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Fruit juice market awaits exporters

BY PAUL ICAMINA Filipino exporters have barely scratched the surface of a $500-million world market for fruit and vegetable juices. "In recent years, health and well-being have increasingly influenced consumer choices, specifically in the beverage industry," said Rowena Grace O. Rumbaoa of the University of the Philippines (UP) Diliman, adding Filipinos have not really tapped into the bigger potential market. "Juices, in particular, are getting advantage from consumer interest in the more natural options available," she said. "The Philippines being a tropical country has a competitive advantage from consumer interest in terms of availability of raw materials for processing," she said. "Fruits that stand out and with potential marketability include pineapple, mango, papaya and banana." Rumbaoa is one of the researchers at UPs Department of Food Science & Nutrition, College of Home Economics, who studied local juice and vegetable blends with a competitive edge in the lucrative international market. The Philippines, according to Rumbaoa, ranks 18th among the worlds leading exporters of fruit and vegetable juices led by the United States, The Netherlands, Germany, South Africa, Spain and France. The leading markets, she said, are France, Canada, Italy, United Kingdom, Botswana, United States, The Netherlands , Saudi Arabia, Oman and Russia. The Philippines sold about P4 million of fruit and vegetable juice mixtures in 2005, mainly to the U.S., Canada, South Korea, Trinidad and Tobago and Saudi Arabia. In turn, the Philippines imported about half a million pesos from the U.S., India, Australia, Singapore, South Korea and Thailand. The researchers headed by Teresita P. Acevedo and composed of Rumbaoa, Ma Leonora dL. Francisco, Mary Rose J. Demetillo and G. Santos looked at local fruits and vegetables and came up with exotic and unique taste blends. "Out of the several juice blends from indigenous fruits and vegetable that were investigated, the study arrived at five blends with the highest acceptability: mango-guapple, pineapple-dalandan, carrot-calamansi, papaya-calamansi and strawberry-banana," Rumbaoa told Malaya Business Insight.

"These are all premium juices because they are fresh, natural, with no stabilizers, no preservatives nor sugar, and with new flavor blends," said co-researcher Demetillo. The five fruit/vegetable blends were fortified with nutrients to meet at least 33 percent and 100 percent of the Recommended Energy and Nutrient Intake for Vitamin A and Vitamin C, respectively. The products were processed inside a "clean room" facility at the UP College of Home Economics to ensure aseptic treatment and packaging. Inside were a state-of-the-art pasteurizer, heating vessels and other processing equipment. "There were minimal changes to the sensory and nutritional characteristics of the products, allowing them to have fresh tastes," said Rumbaoa. "The products are stable at room temperature and have a minimum shelf-life of six months." "For investors, the start-up cost is at least P1.2 million for the clean room facility and another P1.2 M for the pasteurizer," she said, "plus development and licensing costs, utensils and so on." She said the clean room at UP may be rented as a business incubator for interested investors, inclusive of technical assistance and on-site training on production and quality control.
http://www.malaya.com.ph/02152010/busi10.html Tropical Fruits Purees and Juices

Food manufacturing including food and beverage processing remains as the Philippines most dominant industry in manufacturing accounting for 40.1% of total output. The industry represents a gross value added of more than $2.0 Billion and grew by 3.2% in 2007. Most of the companies are owned by single proprietors that is common among micro, cottage and small industries; but large local companies such as San Miguel Corporation, FRM Corporation and Universal Robina Corporation, with diversified product lines dominate the sector and compete with multinationals. Big multinational companies include Dole and Del Monte. Changes in todays lifestyle and dietary preference, along with improvement in socio-economic status has resulted in significant increase in demand for processed fruits and vegetables and beverage products, tropical fruit juices included. Philippine tropical fruits include banana, pineapple, mango, calamansi (lime), papaya, guava, soursops (guyabano) and mandarin processed into purees and juices.

Market Opportunity

Increase in Crops Production From 2005-2007, fruit crop production increased at an average annual rate of 7.54%. Top 3 fruits crops produced in these years were banana (at 9% average annual growth rate), pineapple (at 6.3% average annual growth rate) and mango (at 2.4% average annual growth rate). Other fruit crops include calamansi, papaya and mandarin. Assuming that the 7.54% average annual growth rate is maintained, 2010 production of tropical fruit crops can be projected to reach 13,600,000 MT. Mindanao remains as the major source of Philippine tropical fruits with 87.20% of pineapples harvested in Northern Mindanao and SOCCSKSARGEN, and 78.72% of bananas harvested in Davao in 2007. Mango remains as Luzons main fruit crop accounting for 6.22% of the total harvest in 2007(43.37% was harvested in Ilocos region). Mindanao produced about 20.92% of the crop in the same year. Projected Global Demand for Processed Tropical Fruits & Beverages Overseas demand for Philippine fruit purees and juices from 2005-2008 is increasing at an

