5 Sept 2017
Manila Food Show: Sourcing Companies Upbeat, but Suppliers Wary
At the packed IFEX Philippines expo, many overseas companies were optimistic as to the potential of the country's food exports, while would-be suppliers to the local market remained notably cautious with regard to consumer preferences.
Given the booming local economy and the steady demand from developed economies for ethical and artisanal products, it was perhaps no surprise that this year's IFEX Philippines expo was quite so well attended. Billing itself as Asia's Ethnic Food and Ingredients Show, the event attracted a large number of the Philippine's smaller producers, all keen to expand their domestic and overseas client base, as well as a number of foreign companies looking for opportunities in the local market.
One of the most commanding presences at the show came courtesy of North Ridge Foods, a Quezon City-based import-export business. Technically a consolidator of Filipino products and an international marketing company, North Ridge primarily exports Filipino grocery products to North America and the Middle East, although it has, more recently, also turned its attention to Singapore and Hong Kong.
Explaining the company's operational strategy, Senior Executive Drew Alianan said: "While most exporters typically regard their involvement as ending as soon as they get their client's products abroad, we are somewhat different. We also represent any brand or company we work for in their actual export territories, marketing their products and ensuring the use of the most appropriate retail channels. We work with our clients throughout the whole process, from end to end.
"At present, we're seeing something of resurgence of interest in Filipino products. This is not coming solely from overseas Filipino communities, but also from mainstream consumers. People in general now seem more curious about products they are unfamiliar with. It's no longer just all about burgers, fries or Chinese food.
"We find that people are actually looking out for Filipino foods and snacks. Many Americans, for instance, are now trying out Halo-Halo, a popular Filipino desert, and when Anthony Bourdain [a popular US TV chef] featured Filipino food on one of his shows, we had a notable surge in sales."
Another company looking to the export markets was My Philippines Lifestyle, a Quezon City clothing brand that is a comparative newcomer to the beverages industry. Outlining why the company had moved into this highly competitive sector, Director Patrick Dy said: "Traditionally, our company has focused on the manufacture and sale of T-shirts, souvenir shirts and other products inspired by Philippines culture. We also have a line in hardwood handicrafts, all designed and manufactured by local designers and craftsmen.
"A few years ago, though, we decided to launch Nyogi Pure Coconut Water, a range of high quality, locally sourced and artificial-additive-free drinks. This has seen us go into competition with a number of very large food companies, including Vita Coco, a local business and the world's largest supplier of coconut water products. Despite that, we have still found that there is a niche in the market for a high quality, natural brand."
Another business looking to find success with a coconut-based product was Makati-based Niyog, an artisanal producer of non-dairy organic yoghurts. Majoring on the health benefits of his company's range, Chief Operating Officer Ravi Singh said: "As I was originally a doctor of natural medicine, I wanted to provide my Filipino customers with something that would improve their health. After considering a number of ideas, I came up with a non-dairy yoghurt that used coconut as its base.
"It took a while to get the taste right but, as I originally come from India, I knew just what a good yoghurt should taste like. I started selling the product in Makati last year and sales have grown every week. As a result, I can see that the local market for healthy lifestyle products has huge potential."
In terms of the more established beverages sectors, the companies behind several of the local artisanal coffee brands on show at the event were all keen to find overseas buyers/distributors. In particular, many of them were hoping to capitalise on the growing international interest in ethically produced products, as promoted by such organisations as Fairtrade International, the Germany-headquartered champions of sustainable development.
One such company at the event, Coffee for Peace, had a particularly interesting backstory, an asset likely to play well with consumers in the more developed economies. Explaining the unusual origins of his business, Founder and Chief Executive Joji Pantoja said: "It all goes back to when I was working as a government peace worker. At the time, I was involved in negotiating a settlement on Mindanao, a Filipino island that was at the centre of a lot of conflict.
"During the peace talks, I was struck by just how good the local coffee was, to the extent that I sent a sample to a Canadian friend of mine who worked in the coffee industry. His view was that it was of a very high grade and he even placed an order to buy his own supply.
"From there, we gradually began to set up the business. We started off by buying from local famers, while also providing the kind of help and expertise that allowed them to maintain a consistently high standard and increase production to a level that could meet commercial demand. In the first year, we produced five tons, but we got it up to 20 tons last year.
"One of the benefits of this is that people in the region have been able to earn enough money to genuinely improve their quality of life. They are now able to send their children to school, eat three times a day and have a proper family life. It really has helped in reducing tension across Mindanao.
"We are now looking to use the same model to help defuse the situation in Cordillera, a region that has faced similar problems. In order to dissuade the people there from taking up arms again, they need an alternative way to earn money."
Perhaps less praiseworthy, but potentially more profitable, was Haladeen, a Singapore-based online marketplace specialising in the sale of halal goods. The company had made the trip to Manila largely to identify new products suitable for its digital platform.
Outlining the fit between the platform and Philippines-based producers, Sam Mahmood, Haladeen's Business Development Manager, said: "Basically, we provide good-quality halal brands for our customers, something we have been doing for five years now. At present, we offer a range of more than 5,000 such products.
"In the Philippines, while they have a wide selection of good quality halal products, many producers don't know how to sell them internationally in a cost-effective fashion. Many of them still believe they have to open a store or find a distributor, all of which can become very expensive. In today's digital world, online marketplaces such as Haladeen provide producers with a direct channel, allowing them to sell their product in a far more economical and efficient way."
While Haladeen typified the bullish approach of many companies looking to source from the Philippines, many of the overseas companies looking to sell into the local market were notably less confident. Thailand's Fancy Rice Intertrade was primarily attending the show in the hope of recruiting new agents to help with its push into the country.
Expanding upon the challenges and the opportunities represented by the market, a Sales Representative for the company said: "With the country having recently relaxed its restrictions on imported rice, this should be a prime territory for us. Filipinos are familiar with Thai rice and seem to love its taste.
"We also sell red, brown and black rice, but there has been little interest. Overall, the European markets are far more open to the healthier varieties of rice than many of the Asian countries."
Another organisation struggling to tempt local taste buds was the Korea Agro-Trade Center Hanoi, a Vietnam-based state-run body set up to help Korean businesses sell their food products overseas. Outlining the organisation's strategy for accessing the Filipino market, Deputy Director Kim Hyouk said: "We are here to gauge the attitudes of local consumers. At the moment, it is a market that is growing very slowly for us. There is relatively little demand for Korean food products, partly because there is not a great deal of awareness of what we offer.
"With that in mind, we are not just targeting Filipinos. Instead, we are looking to appeal to the many Japanese, Chinese and European tourists that come here every year. Interest in healthy eating is increasing across the world, so we have high hopes for the future sales of Korean Ginseng in particular."
Another company taking a decidedly cautious approach to the Filipino market was Black River, a Hong Kong-based business that distributes French and Spanish food and drink products across Asia. Explaining his somewhat wary view of local consumers, Federico Vilela, the company's Managing Director, said: "The market here is still very focused on fast food. Despite that, the country has a considerable Spanish heritage, enough to make us hope that Spanish wine and Spanish ham will ultimately take off here.
"One big drawback for us is that the import regulations here are very strict, especially with regard to wine, as each individual producer has to be registered before we can introduce their products to the market, a process that can take up to six months. At the same time, the country's import tariffs are also notoriously high."
IFEX Philippines 2017 was held from 19-21 May at Manila's World Trade Center.
Marilyn Balcita, Special Correspondent, Manila