Top 3 Challenges For Philippines Market Entry
Written by: Tanibel Ang, Asia Sales Manager at Incite
The Philippines market presents significant export sales opportunities for F&B brands with a burgeoning premium grocery sector and open-minded and 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.
In 2023, Incite supported many of our key clients to enter and grow the Philippines market. Tanibel Ang, Asia Sales Manager at Incite, shares the top three challenges that food and beverage brands face when entering the Philippines.
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). Up until 2017, the rules around FDA compliance were much more relaxed and many shipments could enter the country without having been registered with the FDA. Today, FDA requirements are extensive and all food and beverage items must first be registered before they can be imported into the Philippines.This even applies to large sample shipments.
Ensuring that FDA documents are in order prior to shipping is essential to avoiding running into compliance issues which could result in delays with clearance.
The key to a swift completion of FDA registration is to work with an in-market distributor with a strong compliance team that can help you navigate the process. In the Philippines it is the norm for the in-market distributor to process the FDA registration application, using documentaton provided by the manufacture.
Strict Import Rules
In addition to FDA registration, there are other documents that exporters must provide with their shipments. A Certificates of Analysis (COA), product specifications for each SKU and manufacturing certificates are a handful of documents that can be required.
All export documents must comply with strict compliance criteria. For example, the product description used must be an exact match across all export 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 distributor with strong compliance capability and relationships with regulatory authorities can help brands avoid delays and costly mistakes.
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, “Long lead times between ordering and arrival in the Philippines are common. For instance, one distributor we work with has to factor in a six to eight week production lead time plus an additional six weeks for shipping. In total, they are 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.
Opportunity
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 behavior.