Here’s Why The Caribbean Will Lose Out on The Cannabis Opportunity

THE STAR BUSINESSWEEK JANUARY 11, 2020

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HERE’S WHY THE CARIBBEAN WILL LOSE OUT ON THE CANNABIS OPPORTUNITY The debate surrounding product labelling is one that illustrates the tension between global trends and national approaches. For Caribbean nations seeking to future-proof their economies and capitalise on growing industries, the problems may be global but the solutions must be local.

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Travel Trends to Watch in 2020: Industry leaders share their predictions When it comes to predicting the next big thing in the ever-changing tourism industry, traveller data can give destinations a useful heads-up. And knowing what’s coming is vital for the Caribbean which is the most tourismreliant region in the world.

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BY ED KENNEDY, STAR BUSINESSWEEK CORRESPONDENT

Preparing for the Digital Workplace As the Caribbean looks ahead to what’s in store for 2020, stakeholders are realising that saying goodbye to one decade means preparing for the next.

More than half of today’s primary school pupils will grow up to take jobs that don’t exist yet.

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Cannabis exports could be the next battleground of the product labelling debate

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TRAVEL TRENDS

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TRAVEL TRENDS TO WATCH IN 2020: Industry leaders share their predictions

BY CATHERINE MORRIS, STAR BUSINESSWEEK CORRESPONDENT

Booking.com predicts that 2020 will be a year of exploration (Photo courtesy Booking.com)

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hen it comes to predicting the next big thing in the ever-changing tourism industry, traveller data can give destinations a useful headsup. And knowing what’s coming is vital for the Caribbean which is the most tourism-reliant region in the world. Understanding the market can help islands dominate that market, and the latest research from travel giants Expedia and Booking.com gives valuable insight on the fastest growing destinations, traveller needs and who will be the movers in the market in 2020.

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DESTINATIONS IN DEMAND Unfortunately the Caribbean doesn’t make an appearance on Expedia’s list of top ten destinations for 2020. Spain, Canada and Peru take the top three slots, based on their growth throughout 2019, and the remainder is rounded out

by European hotspots such as Italy and Portugal, alongside more adventurous picks like Brazil, India and Japan.

And, while beach vacations show no sign of a slowdown, the Caribbean risks missing out, thanks to rising competitors the United Arab Emitrates which saw a whopping 255 per cent increase in hotel bookings last year, the Philippines which experienced 250 per cent growth and Italy which enjoyed a 130 per cent boost.

It’s not entirely bad news for the Caribbean, however, according to the Expedia Travel Trends 2020 report which states: “The data proves the Caribbean remains a go-to destination for Americans in search of a warm beach vacation closer to home.”

Expedia tracked hotel demand in the region in 2019 and found that Philipsburg in Sint Maarten came out on top with a 215 per cent jump in demand. Rounding out the top three were Black Rock in Trinidad and Tobago and Falmouth in Jamaica with the former seeing a 170 per cent increase in bookings and the latter 150 per cent. Saint Lucia made the list of top ten Caribbean destinations in 2019, with a 100 per cent increase in demand for the Soufriere area securing it in sixth place.

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CRAFT BEER MARKET

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THE CARIBBEAN’S BREWING CRAFT BEER INDUSTRY

BY ED KENNEDY, STAR BUSINESSWEEK CORRESPONDENT

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hroughout the 2010s the beer industry saw a surge of consumers increasingly preferring craft beer over established alternatives. By 2025 the craft beer industry is predicted to command US$ 186.59bn annually around the world. Consumers are championing breweries that offer a point of difference in their product, and enterprising beer aficionados happy to provide it. As a result, the Caribbean can contemplate a landscape where the existing craft beer industry is not only here to stay, but well-placed to grow in future. So what does this mean for fans of new beer and new businesses alike?

CRAFTING A CARIBBEAN BEER IDENTITY As a region most famous for its rum, the Caribbean won’t be outpacing Bavaria any time soon as a beer epicentre. Nonetheless, recent years have seen the craft beer identity of the region grow strongly, and in unique ways.

As well as individual success stories like West Indies Pale Ale in St Vincent and the Grenadines, Puerto Rico has emerged as a craft beer capital of the Americas with businesses like Ocean Lab Brewing Co and Zurc Brauhaus winning acclaim on the island and beyond.

Notably, the rapid growth of its craft beer industry has also seen established major breweries – the Puerto Rican equivalents for Saint Lucia’s Piton or Jamaica’s Red Stripe – up their game in providing new brews in response to changing market demand.

