Profiles on Oasnon Industries: Puto Making

          ONE LOOK AT THIS WOODEN HOUSE IN TALONGOG and it’s not difficult to imagine that it had seen better days. The fading signage on the entrance to the fenced property is not of ownership but rather an announcement: “Gie’s Puto de Oas”.

         But behind this unassuming exterior, one’s attention is drawn by the hubbub of entrepreneurial activity and  to a product which Oasnons share close affinity: the rice puto.  It is incongruous because on entering, the visitor is greeted with frenetic activity – men and women in various bent positions, preparing the puto in different stages of manufacture.

        There could be no better disguise for an icon than the puto that is made within this compound.

Beginnings

        The Oas puto industry traces its humble beginnings in 1903 when Sabino Reonal of Talongog, Benito Reonal’s (Gie’s husband) lolo developed the recipe for what was the forerunner of  the puto as we know it today. Placed inside a kararaw (bamboo basket), he peddled the puto at the mercado and sold them wrapped in a piece of paper.

        Lolo Sabino’s puto is a concoction of rice flour, sugar, milk and eggs and was produced using rudimentary methods and processes that has not changed to this day.

        Today,  puto making has spawned an industry that counts 30 producers in Oas, benefits around 100 families and provides year-round and off-farm employment in the municipality. Then as now Talongog is the center of production activity. Reonal, Reblora, Riparip, Reamico, Racal and Espinas are recognized bynames in the local puto trade.

        The product has also generated wide attention, from the LGUs of Nueva Ecija, Samar, Leyte, Quezon and Isabela which sponsor observation and field trips to Oas, to government agencies such as the Department of Trade and Industry (DTI), Department of Agriculture (DA) and PhilRice, media organizations such as ABS-CBN, GMA, ABC 5 and the Philippine Daily Inquirer, even student thesis writers from the Ateneo de Naga, Aquinas University, and the Bicol University in Legazpi and Polangui. In 2003, the puto was awarded the Best Alternative Food at the Hongkong Regional Food Expo.

        In recognition of its role as an important commodity – a product champion with a competitive edge - and a potential for promoting entrepreneurship and creating jobs, the DTI has selected puto as a One Town, One Product (OTOP) commodity for Oas. This entitles it to a comprehensive package of services from the LGU, national government agencies and the private sector such as business counseling, skills and entrepreneurial training, product design and development, appropriate technologies and marketing.

       
Production

        Making puto is a laborious, yet relatively simple process. First, rice is pounded with a mortar and pestle (lusong) and manually sifted in a sisigan (sinamay sieve) to attain the desired flour consistency. Sugar, milk, eggs and margarine are added to the rice flour in proportionate amounts and the mixture is placed inside half coco shells.

        The filled coco shells are placed in an improvised steamer (made of used 10 gal. oil can with two vents at the top) where they are cooked for about 4 minutes. The cooked puto are removed from the coco shell and placed in a galvanized iron table where they are allowed to cool. These are sliced manually in a slicing tray using a thin knife and sorted according to size.

         The sliced puto, arranged neatly on a chicken wire, are toasted over coconut charcoal and manually flipped over by a cook to get the desired color consistency. This gives it the characteristic checkered design that Oas puto is normally associated with. The toasted puto are placed in a cooling tray to cool.

         The puto are then quality-checked, sorted according to size and put inside cellophane bags and labeled.
      
Marketing

        Puto is popular as a pasalubong or as giveaway to guests and friends. It has a long shelf life and when packed properly outlasts baked and other prepared foods. As a snack food, it is readily available in public markets, jeep and bus terminals, train stations, pasalubong centers and local supermarkets in the Bicol Region such as the LCC and the Gaisano.

        Puto is sold to the different market outlets in Albay such as Polangui, Ligao, Guinobatan, Camalig, Daraga, Tabaco, Legazpi City and neighboring areas such as Sorsogon and Samar. It is also found in Manila and Alabang.

        Majority of the puto makers sell their produce to wholesalers and retailers via consignment. They are paid weekly as supply is replenished after replacing the damaged goods. The big producers deliver their products to these outlets weekly and are paid COD. Small producers sell their puto direct to the consumers, mostly during market days.
       
        For lack of sufficient working capital, puto producers shy away from supplying the big supermarkets in the province, given the latter’s stiff 15-day payment term, paid with a 15-day postdated check. Supply to these outlets are filled in mostly by the wholesalers.

        With a low entry barrier, there has been growing competition from other towns (especially Nabua) who supply the market with puto products, albeit of the low quality. These are the small, round puto found mostly in jeep and bus terminals.

        In targeting the low end of the market pricing is key, and Oas producers have responded to the competition by producing similar products and pricing them at competitive rates. Premium puto, shaped like a half-moon, remains a town trademark and in this the competition don’t tread.

        Low-end puto contributes a higher net margin than the premium variety, at 40% vs. 15%. This low figure is attributed to the higher cost of inputs, such as sugar and packaging material, and to the relatively higher raw material content used in  producing  this quality product. As demand is market-driven, a shift to the low-end product is approached rather cautiously, as doing so might impact on reputation and quality.

