President Aquino must have thought of natural ingredients as one of the factors that would boost Philippine farming when he delivered a fitting tribute to Agriculture Secretary Proceso J. Alcala in his 3rdÂ state of the nation address (SONA) on July 23.
Indeed, Alcala has been talking about pump priming the natural ingredients industry even as he grapples with the great task of securing food sufficiency by the yearend of 2013.
The good secretary is talking not only of rice, other nutritious staples like cardaba and cassava, and that natural ally of everyoneâ€™s heartâ€”bananaâ€”but also of vegetables, natural ingredients and everything else that comes from the topsoil to support this country of nearly 100 million.
Now, he is keen on listening to reports about the potentials of the natural ingredients industry, a sector of the farming industry that had been silently raising revenues for the past decade or so, earning precious dollars while everyone was concerned about rice shortages and unremitting imports that had enriched farmers in Vietnam and Thailand.
One thing going for the natural ingredients sector is that it requires only basic manufacturing processes and overhead costs are far less than what other industries have to endure.
However, Alcala is concerned about how the industry could be sustained and how imports for the health and wellness products could be reduced and eventually eliminated.
Window of opportunity
â€śItâ€™s actually being looked at now (by government) because it provides an opportunity to our farmers for additional income, particularly those in the uplands,â€ť says Dr. Candida Adalla, program director of the Department of Agricultureâ€™s Biotech Implementation Unit (DA-BIU).
Adalla says there is a niche for natural ingredients the world over and it becomes a matter of duty for Filipino entrepreneurs to go for it, particularly now that the world market is turning green.
Two of the countryâ€™s biggest pharmaceutical companies have prioritized the development of natural ingredients for their medicines, but they have so far only focused on lagundi, now a popular medicine for cough.
Natural ingredients, Adalla adds, are derived from crops and plants that are indigenous to our soil and climatic conditions and even from plants that could be introduced and produced in substantial volumes.
These crops and plants are easy to manage and require minimum inputs.Â However, the wellness market is still surprisingly dependent on imports, withÂ essential oilsÂ used in spas coming from China, India, and Vietnam.
For instance, turmeric, which is known as â€śluyang dilawâ€ť and has become popular as an herbal supplement, is imported from India when this can be grown locally without local its efficacy.
Unfortunately, the countryâ€™s biggest food ingredient company still imports 8,000 metric tons (MT) of tamarind for its â€śsampalocâ€ť broth when the tree grows practically everywhere and is standard fare for regional dishes.
A good start
Adalla stresses that her office has undertaken a study with Hybridgim Consulting, Inc. on how to capitalize on global demand for Philippine ingredients and found out that the country can join the bandwagon and even join the lead pack.
â€śThe result of that study showed there is a big market, a global market, for natural ingredients,â€ť she adds.
As proof of this, the study said the industry has been growing over the past few years â€śas it responds to shifting consumer trends and new market opportunities.â€ť
One major development was the surge in media coverage on wellness, causing many people to redefine their concept of health â€śnot merely as the absence of disease, but of increased vitality.â€ť
Concern for vitality and not only vanity has been a big plus for wellness.Â â€śThis has been one of the growth drivers for foods, beverages, and cosmetics which incorporate functional ingredients,â€ť the study said.
Pharmaceutical ingredients have already created niches, with demand for new product categories such as â€śnutraceuticalsâ€ť and â€ścosmeceuticalsâ€ť stronger than expected.
The global market for natural ingredients was even forecast to reach $18 billion by 2013.
The global market for cosmetics that use ingredients which confer health or wellness benefits were projected to grow by 8.1 per cent, with the demand for the ingredients outstripping the demand for products.
Now, there’s also less emphasis on essential oils and aroma chemicals, with research and development (R&D) by ingredients companies leading to the shift.
In the last three decades, there had been substantial growth in herbal medicine market globally.
