"What we are proposing to do for Mindanao banana chip exporters is similar to what Norway did for its popular Norwegian Salmon. Norway created a standard for its salmon exporters and branded it as such for all its shipments worldwide. It created a market for its product because having different salmon products with a Norwegian Salmon stamp distinguished them from other producers and at the same time established its brand as something to be reckoned with," said Agnes G. Luz, export market development team leader of Growth with Equity in Mindanao 2 (GEM 2).
The USAID-funded (United States Agency for International Development) GEM 2 extends technical, capacity building and marketing assistance to various groups such as farm producers that seek to establish markets overseas.
Luz whose team conducted a market study on banana chips exports said prospects are bright for the Philippine banana chips sector.
The study shows that the global market for processed fruit such as banana chips has grown into a billion-dollar market as consumers worldwide are leaning towards more healthy food.
Thus, global sales for more natural and organic food is expected to reach $100 billion in 2008 with major markets for premium-priced organic products such as European Union members Germany, the United Kingdom and France, US and Canada, Japan, Singapore and China, projected to grow at a clip of 20 to 30 percent annually.
On the other hand, the Philippines has over the years, been developing its banana chips industry..Its raw material for banana chips is the cardava or plantain banana variety which is processed in various product forms such as fried, dried, vacuum fried and vacuum freeze dried chips and as ingredient for breakfast cereals and trail mixes.
Majority of the country’s production comes from Mindanao, accounting for 90 percent of output. There are about 15 major companies in the region with average production capacity of 580 metric tons per day.
Industry data show that the country’s annual banana chips exports averages close to $80 million with the biggest shipments going to the US, Taiwan, Hong Kong and mainland China.
In recent years though, China has emerged as one of the fastest growing markets, which is why GEM 2 is assisting producers to improve the quality of banana chip exports to China.
"It is worth noting that in major cities in China, Philippine banana chips are considered better in quality compared with banana chips from Thailand, the other major source of banana chips. Our chips are more acceptable because of their appearance, moderate sweetness and the breakage is good," said Luz.
GEM 2 has been urging local producers of banana chips to capitalize on the good reputation of Philippine banana chips.
"To really capitalize on this some manufacturers and repackers indicate Philippines on the packaging. We should take that to a higher level with producers banding together and coming up with a distinct Mindanao Philippines brand."
"Exporters have to increase their bargaining power by coming up with one brand, they should stop competing against each other and market their product as a Philippine product. Since it is preferred by the market, they can dictate better prices, improve their profitability and even reduce their cost through joint marketing,"stressed Luz.
To further establish the Philippines, particularly Mindanao as the primary producer of banana chips, GEM 2 is also encouraging producers and exporters to intensify measures to have their product acquire international food safety standards.
Moreover, production of cardava banana should be increased to keep pace with intensified efforts by Thailand to raise its volume of exports.
Industry players earlier warned that Thailand is bent on wresting the Philippines’ dominance in the lucrative banana chip exports market, with its government extending strong financial and technical support to its farmers.
In contrast, small Filipino banana farmers, chips processors and exporters are struggling to cope with various concerns, including cutthroat competition to inadequate credit access and lack of cost-efficient technology.
"These are valid concerns which we hope we could help exporters address by assisting them to organize themselves so that a concrete plan of action could be carried out," said Luz.