An Analysis of the Sourcing Practices and Strategies of White Cheese (Kesong Puti) Producers in Laguna Amidst the Covid-19 Pandemic

Date

6-2022

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Cris Edwin B. Bonalos

Committee Member

Renen Szilardo C. De Guzman, Jeanette Angeline B. Madamba

Abstract

Kesong puti or white soft cheese in the Philippines that is traditionally produced from carabaos' milk or from the milk of the domesticated Philippine swamp buffalos, Kesong puti processing is one of the oldest cottage industries in the country which is concentrated in certain towns in Laguna. For many, decades, it has been an important cottage industry because it serves as a form of livelihood for the inhabitants of the province and its neighboring areas. Moreover, kesong puti caters to niche markets and since Filipinos patronize locally-produced products, the demand for the cheese is high.

This study sought to describe and analyze the current sourcing strategies used bu the kesong puti producers in selected municipalities of Laguna. Specifically, the objectives of the study were: 1) to present the profile of kesong puti producers and their enterprises; 2) to discuss the current sourcing practices and strategies of the kesong puti producers; 3) to map out the sourcing network of the kesong puti producers in Laguna; 4) to describe the macroenvironment and microenvironment of kesong puti enterprises; 5) to assess the the issues and challenges in sourcing faced by kesong puti producers; and 6) to formulate recommendations which could improve the sourcing practices and strategies of the kesong puti producers in Laguna.

Primary data were gathered through questionnaire-assisted interviews with small-scale and large-scale kesong puti producers. Secondary data such as the lists of registered enterprises and statistical reports were obtained from the public information offices of each municipalities in Laguna and from government agencies like the National Dairy Authority (NDA) and Food and Agriculture Organization (FAO). Others were gathered from books, journals, related studies, and reliable sources on the internet.

A total of 12 kesong puti producers served as respondents for this study, wherein 67% were sole proprietors and 92% were registered. Most of the producers were male, most were in the age range of 41 to 50 years old, and half of the respondents were married. In terms of educational attainment, the majority of the respondents obtained a college degree.

Most of the kesong puti producers in Laguna practiced outsourcing for their main ingredient in cheese-making, which is raw milk, due to its limited supply and because they do not own any dairy animals that produces them. The respondents who outscore either applied dual sourcing or multiple sourcing in acquiring raw milk. On the other hand, five of the respondents were able to practice insourcing because they own the dairy animals needed to supply the raw milk for kesong puti processing.

The PESTEL Framework was used to analyze the general environmental of the kesong puti industry. The analysis found that the current condition of the macro-environment is challenging for kesong puti producers mainly because of the serious effects of the COVID-19 pandemic. The economic shock experienced by the country and the different quarantine protocols and restrictions set by the government greatly affected the enterprises and changed how they operate. Nonetheless, the researcher was able to identify opportunities in different factors of the macroenvironment, especially with regards to technological advancements that offers convenience and cost-efficiency; and the trends in lifestyle and consumer behavior which improves the adaptability and development of the kesong puti enterprises in Laguna. Proper utilization of these opportunities could improve business operations and lead the enterprises to success.

Porter's Five Forces was used to analyzed the micro-environment or the kesong puti industry in the province of Laguna. Based on the findings, it is found that the threat of new entrants, threat of substitutes, and bargaining power of buyers were considered to be moderate. On the other hand, the bargaining power of suppliers and the rivalry of industry competitors were identified to be high.

In conclusion, this research study was able to identify the issues and challenges prevalent in the current sourcing practices and strategies of the kesong puti industry in Laguna which are clustered based on the producers' scale of operations. The study discovered that the problem faced by small-scale kesong puti producers in sourcing were as follows: 1) low availability of milk supply; 2) high perishability of raw milk; 3) lack of contract between producers and suppliers; 4) quarantine protocols brought by the pandemic; and 5) environmental threats. For large-scale kesong puti producers, the identified challenges were as follows: 1) high perishability or raw milk; 2) quarantine protocols brought by the pandemic; 3) competitive bidding system in raw materials procurement; and 4) milk supply allotment for both kesong puti processing and milk feeding program.

Hence, to improve the sourcing practices and strategies of the kesong puti enterprises in Laguna, it was recommended for the kesong puti producers to: 1) find reliable and multiple sources of supplies; 2) establish strategic alliances among kesong puti producers; 3) use milk alternatives as replacement for the traditional dairy milk; and 4) focus and improve own milk production. In addition, it was recommended for the local government unit to: 1) establish a consolidation center for raw material supplies; and 2) provide risk readiness seminars and trainings for the kesong puti producers.

Language

English

LC Subject

Cheese industry, COVID-19 Pandemic, 2020-2023

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2022 M17 A53

Notes

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Document Type

Thesis

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