For Puerto Ricans this may well be a fantastic turn of events but, in the wider context, the truth is more complicated. In order to understand the significance of Puerto Rico’s story, and what it shows about the future of the Caribbean craft industry, first it’s essential to grasp

This is also a region where the combination of beer and rum could be better built in a bold and distinctive way. Many who have perhaps mixed this combo poorly at Gros Islet’s Friday Night Street Party may wince at them coming together but there already exist brands out there, like Untold, that are combining this alluring mix into one drink, and making it available for sale locally and globally.

Today England is known for its stouts, Germany for its wheat beer; tomorrow the Caribbean could be known for its world-leading craft beer and rum combinations. But achieving this first requires recognition of what beer makers are most likely to cement into such a distinctive identity.

Piton beer, brewed by Windward & Leeward Brewery Ltd (owned by Heineken), is an example of a highly popular local beer with vastly unrealised global appeal

the state of the craft beer industry globally.

THE MARKET IN-DEPTH Though the branding of many craft beer breweries places emphasis upon being local, the growth of the industry as a whole is borderless and global. Data also shows the industry’s capacity to deliver surprising trends.

Within the US domestic market, the most famous craft beer breweries, such as Sierra Nevada, are commonly found out west, within California and Oregon.

However, the north-east state of Vermont claims the title of the nation’s craft beer capital, with 11.5 breweries per 100,000 people (over the legal drinking age of 21).

The story of Sierra Nevada evidences the scale of success a craft brewery can have, with the humble beginnings of the brand now a distant memory as the company is held to have a value of over US$ 1bn and has also achieved the notable feat of being the first publicly traded craft beer business.

The US is currently the biggest craft beer market but the future of the export industry is considered to be in Asia, given the region’s unmatchable capacity for

blockbuster growth. Smaller regional nations, like Australia and New Zealand, have looked to leverage their ‘clean and green’ agricultural image in exporting into Asia craft beer produced with an emphasis on pure and high quality ingredients. In doing so they have blazed a path for other countries in other regions, seeking to capitalise upon the craft beer revolution.

THE BUSINESS OF BREWERIES Craft beer breweries can become a major local attraction, given the beer is locally made. Yet, for Caribbean breweries the greatest opportunity comes not by seeking to compete with a brewery in a mega city like New York or LA, but by exporting a local offering into such a huge market.

There is a terrific opportunity here for the Caribbean. The region’s brewers do not need to define a whole new identity when it comes to local beers, but simply build upon the existing one. This is not a region where a heavy stout or hearty wheat beer has a natural home but it’s the perfect place for fresh and vibrant beers – those with light colours and citrus and floral notes that encapsulate the vibrancy of the Caribbean climate and the many cultures that live among it.

THE FUTURE FOR CRAFT BEER IN THE CARIBBEAN The aforementioned Puerto Rican experience is indicative. While it sounds good in theory for established businesses to respond to the craft’s rise by concocting new brews of their own, the global experience shows this can be a challenge for consumers.

In response to growing competition, many major beer brands will look to tap into the craft beer market by putting out a new brew with a ‘local’ name and passing it off as a craft creation when, in fact, it is being made at the same distillery as all their other major brands.

For Caribbean craft beer enthusiasts who seek to develop and promote the region’s best brews, retaining their genuine links to the craft industry remains a key challenge as the established players seek to consolidate their market share. This is especially so for those who would one day like to see local beer desired abroad in the same way as the region’s rum.

Recent years have seen Caribbean rum going through a renaissance, with demand surging globally. Undoubtedly a healthy Caribbean craft beer industry must be one where there are true craft brands and not simply just major SBW producers masquerading as such.

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TESTING

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HERE’S WHY THE CARIBBEAN WILL LOSE OUT ON THE CANNABIS OPPORTUNITY Continued from page 1

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his applies to all industries but especially to the cannabis industry which is set to grow strongly around the world, and which Caribbean nations may

miss out on.

Here’s what must be understood about the current labelling challenges and what local nations will need to contend with in the near term when it comes to considering their cannabis future.

THE INGREDIENTS OF THE ISSUE Around the world recent years have seen strong international movements that push for universal standards on certain products. Arguably most prominent among these has been the efforts to implement plain packaging on (tobacco) cigarettes, with advocates maintaining there should be a ban on unique branding that seeks to make cigarette smoking seem glamorous or otherwise attractive.

