The COVID 19 pandemic has significantly changed the way we live. For more than two months now, most of us, by force of governmental regulation, have stayed at home, avoided public and even social gatherings, set aside various recreation activities, and abstained from going to religious services. These new patterns of behaviour, regardless of the involuntariness of its nature, have altered not only how we think and do things; they also significantly altered the way we produce and consume things.
Businesses are severely affected by this pandemic. Mall sales had gone down, not only because they were closed for a while, but also because many people can no longer go there, including children and the elderly, (and those without quarantine passes) even when lockdown rules were relaxed. When religious celebrations were halted, sales for flowers and candles went low. When borders were locked, revenues of car rental companies, tour guides, and tourism-related establishments plummeted to nothing. But others managed to stay afloat, weathered the crisis, and bounced back quickly. So, I thought we need to learn from these businesses and see how we can inject resiliency to small-scale enterprises and build a sustainable business.
I actively searched for exemplars of these types of businesses within Tagbilaran City. I found one managed by a woman with whom I spent a great deal of my time in graduate school some seventeen years ago – Balai Cacao.
The Story of Balai Cacao
Balai Cacao is a sole-proprietorship owned and managed by Marie Frances Macabenta. Nene, as she is fondly called by people who know her, is a good friend. We completed our Masters in Business Education degree at the University of San Jose Recoletos in 2003 as scholars of the Commission on Higher Education. I was then teaching at Holy Name University while Nene was a professor at the University of Bohol.
“What started as a dream retirement place for our family became a haven for God’s provisions.”, Nene recalled. In 2014, Nene and her husband Ernie purchased a vacant lot in Barangay San Isidro, Tagbilaran City, Bohol where they planted some cacao trees. The couple built a nipa hut as a weekend get-away while tending to their crop. The small nipa hut began teeming with around 30 children every time they and their son EJ arrive during weekends, prompting Nene to conduct literacy and values classes for them along with a feeding program. Ernie, on the other hand, gave away cacao seedlings to interested fathers to plant in their front yards. Because the cacao trees began to populate the street, the alley leading to their lot was then called by the neighbours as Cacao Road. The children then called themselves the Cacao Road Children’s Club.
In 2015, after consulting with the parents, Ernie organized the Cacao Road Savings Group where four men and 15 women joined. Ernie works at World Vision and authored the community-managed savings and credit association (COMSCA) as an economic development strategy. He introduced it to the community in San Isidro as a vehicle for economic empowerment. Later, the savings group became an all-women group that engaged in small income-generating activities. Members, however, realized that the returns were not sufficient for family needs and managing a group enterprise is difficult.
Meanwhile, as the cacao plants began to bear fruits, Nene started making tableya on the side for fun and a little bit of added income. She is fond of chocolates and learned how to make tableya - tablet of raw, dark chocolates, from an elderly neighbour. She used to buy the lady’s tableya, wrap them in a nice package and sell them to her friends, mostly from other parts of the country, at a mark-up. Both Nene and Ernie realized that they could transform their hobby into an enterprise and provide jobs to the community in barangay San Isidro and sustain their community program.
In 2017, after much prayer and careful study, the Macabentas registered the Tableya making enterprise as a sole proprietorship. Nene used her small savings from her 21 years of teaching business in a university as start-up capital. Ernie, on the other hand, fixed the old grinder, turned their dirty kitchen into a small workshop in the back of their house in Barangay Manga. Niza, their trusted house assistant and three other women from San Isidro were the first production workers. The enterprise derived inspiration from home and families, thus the name BALAI CACAO.
As earlier mentioned, Balai Cacao was least affected with the pandemic. So my interest lies in how was this made possible. I spoke with Nene for over an hour and these were the things I learned:
1. Build your business on a sustainable value chain.
Simply put, “a value chain is a set of activities that a firm operating in a specific industry performs in order to deliver a valuable product (i.e., good and/or service) for the market.”. A tableya value chain starts from growing cacao trees and ends up with the tableya landing on a customer's cupboard.
For the most part, Nene has control of her business’ value chain because she grows cacao trees and markets them on her own, and also supports local bean producers like the small farmers in San Isidro. Sustainable practices also underpin her production technology. Finally, the nature of the product facilitates sales even during crises – it is a food product, a healthy alternative to processed drinks, and has nutritional qualities.
Building your business on a sustainable value chain means a lot of things. It means less supply chain disruption, lesser production delays, better market outreach, and more flexible revenue streams.
