TUESDAY, OCTOBER 16, 2018
SPECIAL REPORT
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BREAD REMAINS THE STAFF OF LIFE
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BY NAT MARIANO
EADY the flour, exercise the hands and preheat the oven. These are the steps we “knead” to take for us to commemorate the international celebration of the “pan-packed” World Bread Day. In Filipino culture, there is one popular adage that says, “When people throw stones at you, throw bread at them instead.” The maxim figuratively suggests not to repay evil with evil or insult with insult. On the contrary, we should repay evil with blessing. Even in the old times, no matter how they slice it, pull it apart, and chow it down, Filipinos know the value of having bread in the table. Just a taste of one grain of truth — bread has various significance beyond the usual nutritional benefits in many cultures in the West and the Middle East due to its historical and contemporary importance. In the early 2500 B.C., the ancient Greeks were already producing more than 80 types of bread Egyptians also viewed bread in the early times as a type of currency. They highly regarded it to the point where they would often place the bread in the tombs of their loved ones. Also, the consumption of bread has a large significance in religion as Christianity uses the sacramental bread as one of the elements, alongside wine, of the Eucharist. In order to commemorate the international celebration, the Manila Standard followed the appealing smell of the freshly baked pieces of bread around the world and ranked them from top to bottom.
TheTop 5 Bread around the world 1. Baguette (France)
The most iconic of them all. With its golden, crunchy crust, chewy interior, and creamcolored and mellow crumb, the Baguette has become a trademark food of French culinary tradition. When bread lovers in France think of heaven, most of them think of eating Baguettes, with butter, emerged hot from an oven. Bon appetit!
2. Focaccia (Italy)
Focaccia is a thick, flat oven-baked Italian bread. With its high gluten flour, salt and olive oil, mixed herbs, and other spices, Focaccia is like a pizza base. This Italian bread product is often served as a side dish or even as sandwich bread flavored with herbs, vegetables or cheese.
3. Sourdough (United States)
While most bread products are made with commercial baker’s yeast, Sourdough relies on Saccharomyces exiguous, a wild yeast. This bread has a mildly sour taste and has better keeping qualities. The sour flavors are due to the lactic and
acetic acids produced by inevitable environmental bacteria, which are working on the flour’s sugar along with the yeast. Different bacteria make different sour flavors. And San Francisco in the United States is blessed in local bacteria species, making its sourdough bread quite tasty and famous.
4. English Muffin (United Kingdom
English muffin is a small, round, flat yeastleavened bread, commonly sliced horizontally, toasted and buttered. This bread product is often deemed as a breakfast food, served with sweet toppings like jam or honey, and flavorful toppings like a cooked egg, sausage rounds, or bacon and cheese. Most English people in the United Kingdom consume English muffin for its low-fat qualities, proving to be a healthy addition to a meal.
5. Bagels (Poland)
Bagel is a firm, doughnut-shaped roll traditionally poached in water first for a short period of time before being baked in the oven. This bread, which originated in the Jewish communities of Poland, has now spread to many countries, including Canada and the United States. Other variations change the flavor of the dough, often using salt, onion, garlic, egg, cinnamon, raisin, blueberry, chocolate chip, cheese, or a combination of the mentioned ingredients. These five known pieces of bread are only a testament that the baking industry adapts from time to time. Most of the bread products that we have now are made centuries ago. It even came to an extent where only the rich and the powerful had access to these deliciously crafted bread products in a length of an arm. However, the variations that the bakers have done through time somehow developed how we perceive bread and how to consume it. Together, let us break the mold as we commemorate the World Bread Day through promoting good bread, consuming one from your local bakery, and baking a masterpiece on your own. Whether you agree or not, life is a bit butter with a slice of bread. The World Bread Day, annually celebrated on Oct. 16, is an annual event for all the bakers and bread-lovers in the world to commemorate the simple food known to the stomach of mankind since the early times. The commemoration was created by the
International Federation of Bakers and Confectioners to “dedicate a day to the history and future of bread, to share the bakers work, exchange views on the raw material from which many varieties of bread are made.”
