Philippine Calamansi Association, Inc.: Charting The Path To Success
Philippine Calamansi Association, Inc.: Charting The Path To Success
By:
Jacob Benedict ● Julia Crowley ●
Anna Enocksson ● Bradly Verdant
1
Acknowledgements
Table of Contents
3 Executive Summary
4 Introduction
6 Background
The Philippines
Calamansi Fruit
Philippine Calamansi Association, Inc.
10 Methodology
12 Situational Analysis
Strengths
Weaknesses
Opportunities
Threats
38 Conclusion
40 References
3
Executive Summary
The Philippines grows more calamansi than any other citrus fruit. Its sour taste constitutes the
main ingredient of the locally popular beverage known as calamansi juice. On January 15, 2013, a group
consisting mainly of calamansi processors came together to form The Philippine Calamansi Association,
Inc. (PCAI). PCAI consists of 16 members who aim to unite as one force to promote the calamansi in
both local and international markets. In addition to calamansi processors, there are also some farmers
in the organization. The president of PCAI, Helen Del Rosario, expressed that PCAI is struggling to
maximize its productivity and achieve its goals of enhancing the calamansi.
Four students and one professor from Cornell University conducted a two-week study from
January 6-18, 2014 to better understand the shortcomings of PCAI. Data was gathered through
interviews with PCAI members, government officials, local agriculture experts, and farmers to better
understand the conditions of calamansi production in the Philippines. Visual observations were made of
the calamansi production process in the Philippine provinces of Tarlac and Oriental Mindoro.
Through the collection of data, the research team identified five challenges that are restricting
the progress of PCAI. These challenges include: calamansi supply shortages; packaging shortages; a lack
of standardization; shortcomings in PCAI’s organizational capacity; and marketing struggles. After
identifying the challenges, the team has provided ideas for mitigating the restrictions such challenges
impose on the success of PCAI.
To alleviate the effects of calamansi supply shortages, the team proposes the idea of increasing
off-seasonal fruit production through adjusting agricultural practices. In order for this to be possible
extension work and research needs to be improved. As for the packaging shortages, the team suggests a
short-term strategy of collectively sourcing the packaging materials. A longer term strategy of
establishing a packaging sector in the Philippines is also recommended. In regards to PCAI’s lack of
standardization, the team puts forth the recommendation that PCAI define standard criteria for
beverage classification as well as adopt food safety standards. In response to the observed
shortcomings in PCAI’s organizational capacity, the team suggests that the organization prorate
membership dues, construct standardized expectations for PCAI members, and develop strategic
partnerships. To alleviate PCAI’s marketing struggles, the team recommends that members develop
clear communication practices and study successful peer organizations.
4
Part 1: Introduction
5
Introduction
In 2013, 4.7 million tourists flocked to the Philippines to experience the exotic characteristics of a
rich culture. This nation’s world famous beaches, warm weather, hospitable people, and enticing cuisine
are all factors that can be attributed to this colossal figure, which grew by 9.56% from the previous year
(Tourism, 2014). The calamansi, a sour citrus, is most abundant in the Philippines and is a major ingredient
in the nation’s palatable staple products that satisfy the taste buds of both locals and foreign tourists. It
is most common to see this small fruit served with popular dishes like pancit canton and sisig.
Furthermore, the calamansi is the main ingredient in the popular Filipino beverage that has come to be
known as calamansi juice.
Although the calamansi is extremely popular among tourists in the Philippines, it is not well-
known outside of the country. In January of 2013, a group of calamansi processors came together to form
the Philippine Calamansi Association, Inc. (PCAI). PCAI aims to unite as one force to promote the
calamansi as a globally acceptable product in both local and international markets. In spite of its efforts,
PCAI is struggling to achieve this goal as a result of five identified challenges. These challenges include:
calamansi supply shortages; packaging shortages; a lack of standardization; shortcomings in PCAI’s
organizational capacity; and marketing struggles.
The following paper will begin with background information on the Philippines, calamansi, and
PCAI. Next, there will be a discussion of the situational analysis. Lastly, the paper will address each
observed challenge and provide ideas for ameliorating their impeding effects on PCAI.
6
Part 2: Background
7
The Philippines is an insular Southeast Asian nation with a unique history. Having been a colony
of Spain, the United States, and Japan, the country received full independence in July of 1946. Upon
achieving this independence, the Philippines adopted a democratic governmental structure. The nation
is ruled by the President who can only serve one 6-year term. Yet the Philippine government structure is
decentralized as the country is divided into regions which are further subdivided into provinces,
municipalities, and barangays. Barangays function as neighborhoods within municipalities. Each
government unit is overseen by its own elected official.
Since the Philippines became independent, it has experienced both highs and lows in its efforts
to develop economically. According to the Philippine Bureau of Statistics, the nation’s 2012 GDP was
250.3 billion USD (Statistics, 2014). The World Bank ranked the Philippines as the 41st largest economy
in the world based on this GDP (World Bank, 2012). The Philippine economy relies heavily on remittances
from its 6.3 million registered overseas workers (Guitierrez, 2014). The nation is currently the fourth
largest recipient of remittances in the world. Thus its human labor is said to be one of its most valuable
exports. Although the process of looking for higher wages abroad has become quite popular in the
Philippines, many groups are pushing for local innovation and business development in order to promote
the Philippine local economy.
