Food distributor Rainforest Seafoods Limited, which also trades as Rainforest Caribbean, and is known for its wide array of frozen seafood, has expanded its product portfolio, creating a new revenue stream with the introduction of Rainforest-branded canned products. With this move, the company has clearly staked out its claim to a share of the highly lucrative global canned food market that carried an estimated value of almost US$103 billion, or nearly $16 trillion in 2021, and is projected to grow to a whopping US$130 billion, or more than $20 trillion, over the next five years. This adds to Rainforest’s other business lines that include burger meats; frozen potato fries and wedges; packaged fruits and vegetables; imported Irish cheese; the Fresh by Rainforest line of upmarket seafood delicacies such as Scottish salmon, oysters, scallops and mussels; and the 40-acre Rainforest Farm in Martha Brae, Trelawny, that grows and markets a variety of crops, including tubers and fruits. Rainforest also operates Fish Pot Fry Fish Shop, a casual dining restaurant and food truck in Kingston; and the Seafood Market outlet at Freeport in Montego Bay.

The 27-year-old company is said to have spent the past six months testing the market for reactions to what are said to be its fast-moving canned mackerel, Vienna sausage and corned beef products, before it moves ahead with a full-scale roll-out later this year that will determine whether other items are added to the canned line.

The company declined to disclose the investment spend to get the canned products, which are processed and packed overseas, to the Jamaican market. United States export trade facilitation organisations Food Export Association of the Mid-West and Food Export USA-North East have described Jamaica as the third-largest packaged food market in the Caribbean, excluding Puerto Rico. The local retail food market was forecast to have reached a value of US$857 million, or $132 billion, by 2021.

Rainforest’s diversification into canned products comes four years after the company announced its intention to expand its manufacturing division into food processing to create value-added products. The Brian Jardin-led company has processing plants in Montego Bay and Kingston. Its cold storage facilities that are said to boast a capacity for storing up to 10 million pounds of perishables are also located in both cities, from which Rainforest does a brisk export business to some 30 countries. The canned foods are only for the local market for now, company officials have said, not ruling out the possibility of adding them to its export business in the future.

Canned foods were not publicly stated to have been in the works when, some five years ago, Rainforest shelled out US$10 million, or more than $1.5 billion, on the Montego Bay processing facility that Jardin at the time said would be used to produce a range of packaged, ready-to-eat foods, including cooked crabs, lobsters, conch skewers with local vegetables, seafood soups, seafood burgers, pickled fish and fish nuggets, among other value-added products. Some of the packaged foods are still in the works and yet to hit the market.

The company is also said to be exploring the addition of canned sardines, salmon and tuna under the Rainforest brand. Some of these items have been delayed from rolling off the manufacturing belt by shipping and supply chain issues.

“These dry products are just a part of the big picture for Rainforest as it relates to our future plans. We have been reviewing complementary items for our products over the past few years, but canned was a low-hanging fruit for us and we saw an opportunity to launch the products during the pandemic,” Roger Lyn, the company’s director of marketing and corporate affairs, told the Financial Gleaner in an interview.

With the new business line, Rainforest is entering a competitive local market for canned meats that is dominated by GraceKennedy Foods through its Grace and Caribbean Choice brands. Another market leader is Lasco Manufacturing with its Lasco brand. Other brands in the marketplace include Brunswick, Kendel, Delect and Cal’s.

Rainforest’s diversification into canned products is aimed, for now, at breaking into this market and deepening its business with consumers at the lower end of the purchasing spectrum. As part of the market entry strategy, the company has priced its canned goods lower than its competitors. Its seven-ounce corned beef retails at roughly $430, which is among the lowest prices for that product on supermarket shelves.

“It is early days, but the growth of market share and revenue goes hand in hand. There are customers who love our brand and would gravitate to our canned products. So, someone who is not able to purchase shrimp every week would still have the option to purchase one of the products in our dry goods category,” Lyn said.

Rainforest sources its canned corned beef from Brazil, according to the product’s packaging information. The other canned products are imported from markets said to be best known for a consistent supply and efficiency in co-manufacturing operations, according to Lyn, who did not elaborate.

Rainforest Caribbean has access to fish, shellfish and other varieties of fresh-caught seafood from Jamaican and other Caribbean waters that it could use as input for local canning. Its operations stretch from Jamaica, where the business is headquartered, to Barbados, Belize, St Lucia, and St Vincent and the Grenadines, where it recently opened a fourth location as it continues its Caribbean expansion. But a decision to can its local catch would not prove economically viable for the company, Lyn said, noting that there are supply constraints in Jamaica as well as other markets from which it sources its products.

“We have to go where scale is. The countries in the Far East, for example, that are fishing in huge quantities. So, while it would be nice to say its locally produced, it’s not practical,” he said.

Questions

With reference to the case and using examples from this case please answer the questions

1. Identify the strategy ( corporate and business level) you perceive is being pursued and implemented by the company Rainforest?

2. Based on your understanding of the different levels of strategy, suggest the alternatives which are open to the company

3. Using the outline provided indicate how you would, as the new marketing consultant, advise the company to proceed in the medium and short-term. This requires advice on all levels of strategy.

Answer rating: 100% (QA)

The company Rainforest is pursuing a growth strategy by expanding its product portfolio and creating ... View the full answer