Bakers, confectioners lead world celebration The world celebrates World Bread Day on October 16 every year. Initiated by the International Union of Bakers and Confectioners, the observance is dedicated to a staple food that has been of importance around the world since the dawn of agriculture. World Bread Day is celebrated to commemorate the anniversary of the creation of the Food and Agriculture Organization of the United Nations in 1945 to defeat hunger. It has a Latin motto, Fiat panis, which is translated as “Let there be bread.” World Bread Day coincides with World Food Day. Bread is one of the oldest prepared foods. People may have used starch extract from the roots of plants to cook a primitive form of flatbread as early as 30,000 years ago, according to AnydayGuide. Grains became the mainstay of making bread with the dawn of Neolithic age. The ancient Egyptians are believed to be the first to use yeast to leaven the dough. Bread is the staple food in the Middle East, North Africa, Europe and in European-derived countries, as rice is the staple in East Asia. Bread is usually made from wheat, but it can be also made from other cereals, including rye, barley, oats, maize, rice, millet and sorghum. In many cuisines, there are traditional bread recipes that have been passed down from generation to generation. Since ancient times, bread has had a significance beyond mere nutrition in many cultures, where it is a metaphor for basic necessities and living conditions in general. In some religions, including Christianity and Judaism, bread is an important ritual element. OTHEL V. CAMPOS
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TUESDAY, OCTOBER 16, 2018 advertise@manilastandard.net
SPECIAL REPORT
Inflation bothers PH bread makers
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BY OTHEL V. CAMPOS
ISING inflation, a devalued peso and the confluence of factors in the economy is threatening the growth of the bread industry, noted market leader Gardenia Bakeries Philippines Inc. Gardenia president Simplicio wheat. Labor cost has gone up and Umali said bread companies were it still can go up. the government absorbing production is saying maybe anothlosses long enough but er P20 wage hike. It’s fuel increases rendered gonna be very hurtdoing business in the ing,” he said. Philippine unprofitable Gardenia, which has unless bread makers a fully-automated prowould raise prices. duction line, employs “Basically the situaless people in the mantion right now is very, ufacturing process. But Simplicio Umali very critical for the with the extensive netbread industry because a lot of work of market it services nationcosts have gone up. Fuel like diesel wide, everyday, it is a big pool of and LPG has gone through several delivery people including those in increases. The distribution cost for promotions and marketing. the bread has gone up substanGardenia is poised to impose a tially. And then the baking process 3-percent incremental cost to the has gone so big and so expensive. current retail price, which will be In the past whenever there is fluc- about a P2 to P3 increase in white, tuation in fuel that is not a cost for wheat and flavored loaves. price adjustments. Because it goes However, the company will not up then own again, we don’t need adjust the price of its affordable bread prices to fluctuate. To make bread line, New Bake, as per agreematters worse, the peso also has ment with the Trade Department devalued significantly,” he said. to keep the current suggested reMost of the company’s ingre- tail price of basic commodities like dients like milk, shortening and bread until early December. whey are imported. Only flour and The company also cited the high sugar are obtained locally. cost of raisins, one of the key inBread companies, he said, had gredients for its wheat loaf variant. just calculated the effect of the An anomaly in the harvest of white foreign exchange rate and the cost grapes in the US caused a tempoof freight and not factored in the rary shortage in the availability of high cost of sugar and the price of California raisins. global wheat that could impact on Despite a growing bread-consumthe price of local flour. ing market, Philippine bread con“We can hold back probably until sumption still has along way to go. October, beyond that will be diffiIn a proprietary survey commiscult for us already because every- sioned by the company, per capita thing is going up and we have not bread consumption is only at 1.5 yet included in our calculation the kilos, the second lowest among the increase in the price of sugar and countries surveyed.
Gardenia cooling tower
Based on the survey, Japan has 7.2 kilos, Singapore has 8, Malaysia is at 5.2, Thailand has 1.6, Vietnam has 4 and Indonesia has 1 kilo per capita consumption. “Indonesia has the lowest but with its population of 250 million, ours is still considered the least (per capita consumption),” noted Umali, citing that the bigger challenge was higher price and low consumption. The company is trying to bring consumption up. It is not trying to compete with competitors, but singled out rice as its main competition. The idea is to create different types of bread for consumption at different times of the day.
