The Appeal of Bananas

Delicious fruit products from the Philippines are best-sellers in the EU market

By Knowledge Management and Information Service
August 24 2023

MAKATI CITY – The relaxed charm of fourth-generation farmer 35-year-old Raymund Aaron does not show the hard work he puts into successfully running his small family business of manufacturing food products.

The company Villa Socorro Farm and their factory are situated in Pagsanjan, Laguna province, south-east of Manila.

The self-styled 'Banana Chief' of this social enterprise, Raymund, oversees the production and marketing of the company's famous banana chips.

He inherited his passion for agriculture and farming from his father, incorporating a streak of his own.

Right after obtaining a Bachelor of Science in Management from Ateneo de Manila University in 2009, Raymund joined the budding family business.

"I wanted to be an entrepreneur for as long as I can remember. We used to grow bananas on our land in Pagsanjan, and so, after graduating, doing business using bananas seemed the perfect fit," Raymund shared.

An indirect start

The idea of exporting came through his father's work in marketing for a multinational company, which inspired him to engage in international business.

Starting off in 2008 with an initial capitalization of P5 million, the company produced banana chips, with the first export in 2014 to the United States.

The Health Safety Certification from the Food and Drug Administration (FDA), a requirement of the Philippine authorities, was obtained in 2012, which further added credibility to the business as an exporter.

"We began exporting indirectly through a local company that expressed interest in distributing our products to buyers there."

Department of Trade and Industry (DTI) helps reach Europe

Raymund, a regular at the Philippine government’s DTI business matching events, recently returned from a similar event held in Dubai coinciding with Gulfood 2023.

Regular participation in business networking events and seminars since 2015 has provided valuable knowledge and insights on export market access, including the European Union (EU).

Be it the DTI or the Center for International Trade Expositions and Missions (CITEM) handling the International Food Exhibition (IFEX) Philippines, the biggest international food trade show in the country, he always found participation in the trade fairs to be beneficial.

"You never knew who you would meet. I always carried samples of my products along." At one such event arranged by the DTI-Export Marketing Bureau (EMB), Raymund established a connection with the Philippines’ diplomatic mission in Switzerland. Soon, samples from Villa Socorro reached a few Swiss companies with the help of this link.

The products were a hit with one distribution company. By the end of 2019, a 20-foot container with 1,000 boxes that cost USD14,000 has been shipped to Switzerland. "It was support from the EMB that helped us pursue direct exports to Europe. We made our first link through them."

Recognizing the support he received, Raymund is always willing to share his skills and knowledge with other entrepreneurs and to contribute to local DTI capacity-building initiatives.

Why the EU?

The EU appears to be a lucrative market for the company as Raymund gradually expands the product range by including sweet potato chips and corn snacks. About 80% of total current revenue comes from exports, while 20% comes from sales at hotels, restaurants, canteens, airports, kiosks, and selected supermarkets in the Philippines.

Villa Socorro's exports to Europe are at 5%, with buyers in Switzerland, Norway and EU member state the Netherlands. Raymund wants to increase business with Europe, specifically with EU member states, which he regards as the best destinations for healthy organic food products made from tropical fruits.

"It is a market that is willing to pay a premium for natural products."

EU buyers' requirements

Raymund's drive to grow specifically in the EU market is evident in his readiness to comply with the necessary requirements.

The REX number to avail of the EU Generalized Scheme of Preferences Plus (GSP+) scheme to export tariff-free to the EU was obtained on the recommendation of the buyers to strengthen the business.

The Registered Exporter System (REX) is a self-certification system wherein the origin of goods is declared by economic operators themselves by means of so-called statements about origin. To be entitled to make out a statement of origin, an economic operator must be registered in a database by the competent authorities. The economic operator then becomes a "registered exporter."

Product and packaging development were also adjusted. There is a shift to use a more natural Brown Muscovado Sugar to suit customer preferences in the EU.

The company also created a sub-brand, Farmony, to market its products in the EU. "Farmony creates harmony between farmers, manufacturers, and consumers. Our existing brand, Villa Socorro Farm Sabanana Banana Chips, really targets Filipinos or people looking for Filipino products. We created Farmony to have a product that can easily blend on the shelves of the EU market," Raymund shared.

Social entrepreneur

Being on a farm allowed Raymund to become a social entrepreneur. He understands well the needs of the farmer.

To support banana farmers around his family plantation, Raymund buys 98% of the fruit from the community that he fondly refers to as “partner-farmers."

"We buy bananas from more than 200 farmers in a radius of 5km around our farm. We only plant 2% of the bananas that we use for banana chips," he shared. By processing 600,000 tons of bananas every year, he provides the local farmers with a market for their produce.

He considers himself lucky that things fell into place, enabling him to give back to the community that helped him get to where he is today.

Gearing up for the future

"I am still here. I look forward to expanding our business. Sticking with the snacks theme, we're looking at making use of the abundant farm produce in our region and the rest of the Philippines to create fun and healthy snacks.

Raymund is determined to transform the business into a reliable food company by creating an entire line of banana products and drawing in loyal customers at home and abroad.

The ARISE Plus Philippines project is enabling Philippine exporters to take advantage of European Union (EU) market access and the trade privileges granted under the Generalized System of Preference (GSP+). It supports the overall EU-Philippines trade relationship and trade-related policies.