[Interview] Ariestelo Asilo, Co-founder, Varacco, Philippines
Ariestelo Asilo, together with co-founder Kath Manto, started Varacco in 2018. The company was in 2021 recognized by the United Nations as one of the 50 Best Small Businesses in the world providing good food for all.
Could you introduce your company?
Varacco, from Lipa City, Batangas, Philippines, owns the registered trademark brand “Timplado.” It is a food and beverage company that owns the patented dip coffee utility model and focuses on creating rich, full-bodied coffee blends in a matter of seconds. Our quality coffee beans are sourced directly from partner farmer communities in Batangas, and other coffee farms in the Philippines. Varacco also makes the best tasting native Filipino delicacies with a twist. All are made of premium glutinous rice mixed with rice flour and coconut milk. Our brand values and advocacies stand on responsible entrepreneurship, dignified work for farmers, equitable livelihood, and strong support to coffee production and post-harvest handling. Having an innovative product, distinct blends made from purely local ingredients, and a social mission to empower coffee farmers, youths, and PWDs, Varacco will be recognized as a Thought Leader in the Philippine coffee industry and is positioned to grow faster as a Digital-first Brand available to a lot of coffee drinkers and food lovers.
Were there particular circumstances in your community that led you to start your agri-food business and what support, if any, did you receive from local government or your community?
Varacco started as a single proprietorship in 2018. Ideated by co-founder Kath Manto thinking to have an instant “true” coffee that can be drank anytime without using equipment and can be brought anywhere, the dip coffee was born. Kath and I eventually met through a common friend. My background on business development, sales and marketing, investment strategy, and government compliance made us establish the backward integration business model for coffee coupled with Kath’s goal of having a café restaurant. We registered our company as a Corporation raising funds from our own monies, from friends and families. As market demand for coffee increases and as people look for foods that will be best partnered with our dip coffee, we found out that 1) we now have a very limited coffee in our town which used to be a top exporter of coffee in the world 150 years ago 2) we have aging coffee farmers 3) we have a dwindling number of coffee trees due to land conversion 4) a lot women and youths from the non-formal sector do not have jobs. The local Department of Trade and Industry-Batangas enrolled us in their business mentoring program in 2018 and chose us to be one of the 20 recipients of the One Town, One Product project. After the end of the mentoring program, we won “Best Business Plan” landing us to various major media interviews and appearances nationwide. These also gave us slot in major exhibitions and trade shows sponsored by them and granting us low registration fees to join. The community of women and coffee lovers also supported us by buying our Dip Coffee for corporate holiday gifts and personal consumptions. We even won in the bidding in the national government for their coffee give-away. And the rest is history!
How has the Covid-19 pandemic directly or indirectly impacted your business operations?
Taal Volcano Eruption and Covid-19 pushed us to close shop for a few weeks. Our company, Varacco Inc, has suspended operations for 6 months. During this span of time, we continued to support our employees by bringing them foods. But that would not be sustainable and would push us to eventually close shop for good. We suddenly thought of going digital to relaunch our operations. Through the help of creative youths, we came up with a “New Normal” ad that became viral and made people curious of our Dip Coffee and Native Rice Delicacies. And on July 31, we had a soft launch of our café restaurant where people can finally dine in. People though we’re crazy because it’s pandemic and stores are closing! But on a positive note, the pandemic made us even braver, more strategic and calculating with risks! Slowly, we gained a foothold of our target market who have become our loyal customers until now. We are still thriving and even growing one year after!
What other challenges have you faced in your journey and how have you worked to overcome these?
The on and off lockdown in my country takes a toll in the number of people dining in our restaurant. However, from 2020 to present, we saw a 50% profit sales growth! The raw materials costs keep increasing and we had to adjust our prices multiple times. We had to phase out our original food offerings because they were no longer profitable. We retained our coffee and native rice delicacies being that they were our bestsellers. We added nutritious Filipino fusion meals and people began to patronize it. Aside from increasing costs, we also experienced difficulty in government compliances. The difficulty in its requirements and submissions exacerbated by Covid made us anxious. We also faced issues in our intellectual property rights because of some people who try to cheat or discredit our innovations. We had to hire an IPO attorney and spend a lot to secure this. We also experienced challenges on some of the coffee we got due to its substandard quality. Therefore, we sourced coffee and other raw materials from various farmers and suppliers.. In terms of human resources, we had a high turn over rate at first because we would originally hire seniors and mothers. Due to health protocols, we had to let go of them, we began to hire more youths who have higher immunity. We also began to outsource our coffee repackers so that they would no longer leave the comforts of their homes. Finally, we had issues with investments because people would initially not believe our vision. We did well with our impact branding and we have now grown from one to 4 companies.