Expansion
Gardenia to date has three commercially operating plants in Laguna, Cebu and Cagayan de Oro. It expects to complete another plant in Pampanga province by December due to the clamor for more bread in the north. The same facility is expected to add a line or two if the company is to go by a projected surge in demand. The Pampanga plant could saturate its production capacity in a year’s time which by industry standards can only be achieved in five years. The company is prepared to invest another P2 billion on new lines on top of the P2 billion spent for the new facility since company shareholders have committed to plow back their dividends to the Philippine subsidiary to further gain market share.
Gardenia this year has spent P3 billion to build the Cagayan de Oro and the Pampanga plants. The bread facility in Pampanga is also adjacent to the major transportation hubs of Subic Sea Port, Clark International Airport and the newest business district, Clark Global City The north Luzon factory will have a capacity of producing over 200,000 loaves and buns daily. It will cater to the bread demands of the north and central Luzon and serve as a backup for the Metro Manila market. With the new plant, the company can afford to ensure food security and continuous supply of breads, not only during long weekends or when there are special occasions, but also in times of typhoons, flooding or earthquakes. “Should there be a calamity of great magnitude, we have already placed our plants in strategic locations—one in the South, one in the North, another in the Visayas and one in Mindanao,” said Umali.
Social responsibility
Gardenia has responded not only to meet the increasing demand for bread in the Philippines, but calls for food aid in calamity-torn areas and in poor communities badly needing nourishment support. Part of its corporate social responsibility is to provide food aid where it is needed. It has connected to various charitable institutions and even civic groups Rotary Club and Jaycees. It is also working closely with the Red Cross and
keeps on accommodating requests for bread and assistance from local government units and even educational institutions. Business, though not as profitable as the company would like, is paying off since the bread company was able to fulfill two missions—as source of quality and nutritional breads and source of strength for struggling communities and organizations. “Apart from the usual tree planting, what we did is to start an approach to give free breads to charities. During major calamities we set aside a portion of our production. For hard to reach areas, we bring freshly baked breads so even as the delivery time takes about five days, the bread will still be good. Especially those areas that are really, really far. We incorporate this as an integral part of our business strategy,” said. For areas that are nearer or within immediate reach, the company hands over unsold breads that were pulled out a day after display from supermarket shelves. Local charities get to benefit from this act of kindness. But for calamities of big magnitude, the company makes sure to commit a batch of production to these areas. “We always have donations to fire victims or we go to poor communities and deliver the bread free. We have feeding programs also for kids identified by the Education Department as malnourished. We do feeding programs to help the children improve their health and well-being,” Umali said.
With bread as sure seller, open a bakery business BY RIC PINCA
Liberty Flour Mills has its Maya Kitchen in Makati City. General Milling Corporation WHY not a bakery business? has a baking school in Cebu City. All these Planning to put up a business? Why not mills also have technical services staff that a bakery business? go around and help sort out baking issues Baking is a good business. It is profitable at the bakeries. if managed properly and it is not difficult start one as there are a lot of technical sup2. Get your business permits and licensport available from flour millers and ingre- es. If you live in a subdivision and would dients dealers. like to put up your bakery there, you must Bread, being a favorite breakfast and have a permit from the Homeowners’ asmerienda fare is a sure seller. Pandesal, en- sociation. They normally do not charge for saymada, monay and other local favorites this. Take this Homeowner’s permit to the are not only delicious items, they are also Barangay office which will endorse you to easy to prepare. And so long as you exer- the City Hall which will in turn issue you cise good business practices and maintain a business permit. You should also have a the quality of your products, the bakery license from the Food and Drug Adminbusiness is sure to give you a good return. istration (FDA) as a “food manufacturer” Like all business ventures, however, a and from the Department of Trade and Inbakery business requires that you prepare dustry (DTI) a “sole proprietorship” license. well for it. Here are a few basic steps to While these may look tedious, it’s quite guide you should you decide to “dough it” easy to get these permits and licenses. A so to speak. few days is all you need to secure these. 