Red Stripe lauded by Diageo for strong sales growth – and by US for cassava initiative

Concurrently, Red Stripe has garnered the interest of the US Embassy Agricultural Department with its plan to substitute imported barley with locally grown cassava in its beer production.

“In Jamaica strong consumer campaigns on Red Stripe along with the introduction of new formats led to net sales growth of 14 per cent,” stated Diageo in its December second-quarter 2014 results released February 5.

The report, which also showed that Diageo made US$2.1 billion net profit over six months compared with US$1.6 billion a year earlier, indicated that Red Stripe sales benefited from faster restocking of remote corner shops and bars – otherwise termed route-to-consumer interventions.

“Chile, Peru and Jamaica benefited from our route to consumer interventions and all delivered good growth,” stated the report. “Elsewhere spend also increased on Red Stripe driving greater consumer engagement around the football platform,” stated Diageo.

On Wednesday, representatives of the US Embassy toured the company’s cassava farm and production plant to examine the cassava beer initiative for which the Embassy may possibly provide assistance for the operations.

Agricultural attaché of the US Department of Agricultural, Morgan Perkins told the Jamaica Observer that the visit is also aimed at keeping up-to-date on the latest development in Jamaica, to assist with the model and to determine if such development can be used as an example for other countries.

“I think it is a super interesting project and it has good signs,” Perkins stated. “One of the main focuses in agriculture worldwide is trying use locally available products where ever possible in order to facilitate food processing which cuts down on the carbon footprint.”

Perkins added that what’s even more interesting about Red Stripe’s project is the element that they are trying to expand production to get more local farmers and youths involved.

“It improves the production techniques and keeps the project interesting,” he said.

Red Stripe has invested well over $200 million in its cassava project and may accumulate expenditure of up $1 billion over the next five years. Ultimately, the local brewer wants to replace 20 per cent of its imported barley with locally grown cassava.

Over the next two weeks, the company will be receiving factory equipment for the new processing plant and will also be signing a lease contract for an additional 250 acres of land at Wallen, St Catherine, to have the project operational by early April.

“It’s great to have the US embassy on board,” general manager of Red Stripe, Cedric Blair, told the Business Observer. “It would be good if they are able to support us in some way, shape or form, we don’t know yet, but we are committed to this.”

However, the US Embassy representative stated that before any help can be provided, the Department would have to conduct more research to find a model that would fit Red Stripe’s initiative.

“The problem with doing an innovative project is that it doesn’t fall into the categories that people are used to dealing with, so some amount of work needs to be done,” Morgan said.

Red Stripe plans to have 2,500 acres of cassava under cultivation to meet its target of replacing 20 per cent of barley with locally grown cassava. Currently, the 36 acres at Bernard Lodge account for close to 700 metric tonnes, while Wallen’s 250 acres should provide another 6,000 metric tonnes of cassava.

“The whole cassava initiative has created a lot of interest. This project has touched so many lives and already it has a huge emotional connection to Jamaica and Red Stripe. As a large company, giving back and giving this sort of opportunity that creates employment and nation building, means a lot to us,” Blair said.


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