Describe what it means for your agri-food enterprise to be selected by the UN as one of the 50 Best Small Businesses in the world?
In the competition’s question—what are we going to tell the world and the UN organizers if we win? We answered that “Just by having a pair of ears to listen to us already means the world to us.” And this is exactly what feel now! We are so happy about it and we honor all the people who are helping us, the mentors, the supporters, the mothers, the women, the youths, the PWDs, and the farmers. It means that we are becoming their vehicle for them to feed their families, sustain their businesses, to feel more dignified despite the pandemic, and to make us one of their ways to achieve their dreams. It means that we are creating a community of family who better understand each other in terms of giving impact to one another. The win also means our branding has increased in the eyes of our investors, partners and community. And the beauty of this kind of impact branding is that people support you more and the community’s confidence increases more. Our staff has higher morale and it is evident by their 5-star rating and high “tips” given by the customers.
What is your vision for 2022 and beyond in delivering a more nourishing, sustainable, equitable and resilient food system?
For 2022, we envision to 1) expand to two more company-owned stores, 2) conclude our pioneering climate-smart and covid-adaptive low-cost Internet of Things technology for coffee, and 3) be present in major supermarkets nationwide through our distributor. Beyond 2022, we see a future where we have multiple stores in the country that source our coffee and other raw materials from coffee farmers, small businesses, and urban poor mothers who would make our delicacies. We also see that more youths would be engaged in coffee farming and coffee business from all aspects of the value chain. We see hiring more PWDs for our coffee repacking and that more youths are working with us not only as service crews and staffs but also as Ambassadors of Filipino culture, nutritious foods and coffee history.
What further support does your business and others like you need to create good and sustainable food for all?
We need more people to patronize our Dip Coffee made by our PWDs and youths. We offer the truest instant coffee in the market without the preservatives found in artificial coffee. By supporting our dip coffee, we order more from the farmers and we give more jobs to the non-formal sector. We need more investors to support us in our expansion of more stores so that we can reach more people to experience our foods and in building more communities of people who support good food for all. For all of the businesses like us, we need support not just in buying our products but also making sure that they help us protect our brand so we can grow more. Information is knowledge and knowledge is power. The best currency to help us grow is by spreading good information about us and our products and that information also feeds all our minds. Only by feeding our mind and stomach together can we truly say that no one is left behind and no one would be hungry.
What key advice would you give to others that would like to follow your example to become passionate, values-driven, innovative food entrepreneurs?
Be genuine and authentic! Genuineness is a value that is very rare nowadays. With the advent of social media, people can easily fake emotions. And we have to combat it by truly engaging with the community through authentic concern and by giving them their true needs. Of course, we also have to take care of ourselves by continuous learning and by eating the right foods, feeding in with the right information, and doing the right thing. Keep going even when the times are tough. Keep learning even when there are a lot of misinformation. Keep giving even if it means earning a little because the people will also give you more. Keep producing even if people discourage you because mass production no matter how small it starts, is power. And lastly, keep praying, the world needs more positivity, faith and hope.
Is there anything you’d like to add that you feel strongly about in providing Good Food For All?
Good Food for All starts with the mind. My mentor always tells me—it is the mind that is barren and not the soil. And with this, good food means good mind. We have to keep thinking of ways to help the needs of our community. We have to keep thinking not only how to give the needs of the market but also how to give them an authentic product they can truly find value for themselves. Value is how they feel towards the product and each product has a story that one shall know. By knowing this story behind each one of them, all of us become a storyteller of pains, successes, and struggles. When we tell these stories, people are get drawn to the concept, to the foods, and to the future. Good food nourishes the body, the mind, the soul, and the next generation.
This interview is part of a series covering the winners of the United Nations Best Small Business providing Good Food for All global competition.