Tanibel Ang, Asia Sales Manager at Incite, shares the top three challenges that food and beverage brands face when entering the Philippines.
The Philippines market presents significant export sales opportunities for F&B brands with a burgeoning premium grocery sector and open-minded, social media savvy consumers who are looking to experience new international brands and product offerings.
It’s an exciting time for the Philippines as the country emerges as an export market of choice for international food and beverage brands.
FDA registration
One of the biggest challenges brands face when entering the Philippines is getting their products registered with the Philippines Food and Drug Administration (FDA). The FDA requirements are burdensome, with many brands seeking assistance from their embassies to help them get through the process. Up until 2017, the rules around FDA compliance were much more relaxed and many shipments could successfully enter the country without having been registered with the FDA. In the Philippines today, it is nearly impossible for shipments to pass without proper FDA documentation, even for sample shipments. Ensuring that proper FDA approvals and documents are correct prior to shipping is a necessity in avoiding large compliance issues. The key to a swift completion of FDA registration is to have a local importer and distributor with a strong compliance team that can help brands navigate the process. It is the local appointed distributor’s role to collect the relevant documentation from the brand, lodge the application with the Philippines FDA, and successfully obtain the registration.
Strict import rules
In addition to FDA registration, there are many other documents that brands must provide to accompany their shipments. Certificates of analysis and product specifications for each SKU and manufacturing certificates are a handful of documents that can be required. There are also very strict rules that brands must comply with. For example, all the information that is declared in the product description must be an exact match across various shipping documents including the commercial invoice and packing list. Failure to get this right can result in manual corrections, long delays and potentially heavy penalties. It is highly recommended that brands consult an expert before submitting these documents to ensure that a proper checklist is collated to avoid missing anything important. Again, having a professional importer with strong compliance capability and relationships with regulatory authorities can help brands avoid delays and costly mistakes.
Read more: Unlocking SE Asia’s F&B market
Freight and shipping delays
Shipping delays are very common in the Philippines due to heavy port congestion. Even with extra time buffered in, the delays are often much longer than anticipated.
Tanibel shares her own experience, “I had this issue with one of our client brands and their distributor who was struggling to manage their inventory because of this. The distributor was advised to order 6-8 weeks in advance because of the factori’s lead time and add an additional 6 weeks for shipping. In total, they were working on managing their inventory at least three and a half months in advance.”
Freight and shipping delays are inevitable in the Philippines, so ongoing planning and communication between the brand and its importer are critical in avoiding out-of-stock issues.
Overall, demand for international food and beverage products, especially premium brands, is growing in the Philippines. With increased migration to the city, demand for convenient, ready-to-eat foods, trendy coffee and upscale dining experiences are all increasing. Filipino consumers today are looking for aspirational lifestyles that mirror those of personalities they look up to. This is crucial because the Philippines has some of the highest social media consumption globally and digital media continues to heavily influence consumer behaviour.
This story was originally published by Incite, here.
