Title: Production of Coco Vinegar

ACKNOWLEDGEMENT

We wish to extend our immeasurable appreciation and profound gratitude to the

following persons who in one way or another have contributed in making this humble work

possible:

Jeena Sandra R. Manrique,research adviser, for (his/her) unselfish guidance and

overwhelming support in the completion of this study. We are very grateful for having an adviser

like (him/her).

____________________, __________________ and ____________________________,

our panel members, for sharing their valuable insights, wisdom and suggestions to this study;

____________________, __________________, for allowing us to conduct data

gathering.

To our friends and colleagues at PSU, for their moral and spiritual support.

To our students, for their willingness to be the respondents of this study and for their

cooperation in gathering important data.

To our family, for being the best support system in the world, and for the concern, love

and understanding;
 Above all, enormously to God Almighty, our source of strength, who sustain us with all

wisdom, blessings and courage to make all things possible. This piece of work is dedicated to you

with love and humility. TO GOD BE THE GLORY!

Chona Pino, Maybee Barbacena, Angelica Bason, Jessa De lea and Cristine Joy Asido

Certification
 APPROVAL SHEET
This action research entitled , prepared by Chona Pino, Maybee Barbacena, Angelica
Bason, Jessa De lea and Cristine Joy Asido, in partial fulfillment of the requirements for the
course ________________________, has been examined and recommended for acceptance and
approval for oral examination.

________________________________
Adviser

Action Research Committee

__________________________
Chairman

______________________ ____________________
Member Member

____________________________
Member

Panel of Examiners
Approved by the committee on Oral Examination on ________________ with the grade
passed.

___________________________
Chairman

_____________________ ______________________
Member Member

__________________________
Member

Accepted and approved in partial fulfillment of the requirements for ________________

___________________________________
Academic Dean
 Introduction

At the national scenario, Camarines Sur is 12th highest producer of coconut and 6th in terms of

area therefore it is included in the coconut grid of the country. The areas in the coconut grid have

significant role to keep the Philippines and the province as top copra and coconut oil supplier in the

world. However, this goal does not prevent the Province from looking for other commodities that can

complement copra and coconut, as there are better opportunities for improving the local economy

through maximizing utilization of the coconuts. Coco sap is seen as the most lucrative industry of the

province if supported with efficient value chain.

For many years, the coconut fruit had always been used by Filipinos in many diverse ways. Even

if its as delicious as food, as simple as decoration or as complicated as fuel, the coconut fruit has proven

to be very useful. One of its product that had a great impact on Philippine agriculture until now is the

coconut vinegar. A significant amount of the countrys population depends in the coconut vinegar

industry as a source livelihood especially in locations where the coconut tree is abundant. Due to its

increasing demand in the export industry, we decided to make this study about coconut vinegar and

further utilize the other parts of the coconut fruit by expanding our study to a plant the would produce

multiple products from the coconut fruit.

The formulation of Coco Vinegar Value Chain Analysis had undergone coordination with the

Regional Program Coordinating Office (RPCO) interacted with various stakeholders, from producers to

buyers in Baao, Ragay, Goa and Iriga City, through site visits, interviews and focus group discussions.

Interviews were also conducted with the representatives of support government agencies such as the
DA and Department of Trade and Industry (DTI) as well as Coco Republic, a world class processing center

located in Calabanga, Camarines Sur.

Camarines Sur coco vinegar industry is still a small player in the domestic trade but it has the

potential to become a key supplier as it is within the coconut grid of the country. The biggest

competitive advantage of the province is the presence of the giant coco vinegar player Coco Republic,

the availability of raw materials for coco vinegar, and the favorable agronomic conditions of the area.

Camarines Sur biggest competitive gap is that majority of the current processors are home-based in

nature. In terms of the relative financial position of key players, coconut producer/processors only

captured 21.4% of the share in income generated in the value chain. The retailers/wholesalers are

relatively getting huge profit share of 37.4 percent.

 Chapter 1: Project Summary

a. Name of Business

Coco Vine

b. Location of Business

Goa, Camarines Sur

c. Descriptive Description of the Project

Vinegar is defined as a condiment obtained from the consecutive alcoholic and

acetic fermentation of a saccharine solution, the particular type of vinegar being
indicated by a prefix, such as coco vinegar, fruit vinegar, etc. Literally, the term
means sour wine, according to its derivation from the French vinegar (vin-
wine plus aggressor or sharp). According to the standards prescribed by the
Food and Drug Act of the Philippines, finished vinegar must contain not less
than 3 grams. acetic acid (CH3COOH) in 100 cubic centimeters. The United
States government prescribes a minimum of 4 grams. acetic acid in 100 cubic
centimeters at 20C

d. Project Objectives Long Range/Specific

The Coco Vines project long range objectives is to link the global context to the
national, regional, and provincial contexts, with the aim of identifying main
leverage points and key strategies to improve Bicol Region and Camarines Sur,
especially Goas coco vinegar competitiveness and promote development in a
pro-poor and sustainable manner. It will provide the basis for the formulation of
the Provincial Commodity Investment Plan and will lay the foundation for
PRDPs cooperation with the private sector and other government agencies
promoting the development of the coco vinegar industry.
Specifically, the Coco Vine aims to:
delineate the commodity value chain map and determine/identify the
major players in the value chain for coco vinegar in the Bicol region;
identify the constraints, opportunities and potential intervention
strategy of the different players along the value chain;
establish the competitive directions of the coco vinegar industry;
facilitate the translation of interventions into priority projects that must
be implemented to enhance productivity.