Citrus fruits globally have the highest production within the fruit category, and are commercially
grown in more than 50 countries (Ladaniya, 2008). This makes their contribution to the world economy
great, with numbers estimated to be at more than 10 billion USD annually, and it also provides job
opportunities all along the value chains.
Calamansi is a citrus fruit that is a bit smaller than a golf ball in size with a diameter of up to 4.5
cm (1 ¾ in), looking quite a lot like a small lime with its round to oblate shape and green color that turns
orange as it ripens (Morton, 1987). However, it is picked at its green stage due to the composition of the
juice that can be extracted from it. It grows on trees that can grow to become 7.5 m (25 feet) tall with a
densely branched character making mechanization of harvest near impossible. The calamansi tree and
fruit currently go by the Latin name x Citrofortunella microcarpa (CAO, 2010), but it has had several Latin
names over the years; something that is worth taking into account when looking for research on the plant.
8
Its common name, calamansi, has many synonyms as well, such as calamondin and Philippine lime. The
origin of the calamansi has not been established, but it is believed to potentially have originated in China.
Subsequently, it was brought to the Philippines and Indonesia where it was established. (Morton, 1987).
The trees are most abundant in the Philippines where both fresh and processed calamansi is grown and
consumed. Much of this calamansi is used for making processed beverages. In the supermarket you can
also find calamansi detergent and soap as well as calamansi (flavored) soy; much like we are used to seeing
lemon used in the US and Europe.
The flowers of the calamansi tree are self-pollinating, meaning that a tree does not need pollen
from another tree in order for the flower to be pollinated and bear fruit (Morton, 1987). This explains why
it is assumed that most trees in the Philippines are of one single variety with very little genetic variation
between them; practically making them clones (CAO, 2010). The trees are believed to grow best on sandy
loams, but can handle several soil types as long as the soil is not waterlogged but provides good drainage
(Morton, 1987; CAO, 2010).
PCAI is organized into five action teams working in parallel: PCAI Care, Brand Team, Market Team,
Product Team, and Info Team; together, the teams work towards the common goal of growth in the
calamansi market. The PCAI Care Team focuses on people. Through a partnership with national linkages
they work to educate, train and uplift the calamansi farming community, thus ensuring that farmers
receive equitable pay while promoting sustainable farming. The Brand Team works on product image. This
team concentrates its efforts on product packaging, experience, developing brand loyalty, and the overall
9
perception by consumers. The Market Team’s prime goal is market entry; they focus on analyzing and
planning how the calamansi and calamansi products can be positioned in the market via target
demographics, marketing strategies, and market analysis. The Product Team focuses on product quality,
which makes it one of the most important pieces of the puzzle. This is because providing a quality product
is essential to gaining consumer loyalty and to meeting international food and beverage standards. The
Information Team organizes linkages and provides insight on methods that could be implemented to
optimize overall efficiency. PCAI`s organizational structure is shown below:
PCAI Action
Team
Market Product
PCAI Care Brand Team Info Team
Team Team
Ultimately, the organized efforts of PCAI will lead to lasting improvements and development in the
Philippine calamansi market, which can also bring positive, impactful changes across many underserved
communities in the country.
10
Part 3: Methodology
11
Methodology
In order to better understand the shortcomings of PCAI, which were expressed by Ms. Del
Rosario, a team of four Cornell University students and one professor conducted a field study in the
Philippines over a two-week period. Data was gathered through visual observations, presentations, and
interviews with local farmers. To investigate variations in the quality of calamansi within the Philippines,
the research team visited markets in Manila as well as calamansi farms in the provinces of Tarlac and
Oriental Mindoro. Additionally, the team familiarized itself with PCAI by listening to a thorough
presentation that the organization conducted at the beginning of the team’s visit. Local government
officials in the areas of Metro Manila, Tarlac, and Oriental Mindoro also briefed the team on the current
status of calamansi production in their respective areas. Furthermore, university agriculture specialists
as well as officials from the National Department of Agriculture delivered information to the team on
the state of the Philippine calamansi value chain. Lastly, local farmers were interviewed in order for the
team to get an idea of average calamansi production outcomes in each respective location. Such
interviews were mostly conducted in the Philippine national language of Tagalog to ensure clarity.
It is important to acknowledge that the interviews with farmers were acquired through a
convenience sampling process. All visits were set up by Ms. Del Rosario based on who she knew in the
area. Therefore, the data that was gathered on the calamansi farms does not represent the outcomes
of all of the farmers in the areas that were visited. In addition, although the majority of PCAI members
were present during the presentation, they did not all speak. As a result, it is possible that the team did
not hear the concerns or successes of the entire organization of PCAI. Lastly, the mayor of Oriental
Mindoro was away during the team’s visit. Although other local government officials spoke with the
team at that time, it is probable that important information related to the local economy and calamansi
production in Oriental Mindoro could have been overlooked without the presence of the mayor who
oversees the entire municipality.
12
Strengths
The Philippines Calamansi Association, Incorporated benefits from a number of strengths internal to the
calamansi industry:
Most importantly, the Philippines is the number one calamansi producing country in the world.
While the origin of the calamansi is debated, the Philippines is without a doubt, the largest
consumer and grower of the fruit.
PCAI’s motivated membership and strong leadership is a valuable asset for the organization.
