1 Alianzas para el Desarrollo Inclusivo del Sector Coco: Tendencias de Mercado, Potencial y Perspectivas. Agroalimentaria May 19th, 2017
2 Global Market Trends: Coconut ProductsNo longer a vegetable oil commodity RBD coconut oil: stagnation 3-4MMT, market share from12% to just below 3% Niche market: ‘naturalness’ in cosmetics, personal care, and detergent markets Competing only with palm kernel oil Virgin Coconut Oil: Scale independent Favorable environmental and health profile Premium price Global Market Share: Nine Major Vegetable Oils ( ) Source: APCC, Frost & Sullivan
3 Global Market Trends: Coconut Products (Cont’d)Marketing strategy of lead firms boosted consumer awareness and demand for coconut products Coconut water US$1.86 billion in 2015 25% per year growth to US$4 billion in 2019 Pepsi (Kero Coco, O.N.E, Tropicana Coco Quench), Coca-Cola (Zico), & Vita Coco Alternative dairy (almond, soy, & coconuts) US$1.99 billion in 2015 18% per year growth to US$6.27 billion in 2021 WhiteWave Foods Inc., Blue Diamond Growers Inc., Living Harvest Foods Inc. Other products: coconut sugar, flour, VCO.
4 Emerging Regional Coconut Value ChainUS$4.7million in 2014 (Coconuts) Production Primary Processing Advanced Processing Manufacturing End Market Refined Coconut Oil Markets: St. Lucia (US$1.14 million); Jamaica (US$1.53 million); Antigua and Barbuda, Dominica, St. Vincent and the Grenadines Markets: United States, and Dominican Republic (< 10%) US$106 thousand in 2014 (Coconuts) US$0.7 million in 2014 (CNO) Trinidad refines coconut oil and exports under different business relations to the countries in the region (US$2.7 million export in 2014) Dominican Republic processes coconuts into grated, cream and milk Guyana Supplied approximately US$6 million coconuts and products to Dominican Republic, Trinidad, and other countries in the region Non-oil Merchandize Exports, Nine Caribbean Countries
5 Lead Firms and Governance: Brand ManufacturersCosmetics, Personal & Home Care, Pharmaceuticals Firm HQ Annual Sale U.S. 83 France 30 U.K. 64 17 Germany 8 Packaged Food Firm HQ Annual Sale Switzerland 100 U.S. 34 67 U.K. 64 France 26 Beverages (Health & Wellness) Firm HQ Annual Sale U.S. 46 67 Switzerland 100 France 26 Austria 6 Note: 2014 sale figures in US$ billion Multiple business segments, focused on sustainability initiatives, naturally-derived ingredients, not an exclusive focus on ingredient certification Mondelez International, launched in 2012, a 10-year commitment US$400 million program that finances sustainability partnerships. In India, it supported intercropping in coconut plantations, working with 100,000 coconut farmers in four states
6 In-country Main ConstraintsBetter leverage capabilities of CARDI & regional universities Domestic seedling supply is either non-existent or at best the waitlist takes years to access the desired number and variety of seedlings Risk of lethal yellowing, red ring, red palm mite prevail across the region although with some variations Tailored financial services to smallholder farmers is a common challenge across the countries. Access Planting Material & finance & Services A predominantly fragmented industry structure (weak value chain linkages) and smallholder dominated farming system High transaction costs and scale inefficiencies in delivery of key services – market information, technical extension, quality control and finance Weak standardization and certification of the non-traditional products Small structure and weak end-market presence limits flow of consumer market information to the local industry stakeholders and feed into the weak market intelligence and export promotion. Few Incentives for smallholder market integration and low income generation Weak Industrial organization and no support to smallholders Lack of Statistics & legacy of ‘copra oil’ era Unavailability of reliable industry statistics about the plantations, age-profile, production capacity, and trade is a major source of investment risk Despite its rising contribution to the agricultural GDP of the target countries, coconut industry does not have priority policy support.
7 Caribbean Coconut Regional and Global Value ChainAgroalimentaria May 19th, 2017
8 Coconut Value Chain: Input-Output StructureCoconut Kernel Household consumption Baking, alternative dairy, and confectionery industries Cosmetics Personal care Pharmaceuticals Detergents Local fresh water Pasteurized & packaged coconut water (sports & natural drinks) Inputs Production Primary Processing Advanced Processing Manufacturing End Market Coconut husk Coconut shell Dried Kernel Copra Virgin coconut oil Desiccated coconut Coconut milk & cream Oleochemical (Fatty Acids, Fatty Alcohols, Glycerin) Mature Coconuts Processed & packaged coconut water & various flavors De-husked nuts Crude coconut oil RBD coconut oil Bottled coconut water Coconut coir & pith Natural fiber composites Geotextile products Horticulture Construction Automotive Charcoal & activated carbon Air & water filtration Land Water Seedlings Agrochemicals Biodiesel Copra Cake Institutions: 1) Country Level: Coconut Board/Authority/Associations; Coconut Research Institutes; Ministries of Agriculture; Ministry of Trade & Industry; and Bureaus of Standards 2) Regional/Global Level: Asia Pacific Coconut Community; and Coconut Genetic Resources Network Research & Development Legend: Coconuts-food chain Coconuts-chemicals chain Coconuts-’sports drink’ chain Coconut-coir Chain Coconut-activated carbon chain By-products Tender Coconuts Finance
9 Lead Firms and Governance: Brand ManufacturersHQ Annual Sale Industry (Brand) U.S. 2,500 Packaged Food (LouAna) 2,150 Packaged Food (Spectrum) 1,000 Packaged Food & Beverage (Goya) 250 Coconut Water, Coconut Oil (VitaCoco) 90 Coconut Oil (nutiva) 9 Packaged Food & Beverages (COCOZIA, EPICUREX) U.S 1.2 Personal Care (Oxy) N/A Nutraceutical (Nature’s Way) Single segment and/or niche market brand manufacturers Focused on ingredient and end-product certification Note: 2014 sale figures in US$ million Source: Euromonitor, PrivCo, OneSource
10 Selection of Alliance locations in Jamaica
11 Alliances for Action Model (A4A) for project implementationA4A are partnerships for implementation at the local level Not just Coconuts but associated crops: Fruits, Vegetables, etc. Voluntary network of partners from along the agricultural supply chain into a Value Chain Alliance to jointly implement local level market-led solutions. Generate new opportunities for farmers and entrepreneurs, while increasing trade, diversification, food security and sustainability as a way to drive social and economic impact. Business and value chain alliances for improved business for all targeting coconuts and associated crops
12 Participatory workshop validating modelSummary of KEY ISSUES FOR THE COCONUT SECTOR AT THE NATIONAL LEVEL A Lack of information on business models, market information, opportunities and linkages B Disorganised sector and fragmented value chains C Limited access to quality planting material and R&D D Limited access to finance and investment E Poor value addition and product development; and poor compliance to processing, food safety and quality standards F Poor productivity, coordination and access to extension services at the farm level G Lack of policy support and alignment of policies to support the sector
13 The Roadmaps: Regional and NationalBusiness models and market information Establish commercially driven value chain alliances and improve organization of the sector R&D and Quality planting material availability Access to finance and investment Value addition and product development; processing, food safety and quality standards Productivity, coordination and extension Policy Support and alignment
14 Alianzas para el Desarrollo Inclusivo del Sector Coco: Tendencias de Mercado, Potencial y Perspectivas. Agroalimentaria May 19th, 2017