Coffee Plantation

The Philippines is one of the few countries that produces the

four varieties of commercially-viable coffee: Arabica, Liberica
(Barako), Excelsa and Robusta.

1740 – The first coffee was introduced in Lipa, Batangas by a Spanish

Franciscan monk.
1860 – Batangas was exporting coffee to America through San Francisco
1880 – Philippines was the fourth largest exporter of coffee beans
1950 – Philippine government, with the help of the Americans, brought in
a more resistant variety of coffee
2000 – Coffee’s price and demand soared up
2016 – Local farm’s lacking in supply causing continuous entry of coffee
products from other countries
2018 – Philippines is still a net importer of coffee despite its potential to
grow its own.
1 3 H E A LT H B E N E F I T S O F C O F F E E
1. Coffee can improve energy levels and make someone smarter
2. Coffee can help you burn fat
3. The caffeine can drastically improve physical performance
4. There are essential nutrients in coffee
5. Coffee may lower your risk of Type II Diabetes
6. Coffee may protect you from Alzheimer's disease and Dementia
7. Caffeine may lower the risk of Parkinson's disease
8. Coffee appears to have protective effects on the liver
9. Coffee can fight depression and make you happier
10. Coffee drinkers have a lower risk of some types of cancer
11. Coffee does not cause heart disease and may lower the risk of stroke
12. Coffee may help you live longer
13. Coffee is the biggest source of antioxidants in the western diet
 M A R K E T A N A LY S I S
Coffee is the second most-traded commodity in the
world and is grown in 50 countries along the equatorial zone
called “The Bean Belt”, located between latitudes 25 degrees
north and 30 degrees south. Interestingly, the Philippines lies
within the Bean Belt.

The country is 55% self-sufficient and

45% import-dependent, which is still far from the government’s
goal of reducing imports.
 Trade Secretary Ramon M. Lopez said the Department
of Trade and Industry (DTI) is working closely with the
Department of Agriculture (DA) to ensure the Philippine coffee
industry would be at par with the world’s top producers such as
Brazil, Vietnam, Columbia, Indonesia and Honduras.

According to John Miller, Chairman and CEO of Nestle

Philippines, “coffee farmers are central platform for shared
value; hence, 70% of the coffee requirements of Nestle will be
sourced in the Philippines by 2020.”
 TA R G E T A R E A

Target size of lot: 50 hectares

The DENR’s National Greening Program
allotted 86,000 hectares of land to plant coffee from
2016-2028. For every hectare, 500 seedlings have
been planted at 4m x 5m planting density. The cost
for each coffee seedling is Php 12.00.
 C O S T A N D R E T U R N A N A LY S I S
A. Robusta
Estimated number of trees per ha 850 trees
Estimated number of harvested GCB (Year 2) 350 kg/ha
(Year 3) 840 kg/ha
(Year 4) 1,250 kg/ha
Projected average price per kg Php 80.00
Estimated production cost per kg Php 37.33
Estimated additional processing cost per kg 5.50
Estimated labor costs per kg 12.84
Estimated total cost per kg Php 55.67
Estimated profit margin per kg Php 24.33
List of possible expenses:
Cash Costs Imputed Costs
Fertilizer Operator and Family Labor
Pesticides Exchange Labor
Hired Labor Depreciation
Land Tax
Rentals
Transport of Inputs
Food Expenses
Repair and Maintenances
Non-Cash Costs
Landlord’s Share
Harvester’s Share
Hired Labor Paid in Kind
Lease Rental
B. Arabica

Typical Arabica farm production:

Estimated number of trees per ha 850 trees
Estimated number of harvested GCB (Year 2) 400 kg/ha
(Year 3) 1000 kg/ha
Projected average price per kg Php 125.00
Estimated production cost per kg Php 55.33
Estimated additional processing cost per kg 8.74
Estimated total cost per kg Php 64.07
Estimated profit margin per kg Php 60.93
Modern Arabica farm production:
Estimated number of trees per ha 850 trees
Estimated number of harvested GCB (Year 2) 400 kg/ha
(Year 3) 1000 kg/ha
Projected average price per kg Php 200.00
Estimated production cost per kg Php 47.13
Estimated additional processing cost per kg 6.29
Estimated total cost per kg Php 53.42
Estimated profit margin per kg Php 146.58
 MARKET GAP
To narrow the gap between the demand and supply of coffee, a roadmap
in coffee industry for 2017-2022 was identified. Also, the roadmap
addresses the problem of having high imports that caused significant
decline in the market price of coffee beans.

Hence, some strategies may be done to address these concerns:

1. Value Adding Coffee Products – This strategy might involve value addition to
the harvested coffee beans by means of adding the roasting process.
2. Certification – This strategy make a product more competitive worldwide for
certification is seen as insurance that compliance to certain standards on farm
management and growing practices has been practiced.
3. Diversification