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Qualitative Analysis

Qualitative Analysis

Quick Facts
  • Organic products continue to have a negligible presence in the Philippines’ market, with these products still perceived to be too expensive. At the same time, most consumers remain unaware or unconvinced of their benefits.
Market Trends
  • As the demand of healthier products surged in the Philippines market, manufacturers are increasingly developing new products across health and wellness packaged food and beverages category. Products focused on boosting immunity remained an area of focus along with other categories such as fortified functional dairy and naturally healthy fruit/vegetable juice. Manufacturers are highlighting the health benefits of existing categories to drive sales in the forecast period.
  • Value for money products with health benefits remained popular during the outbreak. For instance, Century Tuna Lite from Century Pacific Food Inc. Economic pressures will remain a barrier for more expensive health and wellness product lines such as organic. 
  • Better for you packaged food continued to struggle in recent years due to the disappearance of key brand Lady’s Choice Mayo Lite from retailer shelves – the brand had accounted for nearly half of all value sales of better for you packaged food before the Covid-19 outbreak.
Competitive Landscape
  • Sales of organic products in the Philippines remain negligible due to products being too expensive as well as a lack of awareness among consumers. As a result, demand for organic packaged food and beverages remain confined to high-income individuals and fitness enthusiasts. 
  • In major grocery retailers, organic brand options are usually limited. However, a selection of brands and products is generally available through health food stores, but the category remains a niche. Despite low interest in organic packaged food, Arla Organic Cream Cheese was introduced in 2021. This new product is said to be free from preservatives, GMOs, and artificial ingredients – it is among the few organic cream cheese options in the country.
Prospects And Growth Opportunity
  • Better for you beverages are expected to grow in the forecast period as the economy of the Philippines recovers from the impact of Covid-19. Both Coca-Cola and Pepsi account for nearly all the sales of better for you beverages, and they look further to target the increasingly health-conscious consumer base with new product development. It is expected that both the players will increase their distribution and marketing efforts for better for you beverages. Coca-Cola Zero Sugar has witnessed a good amount of growth post reformulation, and other players in the market are expected to focus on the same to improve the taste. Pack size is another area where Coca-Cola has seen success, and it is likely to be replicated by other players. 
  • Consumers are increasingly looking to improve their health and wellbeing by reducing their sugar intake, thus reducing their chances of developing illnesses like diabetes. Producers of better for you beverages are expected to target this and will likely focus their marketing communications on the benefits of reducing sugar intake. This should be made somewhat easier by the fact that a growing number of local consumers are either overweight or obese, with this public health issue likely to receive increased government attention.
  • Better for you beverages’ distribution is dominated by modern grocery retailers, as traditional retailers have limited shelf space to dedicate, and the category remains a niche. Moreover, many consumers are unaware of the risks associated with high sugar and caffeine intake. Manufacturers may require more spending on marketing efforts, which is likely to drive the demand for reduced sugar and caffeine beverages. With growing awareness, traditional retailers could help support the growth of the category.
  • Covid-19 has led to a surge in e-commerce, with its retail value share increasing significantly in 2020 and 2021. E-commerce remained a suitable channel for bulk buying during the Covid-19 outbreak. As consumers continue to grow more comfortable shopping online, retailers are expected to increase their investment in the channel. The value share of e-commerce across health and wellness packaged food and beverages is likely to continue expanding during the forecast period.
General Health And Wellness Trends
  • Fortified/functional beverages will struggle to keep up growth in categories like juice drinks (up to 24% juice) and concentrates. Still, the category will continue to account for most sales of health and wellness beverages over the forecast period. However, demand for fortified/functional energy drinks and carbonates will continue to grow due to increased product development and marketing investment.
  • Naturally healthy beverages and better for you beverages are expected to see more substantial growth compared to fortified/functional beverages over the forecast period. The change is led by increased distribution in modern retailers, new product development and a broad range of variety in terms of packaging. 
  • Fortified/functional dairy is expected to drive health and wellness packaged food as constant new product development is likely to fuel demand. Also, the entry of Vietnam Dairy Products JSC (Vinamilk) in the market in 2021 is expected to shift the dynamics favourably. The company has a joint venture with Del Monte PH, and look forward to utilising its extensive distribution and technical know-how to capture the market share. Organic demand will remain sluggish due to high prices, limited distribution, and lack of consumer education regarding the benefits of these products.
General Economics And Demographic Landscape

