Mindanao’s vegetable producers must identify and develop niche markets as a strategy to remain competitive and ensure their expansion in the coming years.
These were among the recommendations made by Dr. Sylvia Concepcion, dean of the School of Management of the University of the Philippines-Mindanao, during the 7th Mindanao Vegetable Congress organized by the Caraga High-Value Cluster, Inc., and supported by USAID’s Growth with Equity in Mindanao (GEM) Program.
Concepcion said that given changing consumption patterns and the increase in urban household incomes across the country, vegetable growers in Mindanao may find it more profitable to focus on a specific market segment.
“Small [vegetable] producers must choose to serve market segments that they have the capacity to supply,” she said, explaining that the country’s vegetable market is made up of four segments characterized by different volume, quality and packaging requirements.
The first segment, which includes upscale hotels, resorts and restaurants, is the “most quality discerning,” and requires the widest range of salad, temperate and tropical vegetables.
This market, which serves upper-income consumers mostly residing in Metro Manila, requires suppliers to include highly detailed product descriptions in their packaging and to employ sustainable farming practices.
The second segment includes business hotels, mid-priced resorts and restaurants and supermarket chains. This market, which caters to upper and middle-income consumers and tourists, is more “price-conscious” and flexible in the kind of vegetables it sells.
The third segment’s clients include wholesalers and consolidators supplying upscale institutional, business, and wet markets. This market absorbs the largest volume of vegetables traded on the wholesale market, and is capable of importing produce once local suppliers are unable to meet its volume requirements.
The fourth segment, which serves middle-income and lower-end consumers, accounts for almost 75 to 80 percent of fresh vegetables sold in retail markets across the country. This market, which mostly sells tropical vegetables, does not have strict quality requirements and is not generally affected by shortages in supply.
In order to maintain an advantage over competitors, Concepcion said, Mindanao’s vegetable farmers need to keep abreast of the latest production technologies and “commit to the market” by establishing long-term relationships with their clients, Concepcion said.
She encouraged growers to develop a well-rounded market overview and to find ways of integrating themselves in the production supply chain in order to penetrate more lucrative markets.
During the congress, which also served as marketing venue, a group of vegetable traders from Cebu met with several Mindanao vegetable producers.
Maria Buanghung, president of the Cebu City Market Vendors Association, which operates at the Carbon Public Market, said that there is a huge market for vegetables in Cebu, as growers there cannot keep up with increasing consumer demand.
Buanghung said that their group buys weekly about 10,000 to 15,000 kilos of eggplant and 20,000 kilos of squash, which can be readily supplied by Mindanao growers.
“We just want to be assured that Mindanao growers can consistently provide our volume requirements,” she said, adding that their association also supplies markets in Leyte, Dumaguete and Bohol. [GEM]
