Dix­ie-Ann Dick­son

Im­port­ed ice-cream brands seem to be churn­ing out lo­cal flavours from pop­u­lar re­tail stores and su­per­mar­kets. God­frey Bain, chair­man of ice-cream man­u­fac­tur­er, Fla­vorite Foods Ltd, says the com­pa­ny seemed to be get­ting the raw end of the deal as "im­ports of cheap, low qual­i­ty, First World sub­sidised ice-cream" is dom­i­nat­ing cer­tain dis­tri­b­u­tion chan­nels. Bain, re­fer­ring to an im­port­ed Amer­i­can ice-cream, said he be­lieved that this was a con­tribut­ing fac­tor to the com­pa­ny's low do­mes­tic sales while oth­er small lo­cal man­u­fac­tur­ers, among them B's Home­made Ice-cream, Munch Kings, Ma­ma's and Willie's, were feel­ing the pinch even more. Bain said Fla­vorite has been rais­ing the is­sue for about two years of un­fair com­pe­ti­tion with the Min­istry of Trade and In­dus­try, but has not re­ceived the at­ten­tion the is­sue de­serves.

He said lo­cal ice-cream man­u­fac­tur­ers have formed an or­gan­i­sa­tion and met with of­fi­cials of the Trade and In­dus­try Min­istry on March 11 to ad­dress the con­cern. The min­istry has re­ferred it to the Coun­cil for Trade and Eco­nom­ic De­vel­op­ment (Cot­ed) with­in the Caribbean Com­mu­ni­ty (Cari­com). Part of Cot­ed's re­spon­si­bil­i­ty is to eval­u­ate, pro­mote and es­tab­lish mea­sures to en­hance pro­duc­tion, qual­i­ty con­trol and mar­ket­ing of in­dus­tri­al and agri­cul­tur­al com­modi­ties so as to en­sure their in­ter­na­tion­al com­pet­i­tive­ness.

Bain said the meet­ing with Cot­ed may take place this week. "While we had an over­all prof­it for 2010, our do­mes­tic sales were flat. Ac­tu­al­ly, the re­gion­al sales has large­ly ac­count­ed for the en­tire in­crease in Fla­vorite's turnover for 2010," said Bain, in an in­ter­view at Fla­vorite's Bound­ary Road, San Juan, plant.

The 40-year-old com­pa­ny rev­enue has moved from $84.8 mil­lion in 2009 to $89.7 mil­lion in 2010. Do­mes­tic sales con­tin­ue to fall, Bain said.

In the first quar­ter of 2010, Fla­vorite's do­mes­tic sales were $23.8 mil­lion, falling to $22.2 mil­lion for the same pe­ri­od in 2011. "I do not have a prob­lem with com­pe­ti­tion, but it must oc­cur on a fair play­ing field while pro­vid­ing a fo­rum for every­one to com­pete, but this is not hap­pen­ing." Bain ex­plained that its is­sue does not rest with im­port­ed pre­mi­um brands, such as Haa­gen Dazs and Cold Stone, "but with cheap sub­sidised brands, like Blue Bun­ny, that is hug­ging the mar­ket at cer­tain gro­cery stores."

Pric­ing, qual­i­ty

Bain of­fered sam­ples of his com­pa­ny's ice-creams-gold­en vanil­la and choco­late-and sim­i­lar flavours from an­oth­er pop­u­lar brand for the Busi­ness Guardian team to sam­ple, dar­ing us to de­clare which of the two brands was su­pe­ri­or. A con­fi­dent Bain said he was cer­tain his prod­ucts could stand up against com­pet­ing brands, but that com­pe­ti­tion must be fair. While ad­mit­ting that Fla­vorite con­trols a large share of the lo­cal ice-cream mar­ket, he was more con­cerned about small­er ice-cream mak­ers. He said that su­per­mar­kets, such as Hi­Lo Food Stores and PriceS­mart, were "delist­ing" cer­tain lo­cal ice-cream brands, but pro­mot­ing the Amer­i­can brand. Prices­mart, Bain said, has delist­ed Willie's ice-cream since last Sep­tem­ber. PriceS­mart was Willie's' biggest re­tail out­let. The club mem­ber­ship store now sells on­ly Blue Bun­ny. Bain said while Hi­Lo Food Stores was still sell­ing some lo­cal ice-cream prod­ucts, Blue Bun­ny is the pre­dom­i­nant prod­uct on dis­play. "Hi­Lo stopped pur­chas­ing Fla­vorite's four-litre con­tain­er of ice-cream, which was in di­rect com­pe­ti­tion with Blue Bun­ny's 4 1/4-litre," Bain said.

Bain, an ac­coun­tant by pro­fes­sion, said the move was dam­ag­ing to Fla­vorite as Hi­Lo was one of its biggest re­tail­ers and among the few that pur­chased the four-litre con­tain­er. Asked if Hi­Lo gave rea­sons for its de­ci­sion, Bain said, yes, that Hi­Lo stat­ed it was delist­ing that size be­cause de­mand for it had shrunk in favour of an­oth­er brand. Bain main­tains that Fla­vorite was a bet­ter brand as all oth­er su­per­mar­kets had fair sales of oth­er lo­cal brands: Munch Kings, B's, Willie's and Fla­vorite. Peo­ple are se­duced with the idea that a for­eign prod­uct is bet­ter, Bain said. He be­lieves, too, that Blue Bun­ny was be­ing sub­sided, which al­lowed it to sell at a low­er price than lo­cal brands. Bain, who is no stranger to a high­ly com­pet­i­tive en­vi­ron­ment, hav­ing worked at An­gos­tu­ra for 27 years where he was the chief op­er­at­ing of­fi­cer, said Fla­vorite has em­barked on a num­ber of ini­tia­tives that will com­pen­sate for low­er sales do­mes­ti­cal­ly.

As a mat­ter of fact, Bain said Fla­vorite was the fran­chise own­er of the pop­u­lar Cold Stone ice-cream, which has out­lets at Price Plaza in Ch­agua­nas, The Falls at West Mall and Movi­eTowne at In­vad­er's Bay. A fourth out­let will be opened at Trinci­ty Mall on May 24. "We bought the re­gion­al fran­chise through our sub­sidiary com­pa­ny, Sun­daes Ltd," Bain said. He not­ed that Fla­vorite was just an in­vestor in Cold Stone and does not own the brand. He said Cold Stone is a com­plete­ly in­de­pen­dent op­er­a­tion owned by Ka­ha­la Cor­po­ra­tion based in Ari­zona, Unit­ed States.

Ma­jor­i­ty share­hold­er: An­dre Mon­teil

God­frey Bain said An­dre Mon­teil, own­er of Stone Street Cap­i­tal Ltd, is the ma­jor­i­ty share­hold­er in Fla­vorite. The com­pa­ny pulled Mon­teil out of re­tire­ment to be the chair­man of the ice-cream gi­ant.

In 2008, Mon­teil, for­mer chair­man of the Home Mort­gage Bank (HMB), and his wife, Sher­lyn, through Stone Street Cap­i­tal Ltd, bought $110 mil­lion worth of shares in HMB. Those shares have since been bought by the Na­tion­al In­sur­ance Board. Bain said Mon­teil is on­ly an in­vestor in Fla­vorite Foods Ltd, that he has no role in the com­pa­ny's dai­ly op­er­a­tions