Similar movements have also sought to introduce restrictive labelling and warnings on alcohol, and even soft drinks, the reasoning being that the risk of health issues, such as diabetes, due to excess consumption, justify it; albeit with less success.

Then there has been the prominent case of Monsanto’s Roundup, the herbicide banned in many countries around the world but still available in the Caribbean. For better or worse, Roundup is an example of the inconsistency of standards from one nation to the next.

Governments that want to grow industry need to recognise they have a dual role to play in the market. They need to build a reputation for clear and consistent labelling for consumers, and for businesses they need to reduce the cost and time it takes to clear the hurdles of labelling requirements.

DEFINING THE DEFINITIONS Striking the balance when it comes to proper labelling isn’t easy. It can also be subjective, whereby what one person deems ‘nanny state’ interventionism, others regard as necessary action to help combat society-wide threats such as obesity and cancer that can not only hamper individual lives but collectively strain the national health budget. It can be especially difficult when existing products clash with new standards.

In the United States the FDA faced criticism for allowing businesses to advertise their products as ‘light’ if they had used the term in the past, before the new regulations came into effect, even if the product would no longer be regarded as light under the new FDA dietary standards. Locally, CARICOM’s recent efforts have been far more sensical.

Before its 39th Regular Meeting in July

Banned in 2019 by countries around the world, Roundup is the brand name of a glyphosate-based herbicide originally produced by Monsanto (now Bayer).

The company is currently facing over 11,000 lawsuits that link its product to increased cancer rates in humans. Despite this, Roundup is still stocked and promoted by retailers all over the Caribbean, including in Saint Lucia

2018, CARICOM’s heads of government listed Front of Package labelling as one of its six priorities.

The vision underwriting this goal is to provide consumers with simple and unambiguous information on packaged products, enabling them to make easier purchasing decisions about healthy products. When it comes to current labelling standards, Caribbean nations must reflect not only on existing products and those purchased in-country, but also local products set to have an international market in the years ahead.

THE CANNABIS CONSIDERATIONS Whether one loves or loathes it, many governments around the world have moved, or are moving, to legalise the recreational use of cannabis. Certain aspects of cannabis face change for it to become legal – from where it is grown, to the purity of the product, to the ability of sellers to openly offer it for sale in public – but legalisation also creates a raft of new regulations and requirements for those involved in the business of cannabis.

This is one area where the lack of consistent labelling across the region could come back to hurt Caribbean nations. Other countries, such as Canada, have loosened the laws for recreational cannabis use, but with an accompanying strict regulatory regime when it comes to packaging and labelling of the product.

As well as common prohibitions on advertising any false or misleading claims,

there are prohibitions on marketing the product in a way that could be seen as appealing to children, or advertising with a testimonial or endorsement included.

As a result of these strict regulatory controls, Canada has not only provided clarity and certainty to its domestic industry, but also set the stage for its cannabis export industry to grow in the years ahead. There is little doubt that the global industry is set to grow but it’s highly questionable whether Caribbean nations will be in a position to capitalise on it – at least before it becomes too late to establish a strong market presence amid other established nations.

Presently many countries are still

Governments that want to grow industry need to recognise they have a dual role to play in the market. They need to build a reputation for clear and consistent labelling for consumers, and for businesses they need to reduce the cost and time it takes to clear the hurdles of labelling requirements

in the earliest years of a pro-cannabis policy, and many are still seeking to form the foundations of their own domestic industry, with the notion of serving as a market exporter an enticing but distant goal. Nonetheless, those that already have a strong regulatory regime for labelling will have a far easier path to capitalising on strong demand as exporters, compared to those that do not.

Even if nations like Canada achieve substantial consolidation within the industry, cannabis is ultimately an agricultural product. Thus, the current challenge for the Caribbean in reconciling any future ambitions with current regulatory shortcomings means that not only would aspiring cannabis businesses stand to suffer if labelling reforms are not pursued, but also the wider agricultural industry, from one Caribbean nation to the next.

THE FUTURE OF STANDARDS The goals of building a strong labelling regime and making the process more efficient are not mutually exclusive. They are goals that will increasingly be driven by necessity as the world becomes more economically borderless. Nations that are economic powerhouses will have the ability to undercut less developed countries and consolidate the market if the smaller nations do not make use of their capacity to pursue and cement new standards faster, by virtue of their relatively reduced size of government, bureaucracy and industry.

