Master in Innovation and Business
Master in Innovation and Business
In Partial Fulfillment of the Requirements for the Course Innovation Strategy and Journey One: Insighting
Master in Innovation and Business
Master in Innovation and Business
EXECUTIVE SUMMARY
A dilemma facing the coffee industry in the Philippines is the country's inability to produce coffee in the quantity consumed despite being one of the biggest coffee consumers in Asia, and fifth in the world, consuming over sixteen point eight billion cups of coffee each year, penetrating nine out of ten households in the Philippines, with a market size of ninety-seven point five billion Philippine pesos annually. The annual consumption of coffee in the Philippines is two hundred thousand metric tonnes while the production capacity is only thirty thousand metric tonnes, hence a need to import eighty-one percent of coffee needs, amounting to three hundred thirty thousand metric tonnes of soluble coffee in the year twenty twenty-three alone.
The problem in the country's coffee sector is not based on agriculture, but rather an institutional issue. First of all, the crisis is caused by small-scale farming involving aged growers (aged fifty-seven years) who are losing young farmers' interest to farm, farming on one to two hectares of land with senile plants, lack of quality seeds and fertilizers, technical assistance, poor post-harvest infrastructure, and risks from climate change where forty-seven percent of the world's coffee comes from countries that may have sixty percent reduction of viable land by two thousand fifty.
With average yields ranging from zero point two four to zero point five four metric tonnes per hectare, compared to the two metric tonnes per hectare benchmark set by the Department of Agriculture, farmers are locked within the poverty line of one hundred twenty-nine thousand seventy-two pesos per year, while private investors shy away because of the massive capital needed, complicated process, and gestation period of two to three years.
This capstone project identifies and validates the problem space through comprehensive industry analysis, gap assessment, and customer segmentation. Drawing on data from the Philippine Coffee Industry Roadmap twenty twenty-one to twenty twenty-five, the Nescafé Plan twenty thirty Progress Report, PhilCAFE project outcomes, Nestle's Project Coffee plus impact metrics, Cooperative leaders of Tibolo Farm Workers Association, Bagobo Tagabawa Fair Trade Marketing Cooperative, Operations leaders and farmers of SunFood Marketing and the Department of Agriculture. Roots2Beans will demonstrate that the barriers to Philippine coffee self-sufficiency are not agronomic related but systemic coordination failures. When provided with quality planting materials, agronomic supervision, in-kind financing, and guaranteed offtake, farmers in Project Coffee plus achieved a fourfold increase in yield-from zero point two four metric tonnes per hectare to one metric tonne per hectare-and crossed the national poverty threshold. Roots2Beans seeks to replicate and scale this success through a replicable, investable, and market-driven platform that aligns farmer livelihoods, landowner returns, buyer requirements, and national development goals into a single, sustainable value chain.