Father-son duo plots new ways to spice up Gray’s Pepper
Lloyd W. Gray’s early working years were spent tending livestock as a government worker, but he dreamed of running his own company some day.
So whatever time he got off the job would be invested in mapping out that business, an agro-processing venture that is now being run by the second- and third-generation members of the Gray family and whose brand is a familiar presence on grocery shelves.
Gray’s business of formulating spices began in 1960 in the garage of his home in Savanna-la-Mar, Westmoreland.
Gray’s Pepper Products started as a part-time operation, but soon enough, Gray ramped up production after retiring in 1968 from Government service. Today, the spice company employs 29 persons, but the family has declined to speak to the size of its sales.
“Gray’s Pepper started as a seasoning company, at which time the business operated for roughly six months out of the year, which was mainly peak season. Our first customer was Lewis Kelly and Sons, which was a distributor that was based in Three Miles,” said Andrew Gray, son of Lloyd Gray and managing director of Gray’s Pepper Products Limited.
As the factory’s output climbed, so did the need for operating space for Gray’s Pepper, and a portion of the land previously used to raise animals by the family became the site of the factory.
Today, the Gray’s plant spans about 20,000 square feet of space on 1¼ acres of family-owned land in Chantilly, Savanna-la-Mar, and is being managed by Andrew and his son, Drew Gray, following the passing of Lloyd Gray in 1999.
“I came back home in 1985, and the business was mainly a manual operation. We grew slowly because my father was risk-averse, but I said we needed to take some risks if we wanted to stay in business,” said Andrew Gray, 58.
“One of our customers, GraceKennedy, had a growth target of 20 per cent per year, and when we looked at the operation that we had, we couldn’t achieve that target, so we had to modernise,” he said.
When Andrew took over the business, the filler at the plant was doing four bottles at a time.
Now, it’s doing 24 bottles each time, “and it looks like we are about to outgrow that,” the managing director said.
Needing capital to grow, Gray’s Pepper took on GraceKennedy subsidiary GK Investments as an investor last year and took steps to obtain global food safety and quality certification, which it has achieved. GraceKennedy, which has been a customer of Gray’s Pepper for around 40 years, now owns 33 per cent of the business.
The pepper company plans to expand its warehousing facility from 5,000 square feet to 15,000 square feet on its property in Westmoreland, a $54-million project to be funded from internal cash resources and a bank loan. Andrew now awaits approval from the Westmoreland Municipal Corporation to begin construction of the warehouse space, scheduled to start by year end.
The warehouse expansion will see the Gray’s plant increasing its overall space from 20,000 square feet to 30,000 square feet.
“Right now, we don’t have enough storage space, so we have been storing goods in a rental space in Kingston, but once we build that warehouse, we can store everything here, and the old warehouse that we have now can be utilised for something else, maybe to expand the factory because it’s a bit tight where we are now,” Andrew told the Financial Gleaner.
The warehouse project is part of a more expansive plan to grow the operation. Gray has a vision for the company to move into barrel-aged sauces, as a new revenue stream for the business.
“We want to do limited-edition sauces – five-year-old and 10-year-old products that are sold at a premium – but that’s when we have adequate raw material,” the managing director said.
He is also eyeing a second production line to increase output volumes by about 50 per cent.
The Gray’s portfolio of products includes the Gray’s-branded hot pepper sauce, fish and meat sauce, habanero sauce, scotch bonnet sauce, jerk sauce, and jerk seasoning.
The spice company also packages products for other brands under contract, including GraceKennedy.
Gray’s Pepper, which claims the title of largest sauce producer in Jamaica, has the capacity to produce roughly 50,000 bottles of sauces per day in three-, five-, six- and 12-ounce sizes. However, over the years, the company has complained of not being able to maximise production capacity, primarily because of the limited supply of peppers, and crime.
“Because of the crime problem, nobody wants to work late nights, and even for them to work late in the day, it’s an issue,” said Gray.
“If we didn’t have, a crime problem, the machinery that we have, we could do a double shift. Instead, we have to be making unnecessary investments in new equipment so that we can have more production done during the day. It’s not feasible for a company to only work an eight-hour shift,” he said.
The company’s need for a more consistent supply of raw materials was recently addressed when GraceKennedy, through its agricultural division, Grace Agro-Processors, partnered with the Ministry of Industry, Commerce, Agriculture and Fisheries last year to establish an agro park on 110 acres at Ridge Pen, St Elizabeth. The crops, which are slated for reaping next month, will plug the annual shortage in pepper supply usually experienced by manufacturers between December and April each season.
Additionally, Drew Gray has started a three-acre pilot West Indian red pepper farm in Whitehouse, Westmoreland, from which the raw material will be used to feed his three-year-old venture, Scotch Boyz Jamaica Limited, which packages a line of five-ounce sauces that has already found a market overseas in Canada. Its second shipment of sauces to Canada is planned for this week.
Scotch Boyz was created as a separate entity from Gray’s Pepper Products and currently has a co-packaging arrangement with Gray’s.
Drew, a 29-year-old graduate of McMaster University in Ontario, Canada, was employed in the Canadian banking sector for four years before returning home to assist his father with the business. He currently holds the post of general manager of Gray’s Pepper but saw the opportunity to create his own legacy during his stay in Canada.
“One of the main problems I found in Canada is that I just couldn’t find fresh produce. So leveraging Gray’s Pepper Products’ relationship with GraceKennedy, we came up with an arrangement where the sauces would be produced by Scotch Boyz and marketed through GraceKennedy,” Drew told the Financial Gleaner.
He said Scotch Boyz is jointly owned by himself, as majority shareholder, and his childhood friend, Neil Hudson.