HUMAN CAPITAL

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PREPARING FOR THE DIGITAL WORKPLACE

BY CATHERINE MORRIS, STAR BUSINESSWEEK CORRESPONDENT

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s the Caribbean looks ahead to what’s in store for 2020, stakeholders are realising that saying goodbye to one decade means preparing for the next. More than half of today’s primary school pupils will grow up to take jobs that don’t exist yet. So how do you equip the Caribbean labour force for the unknown technological advances of the future? Through sweeping education reform that gives kids the tools and knowhow to succeed in areas such as software development, data analytics, machine learning, e-commerce and social media.

TRANSFORMATION “Our world is beginning to embrace the fourth industrial revolution which is moving at an unprecedented and unrelenting speed. Its impact is farreaching. It is driving tectonic changes in our labour markets,” said Dr. Warren Smith, President of the Caribbean Development Bank, recently.

For the Caribbean, technology can be a double-edged sword, taking away the routine jobs that have traditionally benefitted developing countries but also providing more opportunities for new, higher-paying work. According to a 2019 report from the World Bank Group, technology is affecting the future of work in several key ways. As digitalisation increases, the boundaries are blurring and firms are making more use of the global marketplace – using online platforms to sell to, and trade with, international partners. It is also reshaping the skills and qualifications needed from employees, according to the research which states: “The demand for less advanced skills that can be replaced by technology is declining. At the same time, the demand for advanced cognitive skills, sociobehavioral skills, and skill combinations associated with greater adaptability is rising.”

The answer, suggests the World Bank, lies in investing in human capital at every level, from childhood development to adult re-training and continuing education.

EDUCATION REFORM Human capital will always be a country’s most valuable asset but realising the potential of that asset now requires lifelong learning and significant public investment in infrastructure and education. And that means a change in the way the Caribbean approaches its schooling system. According to Dr. Smith: “[There is] an urgent need for an education strategy focused on training and retraining of the labour force to meet new job market requirements. We have been talking about it forever. We must change what, how, and when people learn.”

Prime Minister Allen Chastanet, Minister for Education Dr Gale Rigobert and Permanent Secretary of Youth and Sports Mr. Benson Emile hosted a December luncheon with the new executive of the National Students Council (Photo courtesy Office of the Prime Minister)

The first and most basic criteria for modern learning is affordable access to the internet and tools such as mobile devices and online platforms. App designers, software engineers, data analysts, e-commerce experts and machine learning specialists – these are the jobs of the future and only those familiar with cutting-edge tech will satisfy tomorrow’s employers.

“These jobs will generally require an education with a high science, technology, engineering and mathematics content, an area with traditionally low enrolment in the Caribbean,” said Dr. Smith. “Strategic reforms are required to bring about radical shifts in human resource development and training.

Policymakers, educators and the private sector must forge alliances to secure a match between labour market needs, curriculum development, training and skills availability.”

Alongside the need for specialised skills, soft skills such as effective decision-making, problem-solving, the ability to collaborate and communicate, and commitment to a task will always be important in the workplace. According to the World Bank Group, demand is rising for advanced cognitive skills, sociobehavioural skills and skills associated with adaptability. These soft skills are best incorporated into early childhood development, building mental capacity at the very start of a child’s educational journey.

And it’s not just early learners who can benefit from educational reform; adult training is also important as the

Caribbean labour force adjusts to new demands and new careers. Those seeking to re-skill and move into new and emerging sectors need the right support if they are to succeed and create yet more economic opportunities for others. In Latin America and the Caribbean only 19 per cent of total government investment in education goes to tertiary learning, according to the World Bank, and just under half of the region’s working age adults (those aged between 15 and 64) have low reading proficiency.

Adult learning programmes have had mixed success in the region for a number of reasons. Firstly, adult brains learn differently and this is often not reflected in the structure of courses on offer.

Another major factor is time constraints.

It is difficult to plan learning around the demands and responsibilities of adult life and, even if training opportunities are maximised, it can be a while before the benefits are felt in terms of career progression.

STRATEGIES AND PLANS The Caribbean Development Bank (CDB) has said it is eager to release funds to help borrowing member countries pursue education reform and “mainstream this new technological approach to education”.

Efforts are already underway. In 2016 the CDB approved just under US $24mn in financing for Saint Lucia’s Ministry of Education to improve the “quality, equity, efficiency and effectiveness of the education system”. The funds are being used to refit schools, strengthen management and help ‘diverse learners’.

On average, OECS countries spend over 17 per cent of their national budget on education, or 5-7 per cent of GDP, according to the Global Partnership for Education which helped devise a 20122021 education sector plan for Dominica, Grenada, Saint Lucia and St Vincent and the Grenadines. This operates in addition to Saint Lucia’s own Education Sector Development Plan which is designed to run until next year.

