Introduction
Globalization has strongly boosted international trade, especially international business activities increasingly grow in Asian markets. Therefore, it is obvious that there will be more Canadian companies that tend to trade with Asian partners. In addition, Canada and Indonesia have maintained strong bilateral relations and have been partners in reputable multilateral organizations, such as World Trade Organization (WTO), the G20, Asia-Pacific Economic Cooperation (APEC), the Regional Forum (ARF), and the Association of Southeast Asian Nations (ASEAN) (Government of Canada, n.d.). These two countries experience comprehensive cooperation in various industries.
Indonesia is the world’s largest producer of coconut; however, through the past five years, Indonesian coconut-related imports contributed a very minor proportion to total Canadian coconut and its bi-products imports even though the demand from Canadian market for this category is substantially higher than its domestic supply.
As a sweetener with a distinct flavor, coconut sugar has become more popular since there is greater interest in traditional taste in more countries around the world and stronger health consciousness of worldwide consumers, especially in developed nations. This market’s potential for supplying qualified coconut and its bi-products should be put into thorough consideration. This research, therefore, serves as an evaluation of Indonesian market potential for coconut sugar and provides appropriate suggestions for Canadian importers as well as Indonesian exporters to promote international trading of coconut sugar.
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Background
Coconut sugar also known as coco sugar, coconut palm sugar and coconut crystals is predominantly manufactured in Thailand, one of the world’s largest coconut producing countries located in South Eastern Asia. According to Beck (2014), coconut sugar is sited to have a lower glycemic index when compared to other sweeteners. This low glycemic index does not increase one’s blood glucose nor insulin levels as other sweeteners do. The use and consumption of coconut and its bi-products has increased significantly in the United States of America in recent years and as such its popularity, uses and benefits have been known based on heightened awareness and positive results from usage. However, many worldwide regions such as South Eastern Asia and the Caribbean have known the use coconut and its many bi-products for many years as this product has been a part of their culture.
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Canada on the other hand, has not been a country that has gravitated to the use of coconut sugar. Canada, known as the multicultural community with influences from South Eastern Asia and the Caribbean possibly has the potential to explore offering coconut sugar in the Canadian marketplace.
The framework for exporting from Thailand to Canada has been put in place and this has been supported by EDC Trade (n.d.) and TFO Canada (n.d.) embodied in a free trade agreement between both countries. Through TFO Canada (n.d.) available suppliers in Thailand can be located through TFO’s online database by Canadian buyers with the assurance that the necessary documentations, health and food safety regulations and approvals have been ascertained by these companies as compliance is imperative for a developing nation to be supported by TFO. Thailand is a developing country support by TFO and EDC Trade.
Business Opportunities
Importing coconut sugar into Canada is an opportunity that should be explored entirely to maximize the benefits and gains that will come from this pursuit. Coconut sugar is used as a traditional alternative sweetening for years in South-East Asia. Its popularity has also reached other markets such as Australia, Canada, New Zealand, USA, and many more. One of the main reasons why coconut sugar industry is continuously growing is because of the demand; coconut sugar is one of the healthiest alternative sweeteners available in the market. In 2014, ‘coconut sugar’ was named the single most sustainable sweetener by the Food and Agricultural Organization (FAO) of the World Bank. The product has its glycemic index lower compared to the accustomed cane sugar and honey. Coconut sugar compared to other sweeteners lessens the sugar level rise in an individual’s bloodstream. This in turn, along with the rise of healthier lifestyles and the amount of people living with diabetes, makes it apparent that the demand for coconut sugar isn’t going down anytime soon. The growing awareness towards health is the prime driver for the coconut sugar industry.
In addition, the group believes that Indonesia should be the main country of focus in terms of importing coconut sugar into Canada because Indonesia is the largest coconut-producing country in the world, with over 15 million nuts being produced, averaging to 18.3 million tons (APSEC, 2017). The demand for coconut products exceeds the current supply of coconuts (Dillinger, 2017). This is why the group suggests that Indonesia is the most viable country for this venture because they have the most land area being used for coconut farming and production, approximately 3.61 million hectares (APSEC, 2017).
