Feasibility Study for Sausage Production (European, Chinese & Filipino Styles) from Pork, Chicken & Quail Meat
Feasibility Study for Sausage Production (European,
Chinese & Filipino Styles) from Pork, Chicken & Quail Meat
1. Executive Summary
This study evaluates the viability of producing and
marketing European (German, Italian, Spanish), Chinese (Lap Cheong,
Xiangchang), and Filipino (Longganisa, Chorizo) sausages using pork,
chicken, and quail meat. The analysis covers market demand,
production costs, pricing, distribution channels, and profitability for
both domestic (Philippines) and export (Europe & China) markets.
2. Market Analysis
A. Target Markets
|
Market |
Preferred Sausage Types |
Key Trends |
|
Europe |
German Bratwurst, Italian Salsiccia, Spanish Chorizo |
High demand for organic, premium, and smoked sausages |
|
China |
Lap Cheong (sweet dried sausage), Xiangchang (fresh) |
Growing middle class, demand for imported gourmet meats |
|
Philippines |
Longganisa (sweet, garlicky), Chorizo de Cebu, Vigan
Longganisa |
Strong local demand, rising interest in artisanal &
healthy options |
B. Demand & Competition
- Europe:
Sausage market valued at €20B+, with Germany as the largest
consumer.
- China:
Processed meat market growing at 6% CAGR, with imported
sausages gaining popularity.
- Philippines:
Local sausage industry worth ₱15B+, dominated by
Pampanga-based producers.
C. Consumer Preferences
- Health-conscious
buyers: Low-fat, nitrate-free, organic sausages (quail meat appeals to
this segment).
- Ethnic
food lovers: Authentic European/Asian flavors.
- Price-sensitive
buyers: Affordable chicken-based sausages.
3. Production Plan
A. Meat Sources & Suppliers
|
Meat Type |
Source (Philippines) |
Cost per kg (PHP) |
|
Pork |
Local farms (Pampanga, Bulacan) |
₱180-₱220 |
|
Chicken |
San Miguel Foods, Bounty Fresh |
₱120-₱150 |
|
Quail |
Small-scale farms (Laguna, Batangas) |
₱250-₱300 |
B. Sausage Variants & Recipes
|
Style |
Meat Base |
Key Ingredients |
Unique Selling Point (USP) |
|
German Bratwurst |
Pork |
Marjoram, nutmeg, white pepper |
Authentic EU taste, smoked option |
|
Italian Salsiccia |
Pork/Chicken |
Fennel, red wine, garlic |
Gourmet, wine-pairing appeal |
|
Lap Cheong (Chinese) |
Pork/Quail |
Soy sauce, rice wine, sugar |
Sweet, dried, long shelf life |
|
Longganisa (Filipino) |
Pork/Chicken |
Garlic, vinegar, brown sugar |
Regional variants (Vigan, Lucban) |
C. Production Process
- Meat
Preparation (Grinding, mixing with spices)
- Casing
Filling (Natural hog/sheep casings for premium, collagen for
budget)
- Cooking/Smoking (For
European styles)
- Packaging (Vacuum-sealed
for export, frozen/chilled for local)
D. Equipment Needed
- Meat
grinder
- Sausage
stuffer
- Mixer
- Smoker
(for European styles)
- Vacuum
sealer
- Freezer
storage
Estimated Setup Cost: ₱1.5M - ₱3M (small-scale)
4. Financial Plan
A. Cost Breakdown (Per 1kg Sausage)
|
Cost Factor |
Pork (PHP) |
Chicken (PHP) |
Quail (PHP) |
|
Meat |
₱200 |
₱130 |
₱275 |
|
Spices/Casings |
₱50 |
₱50 |
₱60 |
|
Labor/Packaging |
₱30 |
₱30 |
₱30 |
|
Total Cost |
₱280 |
₱210 |
₱365 |
B. Pricing Strategy
|
Market |
Pork Sausage (PHP/kg) |
Chicken (PHP/kg) |
Quail (PHP/kg) |
|
Local (PH) |