annual average rate of 4.44% From January to June 2009 alone, export proceeds amounted to US$45.98 Million, which is about 50% of the full 2007 exports. At this rate, full year 2009 exports can estimated to reach US$85.11 Million. If the same rate for overseas demand will be maintained, the Philippines will need additional capacity to supply around US$105.75 Million worth of trade in the sector in the next five (5) years. This translates to an estimated additional capacity of about 42,000 tons per year. Major export markets include USA, Canada, The Netherlands, Japan, Singapore, Australia, Hong Kong, New Zealand, Spain and Great Britain covering about 50% of export revenues. World demand for tropical beverages has been projected to grow by 1% per year from 19992010, while world net exports is placed at 0.9% per year mostly coming from developing economies. -Demand from developing economies is projected at 1.6% per year. -Demand from economies in transition is projected at 2.9% per year. -Demand from industrialized countries is projected at 0.6% per year. Other Areas for Investment/Collaboration Soursop (guyabano) juice, which is especially popular in Canada, has been found to be a health drink and favorite flavor for ice cream; Calamansi (lime) juice proven to be a popular fruit drink in Japan; New fruit juices mixes coconut water mixed with other fruit juices; High-fiber product such as nata de coco (a coconut product) mixed with fruit purees and juices

to increase dietary fiber content; Packaging and labeling; High-yielding and tested technologies for fruit processing; Equipment for dehydration, filtration, juice extraction, refrigeration, etc.

Philippine Advantage

Natural resources -The Philippines is a market leader in canned pineapple and juice market being a major processor of tropical fruits. -Abundance of variety of Philippine tropical fruits for processing that are generally cheaper during peak seasons. -Suitability of climate and soil fertility to grow a wide variety of agricultural products. Strong Support from Government/Industry Association Processed food that includes processed fruits and vegetables is one of the 10 revenue streams and given support by the government through designation of brand management teams to supervise the export of the promotion of the sector. Presence of dynamic industry associations Philippine Food Processors and Exporters Organization, Inc. focuses on planning, development and sourcing of raw materials, improvement of manufacturing efficiency and productivity, promotion of sound trade practices, among others. Philippine Exporters Confederation, Inc. mandated to strengthen the countrys export industry through its export promotion and development programs. Support industries/infrastructure Contract growing arrangement or supply agreement with framers is encouraged to ensure continuous supply of raw materials and to maximize volume of production as well as support framers growth. Availability of post-harvest facilities and other logistical support facilities.

Government Support

Enabling laws/policies Medium-Term Philippine Development Plan 2004-2010 -Development of about 300,000 hectares of new areas for high-volume crops production by 2010 Medium-Term Agricultural Development Plan (MTADP) Agriculture and Fisheries Modernization Act (AFMA) Philippine Export Development Plan 2008-2010 Region 10: Northern Mindanao Development Investment Plan 2005-2010 Continuous provision of technical assistance from Food Development Center (FDC), the Bureau of Food and Drug (BFAD), the Philippine Association of Food Technologist (PAFT) and the academe. Market/Technical/R&D support Research and Development support from the Department of Science and Technology (DOST), particularly the Philippine Council for Agriculture, Forestry and Natural Resources Research and Development (PCARRD) and Industrial Technology and Development Institute (ITDI)

Incentives

Fiscal 4 to 8 years Income Tax Holiday (ITH); Special 5% tax rate on gross income after the lapse of ITH (for Eco-zone locators); Tax and duty exemption in imported capital equipment (for Eco-zone locators); Duty-free importation of capital equipment (for BOI-registered firms under E.O. 528); Exemption from 12% input VAT on allowable local purchase of goods and services, e.g., communication charges (for Eco-zone locators); Additional deduction for labor expense.

Non-fiscal Unrestricted use of consigned equipment; Exemption from wharfage dues and export tax, duty, impost and fees; Employment of foreign nationals; Special Investors Resident Visa.

Costs of Doing Business

Estimated Investment Cost US$460-670 per ton fruit puree Salaries and wages (average per day) NCR Php 345.00 Region/Provinces Php 202.00 255.00 Ideal Locations (based from investment opportunities identified by the Department of Agriculture) Cebu Davao Region Region XI Cagayan de Oro, Misamis Oriental Northern Mindanao Region X CALABARZON Cavite, Laguna, Batangas, Rizal and Quezon Region IV-A MIMAROPA Mindoro, Marinduque, Romblon and Palawan Region IV-B Rentals and lease (average per month) Commercial space lease US$2.0-9.0/sq.m. Office space rental NCR: US$10-12/sq.m.; Regional/Provincial: US$5-6/sq.m.

