Roughly 9 million Filipinos who depend on coconut farming live in poverty.
Majority of high-value coconut products (e.g., virgin coconut oil and desiccated coconut) are manufactured in huge factories located in industrialized parts of the country. Their problem: heavy competition with each other for the same supply of nearby coconuts. Meanwhile, in more remote regions, coconuts are more readily available, but the cost of transporting them to the factories is just too high.
Farmers who live far from large factories have little choice but to process coconuts on their farms, typically into a low-value product called copra. Average annual incomes from copra are only P32,000 ($620) per year, making copra-dependent communities among the poorest in the Philippines. That’s where CocoAsenso comes in.
Fresh off winning a P1,000,000 grant from Impact Hub Manila’s year-long fellowship program, we caught up with Asa Feinstein, CEO of CocoAsenso.
We talked to him to learn more about the startup— what it’s about, why he’s doing it, and what he has planned for the coming years.
Wow, tough question. Well…I like coconuts.
I first arrived here in October 2014 with a Canadian NGO to help an LGU in Samar identify agribusiness opportunities.
CocoAsenso aims to improve livelihoods and efficiency in the coconut sector by bringing high-value coconut processing to farming communities.
Over the past decade, virgin coconut oil (VCO) production in the Philippines went from almost nothing to an industry earning 10 billion pesos per year. This is great because VCO is a high-value and labor-intensive product that could bring a lot of benefits to Filipino farmers who currently earn an average of only 30,000 pesos per year from their coconuts.
Some important background on how VCO is produced: The first step is to process whole coconuts into desiccated coconut (or dried coconut meat flakes). The desiccated coconut is then put through a big machine that squeezes out the oil.
Currently, the entire production process occurs in large-scale factories located in the industrialized centers of the country—far from most farmers. This is unfortunate for farmers because they don’t have the opportunity to contribute to value addition. This also creates challenges for factories because they need to spend a lot of money transporting whole coconuts hundreds of kilometers to their factories.
We realized that VCO factories don’t necessarily need coconuts. What they need is a reliable supply of high-quality and low-cost desiccated coconut. We also realized that with the right technology, high-quality desiccated coconut could be economically produced in smaller-scale processing facilities located within farming communities. So this is what we’re doing.
We are establishing a network of municipal-level coconut processing centers in remote regions of the Philippines where coconuts are purchased directly from local farmers and processed by these same farmers into desiccated coconut. The desiccated coconut (which is seven times cheaper to transport than whole coconuts) is then transported to centralized VCO factories.
We envision our coconut processing centers to eventually become farmer development hubs where we leverage our local infrastructure and strong relationships with farmers to promote improved coconut production practices, farming of crops between coconut trees and access to financial services.
We recently began operations of our first desiccated coconut processing facility in Paranas, Samar. We are now scouting locations for future processing facilities, focusing initially on the Eastern Visayas.
I started becoming interested in the coconut sector while interviewing a coconut farmer in Samar during my NGO work. The farmer was explaining how coconut farmers rely on their buyers for credit and so, when it’s time to sell their product, they don’t have the freedom to shop around for a buyer with a good price. This immediately interested me and soon I started developing an idea for a social enterprise that could give both farmers and buyers a better deal.
When my NGO work finished, I decided to take a month to speak with every coconut expert I could find (farmers, buyers, processors, government agencies, academics, NGOs, etc.) to see if this idea was any good. After a couple of weeks I realized that my idea really wasn’t very good. I decided to spend two more weeks doing open-minded industry exploration to see what other opportunities I could find. A six-hour motorbike ride, an impromptu meeting with a large-scale virgin coconut oil manufacturer and a visit to a small-scale coconut-processing cooperative ended up sparking the basic idea for CocoAsenso.
The beginning was a lot of research to learn as much as possible about the coconut sector and the farmers we intended to work with. The very first thing we did on the ground was to conduct a detailed survey of over one hundred randomly selected coconut farmers in our pilot municipality (the same municipality where I had been working with the NGO).
Our core team organically formed from the Samareños I worked with while doing my NGO work. The first person to join me was Rom. He was my local counterpart from the LGU while I was with the NGO and he was also a very close friend. Jun, our operations manager who is also a farmer and leader of a farmer’s association, joined Rom and I a couple months into the project.
I learned about Impact Hub Manila right around the time it started, which was also the time CocoAsenso started. Entrepreneurship can sometimes be a lonely endeavor, especially in the early days of building a business. Impact Hub has been really valuable in connecting me with events and people in the social entrepreneurship space.
So far there really hasn’t been too much routine—which is ideal for me.
One of our mistakes was getting seduced by a sexy, new coconut product (coconut jerky) that we thought we could easily produce alongside our core product (desiccated coconut). We spent a couple months with this product before realizing that it was much more demanding than we had ever imagined. We ditched the jerky and went running back to desiccated. Luckily it took us back—no flowers needed.
Advice for fellow social entrepreneurs: Check out the Finding Impact Podcast. It’s full of great advice that I’ve been enjoying recently.
Advice for aspiring entrepreneurs: Do it, you won’t regret it.
We will be working on four really exciting projects over the next six months. 1) Increasing production and streamlining operations at our first processing facility in Paranas, Samar; 2) Designing and constructing a biomass energy system for our facilities that will utilize coconut waste products to produce all of the electricity and heat needed for our coconut processing facilities; 3) Designing and constructing an improved coconut dryer; 4) Identifying two communities for future desiccated coconut processing facilities and beginning the production of sulfur-treated white copra in these communities (the first time this product will be produced in the Philippines to our knowledge).
We hope to establish our second desiccated coconut processing facility at the beginning of 2019 and we will likely be raising funding for this around November.
Want to learn more about the Impact Hub Manila KICK Program?