Economy: 

  • Philippines Real GDP growth rebounded to 5.6% in 2021 and is forecast to accelerate to 7.1% in 2022. 
  • Private final consumption registered 4.2% growth in real terms in 2021, with a gain of 6.9% expected in 2022.
  • Inflation accelerated to 3.9% in 2021 and is projected to stand at 3.4% in 2022.

 

Population demographics: 

  • The population of the Philippines was 111.0 million in 2021. It is expected that the population will increase by 5.2% to reach 116.8 million in 2025.
  • The median age in the Philippines was recorded at 26.0 years in 2021, an increase of 3 years from 2010. 
  • The population over 65 years of age contributes 5.7% to the total population of the Philippines. The country had 29.6% of its total population under 14 years of age in the year 2021. 

 

Income & expenditure: 

  • The savings ratio in Philippines was 0.3% of disposable income in 2021, with the indicator is expected to remain the same in 2022.
  • Consumer expenditure per capita was recorded at US$2,595 in 2021, with the indicator expected to increase by 5.9% to reach US$2,748 in 2022. 
  • Disposable income per capita was US$2,686 in 2021. The indicator is expected to grow by 5.8% in 2022. For the period 2020-2030, disposable income is expected to increase by a cumulative value of 64.6% in real terms, recording an annual average rate of 5.1%.
Data

Data

Organic Packaged Food And Beverage Data

Data type

Unit

2018

2019

2020

2021

2022

2023

2024

2025

CAGR
(18-21)

CAGR
(22-25)

Health & wellness products consumption

USD million

5,146.9

5,385.3

5,538.8

5,765.5

5,927.1

6,113.3

6,308.9

6,508.0

3.9%

3.2%

Organic packaged food and beverages consumption

USD million

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

-

-

Organic packaged food consumption

USD million

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

-

-

Organic beverages consumption

USD million

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

-

-

Organic packaged food and beverages consumption as a % of total health & wellness products consumption

%

-

-

-

-

-

-

-

-

-

-

 

[1] Health and Wellness Definition: Health and wellness is the aggregation of organic packaged food and beverages, fortified/functional packaged food and beverages, naturally healthy packaged food and beverages, better for you packaged food and beverages and food intolerance products. The above definition and more can be referenced from the definitions table at the end of the report.

Economic And Demographic Data

Data type

Unit

2018

2019

2020

2021

2022

2023

2024

2025

Total population

million

106.7

108.1

109.6

111.0

112.5

114.0

115.4

116.8

% Middle and upper class of total population

%

27.8

28.0

28.1

28.2

28.2

28.3

28.4

28.4

% Population aged 65+

%

5.1

5.3

5.5

5.7

5.9

6.1

6.3

6.5

% Population aged 0-14

%

31.0

30.5

30.0

29.6

29.2

28.8

28.4

28.0

% Population with higher education degrees

%

29.5

29.6

29.6

29.7

29.7

29.8

29.8

29.8

Average number of children per household

children

1.6

1.6

1.5

1.5

1.5

1.4

1.4

1.4

GDP per capita

USD per capita

3476.6

3664.7

3323.2

3532.1

3733.8

3925.5

4116.8

4311.0

Consumer expenditure per capita (US$)

USD per capita

2443.9

2597.6

2417.3

2595.5

2748.0

2882.7

3022.2

3161.3

Consumer expenditure per capita on food and non-alcoholic beverages (US$)

USD per capita

1039.6

1094.9

1033.8

1110.9

1173.2

1229.4

1288.7

1347.1

 

Retailer And City Data

Top 5 Cities By Population

Data category

Rank

City/retailer

Population
(millions)

Top cities by population (2021)

1

Manila

28.8

Top cities by population (2021)

2

Cebu

3.1

Top cities by population (2021)

3

Davao City

2.8

Top cities by population (2021)