Within economic zone lease of lots US$0.40/sq.m. Business Permits License to Operate and Product Registration from Bureau of Food and Drugs (BFAD); Environmental Compliance Certificate from Environmental Management Bureau (EMB); Registration of Incorporation from the Securities and Exchange Commission (SEC).

http://www.tripleiconsulting.com/main/philippines-investment-resources/value-propositions/tropicalfuit-juices-and-purees Beauty line is fruit-juice based

By Ronna Capili Philippine Daily Inquirer DateFirst Posted 00:00:00 06/04/2010

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Not everything marked organic is so. Juice Beautys Alaina Thompson spills insider secrets WITH THE GREEN lifestyles increased popularity, its quite a surprise that there is only one law that regulates organic beauty products, the California Organic Product Act, which requires at least 70 percent organic content. Despite the growing trend, which has made going green or being environmental the latest trend in lifestyle changes, Juice Beautys Global Marketing and Sales Manager Alaina Thompson reveals, organic beauty products are not tightly regulated. When someone calls a product organic, most people believe it, and you would like to think that you could believe it; but unfortunately, its not always that authentic, says Thompson. Juice Beauty, an organic beauty solutions brand available at Beauty Bar, was founded in 2004 by Karen Behnke, who was looking for healthy personal care products when she first became pregnant at 40. A wellness business entrepreneur of 25 years, Behnke was always advocating healthy diet and lifestyle and only realized during her pregnancy that she overlooked beauty products. She was shocked at what she had been applying on her face for years. With director of Product Development, Melissa Jochim, whos had 20 years of experience with organic formulations, Juice Beauty pioneered the juice-based beauty products. Most products use water as main ingredient, but Juice Beauty, as the name suggests, harnesses the natural yet potent power of juices to bring out beautiful, healthy skin. For anti-aging concerns, for example, Juice Beauty uses green apples antioxidant properties for a skincare line that includes a cleanser, peel, hydration mask, moisturizer and serum. Other juices like lemon, grape, raspberry, are used and combined for other products to achieve the desired skin results. 85-percent organic Though the California Organic Product Act only requires 70 percent organic content, Juice

Beautys products range from an 85-98 percent organic content. Thompson defines organic Theres no toxins, pesticides and no chemicals in all the ingredients used. There are also no parabens, petroleum and synthetic fragrances. All the colors and fragrances come from the fruit juices, she says, and all ingredients are certified by the United States Department of Agriculture (USDA). To preserve the beauty formulas, Juice Beauty uses only food grade preservatives, such as sodium sorbate and grape alcohol, and has created packaging to help in the process. Each product has a two-year shelf life, just like any other beauty buy available today. Does organic skincare really work? Third-party clinical validation in France has shown that the Green Apple Skincare collection, which uses age-defying ingredients such as alpha lipoic acid, coenzyme Q10, DMAE, peptides, fat soluble Vitamin C and essential fatty acids has shown an 85-percent reduction in free radical skin cell damage, meaning less wrinkles and sun spots. The Green Apple Antioxidant Moisturizer, Thompson says, has shown 68-percent reduction in free radical skin cell damage, which is the sign of aging, and thats only after wearing it for a three-hour time period. Kate Hudson Thompson, who has been with the company for three years, says she was also shocked at all the chemicals shed been applying on her face before making the big switch. I threw them all away! she says. One of Juice Beautys biggest celebrity fans, Kate Hudson, made a similar move after discovering the Green Apple Peel. She asked Behnke to help her sort through her cosmetics, then switched to Juice Beauty. Thompson suggests that one tries a new skincare regimen for a month before switching to it completely. If you want to really see a difference, you need to stick to it for at least 30 days, unless youre experiencing an allergic reaction, for your skin to purge. Because sometimes that might have to happen; your skin might be clearing of all these toxins of other products, she says. Thompson suggests starting with the Juice Beauty Cleansing Gel (great for the warm weather and oily skin), with antioxidant-rich cherry and lemon juices, to deep clean skin. Since it doesnt have artificial sudsers, it wont give you that foam. You just need one pump, rub it in all over, and you can use a towel or your hands with warm water to wash it off. But that will get your skin nice and clean. And maybe the Oil Free Moisturizer, with white grape and organic juices, would be great for this weather. I think its a good idea to switch completely, because if youre using this [Cleansing Gel] with your old moisturizer, you might not know what your skin is changing from, your old moisturizer

or your new cleanser. You dont need to try 10 different things at once, maybe just a cleanser, moisturizer and treatment product for your needs, Thompson says. Everyones going green Since they are pioneers in the organic beauty business, Thompson claims their head-start in experience and research makes them a cut above the new brands. She says much of the companys time is spent educating sellers and consumers. Thompson also recommends the clear skin system for Filipinas, starting with the Cleansing Gel containing cherry and lemon juice, Blemish Clearing Serum, having willow bark and coenzyme Q10, and the Green Apple Sensitive Peel once a week. Its the instant result product! she says. Just leave on for 10 minutes and rinse right after, then finish with the Oil Free Moisturizer. Soon Juice Beauty will have a whole range of juice-based makeup products. We at Juice Beauty see [organic beauty solution] as more than just the coolest thing to do now. We are really passionate about helping women and men have healthy products that are safe for their bodies, Thompson says.

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