Overall, the opportunity in importing coconut sugar in Canada seems to be apparent. However, further research is required to consider the challenges that might come along with this possible venture, and other opportunities that will arise from it.
Research Objectives
To determine the strength of the demand for coconut products in Canada, in order to discern if exporting “coconut sugar” to Canada is a worthwhile opportunity
The multicultural country of Canada, presently has a market for coconut products however, coconut sugar is not a popular product in the market place. It must be ascertained as to how lucrative it would be to increase the importation of coco sugar and if through marketing and building knowledge awareness and base, if this medium will assist in positively influencing the demand for this product amongst Canadians.
To identify the needs and wants of Canadians, when it comes to their diets to fully maximize the health benefits coconut sugar can offer
As stated by Beck (2014), coconut sugar has the same nutritional values as offered by white sugar as it relates to calories and carbohydrate contents. The difference can be seen in coconut sugar being a higher retainer of mineral content especially potassium and having a lower glycemic index which is a positive factor for diabetics. These benefits can positively impact the health benefits from consuming this sweetener. It must then be examined, that even though Canada is known to be a health conscious nation when compared to other nations, would the populous consider using this product? Being mindful that a sector of the population is familiar with this product and one would not need to convince them.
To assess the current Canadian sweeting industry, in order to detect the variances between the different sweetening products (cane sugar, agave, maple syrup)
Langlois, Kellie, Garriguet, Didier, (2015) states that one in every five calories consumed by Canadians includes sugar. These calories are obtained through natural sugars or additives. This figure translates to a 21% daily average intake from added sugars in the overall food and beverage consumption of an individual. With this information, it can then be analyzed that if the sugar intake for additives is at this consumption rate, it is important to examine the nutritional values that may be available in other sweeteners and a comparison be carried out. The benefits for coconut sugar have been sited and it can be ascertained that there is a possible permanent place in the market for this product.
Methodology
This research incorporates both primary and secondary sources of data with a priority on secondary sources regarding the demand for coconut products in Canada. Research information will be based on both quantitative and qualitative approach.
Primary will be collected by interviews with experts and representatives from the TFO Canada and the Indonesian Consulate. Also, there will be surveys and questionnaires to be collected from Canadian customers about their preferences, behaviors, attitudes and perceptions to assess the quality aspects of coconut sugar. Research will be conducted in Toronto, Canada with estimated number of 50 customers.
Secondary sources will include various Internet sites and previous publications and reports which provide Canadian consumers study reports, Canadian governmental regulations on food safety, coconut sugar market and product information, general information on bilateral trade of Canada and Indonesia with a focus on Indonesian coconut-related imports. Reference websites will include reliable governmental and non-governmental sources, such as: TFO Canada, Health Canada, Export Development Canada (EDC), Government of Canada.
Implementation Plan
The group decided on having four main steps for the research. Each succeeding step requires the previous step to be finished before the succeeding step can be conducted.
- Conduct Initial Research to Analyze the Current Information Available: 1 week
- Plan and Design the Research Questions that Need to be Answered: 2 days (The questions will be based on the lacking information in Step 1).
- Data Collection: 3 days
- Data Analysis in Accordance to the Secondary Data Obtained in Step 1: 1.5 weeks.
Overall, the maximum time of finishing the research will be 4 weeks; the minimum is 3 weeks. The total estimated budget is roughly 10,000 CAD. 15% of the budget will be allocated to Step 1, 10% for Step 2, 40% towards to the data collection, 25% for the data analysis, and the remaining 10% as petty cash.
Conclusion
With high potential of coconut sugar products and positive prospects of Indonesian import growth, this research will determine the opportunity to export Indonesian coconut sugar into Canadian market as well as evaluate the size of the market for this product. Furthermore, the research will be valuable in providing helpful suggestions for businesses in Canada and Indonesia to take advantage of the coconut sugar market. The results may benefit both business objectives of expanding operations and government targets of promoting global trade, especially between developed and developing countries.
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