1. Learn how to bake. Successful bakery 3. Choose a good location. Look for a owners know how to bake. Commercial place where there is plenty of pedestrian baking or baking for business is different traffic, meaning, your choice of location from home baking. It is not right to pre- has a lot of people who are all potential sume that since you can bake a good chif- customers. Look for places near a market, fon or pound cake at home ( using a tea- church or school, bus or jeepney or even spoon of this and a cup-full of that ingredi- tricycle stations. Wherever people congreent) then you can produce the same good gate, there is business. And that is where results once you bake for say a hundred you should put up your bakery. people. In commercial baking, ingredients 4. Bake only products that sell. French are measured in percentage compared to breads and whole wheat breads are a the weight of flour. This way, your product must for the rich and health and fitness will taste exactly the same whether you buffs. But your jeepney driver or your evproduce 50 or 100 or more loaves of bread eryday Juan de la Cruz prefers pandesal or a thousand pieces of cupcakes. hot from the oven. Baguettes and croConsistency in product taste and quality quets may sell if your shop is in a shopis what people look for in breads and cakes ping mall. But if your bakery is in Tondo, . And you can only consistently produce or Pandacan or any neighborhood corthe same quality bread and cake products ner in San Andres, the best sellers would if you can be consistent with your product be pandesal, monay, ensaymada. As a formulation. This in turn depends on your prospective bakery owner, you must knowledge of baking. know your market and produce products The flour mills usually have baking that this market desires. Remember, you schools or technical centers that offer are in the bakery business and you bake baking courses as part of their marketing bread to sell it. Therefore avoid baking efforts. Pilmico Foods Corporation has a products that will just stay in your shelf. baking school in BF Homes, Paranaque. Turn to D3
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TUESDAY, OCTOBER 16, 2018 advertise@manilastandard.net
SPECIAL REPORT
Bakers keep prices stable BY OTHEL V. CAMPOS
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group of bakers vowed to keep bread prices affordable this year, despite the increase in the cost of other commodities such as rice and petroleum that led to a 6.7-percent inflation rate in September. Members of the Philippine Baking Industry Group made the assurance during a meeting with the Trade Department to allow Filipino consumers to enjoy affordable bakery products during the Christmas season. The group includes mostly producers of Pinoy Tasty and Pinoy Pandesal products. PhilBaking members said the current price of P35 per loaf of Pinoy Tasty and P21.50 per 10-piece pack of Pinoy Pandesal would remain until the holidays are over. The group said it decided to maintain prices in response to the Trade Department’s call for manufacturers to refrain from increasing the prices of basic commodities this holiday season. PhilBaking said despite the rising cost of ingredients, its members continue to absorb the additional cost brought about by the increasing prices of raw materials. “While other products have gone up, Pinoy Tasty and Pinoy Pandesal will remain at P35 and P21.50, respectively, until end of December,” PhilBaking president Paolo Valderrama said. Valderrama is a second-generation executive of the country’s second largest bread company, Marby Food Ventures, maker of the Marby bread.
Data show the prices of Pinoy breads have not moved up since April 2016. Flour prices also remain manageable, according to the Philippine Association of Flour Millers Inc. Pafmil executive director Ricardo Pinca said the increasing capacity of flour millers and the entry of two more players would keep flour prices in the country competitive. Data from Pafmil showed that despite the high prices of global wheat, Philippine flour prices declined to P670 per 25-kilogram bag this year from a range of P870 to P900 a bag four years ago. Pinca said while retail prices of flour remained competitive, other inputs to baking rose because of inflation and the devaluation of the peso against the US dollar. Most inputs are imported. Valderama said while members of PhilBaking agreed to freeze prices this year, they may have to adjust the prices of Pinoy Tasty and Pinoy Pandesal in January 2019. Pinoy Tasty and Pinoy Pandesal are products of a joint project between the Trade Department and the bakers group as an integral component of the industry’s corporate social responsibility to provide accessible and affordable bakery prod-
Trade Secretary Ramon Lopez (sixth from left) welcomes the commitment of the Philippine Baking Industry Group to keep prices of Pinoy Tasty and Pinoy Pandesal stable. ucts to consumers. The project resulted the proliferation of many other reasonably-priced loaves and breads in the market. Pinoy breads (tasty and pan de sal) are part of the baking industry’s efforts to provide alternative to premium, branded breads, in cooperation with the Trade Department. “Based on the major costs, such as flour, sugar and yeast, there has been an average of 6 percent increase due to the impact of these factors,” he said. The Trade Department assured consumers that the price of Harinang Pinoy would remain stable until December 2018. Bakers expect a P45 increase in the price of a bag of flour, including Harinang Pinoy, once the price holdoff is lifted by December. Valderrama said the association members were actively promoting Pinoy breads which also contain vitamins and minerals present in premium breads. He said the group wants to keep the prices of Pinoy breads affordable, despite the rising inflation rate and fluctuation of
foreign exchange. “Inflation and foreign exchange have been a problem not just for bakery ingredients, but also for all industries. Some players would opt for cost cutting in this situation,”Valderrama said. “Inflation has a domino effect. Once cost of materials rise, cost of retail prices usually follow. Majority of consumers will get affected and they would adjust their budget and their buying behavior accordingly,” he said. What is more challenging, he said, is that some suppliers were hoarding ingredients, resulting in sourcing problems for bakers. “Since they can control prices and also during seasonal times, some ingredient makers would prioritize selling to retailers instead of manufacturers,” he said. Valderrama said despite these challenges, local bakers had not succumbed to competition including foreign bakeries. He said existing players were con-
