1. UMFI Experience - Linking Community-Based Enterprises with the Mainstream Markets “ Making markets work for small farmers: Understanding Marketing and Market Intermediation ” First Regional Forum cum Training Workshop Linking Small Farmers to Markets June 7-11, 2008 Hanoi, Vietnam

2. UMFI Background and Context  Marketing Program that started in 1989 as a program component on Upland Development for Tribal-Upland Communities  Project Objective was to address “Marketing” concerns of Upland Communities  Current Mandate is to provide market access to Community Based Enterprises (CBEs) with support services on access to Technology and Finance

3. Bridging the Big M A R K E T Divide UMFI’s Core Business CBEs Supermarkets

4. Primary Clients: Community Based Enterprises (CBEs) in Sustainable Development Sustainable Forest/Resource Mgt -Non Timber Forest Products Sustainable Agriculture - Use of appropriate Farming Technology - Organic Farming - Non Destructive/ Environment Friendly Sectors in Partnership - Indigenous Communities - Agrarian Reform Communities - Coastal Communities - Micro-Small Enterprises

5. Primary Markets Consumer Market - Supermarkets (230) - Groceries/ Convenience Stores (100) Current Operations Distribute 8 CBE products - Organic Rice, Muscovado Sugar, Jams-Jellies, - Bottled Sardines, Honey, Juices, Vinegar, VCO

6. Sales Performance 7 year period

7. So we have accessed the Mainstream Market! Success??? Problem Solved? OR Just the beginning of an endless state of Solving Problems

8. UMFI’s core learning  The easiest thing to do in Market Intermediation is getting there – accessing the market.  What happens next is the real challenge  How do you survive or maintain the market?  How do you grow in the market?  How do you protect your share of the market?

9. Getting There  Hiring of Personnel – Professionals from within the Industry  With Expertise (knows the systems, policies)  With Experience (knows how to manage dynamics)  With Contacts (knows the people inside)  With Right Attitude and Orientation  Know the Market – In order to have the right product to sell

10. Market Opportunities and Realities  Market Trends: Increasing Demand for the following:  “Healthy” Food products, All natural product, No Chemicals, Preservatives, Organic  Consumer Survey (200 respondents) Results:  50% willing to pay premium price for healthy products  Premium Price is 35% higher than commercial price  Healthy Products defined as Fresh (fruits and vegetables) No Preservatives, No Chemicals, No Additives  2% willing to pay premium prices for Environment Friendly Products  1 % willing to pay premium prices for Fairly Traded Products

11. Strategic Positioning  Community-Based Products as “HEALTHY PRODUCTS”  Healthy for the Consumers  No Chemicals, No Preservatives, All natural Ingredients, Organic  Healthy for the Environment  Use of Appropriate Technology, Supports Sustainable Forest Use  Healthy for the Community  Fair Trade Practices

14. How Do We Recover our Marketing and Distribution Costs? CBEs Upland UMFI Supermarkets,Groceries,Retail Shops END CONSUMERS Book Orders Distribute Collect Merchandise Maintain Promote/Adv CBEs Lowland CBEs Coastal SMEs Consolidation = Scale to cover costs Any volume but must be constant Champion Products – Large Volume Rider Products – Small Volume Consolidating for Sustainability Limited Volume/ Limited Products To sell STILL not Enough Products/ Volume To sell 70%< 1% Surviving/ Maintaining the Market

15. How Do We Grow the Markets given the limited capacities of CBEs? CBEs UMFI Champion Products Supermarkets,Groceries,Retail Shops END CONSUMERS CBEs Common Brand = Shared Quality Standards, Shared Costs-MANY Organic Rice = 1  10 CBEs Muscovado Sugar = 1  5 CBEs Honey = 1  6 CBEs Allows CBEs to collectively Supply the market and to recover From impact of natural disasters/ Internal problems Common Brand for Sustainability

16. How do we Protect our share of the Market – Erecting Barriers  Making it harder for new entrants to come in  Build a Strong Brand, Saturate the market  Product Standards on an Industry Level  Certification  Making it harder for new entrants to copy  Product Development – Higher Value products – going beyond access to markets and better packaging

17. Current Level of Operations  89% increase in Farmers gross income  Recognized in the supermarkets as the distributor of organic products  Recognized as the No. 1 Brand for organic rice in 2007 consumer survey, Estimate share 40% (25% Main Brand, 15% Smkt Brands)  Brand recall of 24% unaided (highest) 43% (aided), Product usage: Trial: 31%, Used most often: 24%, Brand used in the past 12 months 26% Brand used last: 23%, Brand will use next: 25%

19. Overall Survival Strategy  If you can, know everything but do NOT do everything. Address the bottlenecks   Establish partnerships – Trust and Transparency  Outsource services outside your core business  Work with past/existing/relevant initiatives (organized communities, standards, policy)  Focus on core business Research, Studies Assessments, Analysis Input Sourcing Production Distribution Sales and Marketing Customer Service / Market Feedback

20. Thank You