Everything Fresh Limited has plans to increase its retail sales in restaurants, supermarkets and online shopping through improved merchandising and inventory management.
The company disclosed in its annual report that since the start of 2021, the hotel sector accounted for 35 per cent of total sales.
“This is a positive shift,” management stated in the report, adding, “Continued focus on the retail segment will eliminate reliance on the hotel industry and support sustainable growth.”
Under COVID-19 conditions in 2020, Everything Fresh’s sales dropped to 50 per cent of pre-COVID levels, particularly with the decline of the hospitality sector.
Overall, the magnitude of the pandemic precipitated a 52 per cent decline in gross profit to JM$142.8 million, down from JM$299.5 million a year earlier.
The company’s business model pre-COVID relied heavily on the hotel industry, which contributed over 85 per cent of total sales. However, with travel and hospitality among the first industries to have suffered significantly from the pandemic, Everything Fresh lost 98 per cent of its main revenue stream within the first quarter of the year.
As a result, the company moved to restructure operations, targeting the following retail channels: in-house sales, restaurants, supermarket business, and wholesale. From March 2020 onwards, sales to the retail channel more than doubled and hotels accounted for 46 per cent of total sales by the end of the year.
Management stated that the sudden and total disruption in the operating environment slashed revenue in half to JM$1.05 billion as at December 2020 year end when compared to JM$2.2 billion in 2019.
The company saw its steepest rate of decline in revenue during the middle of the year with improvements coming in the final quarter.
Notwithstanding, new product lines such as the Deep River brand of snacks and Provecho wraps performed very well in supermarkets.
With this in mind, the company will continue to source and introduce new products to meet consumer demand with the expectation that improved margins from retail sales will offset promotion expenses.
With revenues falling, Everything Fresh reduced its capital expenditure in 2020 to JM$21.7 million, compared to $103.7 million in 2019.
The bulk of the funds went towards building cold storage rooms at JM$3.9 million, followed by new fixtures and equipment at JM$10.3 million and motor vehicles at JM$6.9 million. A further sum of JM$0.6 million was spent on general warehouse improvement
Management also noted that a hiccup in the acquisition of 60 per cent of the shares of Everything Fresh Bahamas Limited, a company registered in The Bahamas, will be resolved soon.
“Current projections are for strong growth in the retail sector throughout 2021. There are also good indications that tourism will begin to normalise as the vaccine roll-out continues, and we expect that the tourism industry will recover in time for the start of the winter season,” management outlined.