Current President, Helen Del Rosario, dedicates a significant amount of time furthering PCAI’s
goals. Her interactions with trade partners, government employees, and other related parties
have worked to increase attention to the calamansi within the past year.
The members have also helped to build PCAI into an effective organization. They represent a
diverse array of business experiences and calamansi product offerings.
Weaknesses
One challenge is the competing interests inherent to any industry group. PCAI’s members
sell products that, in many cases, directly compete against one another. Although this
competition has not created any significant issues thus far, it will always be a challenge
for the organization.
Along with competition comes product variation among members. In a market such as
the Philippines, processors are able to label “concentrate” or “juice” without complying
with food product definitions. Variations in labeling as well as product quality exist among
the members of PCAI.
The organization does not include large calamansi processors. This means that PCAI’s
advocacy has a more limited reach because it does not represent multinationals and other
major processors who have significant sway.
14
During the high season, calamansi supply is so great that farmers dispose of their excess
fruit. During the low season though, calamansi prices are too high for a processor to
purchase the fruit. These peaks in seasonality create issues for processors seeking to
utilize their capacity year round.
Processors also have issues securing inputs for their products such as packaging supplies.
Limited domestic production paired with import difficulties means that members
frequently face bottle shortages.
Finally, the calamansi itself presents a challenge for PCAI. Domestically, it is seen as a low
value product. Internationally, it has low visibility, especially outside of Asia. PCAI has to
work to overcome the domestic reputation and increase awareness outside of the
Philippines in order to fulfill its mission. This is being complicated by a lack of
understanding of the calamansi. Little research exists on the fruit, especially on aspects
relating to calamansi production.
Opportunities
A number of opportunities external to the calamansi industry can play into PCAI’s success:
One opportunity is the economic growth of the Philippines. In the past two years, the
Philippines has earned 6.8% GDP growth, qualifying them as an emerging market
(International Monetary Fund, 2013). The economic growth is forecasted to continue
for the foreseeable future, which bodes well for any type of industry focused on the
Philippines.
Finally, Geographical Indication (GI) has the potential to elevate the calamansi’s
marketability worldwide. GI is a legal designation given to a product that is produced,
most typically, in a specific region. It is used to promote traditional practices and
15
highlight regional specialties. GI is being considered for the calamansi by the Philippine
government. If successful, GI status could significantly increase demand.
Threats
PCAI faces pressure from a variety of negative forces outside of their control:
Most notably is the Philippines government. The Philippines ranks 108th on the World
Bank’s ease of doing business index, primarily because of government inefficiencies
(World Bank, 2014).
The calamansi is also a low priority for investment from the government’s agriculture
budget. Approximately 60% of spending goes toward rice, with 2.18% divided up among
a large number of high value cash crops, including the calamansi, ranked eleventh in
importance (Philippines Department of Agriculture, 2014).
Another threat for PCAI is the growing competition of products in the health oriented
space. Calamansi competes with store shelves filled with products touting similar claims.
This could be particularly problematic in Western markets where consumers would have
little knowledge of the calamansi.
Another issue in export markets that may arise is competition in calamansi production.
Foreign markets such as the United States and the Middle East may have the climate to
be able to support calamansi growth. This could become an issue if the product achieves
success in these markets. Importers could lower costs by choosing to seek out domestic
growers.
16
As mentioned previously, PCAI is struggling to fulfill its goal of increasing the recognition of
calamansi in both local and international markets. Observations conducted during a two-week period of
field research have led to the identification of five key challenges that account for the organization’s
shortcomings. These challenges include: shortages in calamansi supply; shortages in packaging; a lack of
standardization; shortcomings in PCAI’s organizational capacity; and marketing struggles. The following
section will describe these five challenges and provide ideas to mitigate the inhibitions they impose on
PCAI’s success.
Value Chain
18
to a certain extent. It may not be possible to stretch it over the whole year, but the peak production
volumes could be leveled out and its length stretched out to ensure a more stable supply to producers,
as well as other markets where the fruits are sold for fresh consumption. To achieve this there needs to
be more work done towards the calamansi farmers as we have identified several bottlenecks to
increasing (off-seasonal) production in this sector: knowledge, research, organization among farmers,
and access to inputs.
Knowledge
PCAI does not necessarily work directly with farmers themselves. However, it appears that
extension work directed towards calamansi farmers is very limited and this needs to be improved, either
through the establishment of new extension agencies or through the strengthening of existing ones such
as the Catholic Relief Service or the governmental Agricultural Offices. An alternative to this would be
for PCAI to help fund calamansi extension work through existing NGOs or to hire an agent to conduct
this work on behalf of PCAI. It could also prove useful to help farmers build their capacity to keep
records on the farm that document their practices, such as the time and quantity of fertilizers and
pesticide application. These records could also include prices of purchased inputs and harvested fruits
in order to help them map their costs and income. This type of improved documentation could help
target interventions on what type of capacity needs to be taught and also to assess the impacts of
certain practices; something that could be beneficial for both research and governmental interests in
strengthening the calamansi industry. Numbers can also help strengthen an argument for increasing
investments in the industry on both a domestic and international level.
20
Research
Research is another field that needs to be improved within the calamansi industry. As far as we
are aware, there is hardly any research currently being conducted on calamansi in the Philippines.