Today, 80 per cent of the people in developing countries reportedly rely on plant-based products for health care that are widely available and more affordable.
As the seventhÂ most biodiverse country in the world, the Philippines has the inherent capacity to produce and trade these ingredients, the study reported.
By harnessing biodiversity, the door is wide open for a more intensive exploitation of the great potential of medicinal plants, functional foods, natural food dyes, tropical fruit flavors, and essential oils.
The study also segmented the market for natural ingredients in different ways.
To a product manufacturer, it is reportedly useful to classify the ingredients by use.Â Some ingredients are used as raw materials in the processing of secondary ingredients, while others are used directly by end-product manufacturers.
It also reported that in its survey of international buyers or natural ingredients which included 50 ingredients from 34 Philippine species, the top 10 ingredients based on quantity requirements were punicalagin (from pomegranate), coconut oil, papain, fucoxanthin aliginate (sargassum), natural red dye, bixin, norbixin, bromelain and carpaine.
But based on metrics and on the market data gathered, the study came out with top 12 ingredients that could be developed in the next few years.
These are papain, corosolic acid, carageenan, moringa oil, rice bran oil, mango butter, focuxanthin, bixin, bromalain, black plum concentrate, elemi oil and marine bioactives.
In 2006, the study noted that Philippine share in natural products was US$400 million, with virgin coconut oil (VCO) cornering three-fourths of the market.
VCO is used as a food supplement and cosmetic ingredient. Apart from VCO, the list of top plants that are commonly used, included banaba, lagundi, ampalaya and malunggay (or moringa).
The study, however, noted that only a few private firms are using biotechnology. As the level of technological complexity increases, private sector use decreases.Biotechnology is oftentimes applied in agriculture and industry or processing of farm products.
According to Adalla, the potential of biotechnology in natural ingredients is actually on bio-processing, citing how enzymes technology can get â€śmore and betterâ€ť quality products from compared to traditional processing methods of chemical or steam distillation.
It also offers almost zero environmental impact.
Through enzymes technology, extractions were improved for natural essential oils extraction for culinary, health and wellness.
Among the products that can use the technology are fish oils (omega 3), turmeric, citronella, elemi oil (from the pulp of the pili nut) and ylang-ylang, among others.
It has also improved the digestibility of root crops chips like cassava and camote as energy source for animal feeds.
Road map for industry development
Based on the DA-Hybridgim study, Adalla says they have prepared a road map that aims to catalyze the development of natural ingredients industry for at least three priority species within five years.
This road map intends to put the Philippines firmly as a major player in the worldâ€™s natural ingredients industry.
Among the ingredients that can be harnessed are the essential oil from citronella which is the ingredient for insect repellant products and crop protection inputs, along with its use as scents for soaps, lotions, air fresheners and cosmetics.
Another is the essential oil from annatto (atswete), which is a natural red colorant for food and beverages, and for cosmetics, hair and skin products.
Turmeric, too, can be developed, with the oil being used for pharmaceutical purposes, particularly for treatment of liver diseases and other abdominal ailments.
This is apart from turmericâ€™s being a natural yellow-orange colorant for food, beverage and animal feed and as a powder for culinary use.
The roadmap intends to support all sectors involved in the value chain, from the growers and producers to the manufacturers.
It outlines the formation of new cluster of bio-based industries that compromise of farming, bio-inputs, bio-processing and manufacturing, resulting in additional job and livelihood opportunities for people living in the countryside.
Farming for natural ingredients can also develop idle and unproductive agricultural lands.
Agriculture Secretary Proceso Alcala has been â€śvery receptive and is very interestedâ€ť in developing the natural ingredients, according to Adalla.
If their plans push through, the DA is confident that within the next three years they can develop a vibrant natural ingredients industry.
Adalla doesnâ€™t see any problem in promoting natural ingredients among farmers.
â€śThe farmer will always plant whatever (is offered) as long as there is a market,â€ť she concludes.