In November the OECS launched ‘ProjectConnect’, an initiative which aims to provide all primary and secondary schools in the Eastern Caribbean with internet connectivity.

The OECS Education Development Management Unit is set to meet with OECS governments in early 2020 for a conference that will develop a roadmap for getting all schools in the sub-region online.

The outcome of all these plans and sector strategies has yet to be seen, but there are signs of encouraging change in Saint Lucia. The prime minister met with Saint Lucia’s National Students Council in December to discuss better integration of technology into the national curriculum, and construction recently began on an early childhood development centre in Gros Islet, funded by the CDB. In addition, the government has committed EC$ 2.5mn to the ICT Integration Project which promotes digital literacy, with the prime minister commenting: “Our education system has become unresponsive to our national development goals. It is a situation on which we must act now if we are to move our nation forward.”

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TRAVEL TRENDS TO WATCH IN 2020: Industry leaders share their predictions Continued from page 2

The older generation will travel more this year, according to industry research (Photo courtesy pixabay.com)

EXPERIENCES AND EXPLORATION “American travellers took the road less travelled in 2019,” according to Expedia, and this need for more dramatic, engaging and off-the-beaten track travel looks set to continue into 2020. Waterfalls in particular proved a big hit last year, pushing Canada’s Niagara Falls and Kaieteur Falls in Guyana into the mostvisited category. The Kaieteur Falls alone increased flight demand to Georgetown, Guyana by 30 per cent.

Excitement is clearly a top priority for travellers, judging by the top-selling activities on Expedia in 2019. These included old favourites such as Universal Studios in Florida and the San Diego Zoo alongside newer entries including a robot restaurant show in Japan and the Mayan site Chichen Itza in Mexico.

“As we enter not just a new year but a

new decade, travel needs, behaviours and wants continue to evolve,” according to Booking.com which predicts that “2020 will be a year of exploration like never before, fueled by technology as well as a growing sense of responsibility and deeper connection with people and places”.

It’s the latter that will be the biggest trend with which tourism has to contend, according to the global booking engine which found that 54 per cent of travellers surveyed by the site wanted to play a part in reducing over-tourism. This will lead to ‘second city travel’, ie exploring lesserknown destinations to reduce travellers’ environmental and social footprints.

Analysts at Booking.com predict that technology will play its part in this niche, with Artificial Intelligence suggesting unfamiliar destinations and helping tourists plan their trip based on their

preferences and previous vacations.

More than half of Booking.com’s users want tech to “offer them a wildcard and surprise options that would introduce them to something entirely new”.

Time will be a factor for travellers in the new year, according to Booking. com which says travellers want to enjoy the journey just as much as the arrival – taking their time and choosing more inventive ways of travel

PERFECT TIMING Time will be a factor for travellers in the new year, according to Booking. com which says travellers want to enjoy the journey just as much as the arrival – taking their time and choosing more inventive ways of travel. 64 per cent said they would be interested in taking a historical train journey such as the Orient Express and 56 per cent wouldn’t mind making longer trips if more unique forms of transportation were on offer.

In the Caribbean this could translate into inter-island sailing excursions on historic sloops or jetting about via seaplane, both of which would allow travellers a unique way to take in the scenery and leisurely see more of what the region has to offer.

While passengers might not mind slowing down for the journey, they are well aware of time constraints once they get to their destination, leading to a surge in ‘all-amusive’ bookings which Booking.com defines as “destinations that offer an array of enriching experiences and attractions”.

Tourists want it all, from nature to nightclubs, and they want it to be nearby and accessible. Montevideo is the top performer in this category, according to Booking.com which also lists Naha in Japan as a popular ‘all-amusive’ choice.

Time is also a priority for 2020’s hottest travellers, grandparents. Booking.com predicts that the older generation will be the ones dominating the sector next year as they seek to take memorable vacations with their grandchildren. 75 per cent of grandparents surveyed by the site believe that vacations are one of the best ways for generations to spend time together. This rising demand, coupled with the fact that today’s elderly are generally healthier, more active and more adventurous, makes grandparents a market to watch.

Retirees are also becoming a force to be reckoned with as the retirement years are now viewed as opportunities to travel and fulfil long-held travel wishes. According to Booking.com, 65 per cent of global travellers believe that travel is the perfect way to spend their golden years and 47 per cent plan to be more adventurous in their travel choices once they retire.

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