e. Highlights of the Study

 The study engaged small coconut farmer organizations and cooperative in Goa
which are involved in coco vinegar production and processing. The questions
were mainly about cost and level of production, product pricing and packaging,
household income, sources of funds, support received from various agencies, as
well as issues, concerns and needs of coconut
farmers/associations/cooperatives.

f. Major Assumptions and Summary of Findings and Conclusion

Coconut Production volume will become a trend in the Philippines, Bicol Region
and Camarines Sur especially in Goa when the municipality produces Coco Mart
Coconut area planted and harvested in the Philippines needs to be bigger, Bicol
Region and Camarines Sur
There should be more number of coconut bearing trees in the Philippines, Bicol
and Camarines Sur especially in Goa.
There is a great Philippine exports of coconut.
Farm gate price trend of coco vinegar

g. Methodology

In order to come up with substantial and significant information within the

period of study the following data collection methods were utilized:

1. Informant Interviews
In coordination with DA project team, interviews with the following key
informants who had provided valuable information were conducted
DA and its attached agencies representatives:
Philippine Coconut Authority (PCA)
Department of Trade and Industry (DTI)
Department of Agrarian Reform (DAR)
Central Bicol State University of Agriculture (CBSUA)
Private sector/Institutional buyer
Wholesaler/Retailer representative
Compradores
Traders/retailers

2. Focused Group Discussions (FGDs)

The study engaged small coconut farmer organizations and cooperative in Goa
which are involved in coco vinegar production and processing. The questions
were mainly about cost and level of production, product pricing and packaging,
household income, sources of funds, support received from various agencies, as
 well as issues, concerns and needs of coconut
farmers/associations/cooperatives.

3. Review of Secondary Data

The following documents were reviewed and considered in preparing the

project reports and meetings with stakeholders:
Coconut Production volume trend in the Philippines Bicol
Region and Camarines Sur
Coconut area planted and harvested in the Philippines, Bicol
Region and Camarines Sur
Number of coconut bearing trees in the Philippines, Bicol Region
and Camarines Sur
Philippine exports of coconut
Farm gate price trend of coco vinegar
Other relevant statistics

4. Study Focus
VC Competitiveness with private sector participation Interventions to attain
PRDP Increase in Income Targets Areas for Investments/ Enterprise
Development.

Chapter 2: MARKETING PLAN/MARKET STUDY

a. Target Market

Institutions and Buyers in:

Goa
Bicol
Philippines

b. Product Service to Sell

Coco Vinegar

c. Demand and Supply Analysis

Table 1. Coconut: Area Planted/Harvested, No. of Bearing Trees, Production:

Bicol Region 2008-2012
Bicol Region accounts to 40% of the coconut farmland in Luzon with 453,501
hectares and 36% of the bearing trees with 35,651,678 million trees. The
province of Camarines Sur comprises 26% farmland in Bicol Region with
7,759,876 million trees. Table 1 shows coconut area planted/harvested, no. of
bearing trees, and production in the Bicol Region from 2008-2012.
 Ave. G.R.
PROVINCE 2008 2009 2010 2011 2012 % Dist.
%
PHILIPPINES

Area plntd/vtd (ha) 3,379,741 3,401,500 3,575,944 3,561,981 3,573,806

# Bearing Trees 339,357,206 340,882,817 341,020,368 339,795,215 344,377,121

Prodn, nuts (MT) 15,319,527 15,667,565 15,510,283 15,244,609 15,862,386

BICOL REGION

Area plntd/vtd (ha) 447,743 447,764 452,679 452,681 453,501 0.14 100
# Bearing Trees 33,994,462 34,094,550 35,015,713 35,015,913 35,651,678 0.45 100
Prodn, nuts (MT) 1,159,810 1,257,221 1,269,538 1,201,707 1,240,459 1.14 100
Albay

Area plntd/vtd (ha) 40,180 40,200 40,200 40,200 41,000 0.09 9

# Bearing Trees 3,600,000 3,700,000 3,700,000 3,700,000 3,819,000 0.58 10.7
Prodn, nuts (MT) 149,595 155,663 161,104 160,986 171,040 1.35 13.8
Camarines Norte

Area plntd/vtd (ha) 85,375 85,376 85,378 85,380 85,400 0 18.8

# Bearing Trees 7,537,040 7,537,128 7,537,200 7,537,400 7,600,000 0.03 21.3
Prodn, nuts (MT) 228,772 234,261 235,022 233,187 239,547 0.47 19.3
Camarines Sur

Area plntd/vtd (ha) 119,045 119,045 119,045 119,045 119,045 0 26.3

# Bearing Trees 7,683,046 7,683,046 7,759,876 7,759,876 7,759,876 0.12 21.8
Prodn, nuts (MT) 306,314 318,603 331,018 322,149 333,822 1.05 26.9
Catanduanes