Previous research also appears to have been lacking in the more agronomical aspects of the calamansi
industry. According to PCAI there has been more research done by local universities than what can be
found in scientific journals. However, it is not clear what aspects of the calamansi industry have been
researched. Furthermore, the end product is often left sitting on the shelves at the universities, and
does not find its way out to farmers and processors where its applied use can be valued. Existing
research needs to be better communicated and brought out to the industry and this should best be
accomplished through an active collaboration between research institutions and PCAI to retrieve and
revive old studies to use as a basis for new research and new agricultural practices to be communicated
to farmers through extension work. As mentioned previously this extension work still needs to be
established or strengthened.
There is research being done on the chemical composition of the fruit and similar properties,
but it is a fact that the calamansi is a horticultural product highly specific to the Philippines. Therefore,
if calamansi is not invested in and valued highly enough in both academia and in government policy, it
could run a risk of being wiped out of commercial use by new pests and pathogens in the future. The
calamansi is reported to be relatively susceptible to a variety of pests and diseases, and such attacks can
affect yields dramatically and in some cases cause trees to die. This scenario has been seen in Florida,
USA on orange trees due to greening disease. In the case of Florida oranges, work is being done on
breeding schemes to create resistant varieties, partially using genetic approaches, but this is only
possible thanks to preexisting research pertaining to how, when, and where the orange trees grow and
function. For calamansi this foundation does not appear to exist, and due to its extremely marginal
existence on the global citrus market, the Philippines would take the full impact of a reduction in
calamansi on the market.
Organization among farmers would also be needed in order for there to be a stable supply of
fruits for as long a season as possible. Unless farmers cooperate and decide on who is going to
manipulate their trees to shift production season, the risk is that the peak season will simply be moved.
This could be the case if most farmers start employing the off-seasonal approach in order to get higher
prices for their produce. The organization of the farmers could be done through farmers’ associations,
but it does require its members to work together and trust each other, meaning that there needs to be
good social capital. The members also need to be trained to acquire knowledge about agronomical
21
practices using both farmers’ knowledge and scientific knowledge. This could be called building human
capital by educating farmers. It is, however, important to note that a lot of valuable knowledge on what
practices work and what does not is currently with farmers, and this should not be lost or replaced by
science. Instead, it would be valuable to have experienced farmers share their knowledge with each
other, through e.g. farmers’ associations, potentially helped by NGOs or governmental institutions for
funding etc.
More information needs to be gathered on the incentives for calamansi farmers to join
organized groups like farmers’ associations, as well as how inclusive these groups are. However, there is
one group which is already represented in PCAI and that is the Oriental Mindoro Farmers’ Association
(OMFA), and though this visit offered little information on their organization and objectives it would be
worth studying further. This type of organizations are already becoming important to PCAI as they are
working on introducing minimum prices for the calamansi fruits, and the project went through a three
month long pilot trial in 2013. Such a contract could be further developed in the future to also include
more stable fruit supplies for PCAI members. The existence of farmers’ associations, or other groups
representative of calamansi farmers in certain regions, could help include more farmers into the
contracts and help to provide PCAI members with more stable fruit supplies without turning it into
contract farming.
Access to inputs
Access to inputs such as irrigation, fertilizers and information for farmers needs to be improved
if they are to be able to increase production or achieve more off-seasonal production. The role of
irrigation and fertilizers will be discussed further in the section on agronomic means of increasing off-
seasonal production. Information access relates to the need for farmers to receive good information on
long time span weather projections, to decide when to fertilize and irrigate, as well as access to
information on calamansi pricing on the market to ensure fair prices and build trust between buyers and
producers. The point about price transparency is important to make farmers aware of their costs in
relation to their profits and is a step towards improving the sustainability of the calamansi farms in
regards to the social and economic aspect.
All together this shows an increased need for extension services directed towards farmers, and it is
going to be up to PCAI to decide how they wish to contribute to this work. By becoming the voice of the
calamansi industry they will have a greater opportunity to lobby for increased work with calamansi
farmers through government as well as NGOs. If interested they could also choose to become more
active by planning or participating in the extension work needed by acting as e.g. a connector, the spider
in the web, for relevant government institutions (the Department of Agriculture and the City
22
Agriculturalist Offices), NGOs (Catholic Relief Service), farmers and universities. One thing is for sure and
that is that the opportunities for PCAI members to expand their businesses are tightly related to the
potential of calamansi farmers to improve their production. It would therefore be a logical choice for
PCAI to increase their investments in terms of both time and focus, and possibly money, to make sure
that they have a stable supply and good connections with farmers in order to secure their own future.
However much effort PCAI puts into marketing of calamansi, it risks coming to nothing if there is not
enough supplies of fruits to accommodate a growing market.
The farmer’s knowledge does not, however, appear to be widely spread and we heard from
several farmers that advances made in regards to improved production are often due to one or two
farmers’ interest and curiosity, sparking them to experiment with their practices, not access to
centralized knowledge or research. This example also shows that in order for farmers to be able to
regulate the fruit production season they must have appropriate access to irrigation and fertilizers,
which implies a need for both improved infrastructure and e.g. access to weather projections,
technology and knowledge on how to handle fertilizers to prevent negative environmental impacts.
