An analysis on the market potential of cacao charcoal briquettes in Los Baños, Laguna

Date

5-2016

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Arlene C. Gutierrez

Abstract

Based on the survey conducted by the National Statistics Office (NSO) and the Department of Energy (DOE), it was inferred that despite the presence of electricity and LPG as a source of energy, more than half of the Philippine households still use charcoal for their daily energy needs. Due to this, charcoal producers in the country were compelled to significantly increase the wood charcoal production to meet the daily household demand. However, charcoal production in the country is still being done traditionally wherein trees were illegally cut and burnt down. Due to this, the Department of Environment and Natural Resources (DENR) banned the production of wood charcoal and all its underlying activities to prevent the further depletion of the country?s forests. In line with the aforementioned situation, engineers had been trying to develop a more sustainable and environment friendly alternatives to wood charcoal. The Department of Environment and Natural Resources - Ecosystems Research and Development Bureau (DENR-ERDB) developed charcoal briquettes derived from different species and material combinations including urban wastes and agricultural wastes. These materials include coconut husks, corn cobs, sugarcane bagasse and most recently, cacao pods. Agricultural wastes from chocolate production had been considered for charcoal briquetting due to the anticipated increase in cacao pods as a result of forecasted increase in the production of cacao to meet the 30% expected increase in both local and global demand by 2020. In addition, only 10% of the fresh weight of the cacao fruit was being utilized for chocolate production which implies that the other 90% were being discarded and were considered wastes. In this connection, CocoaPhil Foundation developed the cacao wastes (husk) into new products namely, cacao charcoal briquettes in order to fully utilize the cacao wastes and at the same time provide an alternative for wood charcoal. The foundation along with ERDB promoted the use of cacao charcoal briquettes as an alternative to wood charcoal in Los Baños, Laguna in order to lessen the harmful effects of charcoal production as well as to fully utilize cacao wastes. This study came about to determine the market potential in Los Baños, Laguna as well as the demand for cacao charcoal briquettes. The general objective of the study is to identify the potential buyers and determine the potential demand for cacao charcoal briquettes in Los Baños, Laguna and specifically aimed to: (1) present the profile and describe the behavior of the buyers of the cacao charcoal briquettes (2) determine the qualitative requirements of the buyers and estimate the market size (3) identify potential marketing opportunities, issues and problems in meeting the demand of the buyers and (4) formulate general strategies to address the issues and opportunities. Descriptive research design was utilized to assess the market potential of cacao charcoal briquettes in Los Baños, Laguna. Primary data were obtained through a survey conducted with 19 large scale ihaw vendors, 41 small-scale ihaw vendors, and 50 household consumers. Focus group discussions (FGD) were conducted to gain information regarding the perception of the respondents towards the product. In addition, Usage, Attitude and Image (UAI) study, price point analysis and product attribute ranking were utilized in order to further assess the demand for cacao charcoal briquettes in the area. The results showed that in general, there was a very low level of awareness among the three segments (ie. Large-scale ihaw enterprises, small-scale ihaw enterprises, households) of the market. In terms of the willingness to buy and use the product, 54% of the small scale ihaw vendors still preferred the use of wood charcoal over cacao charcoal briquettes. This was due to the fact that they opted for a product with more smoke and ihaw odor to attract customers. On the other hand, large scale ihaw enterprises exhibited a higher level of willingness to purchase and use the product as compared to the other two segments. Lastly, 52% of the household consumers were willing to buy and use the cacao charcoal briquettes. The study also showed that some of the major factors to why some respondents did not prefer cacao charcoal briquettes were the higher price of the product and it is not yet readily available in the market. After evaluating the market potential of the cacao charcoal briquettes in Los Baños Laguna, it was concluded that the large scale ihaw vendors had the most potential at Php 1,944,000 demand value per year. Moreover, demand potential from small scale ihaw vendors amounted to Php 513,000 annually while the demand from household consumers was estimated at Php 421,000 per year. One of the major issues identified in relation to the potential marketability of the product was the low level of awareness among the respondents which can be translated to a relatively low demand for the cacao charcoal briquettes. In relation to this, intensive marketing and advertising is required. In addition, due to the insufficient supply of inputs in previous years, CocoaPhil might still not be able to produce the volume demanded by the market. In line with this, it was recommended that the foundation should focus on marketing to large-scale ihaw enterprises. The cacao charcoal briquettes should be packaged in 15-kilo sacks and delivered to the customers. Lastly, to further promote the use of the products, the foundation should promote through word-of-mouth, and consider having x-deals with their clients.

Language

English

Location

UPLB Main Library Special Collections Section (USCS)

Call Number

Thesis

Document Type

Thesis

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