Fresh Fruit Exports

from the Philippines:

The Lapanday Foods
Opportunities

By: Francisco X. Lorenzo

8-10 September 2010
Hong Kong, China

Human Resource and Shared Services

 Outline
1. The major fresh products of the Philippines and how they perform
in the market
– Banana
– Pineapple
– Mango
– Other promising crops which could be winners in the export market
2. Major market challenges of Philippine fresh produce in the Asian
markets
– competition with other fruits
– competition with other countries
– competition among Philippine based companies
3. Market trends/changes in the past 10 years of the Philippine Fresh
Produce industry
4. Sharing Lapanday's experience from being a grower for the
multinationals until transforming to become a leading global player.
5. Our Seed-to-shelf philosophy
6. Conclusion
 Bananas

• The major fruit export from the Philippines

• Number two exporter in the world
• Dominates most Asian Markets
• Worth $250 M in Export Revenues
• Creates and Maintains 200,000 Jobs
• An Estimated 60,000 hectares planted
 Bananas

Average Growth of 6.2 percent per year

Philippine Pineapple Exports
• Second largest exporter of Sweet Golden
Pineapple
• Estimated 25,000 hectares planted
• Philippines is the 3rd largest exporter of
pineapples
• Fresh Exports shifted from the Smooth
Cayene variety to Golden Sweet MD2
• The Philippines Dominates major markets
in Japan and Korea
Pineapple Exports from the
Philippines
Mangoes
Share of 2008 Mango Exports

Source: Philexport
 Mango Developments
• China allows eight companies to export
mangoes
• Australia accepts mangoes from Davao
Sur
• Taiwan is reviewing the quarantine
procedures for mangoes from the
Philippines
 Other Promising Fruits for
Export
• Papayas
• Avocado
• Dragon Fruit
• Other Banana Varieties
• Durian
• Mangosteen
 MAJOR MARKET
CHALLENGES OF PHILIPPINE
FRESH PRODUCE IN THE
ASIAN MARKETS
 Philippine Major Banana
Markets
% by Volume
40 38
36
35
30
25
20
15 12 11
10
5 2
1
0
Japan ME China Korea Russia Hong Kong
 Philippine Major Fresh
Pineapple Markets
% by Volume
70 66

60

50

40

30
21
20
9
10
2 2
0
Japan Korea ME China Russia
 Major Asian Markets for
Philippine Fresh Fruit Exporters
• Japan : Mature
• Korea : Shifting
• Singapore: Growing
• Hong Kong: Growing
• China : Growing
• Middle East: Growing
 Other Competing Fruits

• Domestic production: bananas and local

fruit
• Summer fruit
• Temperate and Subtropical Fruit
• Bananas and Pineapples can provide a
whole year supply.
 Challenges at the Major
Markets
• Shift from traditional wholesaler-
supermarket set up
• Consolidation of supermarket chains
• Growth of convenience store chains
• Growth of the hypermarket chains
• Entry and consolidation of the
Multinational supermarket chains
• Global Sourcing
Competition with other countries
Bananas:
• Japan Market: Ecuador and Taiwan
• Korea: None
• Middle East: India
• China: Domestic production
Pineapples (Sweet Variety)
• Japan Market: None
• Korea: None
• China: Domestic production
Share of Banana Exports

Source: Unctad FAO Statistics

2002-2006
 Competition Among Philippine Based
Companies

• Dole is the top exporter of Bananas from

the Philippines.
• Followed by Del Monte, Chiquita Unifrutti,
Sumitomo and Lapanday
• Other small exporters sector is growing,
though it has many challenges to face.
Trends and Changes to Philippine Fruit
Industry
• More independent and small banana
growers
• More independent buyers, consolidators
• Container space availability
• Reducing Tariffs
• Non-Tariff Barriers
• More affluent and discriminating
consumers
Lapanday’s Transition from Grower to a
Global Player

