Glass bottles running low

The operations of local conglomerate GraceKennedy Limited are being negatively affected by the global impact of the COVID-19 pandemic which has seen glass bottle supplies for its popular Tropical Rhythm brand of juices, which were traditional sourced out of South and Central America, drying up.

Head of Global Sourcing and Marketing, Zak Mars, has described as an “umbrella effect” the overall effect of COVID-19 on the manufacturing operations of companies like GraceKennedy, with availability and growing costs, two of the most telling factors.

He explained that historically, the region of South and Central America have been the main source of supplies for glass bottles but increases in domestic demand to meet beer bottles, baby food containers and even vials for COVID-19 vaccines are constraining their capacity. Just as how the Jamaican Government can use the Disaster Risk Management Act to mandate certain new measures, in some of those countries, the governments have mandated that glass manufacturers supply local demand first before they look to supply the export market.

“So they are at capacity constraint and, therefore, it will affect the ability of these suppliers to supply manufacturers in Jamaica with the required quantities. Plus, we are also seeing increases in our demand for the products that are filled in glass bottles,” Mars disclosed.

With Jamaican manufacturers now forced to look elsewhere, the United States, Egypt and China among are the likely alternate supply markets, but their transit times and also costs could far exceed the average three-day time out of South and Central America.

“You start talking about increased freight cost now. Start talking about dealing with a different set of suppliers whose price profile might be different from South and Central America. So that’s gonna drive the costs up as our manufacturers are able to secure new sources of supply outside of the constrained South and Central America,” Mars pointed out.

LOOKING TO AUGMENT STOCKS

For its part, GraceKennedy is already looking to the United Kingdom and the United States to augment its stock of glass bottles for its Tropical Rhythm drink line.

“The whole of 2022 booked out and we can’t see this easing until there is more opening up of economies, with more people going back to work. A part of the problem is that with more people staying at home, consumption has just skyrocketed like that. There will be cost increases, but as we have constantly said and done, we are not are not going to be passing on all those increases to our consumers. We will be absorbing some because we know how rough it is out there,” Mars admitted.

He went on admit that in light of these issues, GraceKennedy has taken a long, hard look at the option of recycling the bottles used for its Tropical Rhythm line, but this is not likely to happen any time soon.

“We went through that exercise just recently again. We went through that analysis and unfortunately, we wouldn’t be able to pull the trigger on that in short order,” according to the head of Global Sourcing and Marketing.

In looking at setting up recycling centres, the company would first have to decide whether these services would be outsourced or owned outright by GraceKennedy. Then it would have to figure out just how much consumers would be willing to pay per bottle. Then it would have to invest in bottle sterilisation and cleansing facility.

“So it’s possible but it is not a tomorrow thing. So we are looking at some numbers and the logistics,” Mars conceded. He then went on to share another impediment to a quick start-up.

“Our Tropical Rhythms bottles are not heavy enough to be recycled, so we would have to actually make some changes to the design and weight of the bottle at the manufacturing source. If you notice our bottle, it is not what you call a stock bottle. You can’t just buy if off the shelf because we have designed it in such a way that if we find a new glass bottle manufacturer for it, they have to spend time creating a mould to produce that exact shape and weight, and the process could take a minimum of three months, and nowadays, an average of six months. That could take up to six months based on current capacity constraints, and then now looking at constructing a facility to do the sterilisation and cleansing, nine months. In other words, it’s a longer-term strategy.”