Studies done on other citrus fruits such as lemon and oranges show that the induction and
initiation of flowering, which then leads to fruiting, is a highly complex process mainly occurring due to
internal signals in the plants and so far there has been little evidence of how external environmental
conditions can have an impact on regulating these processes. It has, however, been shown that a period
of water deficit seems to help induce flowering in several types of citrus fruits, and many of them also
show that induction generally happens under cooler temperatures or rather that induction appears hard
to achieve during high temperature conditions. More precise values for this would need to be
23
researched for calamansi, seeing as most of the data collected on other citrus fruits reflects conditions
of other countries and not the Philippines.
Apart from the use of fertilizers and irrigation it would be interesting to study if grafting could
be of use to the calamansi production, in similar ways as it is used for commercial apple and orange
production. This would potentially allow development and use of varieties with sturdier rootstocks,
which can tolerate different soil and environmental conditions, but may not give good fruits or high
yields. Simultaneously, varieties used for the scions could be optimized for their fruit yields, good
composition of the fruit juice, high recovery rate of juice during extraction, or other traits that can be of
commercial interest. This all points to a need for increased research, in which is something that PCAI
may want to consider a greater involvement. This involvement could be achieved through the
establishment of a calamansi research fund made available to institutions such as universities in the
Philippines which carry out the research. Another way for PCAI to become more involved is to provide
researchers with incentives to study the calamansi such as greater collaborations with farmers and
processors when conducting experiments, though for this to be possible it is necessary that sufficient
funding for the research is available from other sources.
A problem that this approach would need to overcome is the lack of genetic variation in the
calamansi tree population in the Philippines, as new varieties (or cultivars as they are called when bred
for) cannot be found without access to a pool of different traits, linking back to different genetic
compositions. Since calamansi has been grown abroad as well, though it is not nearly as abundant as in
the Philippines, there might be reason for researchers to attempt to conserve seeds from different
varieties and potentially use this material to employ genetic approaches to calamansi breeding in the
future. Worth noticing though is that the apomictic trait (setting seeds without prior fertilization) of the
calamansi tree makes it much harder to achieve such crosses of varieties, since the lack of a pollination
need means that unless the apomictic characteristic is overcome the seeds will still be like copies of the
mother plant.
Postharvest Considerations
According to calamansi processors and agriculturalists visited in the Philippines the juice needs
to be extracted from the fruits within two days of harvest. This can be quite difficult to achieve at times
due to the prevalent need for shipping of fruits from the islands of production to the islands where the
processing facilities are located. Processors source fruit locally if possible, but quality and production
seasons vary with locations and processors take this into account when sourcing fruits. The recovery
rate, how much of the juice can be extracted from the fruit, is a popular quality measurement and
24
processors appear to in addition to this carry out chemical tests of the juice quality to varying degrees,
depending on the size of the processing company. The calamansi fruits are usually shipped during
mornings and evenings to avoid the warmest temperatures since the trucks (jeepney) do not provide
additional cooling systems. According to literature the shelf-life could be extended to two weeks by
storing the fruits at 9-10°C and 90% relative humidity (Morton, 1987). Cooling should likewise increase
the time range for how long the fruit can wait until juice extraction, but there appears to be no clear
data on how much it would improve. Waxing could also be used to help the fruit retain moisture and
ascorbic acid (Morton, 1987), but would likely be costly and labor intensive. One of the farmers in Tarlac
used fans placed around the sorting table, which probably offered the fruits some cooling, but the major
role of the fans were to keep flies away from the fruits. Improving the shelf-life of calamansi fruit
through cooling would require more in depth studies of farmer’s access to stable electricity, costs and
efficiency of different cooling systems as well as studies on how the fruits are affected by the cooling
methods. Since there were more pressing issues to be addressed this report does not further develop
ideas for postharvest solutions, but there are surely lessons to be learned from studying other fruit and
citrus industries worldwide.
25
Packaging constitutes one of the most important elements in product development as it facilitates
the transfer of final products from the manufacturer to the end user or consumer. It is defined as the
coordinated system of preparing goods for transport, distribution, storage, retailing and end use; a means
of ensuring safe delivery to the consumer in sound conditions, at optimum cost and techno-commercial
function aimed at optimizing the cost of delivery while maximizing sales( and hence profits) (Coles &
Kirwan, 2011). With the existence of an almost infinite number of consumer products ranging from
electronics to food, packaging is ubiquitous. Due to its importance in trade and export, there is a thriving
packaging industry in developed countries such as the U.S and Canada. “The packaging sector makes up
about 2 percent of the gross national product (GNP) in developed countries, and about half of all
packaging is used to package food” ( (Robert, 2013).Packaging has four primary roles: containment,
protection, convenience, and communication.
Containment entails the storage of products in various types of packages in a way that enables
easy handling and transportation between manufacturers and consumers. The type of packaging and
standards used are unique to the product being contained. For example, food products normally require
very stringent packing standards to ensure the safety of the consumer. This function entails meeting
consumers’ demand for convenience, which includes prepared foods that can easily be cooked or
reheated without removal from the packaging. Another important aspect of convenience is packaging
design, which aims to improve product portability and ease of access to the product itself. Packaging
plays an important role in marketing by captivating consumers. Besides containment, protection; and
convenience, a package must enable the sale of its content. It accomplishes this through a combination
of its distinctive shape, branding and labeling. The aforementioned three vehicles for brand
communication all facilitate the conveyance of a specific message from producers to consumers. For
example, the particular graphics on a package can evoke a specific emotional response from a consumer,
which makes him or her more likely to choose your product.
