Innovative Practice Philippines: The case of NorminVeggies in the Philippines

by Sylvia D. Concepcion, Larry Digal , Joan C. Uy, 2007

This case discusses the strategies of a group of farmers called the Northern Mindanao Vegetable Producers' Association or NorminVeggies, who were able to successfully market their products by using a business model not previously used in the Philippine vegetable industry. Its organizational structure and marketing clusters enabled the farmers to be responsive to the constantly changing market.

Key informant interviews were conducted among stakeholders in the Philippine vegetable supply chain like farmers' groups from Benguet, Mountain Province, Bukidnon, Cotabato, Davao del Sur and Campostela Valley; traders, consolidators and supermarket suppliers, vegetable processors, food chain managers, hotel representatives and supermarkets in Metro Manila and Mindanao, as well as with NorminVeggies and Normincorp who form the marketing division of NorminVeggies..

Farmers of NorminVeggies were able to successfully participate in the dynamic vegetable chains primarily because of the organizational structures they chose by which to respond: a corporation. This enabled them to take on the agility needed for each development in the supply chain while being in an association enabled access to development assistance. The corporation is paid a facilitation fee for its marketing services ensuring its sustainability. The association also earns from storage fees in the use of NorminVeggies Consolidation Centre (NVCC). 

The association formed marketing clusters, based on farmers' capability, interest and capitalization. They follow a quality assurance plan for each product, have training for good agricultural practices, and designated lead farmers to act as quality managers and coaches. Small farmers are clustered with independent farmers who help jumpstart quality production. Benefits and accountability for quality are shared with all the cluster members. Products are traceable to the farm and farmer who supplied each pack or crate of produce. Farmers maintain ownership of their own products up to the institutional market and therefore have a greater participation in the chain.