• Started as Grower for Del Monte and then

Chiquita
• Operated large farms and managed a small
grower program.
• Opportunity was found in the class B market for
China.
• The major barrier to be a market player at that
time was shipping the shipping limitation
The Solutions Lapanday Took
• Built a state of the art cold store to hold fruits for
2 weeks
• Started a vessel rotation to China every two
weeks
• Planted new areas for the China Market
• Established special technical and quality groups
• Penetrated the high quality demanding
Japanese market.
• Continued plantation and market expansions
WHO ARE LAPANDAY FOODS?
•The Philippines leading independent Banana company
•24 plantations, 5,600 hectares of Banana & 550 hectares
of Pineapple production
•4,700 employees
•Production 23 million cartons of Banana per annum
•Production 2 million cartons of Pineapples per annum
•12% of Philippine export banana production
•Tissue culture laboratory and extensive R&D and nursery
facilities
•Plastic and carton factories with integrated
recycling programs
WHO ARE LAPANDAY FOODS?
•1,500 pallet position cold storage & pre-cooling
facility
•Private port, cold storage and loading piers
•5 reefer ships on time charter serving Japan, China,
South Korea, container service to the Middle East
and South East and Northern Asia
•Sales in 13 countries in Asia and the Middle East
with sales offices in Hong Kong, Singapore & Tokyo
•The Philippines leading provider of Private Label
Brands
•Production contracts with Fresh Del Monte
•Serving the multinational brands as a contract
grower and packer since the 1970’s
PRODUCTION AREAS

•Banana and Pineapple

production is based on
the southernmost
Philippine island of
Mindanao
• The city of Davao is
the regional capital and
it is from here that
Lapanday exports to
Asia and the Middle
East
PRODUCTION AREAS

Farm Location map

BANANAS FROM LAPANDAY
•Regular Cavendish and high brix Highland
Cavendish varieties are available year round
•Choice of 4kg, 7kg, 13kg or 18kg carton
packs
•4-9 hand pack, cluster pack, prepackaged
consumer packs options
•Lapanday brands Aloha, Estrella or Mabuhay
or packed under customers own brand
•Reefer ship service to China, Japan, and
sometimes to Korea
•Weekly container service to ports across
Asia and the Middle East
PINEAPPLES FROM LAPANDAY
•Sweet tasting hi-brix hybrid pineapples marketed under the “Honey
Pines”™ brand
•3 times the vitamin C of regular pineapples
•High external shell color, long shelf life and year round production
•650 hectares of production
•2010 volume availability 1.8 million cartons
•12kg & 18kg cartons available in count sizes 5-18. Fresh sale and fresh-
cut selections
QUALITY ASSURANCE FROM
LAPANDAY
• Lapanday has invested heavily in research
and agri-technology. Advances soil and leaf
analysis testing facilities and a research team
closely monitor soil fertility, plant nutrition, and
pest and disease management in the
plantations.

• Lapanday operates the Philippines largest

tissue culture laboratory, micro-propagating up
to 1,000,000 new disease free plants every
month for its plantations

• ISO, SQF and HACCP practices were

institutes in 2003 and guide Lapanday’s
production and packing practices
QUALITY ASSURANCE FROM
LAPANDAY
• Surveyors conduct field inspections in conjunction
with plantation managers. Weekly quality reports
are circulated throughout senior management
ensuring rapid response.

• Inspectors operate in each of the packing houses

ensuring product quality compliance meets
international standards set for each market

• A third and final inspection tier exists in the loading

ports with all product subject to final inspection
before export clearance. Inspectors are also
stationed in the major markets and undertake
arrival inspections

• Lapanday provides to its customers quality

assurance from seed to shelf
Traditional Delivery Channels for
Bananas

Multinational
Brand only
provided the The product Changed hands
country up to seven times before
market and reaching the customer
brand name
Lapanday’s Marketing Set-up in
the 2000’s

Importer Wholesaler also Ripen and Product Changes hands

provides buffer volumes deliver only three times to
for the supermarkets reach the customer
Key to Lapanday’s Seed to
Shelf Program
• Have sufficient Volumes
• Grow with your customers requirements
• Operate and managed plantations
• Direct grower sources, no consolidators
• Superior quality as good or better than the
Regular brands
• Flexibility in product presentation
• Attractive pricing
• Reliable shipping arrangements
• Going direct to the market
Thank You !
Francisco X. Lorenzo
Sales and Foreign Trade
Lapanday Foods Corporation
+63 82 234 9003
fxlorenzo@lapanday.com
www.lapanday.com