Economic Rationale / Business Model:
FEED has developed a unique sustainable development program that enables us to provide financial inclusion and increased economic opportunities for un-banked rural populations, as well as distribute fresh produce and leading-edge consumer products for both national and global distribution.
The Global Coconut Water Market in terms of revenue is expected to grow a CAGR of 26.75% between 2015 and 2020 (Sources Technavio)
The global coconut water market is expected to cross 8.3 Billion USD by 2023 (Source: Arizton)
The Philippine Coconut Authority have identified an initial 29,500 ha of existing planted areas within the CALABARZON region as accessible for our program.
29,500 ha equates to around 100 Millions Litres of young coconut water, 60,000 tons of young coconut meat, as well as 120,000 tons of husk p/a. As expansion phases of the overall project we will be rolling out an intercropping program with our farmers coconut areas. Intercropping will significantly raise both the yields and incomes per ha for each farmer, as well as form a key component of our endeavours to help increase the food security of the Philippines.
The Business Model
FEED will target global consumers with our value added agricultural products i.e. a new form of cold processed (up to 6 months refrigerated shelf life) certified organic young coconut water, bulk frozen young coconut meat, a ‘vegan’ young coconut meat jerky, buko sorbet, bubble tea ingredient, premium buko pies, various industrial products for the coconut husk, as well as expansion products like coconut water/milk kefir probiotic and yoghurt.
We have already secured distribution letters of intent for both the Philippine (circa 1,000 distribution points + Manila, Clark and Cebu airport catering hubs), as well as Australian national consumer retail markets (circa 6,500 distribution points).
Our distribution network also has pre-existing capacity to quickly expand into other key consumer markets i.e. Japan, South Korea, Malaysia, Singapore, Hong Kong, China, EU/UK, Middle East, and USA/Canada.
The Sustainable Development Approach
Developing a better future for members of our program and the Philippines agricultural community:
- Currently we have secured some 3,500 ha of an allocated 29,500 ha of existing coconut plantations within the CALABARZON region of the Philippines.
- These areas contain on average 1 farmer per every 3 ha and the farmers were secured through our strategic local farming cooperative partners, as well as through collaboration with the Philippine Coconut Authority.
- Further to the unbanked farmer population there is potentially a residual population of up to 15 individuals within the first degree sphere of influence around each farmer. It is estimated that there will be a population of circa 1,000,000 individuals within the sphere of influence of the overall program in CALABARZON as we begin to expand our operations to our available supply capacities.
The Integrated Data Eco-System
Part of the project is to connect the "first mile" to a digital application in order to maintain the traceability of the productions. FEED has developped partnership with different companies in order to build a forward buying model which enable a price stabilization at the Farm Gate
Project Potential Risks:
Like any business there are some potential risks. Jungle Trading has conducted a thorough risk assessment and feels that it has adequately covered all of the major risks we are likely to face including but not limited to, natural disasters, political issues, production issues and product tampering.
In order to mitigate any potential risks the Board will set a risk management panel which will meet once a month to discuss the status of any potential risks, new or old. Furthermore, the risk panel will be responsible for setting the ‘risk appetite’ in terms of making and evaluating decisions around risk factors.
The Transaction Model
FEED is using a digital payments system for our farmers and harvesters which is fully transparent and traceable.
In order to trade with FEED, farmers and harvesters access their own bank account with BRB Digital Bank, and receive a bank card which can be used with any existing banking infrastructure and payment terminal throughout the Philippines.
This banking program ensures transparent and sustainable prices for crops and services, whilst maintaining fair trading principles. It also allows FEED to create digital databases of payments, supply chain, agricultural outputs, as well as other community economic factors which are not currently available.
This data will be used to improve the stability of the supply from the farmers perspective. They will also be used by such organizations as USAid and the World Bank to better understand these communities in order to develop and administer more strategic and fully impact traceable development projects.
The Farming Fund
FEED has developed a Farming Cooperative Fund program tailored to fit with the socio-economic climate of developing world agricultural communities. The program will commence with several Farming Communities across Luzon, working through a partnership with an exclusive and fully Digital Rural banking partner
Through this program the objective is for farmers and harvesters to receive either long term stabilized or significantly increased incomes through trading and working directly with FEED. Their local communities will also benefit from the residual economic 'ripple effect' of the overall program and fund disbursement for targeted community projects.
Farmers will be able to participate in the successes of the company as a whole though quarterly contributions by FEED directly into the Farming Fund. In this way we have created a fully inclusive business model where everyone benefits.
Every transaction meta-data is recorded on the FEED database, purpose built for our needs. The use of this software enables us to become a transparent and fully traceable ecosystem for all participants