4

Cagayan de Oro

2.7

Top cities by population (2021)

5

Zamboanga City

1.5

 

Top 5 Grocery Retailers By Sales

Data category

Rank

City/retailer

Top grocery retailers by sales (2021)

1

SM Retail Inc

Top grocery retailers by sales (2021)

2

Puregold Price Club Inc

Top grocery retailers by sales (2021)

3

Robinsons Retail Holdings Inc

Top grocery retailers by sales (2021)

4

Seven & I Holdings Co Ltd

Top grocery retailers by sales (2021)

5

Metro Retail Stores Group

 

United States Department Of Agriculture Global Agricultural Trade System Data

Top 5 Export Commodities To Peru

Year

Country

Rank of
Product/Commodity

Product/Commodity

Export Value (US$)

2021

Philippines

1

Organic Vinegar and Substitutes

2,254,082

2021

Philippines

2

Organic Peach/Nectarine Fresh

99,444

2021

Philippines

3

Organic Apples Fresh

69,074

2021

Philippines

4

Organic Tomato Sauce Ex Ketchup

48,780

2021

Philippines

5

Organic Coffee Roast Not Decaf

41,145

2021

Philippines

Total

Total Organics*

2,530,504

2020

Philippines

1

Organic Vinegar and Substitutes

3,225,917

2020

Philippines

2

Organic Grapes Fresh

494,925

2020

Philippines

3

Organic Apples Fresh

117,614

2020

Philippines

4

Organic Cherry Tomato Fr/Ch

37,530

2020

Philippines

5

Organic Coffee Roast Not Decaf

36,842

2020

Philippines

Total

Total Organics*

3,990,810

2019

Philippines

1

Organic Vinegar and Substitutes

4,879,733

2019

Philippines

2

Organic Coffee Roast Not Decaf

297,636

2019

Philippines

3

Organic Apples Fresh

109,500

2019

Philippines

4

Organic Grapes Fresh

62,025

2019

Philippines

5

Organic Strawberries Fresh

58,540

2019

Philippines

Total

Total Organics*

5,465,089

2018

Philippines

1

Organic Vinegar and Substitutes

9,232,633

2018

Philippines

2

Organic Grapes Fresh

406,190

2018

Philippines

3

Organic Cult Blueberries Fresh

213,810

2018

Philippines

4

Organic Coffee Roast Not Decaf

164,584

2018

Philippines

5

Organic Strawberries Fresh

69,404

2018

Philippines

Total

Total Organics*

10,151,848

 

Note : Total organics is the sum of all exports in a particular year   

Definitions

Definitions

Term

Definition

Health and Wellness

Health and wellness is the aggregation of organic packaged food and beverages, fortified/functional packaged food and beverages, naturally healthy packaged food and beverages, better for you packaged food and beverages and food intolerance products.

Organic packaged foods and beverages

This category includes packaged food & beverages that are certified organic by an approved certification body. Organic production is based on:

• A system of farming that maintains and replenishes soil fertility without the use of toxic and persistent pesticides and fertilizers.
• Organic food & beverages are minimally processed without artificial ingredients, preservatives or irradiation.
• The use of GMOs (Genetically Modified Organism) is prohibited. “Certified Organic” means the item has been grown according to strict uniform standards that are verified by independent state or private organizations.
• Depending on the country, such products are called ‘organic’, ‘biological’ or ‘ecological’: For organic products to be included under Euromonitor definitions, the organic aspect needs to form part of positioning/marketing of the product. This is an aggregation of organic baby food, bakery, confectionery, dairy, ice cream, oils and fats, ready meals, rice, sauces, dressings and condiments, snack bars, soups, spreads, sweet and savory snacks and other organic food.

Note that fresh food products or individual ingredients are not included in this definition.

Compound annual growth rate (CAGR)

The compound annual growth rate (CAGR) is the average annual growth rate over a specified period of time. For instance, the CAGR consumption of from 2018 – 2021 will be the average growth rates across these three years.