2. Cultivate good relationships within the chain.
Nene admits that supply for cacao beans in Bohol are insufficient to meet production requirement, so she sources out some of her beans from other suppliers across the country. Nene’s customers also have grown quite significantly that she needs to communicate with them through her Facebook page regularly. Maintaining good relationships with her workers, her suppliers, her market outlets, and customers, is Nene’s top priority. This would also mean a lot of things – like giving their workers their due, honoring commitments with market outlets, paying suppliers promptly, and ensuring that the products satisfy customers.
This is something that business scholars have been talking about – that “the fundamental success of the value chain would depend on the mode of relationship between the members”. Better relationships facilitate better results like – loyalty of workers, buyer preference from suppliers, and customer patronage.
Nene, for example, is grateful to people in the intermediary markets – like cafes, local markets, and supermarkets – who allowed the entry of her products to their stores. Nurturing these relationships is important to her and she ensures that Balai Cacao is able to fulfil their requirements.
3. Treat competition as opportune niches.
Balai Cacao is part of the Association of Bohol Cacao Producers (ABCaP), an organization of cacao growers and tableya makers in Bohol, where Nene is the secretary. For Nene, competitors are sources of inspiration, bringers of new information and learning, as well as providers of opportunities for collaboration. She recalled that when she needed cacao beans but cannot purchase the set minimum order of a Davao-based supplier, she pooled the orders from other tableya makers within the association to be able to source out the beans in time.
For her, it is not a case of bringing your friends close, and your enemies closer. She believes that surviving as a business, and more importantly, weathering through the pandemic, is better through collective efforts. This is the reason why she cooperates with enablers of micro, small, and medium enterprises (MSMEs), like the Department of Trade and Industry (DTI) and the PhilippineCommission on Women (PCW) to be able to contribute to the development of the cacao industry in the province and in the country. Her passion to help other entrepreneurs is a way of paying forward, as she too is a beneficiary of the Gender-ResponsiveEconomic Actions for the Transformation of Women (GREAT-Women) Project of PCW and DTI.
4. Explore multiple revenue channels, including digital selling.
With the help of her son EJ, Nene was able to set-up Balai Cacao in digital selling platforms. While she admits that delivery infrastructure in Bohol is not yet mature (e.g. courier companies deliver, but do not pick-up orders), she believes that market reach, especially during this time of the pandemic, lies on online sales. While she continues to supply her physical outlet stores, she now starts to diversify her revenue streams and is exploring other ways to introduce Balai Cacao to other markets. Just very recently, Balai Cacao also opened a website with Global Linker, a digital marketing platform facilitated by DTI and Union Bank to provide marketing support to MSMEs.
5. Learn to see opportunities during times of crisis.
While several of us were misled to believe that “when written in Chinese, the word crisis represents danger and opportunity at the same time”, Nene learned to see opportunities during the time of crisis. Apart from helping out her workers who were forced not to report to work because of the pandemic, Nene was vigorously finding ways to help cheer up frontliners using her business.
Some months ago, I had the opportunity to taste Nene’s torta with tableya nibs on top and a student of mine was raving about her sikwate. During the community quarantine, she distributed torta and her innovation – chilled bottled sikwate, to frontliners at the city health office and other government agencies. The innovation came from the difficulty of bringing sikwate to different locations (as sikwate needs to be served hot to be really good), and what a better way to distribute drinks in this warm weather but to chill it and serve cold! Nene though admits that the use of PET bottles for packaging disturbed her and she aims to find more sustainable means of packaging.
Despite the pandemic, Balai Cacao was able to maintain stable revenue figures after an initial slump. Beginning May 2020, production resumed, and the construction of Balai Cacao’s new production center is on its way.
When I interviewed Nene, it was quite apparent to me that her passion for her business comes deeper than earning profits. It comes from the heart to use God’s resources for the benefit of people and their families. The way she manages her business, as revealed by the lessons above, is quite out of the ordinary. Maybe, it is this seeming “unordinariness” that enabled Balai Cacao to survive the crisis while others are struggling to keep theirs afloat.
Writing this blogpost makes me crave for my next cup of sikwate. Surely, it will be from Balai Cacao.
If you want to order from Balai Cacao, please visit their Facebook page here. You can also find its products at Painitang Bol-anon, BQ Mall, Island City Mall, Alturas Mall, and Plaza Marcela.