Morning Glory cereal now features in 182 stores nationwide— IAST targets Jamaica, Barbados markets

Mar 17, 2019 News

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By Kiana Wilburg

After starting in 2017 with literally zero market share, no brand presence, and in a category with long-term branded names from giant food manufacturers, the Institute of Applied Science and Technology (IAST) can, without question, be applauded for its magnificent efforts in having the Morning Glory Cereal now featured in 182 stores nationwide.
Professor Suresh Narine, who is also the IAST Director, explained how the product was able to achieve such remarkable success, and the regional markets being targeted while providing some insight into the financial performance of the Morning Glory cereal to date.
With regard to the reception of the Morning Glory Cereal has received thus far, Dr. Narine said that he and his team have been delighted with the market response.
He said, “Although in the first year of commercial production, our penetration into the marketplace is not as widespread as I would have liked, all of the locations where the product is sold have recorded strong repeated continuous sales. It seems that Morning Glory has already developed a loyal following.”
In late 2017, he said that IAST commissioned the plant at Anna Regina and recorded sales of $12,749,680.
In 2018, Professor Narine said that sales increased drastically. He said that IAST recorded sales of $40,654,890.

Already for 2019, the IAST Head said that sales as of today are $18,248,287. In 2019 as well, Dr. Narine said that IAST is targeting gross sales of $65 million. He explained that a significant portion of the sales (88.9% in 2018) have come from the National School Feeding programme.
Morning Glory Inc. is being told by the coordinator of the programme that the reaction to the product from the nation’s schoolchildren has been enthusiastic.
Professor Narine articulated that indeed, it seems that Morning Glory cereal is their favourite meal of all the options offered.
He said, “We are hopeful of not only increasing our sales to the school feeding programme, but also in partnership with our main distributor, Ansa McAl, and also through our own and the efforts of smaller distributors, increase the presence of the product on shelves all across Guyana including the small mom and pop groceries.”
Dr. Narine asserted, “We have purchased a branded Canter to aid in the distribution efforts, so look for our branded canter in your neighbourhood! I have provided you with a listing of all the outlets and retail centres where Morning Glory is currently sold and as you can see, the penetration has been decent for only one year of commercial production, but we are not satisfied with this.”
The world renowned scientist added, “At all of the expos that we have participated in (in 2018, more than 15 local expos), the product received encouraging and enthusiastic reactions from consumers – taste, texture, nutrition and packaging seem to be the selling points, together with Guyanese pride that such a well-packaged and professional product is manufactured right here in the Cinderella County (Essequibo).”
When asked about effort at regional promotion for the local cereal, Professor Narine said that IAST has been cautious when it comes to regional sales, as it is starting from a very limited operational budget. In this regard, he explained that the Institute is somewhat constrained in its ability to promote in the regional marketplace.
Be that as it may, Professor Narine said that the IAST just participated in the recently concluded Agro-Fest in Barbados in February 2019 and the product met with enthusiastic approbation from all who sampled or purchased boxes.
Professor Narine said that this exposure also allowed IAST to gauge the correct price point to introduce the product into the Barbados market. Since late 2018, the IAST head said that he and is dedicated team have been working with a Barbados based Guyanese, which had Morning Glory samples on limited shelves in Barbados.
He said, “We expect to significantly increase our presence now that we have more information on the price points and the suitability of the product to the Barbados marketplace. We are cautiously targeting sales of approximately $15 million in the Barbados market in latter half of 2019.
“We have, also, through sales to a local entrepreneur who exports to Jamaica, been able to put products on the shelves in Jamaica for the first time in 2019.”
Dr. Narine said that IAST is having further discussions with two distributors in Jamaica and hope to expand the product’s presence there also.
Speaking to the first set of financial statements for Morning Glory, Professor Narine said that starting up an entirely new, branded food product with only one SKU (one product) is a significant challenge.
, “…From the get-go, we knew we had to compete on price, nutrition, taste, texture and packaging. Furthermore, we knew there was no room for error in quality and safety. So we focused on a policy of no compromise on safety, nutrition and quality. We were prepared to run at a loss but not to let those three imperative aspects of the process be compromised.”
The IAST Head said that this meant of course, focusing heavily on training of staff and on the establishment of robust control measures. He said that it also meant ensuring that the physical presence, physical environment, dress and comportment of staff and the presentation to the marketplace in all aspects had to be of a quality and standard, which resided head and shoulders above even its main and established competitors.
An unrelenting and uncompromising focus on excellence in all aspects of the operations, he said, was absolutely necessary.
Dr. Narine said that this required the templating of a culture of pride and professionalism and acceptance of quality as the most important measure of our output. To assist with this, Professor Narine said that he and his team developed 10 Guiding Principles, which govern how they relate to each other and to their customers, suppliers and wide stakeholder base.
He said, “One of our most important principles is Mutuality— we shall not conduct business with any individual or entity unless we can articulate and commit to ensuring that individual or entity derives real and measurable benefit from their association and business with us.
“This extends to inter-personal relationships in the plant itself, and underscores a culture of mutual respect and responsibility for ones actions…”

