ish Town Road dis­tri­bu­tion hub, which started out at 8,000 square feet, has been ex­panded over the years to about 30,000 square feet.

And: “In our first Christ­mas, we had a price list that was about three pages long. Now, it’s about 12-13 pages,” McCon­nell said.

Des­noes and McCon­nell were well-versed in the wine and spir­its mar­ket given their track record with the for­mer Las­celles deMer­cado group. So they felt well-po­si­tioned to ex­e­cute a growth strat­egy cen­tred on “punch­ing above (their) weight class”, even with an un­known start-up com­pany.

Their more for­mi­da­ble ri­vals in­clude Caribbean Producers Ja­maica (CPJ), which has a strong pres­ence in the hospi­tal­ity sec­tor; and Har­bour Wines, which is owned by the heavy-hit­ting GraceKennedy con­glom­er­ate.

“When you look at our port­fo­lio, it is more di­ver­si­fied than what ob­tains at, say, CPJ or Har­bour Wines,” McCon­nell in­sists.

“What you’ll find with us is that we are very good ser­vic­ing all cus­tomers,” he said.

DIS­RUP­TIVE STRAT­EGY

Select Brands has also pur­sued a dis­rup­tive strat­egy, snap­ping up key brands such as the De­mer­ara line of rums, select foods, and a pop­u­lar gin­ger wine. McCon­nell be­lieves this strat­egy dif­fer­en­ti­ates them from near ri­vals.

“What re­ally sets us apart is the way we ac­tu­ally rep­re­sent lo­cal producers. You will, there­fore, find us do­ing well with Stones Gin­ger Wine and Tor­tuga Rum Cake. We also have a dis­tri­bu­tion chan­nel for the prod­ucts out of Wor­thy Park Es­tates with the Rum Bar line of prod­ucts,” he said.

Stones Gin­ger wine was for­merly dis­trib­uted by J. Wray and Nephew Lim­ited; Tor­tuga Rum Cake was dis­trib­uted by Coun­try Traders; while De­mer­ara Rums was once mar­keted by CPJ.

McCon­nell feels par­tic­u­larly pleased about the Stones dis­trib­u­tor­ship.

He says it has al­lowed Select to deepen mar­ket pen­e­tra­tion and tackle other mar­ket seg­ments.

“It has given us the op­por­tu­nity to grow our dis­tri­bu­tion cov­er­age. Over the last 12 months, we have been selling to a lot more cus­tomers that we never used to sim­ply be­cause we didn’t have a brand that was rel­e­vant to those cus­tomers. We have been build­ing on the re­la­tion­ship by serv­ing those cus­tomers to the best of our abil­ity,” McCon­nell said of the dy­namic in­tro­duced by the ad­di­tion of Stones Gin­ger Wine to its dis­tri­bu­tion port­fo­lio.

Looking ahead, McCon­nell sees greater op­por­tu­ni­ties for sales to both the hospi­tal­ity sec­tor, as well as Ja­maicans.

“We’re looking to grow from our Ja­maican con­sumers who have more dis­pos­able in­come as the econ­omy con­tin­ues to grow and they ben­e­fit from tax breaks,” he said.

“We will also see growth from the num­bers of tourists that are com­ing and a no­tice­able ‘pre­mi­u­mi­sa­tion’ of the tourist in­dus­try. Ja­maica de­mands a pre­mium, and we are looking to have a brand that can fit into each of those con­sumer seg­ments,” McCon­nell said.

DARIEN ROBERT­SON/FREE­LANCE PHOTOGRAPHER

David McCon­nell, co-man­ag­ing di­rec­tor of Select Brands, speaks at the the com­pany’s 5th An­niver­sary cock­tail re­cep­tion on Novem­ber 10, 2016.

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