US Wheat supports PH bread industry BY JOE SOWERS ALONG with our partners in the Philippines, US Wheat Associates is very excited about preparations for World Bread Day 2018 on Oct. 16. This is a day to celebrate the wholesome, nutritious goodness of the high-quality wheat food products produced in this country. It is a treasured part of the long-term partnership between American wheat farmers and Philippine bakers and flour millers. The Filipino diet, derived from Spain and later influenced by American tastes, puts bread and other baked goods in an important place, accounting for more than half of foods that contain wheat flour in the Philippines. Sowers Wheat does not grow well in a hot, tropical climate, however, and must be imported. That is why wheat farmers from the United States established an office here in the Philippines almost 60 years ago. The work of USW is funded by contributions from US wheat farmers and cost-share grants from the US Department of Agriculture. USW does not buy, sell nor process wheat; we do help make it easier for everyone else who does. USW proudly represents the hard-working farm families that produce enough wheat every year to fill American tables, while still supplying a substantial share of world wheat trade. Over the years, bakers and their respective baking associations have worked with USW to advance technical skills within the industry, supporting Filipino bakers’ ability to produce the best products in the world, providing a safe, healthy, enjoyable eating experience. USW has also worked closely with the milling industry to import the highest quality wheat and process it into the highest quality flour at the lowest possible price. These efforts have contributed to the Philippines being one of the
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Rolando Estabillo Publisher Ray S. Eñano Editor Roderick T. Dela Cruz Assistant Editor Othel V. Campos Nat Mariano Writers Annie Grefal OIC-Operations and Sales Baldwin Felipe Advertising Solutions Head Paula Marie Reynoso Supplements Head Marc Christian P. Jarlego Design
most sophisticated wheat foods industries in the world today. Producing appealing loaf bread and other products like hamburger buns requires wheat flour with very specific qualities. Filipino bakers’ have developed a preference for the superior performance of flour milled locally from hard red spring wheat grown in the Northern Plains of the United States. The unique characteristics of this wheat help improve loaf volume, mixing tolerance and stability needed to make Pinoy Tasty and Spanish breads such as pandesal and monay. Wheat buyers, flour millers and wheat food processors can be most efficient and effective when they are informed about wheat quality and export prices. USW continues to provide that service —an effort that also includes risk management and technical education. With this support, buyers and users can specify the qualities they need for almost every enduse product from among the six classes grown across the United States. This combination of reliability and quality provides excellent value to US wheat customers. To provide the best, most wholesome food, millers and bakers constantly try to improve their products. Technical support from USW helps them develop better baked goods produced in more efficient ways. USW helps Filipino milling and baking industries expand product lines and maintain elevated quality and hygiene levels. USW often brings international consultants to the Philippines to work with local industry on similar goals. USW also works with the baking industry to improve business management practices to assure vitality in the industry. Expanding consumer awareness and appreciation for wheat foods, including nutritional information through
seminars, consumer demonstrations, trade shows and promotional campaign support is also part of the partnership with USW. Together, we actively support World Bread Day celebrations in the Philippines. This constant pursuit to improve value to the consumer, has contributed to a significant increase in wheatbased foods consumption. Average Filipinos today eat 26% more wheat-based foods than they did just five years ago. Much of this increase can be attributed to rising middle-class disposable income, changing lifestyles and diets, as well as several years of low prices. The partnership also allows us to meet challenges when they inevitably come. As we embark upon World Bread Day 2018, the global supply of milling wheat is starting to decline because of poor weather conditions in several major wheat exporting countries. As a result, prices are increasing. This comes at an unfavorable time for the Philippine consumer, who is currently experiencing the highest inflation in several years on rising rice and energy prices, among other consumer goods. USW will continue to invest in the Philippine milling and baking industries, helping them increase efficiencies in their processes through a period of rising prices for their key raw materials while maintaining the high standards of quality their customers expect. USW is hopeful that consumers will continue to see value in the convenient, nutritious and delicious biscuits, cakes, breads, pasta, noodles and many other products offered by the Philippine wheat foods industry, even when the industry needs to raise their selling prices to account for rising raw material costs. Maintaining a healthy industry is in everyone’s best interest, to assure continued availability of high quality food into the future. Joe Sowers is the regional vice president for the Philippines and South Korea at US Wheat Associates.