PCAI members process the calamansi fruit to produce an array of products ranging from food
items to non-food items. To meet the demands of their customers, both locally and internationally, having
a stable supply of packaging is essential. Several PCAI members expressed difficulties with sourcing
packaging material for their products. Those difficulties were related to long lead times, minimum order
sizes, and import issues, which are particularly common in developing countries. Industrial limitations that
beset the packaging sector across developing countries include limited packaging solutions to meet
international market demands; and the small size of domestic demand for packaging material that
consequently leads to low investment by the packaging industry (Manalili, Dorado, & Van Otterdijk, 2011).
26
As noted earlier, packaging is an essential component in the transfer of products from the producer to
the end user or customer. To facilitate a stable export of calamansi products, it is imperative that PCAI
address its packaging issues as an organization. To address those issues; several ideas were presented to
PCAI: lobby for development of packaging sector, order local packaging or custom packaging, consider
joint sourcing of packaging, and partnering with The Packaging Institute of the Philippines.
The calamansi industry does not appear to have any standards on what makes beverages into
juices, concentrates or nectars. Standard categories for calamansi beverages could help to conform to
international standards and make export easier as well as improve consumer recognition of categories.
This should be of interest to the Philippine food industry in general, but would be of specific importance.
PCAI has many members producing and exporting calamansi beverages. Following international standards
may therefore be a good idea and we suggest PCAI to take a look at the CODEX General Standard for Fruit
Juices and Nectars to use as a reference for establishing a labeling standard among its members (Codex
Alimentarius, 2005). The Codex Alimentarius Commission (Codex Alimentarius, 2014) was established by
the FAO and WHO with the objective of harmonizing international food standards, making their standards
a good starting point for establishing standards within the calamansi industry, or the national food
industry in general. Apart from having members conform to the standard it could also be of benefit to
introduce the idea to the government to make it applicable to all fruit beverages in the Philippines. This
would make it easier to keep track of exports and production for statistical purposes on a domestic level
but also to avoid the mislabeling of products as the standard would require certain criteria to be fulfilled
for each category (e.g. concentrate, nectar).
In regards to the objective of PCAI to provide “safe products”, as stated in their mission statement,
it may be beneficial to have members move towards a common goal of increased food safety of their
products through the Hazard Analysis Critical Control Points (HACCP) approach. The approach is built on
seven principles and includes several steps to identify and mitigate potential food safety issues during
processing (FAO, 1997). This approach is tailored to each specific process or facility since different
machinery and structures can give different critical points. It does not seem feasible that all members
should go through HACCP certification in order to be allowed as members, but it appears to be a good
29
idea to have all members aiming to grow their business to also look into getting the certification. Members
whose profits are too small to allow for certification could still benefit from trying to employ the approach
in order to produce safe products, and it is important to note that if food safety becomes an issue for a
certain product/fruit the demand is likely to go down for all producers whether they follow good food
safety procedures or not.
PCAI is pushing for the calamansi to be classified under Geographical Indication (GI). They are
well aware of the criteria for this, which is why this topic will not be further elaborated on. It would,
however, seem useful for PCAI to look over how such a classification could affect them seeing how GI can
only be given to products with an origin in a certain region. This provides added value to the product
through e.g. its reputation, or quality (WIPO, na). Since the members source their fruits from different
regions this might end up only benefitting parts of the PCAI members. It should also be taken into account
that there might only be one single variety of calamansi, which is grown throughout the Philippines. This
would limit the GI to discuss how calamansi from one region such as Oriental Mindoro is different from
calamansi grown in other regions by only looking at the impacts of the growing conditions. This poses the
question of whether large enough differences between calamansi from different regions can be proven.
30
Prorate Dues
Current membership dues for PCAI members include an initial fee of 2,500 Philippine pesos (about
56 USD) as well as an annual fee of 1,500 Philippine pesos (about 37 USD). There are also a limited number
of honorary members who have their membership fees waived due to financial strains. However, at the
current state, it seems that the prescribed dues are not strictly enforced as some members have reported
that they do not pay them. Additionally, the limited capacity for honorary members discourages newer
businesses with limited funds from joining PCAI. Therefore, a feasible idea to increase and diversify
membership is to prorate dues based on total volume production. Such a process was successfully carried
out within the Apple Processors Association (APA) of America (APA, 2011).
The current expectations of PCAI members appear to be vague. Aside from attending
organizational meetings, there appears to be a lack of information related to their prescribed duties. It is
therefore an idea that PCAI construct standardized expectations for its members. This can take the form
of creating a membership category for individual actors such as processors and farmers. After making this
distinction, PCAI can set goals for its members based on their areas of expertise. It also appears to be a
productive idea to require PCAI processors to pursue the previously mentioned HAACP certification. This
31
will ensure that all PCAI processors are taking the necessary steps to promote health safety in the
production of their products.
Another idea for increasing and diversifying PCAI’s membership involves the development of
strategic partnerships. This could consist of a special membership for non-calamansi processors whose
success is heavily dependent on the success of the calamansi industry. Examples include bottle producers,
sugar/sweetener companies, and product label makers. Special strategic partner memberships were
employed by the Florida Citrus Processors Association (FCPA, 2012) and the Biscuit and Cracker
Manufacturer’s Association (B&CMA, 2013).