         Sales generally follow a seasonal pattern, with October to December contributing the highest figure.

Industry Output     

         It is difficult to estimate industry output in the absence of published data, and the lack of records at the producer level.

        An empirical estimate, based on the reported sale of an industry leader in 2009, puts annual output at the P1.2-P1.5 million range.

Challenges

         For a product that’s stuck in time, the puto making industry faces a number of challenges. These are:

         Product Development. The puto as we know it today has not changed for over a   century.

         If this product is to remain marketable and competitive, production methods must be raised to industry standards. Mechanization and the use of simple equipment – from flour making, steaming, slicing, toasting – should be given consideration.

         The use of  primitive and labor-intensive equipment such as the mortar and pestle (lusong) and sisigan is not encouraged if one is to remain efficient and productive. Steamers can be upgraded to commercial grade – throughput is increased and productivity is maximized.

         Introducing mechanical slicers is recommended. Manually slicing the puto with a knife is left to the dexterity of the worker. Uniformity in size is sacrificed and wastefulness is encouraged. The use of commercial ovens should also be considered. This will minimize product handling, improve product quality and eliminate wastage from burnt goods. 

         Product packaging should be given importance. The use of industrial grade plastics translates to better product quality and longevity.  The aesthetics are enhanced and makes the product more appealing.

         The adoption of an appropriate packaging material (such as a box) should be considered since puto is a breakable commodity. An attractive package design should be given emphasis and the necessary product information, such as nutrition, included.

         Human Development. Together with the technology upgrade, workers should be given seminars and training especially on food processing technology and good manufacturing practices (GMP). Regulatory bodies such as the Department of Science and Technology (DOST) and the Bureau of Food and Drugs (BFAD) mandate these trainings before accreditation is given.

         The management side of operating the business should also be given attention. Producers should be taught courses on basic supervision, marketing, product costing and pricing, promotion and related disciplines.
     
         Facilities Upgrade. The DOST and BFAD specify guidelines and standards for facilities to be used in food processing. Knowledge of these standards is crucial if one plans to expand its market. These include the building, equipment and ancillaries.

         Product Promotion. The Department of Trade and Industry (DTI) provides training on product promotion which the industry may tap. The LGU can provide valuable assistance by linking and endorsing producers to this training program.

        Where necessary and without sacrificing efficiency and product quality, the application of appropriate technology should be given weight [a producer swears by the efficacy of the coconut shell (abab) in steaming the puto compared to metallic containers since cooked puto comes out cleanly by using the former. She adds that puto tastes better when cooked over coco charcoal (uring)]. We recommend the adoption of the necessary changes to the processes only after the proper technical evaluation and studies shall have been made.

        Product standards should also be put in place, if this product is to retain its reputation for consistency and product quality. With product formulations as varied as the number of producers making it, introducing set standards - and making sure they are followed - must be given attention.

Opportunities
 
        As an OTOP product, the industry’s potential for generating livelihood and creating employment is limitless. With a low entry barrier and a long history of tradition behind it, puto making has the capacity for generating jobs at the countrysides.

        Rice puto, though an old product, can be repackaged. Given the proper management, adoption of the right technology and technical training, and right promotional push the potential for expanding its market exists.

        Presently, its market hasn’t extended beyond the province of Albay, save for a scattered few in Manila, Sorsogon and Samar, attributed mainly to the resourcefulness of enterprising retailers. Producers still rely on their traditional markets and the occasional walk-in customers. Occasionally, the DTI invites local producers to showcase their goods in trade fairs and exhibitions but these are few and far between.
    
        Although there are efforts on the part of producers to expand their market, these are sporadic at best, hobbled as they are by poor product quality, low productivity, and problems in financing. Lack of support from the LGU and the national agencies and/or lack of awareness by producers on what these entities can offer and the absence of an industry association* are few of the identified institutional weaknesses that beset this industry.

        Reformulating the puto and giving its recipe a new twist present an alternative for revitalizing a tired, old product. Product positioning, capitalizing on the nutritional qualities of puto (a dietary product?), while targeting a niche market may help spur its growth beyond the traditional markets.

*In 2002, local puto producers organized themselves into the Oas Puto Manufacturers Association (OPMA). Organized for a different undertaking - the One Town, One Product, One Million program - this association has since disbanded and is no longer active.
       
      

(In May last year, while attending the town fiesta, this writer squeezed what he had of his little time to interview the men and women involved in Oas’ various trades – the puto maker, basket weaver, hollow block maker, and  pili/ampaw/linga producer.

Intended to arouse interest, these articles provide a short profile of  these industries to provide the reader with basic information, in the hope that discussion on the topic is engendered -  to serve as basis for taking action. While not expansive, it provides useful data that can serve as preliminary talking points.

The first of a series, this report highlights the problems and concerns that beset the puto making industry, the challenges it faces, and the opportunities that await it.

While efforts were made to ensure completeness and accuracy in presenting data, lack of time prevented a more comprehensive and in-depth treatment. Some data presented in this report are indicative, hence may not be representative of the industry).