tinuing to diversify. “Given the tight competition, each one has to survive,” he said. Trade Undersecretary Ruth Castelo, who heads the Trade Department’s Consumer Protection Group, said Pinoy breads were among the commodities subjected to price freeze as requested by the agency. From D2
With bread...
Bake products that will fly off your shelf as fast as possible. 5. Begin small, but dream big. It is best to start small and then grow the business gradually. By starting your bakery in a modest way, you get to control your losses should you commit mistakes, which is common for aspiring business persons. Begin with second hand equipment from bakeries that have expanded and need to unload their smaller capacity oven for example. Buy locally made equipment so that technical service would be readily available should the equipment break down. Locally-made ovens and mixers are simple but are tough and tested. Imported equipment may look good and modern but are expensive and parts are not readily available. DCM is a well-known local oven and mixer manufacturer and they produce good, tough ovens, mixers and kneaders. I should know. I have a 24 year old DCM oven and it still works while my second hand spiral mixer also made by DCM works just fine. 6. Know your costs and control your expenses. The cost of bakery ingredients fluctuates due to demand and competition. It is thus essential that you have knowledge of the cost of your ingredients as they change since this will affect the cost of your products. Use locally produced flour as these are fresher and consistent in quality. Local mills also provide bakery technicians who can trouble shoot and help you improve your products. Imported flour is cheaper but they are not as good as the local produce. Here are some numbers to consider: Depending on your formulation and your baking efficiency, a 25 kg bag of local flour may produce about 1,800 pcs of pandesal weighing 25 grams each. The same flour may produce 100 loaves of bread weighing 450 grams each. At P2.50 per pan de sal, a sack of flour will give you gross sales of P4,500 per bag. Your 100 loaves of bread if sold at P36.50 each would gross P3,650 per bag of flour. From these gross sales, you will have to deduct the cost of your ingredients, space rental, packaging,power and utilities, and salaries to get your net income. And don’t forget your taxes because the Bureau of Internal Revenue (BIR) will run after you.
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TUESDAY, OCTOBER 16, 2018 advertise@manilastandard.net
SPECIAL REPORT
Low wheat output seen to raise prices
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BY OTHEL V. CAMPOS
flour industry expert expects the low global wheat production this year to translate into higher local flour prices in the coming months. Ricardo Pinca, the executive director of the Philippine Association of Flour Millers Inc., said the devaluation of the peso against the US dollar and the unrelenting fuel price hikes would exacerbate the situation. “Global wheat [supply] is at its fiveyear low. It is not only the US that has low production, even the world’s biggest producer, the European Union is entering a six-year low production period,” he said. Germany, France, Sweden and the Baltic nations reported lower production, year-on-year, he said. Based on the global wheat production report, Russia, Kazakhstan and Ukraine were expecting a 15-percent to 20-percent decline in output, with Russia fearful of rain affecting harvest that might cause lower quality. There were also concerns that the 12.5-percent protein wheat could be in tight supply now. “So the issue is not simply quality, but also quantity that could further jack up global prices, no matter where the origin is,” Pinca said. Canada, the second biggest exporter of milling wheat of the Philippines, next to the US, warned of a production drop of 2 million to 4 million metric tons. The Philippines sources 95 percent of its wheat requirements from the US.