Area plntd/vtd (ha) 14,375 14,375 14,735 14,735 14,735 0.3 3.2
# Bearing Trees 287,500 287,500 287,500 287,500 287,500 0 0.8
Prodn, nuts (MT) 2,751 3,167 3,782 4,055 4,181 6.08 0.3
Masbate

Area plntd/vtd (ha) 91,076 91,076 95,629 95,629 95,629 0.6 21.1
# Bearing Trees 7,208,974 7,208,974 7,569,422 7,569,422 8,023,587 0.85 22.5
Prodn, nuts (MT) 295,882 315,810 307,108 285,829 317,015 0.57 25.6
Sorsogon

Area plntd/vtd (ha) 97,692 97,692 97,692 97,692 97,692 0 21.5

# Bearing Trees 7,677,902 7,677,902 8,161,715 8,161,715 8,161,715 0.76 22.9
Prodn, nuts (MT) 176,496 229,718 231,504 195,500 174,853 2.85 14.1
 Number of Projected Annual Projected Annual
Name of Cooperative Area Volume of Coco Sap* Volume of Coco
(Liter) Vinegar** (MT)
Association Number of Farmer Planted
Total
Beneficiaries Number of Trees

Maymatan MPC, Goa,

12 45 5,090 2,290,500 327
Camarines Sur

Historical Demand of Vinegar

YEAR Kg

1993 687916

1994 740743

1995 471486

1996 531379

1997 374939

1998 392016

1999 324826

2000 521048

2001 269962

2002 406225

2003 37095
 Historical Demand Vinegar

800000
1993
700000 1994
600000 1995
500000 1996
400000 1997
300000 1998
200000 1999

100000 2000
2001
0
1 2002
2003
Demand (Kg)

Projected Demand of Vinegar

YEAR VOLUME (L)

2005 131,775,187

2006 134,207,372

2007 136,639,557

2008 139,071,742

2009 141,503,927

2011 146,368,297

2012 148,800,482

2013 151,232,667

2014 153,664,852
 Projected Local Supply

Record from the Provincial Planning and Development Office of Camarines Sur
shows that there are five (5) cooperatives/association that are willing to engage in
coco vinegar production enterprise. Although there are already small scale (home
based) processor operating in the province, based on the initial profiling, a total of 155
potential farmers can be tapped for coco vinegar production in the Province of
Camarines Sur with a total coconut production area of 1,493.50 hectares. The number
of dwarf coconut trees that can be tapped accounted for 26,257. From an annual
target of 11,815,650 liters of coco sap production, it can produce around 1,688 metric
tons of coco vinegar. This translates to 10 percent market share in the projected
17,010 metric national production supply by 2016.

Coco Republic which is a world class coco vinegar processor is still on the initial
phase of its operation. For now, its processing plant only process 400 liters of coco
sap per day due to unavailabity of coco sap from organically growth coconut trees.
Coco Republic as one of the giant export player of the industry sourced out 70% of its
raw materials in Mindanao.

d. Pricing Strategies
Figure 2 provides details in the incomes and costs for the various operators in the coco
vinegar value chain. In the cost build-up analysis done, 8 liters of coconut sap are
required to produce one (1) liter of coconut vinegar. Normally, collectors of sap are also
coconut farmers in Camarines Sur but there are few farmers who hire sap collectors.
After sap collection, farmers sell to processors immediately to avoid sap fermentation.
One (1) liter of coconut sap sold by the farmer is valued at Php10
 Figure 1. Cost Build-up Analysis Coco Vinegar

WHOLESALERS/
RETAILERS Sales:Php120
One (1) liter coco Cost:Php80 Profit Share
vinegar Profit: P40 (37.4%)

CONSOLIDATORS
DISTRIBUTORS
One (1) liter coco
Profit Share
vinegar Sales:Php140
(11.8%)
Cost:Php120
Profit:Php20
COCO
VINEGAR
PROCESSORS
Profit Share
1 Liter Coco (29.4 % )
Sap Sales:Php80.00
Cost: Php50.00
SAP
COLLECTORS Profit: Php30

Profit Share
(21.4%)
1 Liter
Coco Sap Sales: Php50.00
Cost: Php 25.00
Income: Php25.00

Key Players Sales Volume Cost & Income Profit Share

e. Packaging/Labelling

Provide quality support services through the introduction of innovations to lower the
cost of production, processing and packaging.
Coco Vinegar contain not less than 4 g of acetic acid per 100 mL at 20C
and may not contain more than 0.5 vol% of ethanol. Coconut Vinegar is
packed in a high quality plastic bottle. The packaging material will be
printed with some specification and will be marked by our company
logo.

f. Marketing Budget Summary

Sales Volume Sales(Php) Cost(Php) Profit(Php) Key Players
1 L coco vinegar 120 80 40 Wholesaler
1 L coco vinegar 140 120 20 Retailer
1 Liter Coco Sap 80 50 30 Processors
1 Liter Coco Sap 50 25 25 Collectors