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Linking farmers to mainstream markets

Linking farmers to mainstream markets

A number of muscovado sugar producers, organic rice growers, and non-government organizations banded together in 2009 to form Global Organic and Wellness Corporation or GlowCorp. It had a combined capital of some PhP270,000.

The new company’s main mandate was to find a direct market for their products and to take back the income opportunity they usually lost to unscrupulous traders.

GlowCorp traces its roots to the marketing assistance program funded and implemented by the Philippine Development Assistance Programme, also one of its main investors. It registered as a for-profit corporation the following year and immediately went to work finding more markets for the partners’ produce starting January 2010. General manager Bernie Berondo was at the helm.

Organic rice and muscovado sugar were GlowCorp’s core products, which fit in with the rising demand for more environment- and health-friendly products.

Berondo sent out business proposals to potential outlets that can absorb the partners’ increasing output. Not all responded but some did. Other than the usual cooperatives and fellow NGOs, new markets including supermarkets and bakeshops eventually opened up.

GlowCorp got a much-needed boost when it was named one of the winners of the Business in Development Challenge Philippines, organized by Citi in the Philippines and the Philippine Business for Social Progress.

The recognition raised GlowCorp’s profile and led to the fateful meeting with Sunnywood Corp., one of the biggest rice distributors in supermarkets and at that time also looking for new products to sell.

Sunnywood was GlowCorp’s first major client. And from it GlowCorp realized it had to meet the high-quality standards of its institutional clients. Its partner-farmers had to raise their standards in order to penetrate these profitable markets.

“Quality was what we needed to improve to satisfy the requirement of the market. That was not in the consciousness of the organic farmers. Thankfully, Sunnywood guided us through the process. That is the beauty of partnerships. Slowly, through ups and downs, we were able to improve and then deliver on our orders,” shared Berondo.

During its first year of operations, GlowCorp recorded sales of PhP1.3 million. This grew to PhP8.3 million the following year. By the end of the third year, GlowCorp was making a profit, but only after it addressed challenges of collection, quality control, and expense management.

By 2013, sales had surged to a whopping PhP32 million, and the farmers and incorporators were getting more than a fair return on their labor and investment. Gross sales further rose in 2014 to PhP47 million when it posted a monthly supply of 140 tons each of organic rice and muscovado sugar under the Prime Organics brand.

More than turning a profit, the incredible growth in sales showed the viability of the idea that the farmers can indeed link up with mainstream markets with help from partners such as the buyers, the marketers, and the funders such as the Peace and Equity Foundation (PEF), which provided much-needed working capital in the critical years.

In 2013, PEF extended to GlowCorp a credit line of PhP6 million and gave a PhP500,000 grant which GlowCorp used to acquire and implement an accounting system to better track income, expenses, and cashflow. It also helped the company apply for License to Operate from the Food and Drug Administration and provide training for its suppliers on good manufacturing practices.

The following year, GlowCorp applied for and got an increased credit line of PhP15 million with PEF.

“Working capital was what we really needed, and PEF gave us that. Then aside from that, they were also to link communities to us, organic rice producers, and tablea producers. We were able to get additional products,” said Berondo, “There were also times when we were able to attend international trade fairs, and they spent for that. That relationship between PEF and us was really a great help, aside from the monetary support.”

He added that PEF’s faith in GlowCorp went a long way in encouraging them to persevere through the peaks and valleys of the fledgling business, which was a trailblazer in the field of organic rice and muscovado sugar.

“You really need to go through challenges, especially in the development stages,” Berondo stressed. These include struggles with getting buyers to pay on time and the never-ending search for customers who can immediately take in the farmers’ output.

What also kept them going was their unwavering belief in the value of their products and their network of hardworking farmers.

The steady increase in the income and the number of farmers benefiting from GlowCorp likewise provided an added incentive to persevere. And it is good that GlowCorp did, as by 2019, it posted its best performance yet with gross sales of PhP84 million and a net income of PhP4.7 million.

It had enough momentum to get even better numbers in the succeeding years. But when the COVID-19 pandemic hit, mobility restrictions hampered the company’s delivery systems and caused the skyrocketing of freight or shipping costs, thus shrinking its net income.

The supply chain disruptions also affected GlowCorp’s ability to find new sources of processed goods such as calamansi from partner-farmers in Guiuan, Eastern Samar. Developing a broad network of partner-farmers was part of its efforts to widen its product base and also act as a social entrepreneur itself and market the products of other farmer groups and peoples organizations.

“We are proud to say that we also support our farmers, help them make a decent profit,” said Berondo.

But GlowCorp expects to help them and its core farmers earn an even better profit in the coming years as the COVID-19 pandemic wanes and the economy shows signs of renewed life and consequently, the return of robust demand for its products.

It had also become a much stronger enterprise than when it started and expects to “graduate” from PEF’s financial assistance program by the end of 2023. However, PEF might still stay on as investor, a possibility that had been envisioned in previous years.

But in the meantime, GlowCorp remains ambitious and committed to jacking up its revenues in 2022 to an ambitious PhP115 million, with the bottomline estimated to hit at least PhP7 million. This will be aided in part by increasing its presence in e-commerce sites such as Shopee.

It has plans of acquiring a warehouse in Cavite and is negotiating with other NGO partners for a loan for its continued expansion, especially as demand for organic and healthy products becomes even more acute now because of the lessons from the COVID-19 pandemic.

GlowCorp’s products are now in 950 outlets of Puregold, SM, Robinsons, Shopwise, The Marketplace, Waltermart, Citimart, Magic Retail, Metro Gaisano, LCC Supermarkets, Prince Retail, Kultura, KCC Malls, Colonnade Malls, Island City Malls, and All Day Supermarkets.

“We are also heartened that commercial banks are now interested in helping us because now we have a track record we can show them,” said Berondo. Indeed, the best is yet to come for GlowCorp, and that spells only good news for farmers who are finally getting the income and t