Organize Conferences
PCAI could also increase its membership diversity by holding annual conferences. Such events
could be open to current members, strategic partners, and potential members. Conference events could
consist of workshops related to calamansi production and marketing. In addition to providing participants
with opportunities to acquire more knowledge about the calamansi, these conferences might also present
valuable networking experiences.
To fulfill PCAI’s need for documentation, it appears to be a productive idea to generate annual
progress reports. Such reports could indicate the total quantity of products produced as well as total
profits. With the use of progress reports, PCAI can have a better understanding of its overall
shortcomings. This knowledge would enable the organization to generate future production goals.
32
While some individual PCAI members have their own website, PCAI lacks an organizational
website. Therefore, an idea to promote advertising is to create a website that will promote all PCAI
members as one united force. This website could introduce PCAI members, address the benefits of
membership, and outline the organization’s achievements by posting its annual progress reports.
Additionally, the website could help promote calamansi products within the international market.
At the current state, PCAI calamansi processors operate individual facilities in different provinces
of the Philippines. The insular geography of the country makes communication and shipping quite
difficult. As mentioned above, the province of Oriental Mindoro currently produces about 60% of the
total Philippine calamansi (PCAI, 2014). Yet none of the calamansi processing plants in this area are
operated by members of PCAI. Oriental Mindoro currently has four small-scale calamansi processing
facilities, which do not produce significant quantities of calamansi beverages. If PCAI opens a processing
facility in Oriental Mindoro, they can benefit from the abundance of calamansi production in the area.
This will also bring in additional revenues for the province since Oriental Mindoro currently lacks large-
scale calamansi processing facilities.
33
As detailed earlier, PCAI has a number of priorities it should address before focusing on securing more
contracts for export. In the meantime, the one marketing activity PCAI can improve on is branding. Even
for a product in its infancy, crafting a harmonized brand message is critical for adoption and growth. It is
especially important for PCAI to create a strong image for the calamansi because there is little awareness
of the product outside of the Philippines.
Communication
Delivering a clear and cohesive message is critical for a young organization such as PCAI. To project a
professional and established image to outside groups such as trade partners and government entities,
PCAI should set a standard for their branding efforts. A logo is currently being developed by PCAI’s internal
branding team. After the adoption of a logo, PCAI’s next branding priority should be to create a template
for external communication. A PowerPoint template for PCAI as an organization and for the calamansi as
a fruit brand should be created; using harmonized color templates and prominent placement of the logo
(Figure 1). A letterhead should also be created with a P.O. box that is separate from any of PCAI’s
members to establish legitimacy. A sample letterhead template for PCAI appears on the following page
(Figure 2).
34
Azim Goals
PCAI
P.O Box 123
Quezon City, Philippines
Tel. 123 456 7890
Figure 2 SAMPLE
Originating from a calamansi interest group
under the umbrella of DTI, the Philippine Calamansi
Association Incorporated (PCAI) is an industry
association whose mission is “to elevate the Philippine
Calamansi to a higher standard and promote it to the
international market.”
Originating from a calamansi interest group
under the umbrella of DTI, the Philippine Calamansi
Association Incorporated (PCAI) is an industry
association whose mission is “to elevate the Philippine
35
UGLI
The first case study is that of UGLI. UGLI represents both a fruit and a brand that
is sold and distributed by Cabel Hall Citrus Limited. The name is a trademark and
describes one variety of tangelos known for their unsightly, rough exterior. The
particular strain is a wild breed of orange, grapefruit, and tangerine native to Jamaica. UGLI markets the
fruits under the slogan “The Affliction is only Skin Deep so the Beauty is in the Eating. “™ Currently, they
distribute throughout the United States, Canada, Western Europe, and Scandinavia. While pricing varies
throughout their distribution network, prices are generally too high to be considered a staple for many
consumers; about 2 USDs each in the Eastern United States.
UGLI created a strong and recognizable brand where the products were available through the use of
their iconic logo and unique marketing strategy. This has not been met with widespread success in terms
of volume though, and UGLI remains a niche product at best. This is perhaps best explained by UGLI’s
high price point compared to competing products such as grapefruits and oranges. These products have
a defined role in the mind of consumer, and UGLI has not been successful in capturing a share from either
of these mainstays.
POM
POM Wonderful, also known as just POM, is a private company founded in 2002.
The owners, Steven and Lynda Rae Resnick, were independently wealthy before starting
the POM venture. Along with investment into thousands of acres of pomegranate
orchards, they sponsored university research into the health benefits of pomegranate juice. Reputable
universities supported claims of the fruits’ superior antioxidant content and the company’s sales grew
from zero to 130 million USDs in 9 years. Single serving juices were sold at 5 USDs and the brand in general
was regarded as a high price, high status product.
36
Although POM Wonderful enjoyed early success, the pomegranate juice market has collapsed over
the past four years. In 2010, the FDA issued a letter warning that POM had made false claims about the
health benefits of their product. (U.S. Food and Drug Administration, 2010) This led to a price decline for
pomegranates in the United States to fractions of their peak levels in 2008 and 2009. Although the future
does not look bright for POM, the company has been credited with introducing the pomegranate to the
US consumer and for its subsequent mainstream success.