With respect to its EBITDA -Earnings Before Interest, Taxes, Depreciation and Amortization, Professor Narine said that in 2018, this was $16,779,397.
He said, “As you know this is one of the most effective measures of a company’s operating performance. This effectively means that before depreciation, the company’s before tax earnings was $16,779,397. In 2017, EBITDA was $6,194,030. 2017 numbers over a limited number of production months are much better than 2018, because in 2017 the operation was still being completely staffed by scientists from the IAST.”
In 2018, Professor Narine said that Morning Glory Inc. was fully operational and acquired its own staff, so that 2018 numbers are much more indicative of reality.
He said that these are very encouraging numbers for a start up manufacturing facility, which literally began with an idea and a location, which was swampland. Further to this, Dr. Narine said that the year-end financial numbers also allows IAST to forensically analyze the areas for improvement of efficiency.
“For example, we operate the plant only two days per week, due to our still small markets. As these markets begin to expand (and this year we will be ramping up our advertising – there is already a television ad on NCN and various radio ads) we will be able to operate the plant for a full shift. This will lead to significant increases in efficiency, because it can be done without increasing employment costs,” expressed the IAST Head.
He said, too, “Our current level of wastage is still too high for my liking – we record on average almost 14% losses of raw materials during manufacturing. This is due in main to the fact that the plant is only operated for 8 hour shifts.
“We are currently experimenting with 16-hour operational periods, over two shifts. This approach provides drastic reductions in wastage as the plant is then operational over a longer period of time at steady state conditions.
“We shall also be introducing a new SKU in 2019 – based on consumer feedback, many children have been requesting a sweeter version of the cereal.”
Professor Narine said that this has already been developed and will be released under differentiated packaging but still under the Morning Glory brand. As IAST owns and operate the facility, Professor Narine said that the facility benefits from the significant scientific expertise at the IAST.
He said, too, that the IAST scientists are also hard at work developing a rice and purple sweet potato based form of “baby puffs” which is a nutritional snack that enjoys significant market share in Guyana and the Caribbean.
“We believe that the plant is ideally suited to also manufacture this type of product and that we can offer the marketplace a price, nutrition, taste and texture competitive alternative to that currently imported.
Speaking to the most rewarding aspect of being involved with this project, Dr. Narine said, “For me, it is the demonstration that Guyanese can produce safe, nutritious, attractively packaged, consistently high quality value added food products that compete with the best in the business.
“It is a constant source of sadness and frustration for me to see products imported into this country which we can produce right here, value add right here and both consume right here and export….”
He added, “Our people are not afflicted by some sort of lethargy or incompetence gene – we can compete with the best in the world. However, it takes projects like these to sometimes provide us the confidence that we can do so.
“This project is for me a flagship project in demonstrating Guyanese ability, because its entire life cycle is local. And the product itself is manufactured from 99.5% locally sourced ingredients…”
Dr. Narine said that there is not a single foreign consultant involved in this project. He noted that it is staffed almost entirely from staff coming from the Essequibo Coast and from the IAST. In fact, the facility employs 18 people from the Essequibo Coast currently and this could grow in 2019 to between 30 per cent and 35 percent.
He said, “When we have fully penetrated the market and can run three shifts, this can grow to 200 people employed. I believe that the production of Safe and Nutritious Food will be our sustainable source of competitive advantage in the future, not petroleum. So this project for me is much more than cereal.”
Going forward, Professor Narine said that a continued and expanded focus on the utilization of local products in state entities or state funded projects is vitally important.
He said, “I am rather upset that despite our best efforts, we have not been able to supply the Guyana Defence Force with cereal, nor the Guyana Prison Service nor the Georgetown Hospital. For sure, we will be redoubling our efforts to do so in 2019. But it would help if state agencies and organizations, which benefit from state subventions, are mandated to utilize local products.”
Professor Narine continued, “Now, obviously, those local products should meet the nutritional, safety and relevant standards and protocols and must be price competitive. But I cannot understand how in this day and age we can condone the use of for example wheat flour based products which in many cases are nutritionally poor compared to products such as Morning Glory cereal in state agencies.”
“If we are so foreign minded that we cannot consume our own products, we only have to look to our Caribbean neighbours to understand our fate: the English speaking Caribbean imports more than US$4.5 billion annually in food.”
The IAST head said he is making just one, recommendation: start at home, start not only consuming local products, but start to demand that those products are competitive in quality, nutrition, packaging and cost. And all boats shall rise, he concluded.

 

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