Prices fluctuated from $192.17/MT in January 2018 to $212.38/MT in September 2018. Prices peaked at $236.63 in August 2018. Global wheat prices may hit the $300/ MT mark, according to analysts, driven by several factors such as the cost of global prices, cost of freight, peso-dollar exchange rate, logistics and labor cost. This means the price of local flour may soon adjust accordingly. Pafmil said flour prices may hit more than P700 per 25-kilogram bag, up from about P640 to P660 per bag at present. The entry of independent, non-affiliated wheat milling companies increased the local flour industry’s capacity by 25 percent to 5 million MT from 4 million MT. From 12 companies, there are now 21 flour millers, including the new players in Cebu, Laguna and Subic. New industry players started operations in 2010 and added a combined capacity of 909,000 MT a year. The new capacity added to the annual 2.55 million MT output of Pafmil members and the 1.6 million MT production of the Chamber of Philippine Flour Millers Inc. New millers include Monde Nissin Corp., Atlantic Grains Inc., Asian Grains Inc., New Hope Flour Milling Corp., Great Earth Industrial Food Inc., North Star
Flour Mill, Mabuhay Interflour Mill, AgriPacific Corp., Big-C Agri Miller and California Flour Mill Group. Pafmil and Chamflour represent the groups of institutional flour millers. Pafmil members are RFM Corp., Liberty Flour Mills Inc., Wellington Flour Mills, Pilmico Foods Corp., General Milling Corp., Universal Robina Corp. and Philippine Flour Mills. San Miguel Mills Inc., the country’s biggest flour miller and Philippine Foremost Flour Mills, the country second biggest flour mill belong to Chamflour. Its other members are Morning Star Milling Corp. and Delta Milling Industries, Inc. Pinca said that with the entry of new players, there was a a surplus or unutilized capacity of 48.7 percent, but milling wheat imports remained high at 2.6 million MT. “The industry, I presume is just preparing for the expected increase in demand. Consumption of flour-based products is steadily increasing by 6
percent yearly. This is due to improving economy and purchasing capacity of Filipinos,” he said. Pinca said an increase in demand is inevitable as the country’s population keeps growing year-on-year. Data show that per capita consumption of flour increased in the last four years from 19.9 kilograms in 2015 to 21.3 kg in 2018. However, bread consumption is still much lower than per capita rice consumption of 114 kg. Competition also encouraged players to diversify flour production to suit the requirement of certain products. The industry started customizing flour for different products such as breads, noodles, cake/biscuit, siopao and pizza. There are also all-purpose flour and whole-wheat flour. New players effectively reduced other companies’ share of the market and some millers also ventured into downstream production. URC recently created bakery subsidiary Baker John Bread Products on top
of its production of Ideal Pasta, Payless Noodles, biscuits, cookies and others. SMC is also now into community bread production with its Kambal Pandesal, while Philippine Foremost debuted its pasta line Amigo. General Milling has its Pasta Magnifico, while Morning Star has Pasta Prima. Strong local competition also limited imports to only 8 percent, with Turkey remaining the biggest supplier of 2.94 million bags or 44.3 percent of total imports. Turkey is followed by Vietnam with 1.9 million MT or 28.9 percent share and Indonesia with 1.18 million MT or 17.8 percent. Bakery products take the lion share in wheat flour distribution at 55 percent and account for 1.15 million MT yearly. This is followed by noodle production with 22 percent or 437,000 MT. Cookies and crackers account for 18 percent or 375,000 MT; pasta, 2 percent or 42,000 MT; and other products, 4 percent or 83,000 MT. Of the bakery products, pan de sal has the biggest share of 19 percent, with 396,000 MT of wheat flour. Loaf bread comes next with 18 percent or 375,000 MT, followed by cakes and pastries with 12 percent or 250,000 MT, and buns and rolls with 6 percent or 125,000 MT. For the bread sector, large companies like Gardenia Bakeries account for 20 percent of the market, while smaller community bakeries still dominate the market with 80-percent market share. Monde Nissin Corp. leads the noodle makers segment with 60-percent market share, followed by URC with 17 percent and other small players with 23 percent.