The global market for processed fruits , most specially the banana chips has grown into a billion dollar market as preference of consumers lean towards more healthy and organic food. The sales for more natural food is expected to reach $100 billion in 2008 and projected to grow at 20-30% annually. Major markets are the European Union Members , Germany, United Kingdom and France , United States and Canada, Singapore, China and Japan
The 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. Fifteen (15) of the twenty four(24) largest banana chips facility is found in Mindanao
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, Hongkong and mainland China.
Davao Region is one of the largest, if not the largest, exporter of banana chips in the Philippines. According to Trade Assistant Secretary Merly Cruz, the region was able to sell $24.77 million of banana chips last year, higher by 32 percent compared with what was exported in 2005.
China's Crackdown on Banana Chips
The crackdown that China recently had on banana products from the Philippines is one hard lesson that must be learned. Although it was fortunate that China spared banana chips shipment from Mindanao as it only seized two tons of banana chips from the country for containing sulfur dioxide 25 times higher than the allowable level; Mindanao producers must bear in mind that the incident was something to ponder upon.
In assuring that the shipment that was seized came from Cebu and not Mindanao, the Trade regional offices in Davao Region and in Central Mindanao both claimed that the recall did not affect shipments from these two regions.
However, banana chips producers in Mindanao must not be complacent because the incident only pointed out that there is so much has to be done in order to protect their products from market manipulation or sheer failure to abide by world standards.
Developing the Mindanao Banana Chips
In its desire to really push the development of banana chips, the Department of Trade Regional office even commissioned a private company to produce 12 variants of banana chips as it called on local producers to commercialize these variants and market them either locally or internationally. These banana chips variants land in shelves of school canteen as substitute of junk foods. The regional office of the Department of Education also made a parallel move by requesting canteens in public school to do away with soda drinks and patronize banana chips.
Homegrown talent Joey Ayala also composed a song that would promote banana, considered the number one export of the region, particularly Davao del Norte which hosts the biggest banana plantations.
There is also a move to develop just ONE brand for Mindanao banana chips- a brand that would be synonymous with excellence and quality. All Mindanao banana chips will carry a single brand and packaging. This will result to better prices, increase in profitability and even reduce cost through common marketing and promotions efforts.
Meeting the Challenges
The China incident should be a wakeup call for all those involved in banana production, particularly those into banana chips making.
For one thing, that should pave the way for these producers to see to it that their products meet not just the minimum international standards but the highest standards attainable. In this modern world of competition, it always pays to invest in improving the quality of products for international markets.
Another issue that must be addressed is for government to help these producers look for additional markets and provide more access to financing. Just about two years ago when prices of banana chips plunged, the incident showed how vulnerable local producers to market manipulation. But with new markets, there is an assurance that even if marketing to traditional buyers falter, exporters can run to these new buyers. With additional financing, the producers can invest in new machineries and technologies.
Lastly, the government and the producers must sit down and discuss how they should package the products. For example, some school canteen operators refused to sell banana chips because children will not buy because they did not find banana chips as attractive as those junk foods. "The problem of packaging is what is hounding us," says one of them.
It pays to improve our products. Otherwise, the competition will just run over us.