USDA GATS data clarification

The data presented in table 2.4 represents the dollar values of the top 5 organic commodities as well as of the total organic exports of the trade partner for the period 2018-2021 as per the United States Department of Agriculture’s Global Agricultural Trade System, a database consisting of international agricultural, fish, forest and textile products trade statistics dating from the inception of the Harmonized coding system in 1989 to present.

Policy Information

Policy Information

Government Agency(s) / Competent Authority

Authorized Government Agency(s):

Philippine Department of Agriculture's Bureau of Agriculture and Fisheries Standards (BAFS)

Agency(s) Contact Information:

Department of Agriculture
Bureau of Agriculture and Fisheries Standards (BAFS)
BPI Compound,
Visayas Ave, Diliman,
Quezon City, Philippines
Phone: (632) 455-2858
Fax: (632) 920.6131
Email: bafpsorganic@gmail.com
BAFS Organic Services
National Organic Agriculture Program

Organic Regulations and/or Standards

Name(s) of Regulation and/or Standard:

July 2016: Updated Philippine National Organic Standards (PNS/BAFS 07:2016) 

Department of Agriculture circulars
June 27, 2016: Five circulars were published in the Philippine Star: 

Department Circular No. 2 Series of 2015: Guidelines for the conduct of Validation Process for the Registration of Organic Primary and Postharvest Food, Non-Food and Input Producers. Department Circular No. 3 Series of 2015: Rules and Regulations on the Registration of Primary and Postharvest Organic Food and Non-Food Products Department Circular No. 4 Series of 2015: Revised Guidelines on the Provision of Certification Subsidy Incentive for Organic Agriculture Entities/ Farmers and Organic Input Producers Department Circular No. 5 Series of 2015: Revised Rules and Regulations on the Registration of Organic Fertilizer Producers

 

Philippine National Organic Aquaculture Standards (PNS/BAFS 112:2016). Standards for organic aquaculture feeds are also in development.

August 2014: Updated Philippine National Standard (PNS/BAFPS 07:2014 - Organic Agriculture) replaces PNS/BAFPS 07:2003.

Republic Act 10068 or the Organic Agriculture Act of 2010 for the development and promotion of Philippine Organic Agriculture.
Implementing Rules and Regulations of Republic Act 10068

Philippine National Standard in organic agriculture (PNS/BAFPS 07:2003) (.pdf; in English)
Executive Order No. 481 Promotion and Development of Organic Agriculture in the Philippines establishes the National Organic Program (Scroll to find download; .pdf; in English)

  • Department Circular No. 5 Series of 2015: Revised Guidelines for the Official Accreditation of Organic Certifying Bodies (OCBs)

Date of Implementation: 2002

Regulation and/or Standard Scope:

The PNS is a mandatory regulation for sectors involved in the production and marketing of organic agriculture. The PNS covers sub-standards consisting of six parts, conversion to organic agriculture, crop production, processing, livestock, special products including mushrooms and honey, and labeling. Aquaculture standards are also available.

Certification and Accreditation

Certification:

International certifiers doing business in the country, whether as sole or in partnership with local certifiers, must first secure clearance from the BAFPS of the Department of Agriculture prior to any business transaction related to organic certification. List of accredited certifiers.

Accreditation Method:

Government

Accreditation:

BAFPS serves as the chair of the National Accreditation Committee which accredits certifying bodies as prescribe in the guidelines.

Additional Information

Reference Standards:

Harmonized with the IFOAM Basic Standards (IBS) and the Codex Alimentarius Standards for Organic Produce (CAC GL 32)

Additional Information:

USDA’s GAIN Report Philippines Exporter Guide (2021)
USDA’s GAIN Report Philippines Food Processing Ingredients (2021)
USDA's GAIN Report Philippines Retail Foods (2021)
USDA's GAIN Report Philippines Food Service - Hotel Restaurant Institutional (2021)
USDA's GAIN Report Shelf-Stable and Frozen Ready Meals Market Brief (2021)
USDA’s GAIN Report FAIRS Export Certificate Report Annual (2021)
USDA’s GAIN Report Food and Agricultural Import Regulations and Standards Export Certificate Report (2022)
USDA’s GAIN Report Food and Agricultural Import Regulations and Standards Country Report (2022)