Sunkist
Currently, there are over 6,000 members who together constitute the largest fresh produce shipper
in the United States. While originally focused on oranges, Sunkist has expanded their offerings to other
citruses, including lemons, limes, tangerines, and grapefruits. One of Sunkist’s greatest successes has
been the licensing of their logo and name to citrus related products. Sunkist brand orange soda, fruit
snacks, and vitamin supplements are all produced by third parties, but generate significant royalties for
the use of the well established brand. Sunkist had also seen success as a lobbyist group for citrus industry
interests. Because of their scale, Sunkist is able to secure favorable contracts from private sector players
as well as preferential treatment from government policy.
37
Part 6: Conclusion
39
Conclusion
The Philippines Calamansi Association, Inc. operates in a dynamic environment and will face challenges in
the coming years. While the organization appears to be on a trajectory of success, PCAI should consider
the following recommendations:
Supply is a serious issue for the members of PCAI and should be a primary area of concern.
Sourcing an adequate amount of calamansi forms the foundation of PCAI’s operations. Before
making any major investments further along in the value chain, this must be addressed. Secondary
to calamansi would be securing a reliable supply of other inputs, namely packaging. By
establishing a secure base domestically, PCAI can increase its chances of success in scaling up
operations.
PCAI should continue to press the government for more resources. Research and extension for
calamansi production can be improved and PCAI should be leading this charge. National
universities, government entities, and other institutions have done little research in the way of
field trials and breeding programs. An emphasis on these programs could raise yields and fix some
of the supply problems associated with calamansi production. Linkages to farmers, government
associated or not, would also be a wise investment.
As an organization, PCAI should continue on its path to maturity. A key area for improvement
would be to push for more standardization within PCAI. This can take many forms including
regulating labeling practices, enforcing quality control, and creating a more unified vision among
PCAI members.
More structure in PCAI’s approach may aid in its development. The current plan, while ambitious,
appears to be concerned with addressing too many areas at once. A phased plan, with tangible
checkpoints, structured around building a solid foundation at the beginning of the value chain and
moving downwards may help to better concentrate PCAI members’ resources.
As it stands, PCAI is the driving force in the calamansi industry and through their actions they have a
great opportunity to shape the future of the beloved citrus fruit. The current state of the calamansi
affords significant potential for development, and the responsibility to see this vision out is now placed
on the capable shoulders of PCAI.
40
References
41
References
APA. (2011). Membership Information. Retrieved March 1, 2014, from New North:
http://www.appleprocessors.org/membership.php
CAO. (2010). Calamansi (Citrofortunella microcarpa). Flyer #004. Davao City, Philippines.
Codex Alimentarius. (2005). General Standard for Fruit Juices and Nectars. Retrieved March 5, 2014,
from Codex Standard 247:
http://www.codexalimentarius.org/input/download/standards/10154/CXS_247e.pdf
Enocksson, A. (2014). Photographies from Philippine SMART Trip 2014. Cornell University, Ithaca, NY.
FAO. (1997). Hazard Analysis and Critical Control Point (HACCP) System and Guidelines for Its
Application. Retrieved January 15, 2014, from FAO Corporate Document Repository: Annex to
CAC/RCP 1-1969, Rev. 3: http://www.fao.org/docrep/005/y1579e/y1579e03.htm
FCPA. (2012). FCPA Allied Members. Retrieved March 1, 2014, from fcpa: http://www.fcplanet.org/
International Monetary Fund. (2013, October). World Economic Outlook Database. Retrieved March
2014, from
http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/weorept.aspx?pr.x=50&pr.y=4&s
y=2006&ey=2018&scsm=1&ssd=1&sort=country&ds=.&br=1&c=566&s=NGDP_R%2CNGDP_RPC
H%2CNGDP%2CNGDPD%2CNGDPDPC%2CPPPGDP%2CPPPPC%2CPPPSH&grp=0&a=
Ladaniya, M. (2008). Citrus Fruit – Biology, Technology and Evaluation. London, UK: Academic
Press/Elsevier.
Manalili, N. M., Dorado, M. A., & Van Otterdijk, R. (2011). Appropriate Food Packaging Solutions for
Developing Countries. Rome.
42
Statistics. (2014). National Quickstat. Retrieved March 1, 2014, from Philippine Statistics Authority:
http://www.census.gov.ph/
Tourism. (2014, 2 10). The Philippines Hosted 4.7 Million International Visitors in 2013. Retrieved March
6, 2014, from Department of Tourism:
http://www.tourism.gov.ph/Pages/IndustryPerformance.aspx
U.S. Food and Drug Administration. (2010, February 23). Pom Wonderful. Retrieved March 2014, from
Inspections, Compliance, Enforcement, and Criminal Investigations:
http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/ucm202785.htm
WIPO. (na). About Geographical Indications. Retrieved February 12, 2014, from
http://www.wipo.int/geo_indications/en/about.html
World Bank. (2012). Gross Domestic Product 2012. Retrieved March 1, 2014, from World Bank:
http://databank.worldbank.org/data/download/GDP.pdf
World Bank. (2014). Ease of Doing Business Rankings. Retrieved March 2014, from
http://www.doingbusiness.org/rankings