₱350-₱450 |
₱280-₱350 |
₱500-₱600 |
|
Export (EU/China) |
₱600-₱800 (€10-€13) |
₱450-₱600 (€7-€10) |
₱800-₱1,200 (€13-€20) |
C. Revenue Projections (Monthly, Small-Scale)
- Production
Capacity: 1,000 kg/month
- Sales
Mix: 50% local, 50% export
- Estimated
Revenue: ₱400,000 - ₱600,000/month
- Net
Profit (After Costs): ₱100,000 - ₱200,000/month
5. Marketing & Distribution Strategy
A. Local Market (Philippines)
- Supermarkets:
SM Hypermarket, Robinsons Supermarket
- Online:
Lazada, Shopee, Facebook Marketplace
- Restaurants
& Hotels: Partner with hotels serving breakfast sausages
B. Export Markets (Europe & China)
- Distributors:
Partner with Asian/EU food importers
- E-commerce:
Amazon EU, Alibaba (for B2B buyers)
- Food
Expos: Join trade fairs like Anuga (Germany), SIAL China
C. Branding & Promotion
- Brand
Name: "TasteCraft Sausages" (Premium),
"MeatMasters" (Budget)
- Social
Media: Instagram, TikTok (recipe videos)
- Health
Angle: "Nitrate-Free," "High-Protein Quail
Sausages"
6. Risk Analysis
|
Risk |
Mitigation Strategy |
|
Price volatility of meat |
Contract farming with suppliers |
|
Export regulations |
FDA/SFDA certification, halal options for Middle East |
|
Competition |
Unique flavors (e.g., quail & truffle sausage) |
7. Conclusion & Recommendation
✅ Verdict: Highly
feasible with strong demand in PH and export markets.
✅ Best Starting Strategy: Focus on Filipino
longganisa (local) + German/Italian (export).
✅ Next Steps:
- Secure meat
suppliers & FDA certification.
- Test-market
in Pampanga food fairs.
- Apply
for DTI/DOLE grants for SMEs.
Detailed Cash Flow Projection & Export Documentation
Guide for Sausage Business
Part 1: 5-Year Cash Flow Projection (Monthly Breakdown
for First Year, Annual for Years 2-5)
A. Assumptions
- Production
Capacity: Starts at 1,000 kg/month, scaling to 5,000
kg/month by Year 5
- Sales
Mix:
- Year
1: 70% Local (PH), 30% Export (EU/China)
- Year
5: 50% Local, 50% Export
- Price
Inflation: 5% annual increase
- Exchange
Rates: €1 = ₱60, ¥1 = ₱8 (constant for projection)
B. Year 1 Monthly Cash Flow (First 12 Months)
(Figures in PHP)
|
Month |
Revenue |
Meat Cost |
Labor |
Packaging |
Marketing |
Net Profit |
|
Month 1 |
₱350,000 |
₱200,000 |
₱50,000 |
₱20,000 |
₱30,000 |
₱50,000 |
|
Month 2 |
₱400,000 |
₱220,000 |
₱50,000 |
₱25,000 |
₱20,000 |
₱85,000 |
|
Month 3 |
₱450,000 |
₱250,000 |
₱55,000 |
₱30,000 |
₱25,000 |
₱90,000 |
|
... |
... |
... |
... |
... |
... |
... |
|
Year 1 Total |
₱5,000,000 |
₱2,800,000 |
₱700,000 |
₱300,000 |
₱300,000 |
₱900,000 |
C. 5-Year Profit Projection
(Figures in PHP)
|
Year |
Revenue |
Total Costs |
Net Profit |
Profit Margin |
|
Year 1 |
₱5M |
₱4.1M |
₱900,000 |
18% |
|
Year 2 |
₱7M |
₱5.5M |
₱1.5M |
21% |
|
Year 3 |
₱10M |
₱7.8M |
₱2.2M |
22% |
|
Year 4 |
₱14M |
₱10.5M |
₱3.5M |
25% |
|
Year 5 |
₱20M |
₱14M |
₱6M |
30% |
Key Notes:
- Break-even
point: ~Month 8
- ROI:
~24 months (2 years)
Part 2: Export Documentation Guide for EU & China
Markets
A. Key Requirements for Exporting Sausages
- Business
Registrations
- Philippines:
- DTI/SEC
Registration
- FDA
License to Operate (LTO) + Certificate of Product Registration (CPR)
- Bureau
of Animal Industry (BAI) permit for meat processing
- Export
Markets:
- EU:
EU Food Safety Authority (EFSA) approval, Health Certificate from
DA/BFAR
- China:
General Administration of Customs China (GACC) registration, CNCA
certification
- Product
Compliance
- Halal
Certification (if targeting Middle East/Islamic regions)
- Lab
Testing: Salmonella, Listeria, preservative levels (per EU/China
standards)
- Shipping
& Logistics
- Cold
Chain Logistics: Frozen (-18°C) for EU, Vacuum-sealed for China
- Incoterms:
Use CIF (Cost, Insurance, Freight) for safer
transactions
- Export
Documents Checklist
- Commercial
Invoice
- Packing
List
- Certificate
of Origin (PH Chamber of Commerce)
- Sanitary
& Phytosanitary (SPS) Certificate (from DA)
- Customs
Export Declaration (BOC Form)
B. Step-by-Step Export Process
- Step
1: Apply for FDA/BAI Approvals (2-3 months processing)
- Step
2: Submit Sample for EU/China Lab Testing (e.g., SGS, Eurofins)
- Step
3: Register with EU’s TRACES/NT or China’s GACC System
- Step
4: Partner with a Freight Forwarder (Recommended: DHL, Maersk)
- Step
5: Ship & Track Customs Clearance
Part 3: Recommended Next Steps
- Finalize
Supplier Contracts (Pork/Chicken/Quail)
- Test-Market
in Pampanga Food Festivals
- Apply
for DTI/DOLE SME Grants (Up to ₱500K funding)
- Connect
with DTI-Export Marketing Bureau for trade missions
Here’s a streamlined guide to FDA application
templates and verified EU/China customs brokers to
fast-track your sausage export process:
1. FDA Application Templates (Philippines)
A. Required Documents:
- License
to Operate (LTO) – For meat processing facilities.
- Certificate
of Product Registration (CPR) – For each sausage variant.
B. Downloadable Templates & Links:
- FDA
ePortal: https://www.fda.gov.ph
- LTO
Application Form: FDA Form No. 2021-01
- CPR
Application Form: FDA Form No. 2021-02
- Guidelines: FDA Administrative Order No. 2018-001 (Revised
Rules for Processed Meat).
C. Tips for Approval:
✔ Label
Compliance: Must include:
- Product
name, net weight, ingredients, FDA registration number, expiry date.
✔ Sanitary Permit: Secure from LGU first before FDA submission.
2. EU Customs Brokers & Compliance Contacts
A. Key Requirements for EU:
- EFSA
Approval: Register via TRACES NT.
- EU
Import Broker: Must be an EU-based agent.
B. Recommended Brokers:
- DHL
Global Forwarding (Europe)
- Contact: ecommerce@dhl.com | www.dhl.com
- Services:
Handles PH-to-EU meat product logistics, including customs clearance.
- Kuehne
+ Nagel (Germany/Netherlands)
- Contact: customs.solutions@kuehne-nagel.com | www.kn-portal.com
- Specializes
in perishable food imports.
- Eurofins
Scientific (Lab Testing for EU Compliance)
- Contact: foodtesting@eurofins.com | www.eurofins.com
- Tests
for Salmonella, Listeria, and preservatives.
3. China Customs Brokers & GACC Registration
A. Key Requirements for China:
- GACC
Registration: Apply via CIFER.
- CNCA
Certification: For meat products (via Philippine DA).
B. Recommended Brokers:
- Sinotrans
(China National Foreign Trade)
- Contact: overseas@sinotrans.com | www.sinotrans.com
- Official
logistics partner for PH-China food imports.
- Alibaba
Trade Assurance Partners
- Contact: service@alibaba.com | www.alibaba.com
- Connects
you to pre-vetted Chinese importers.
- SGS
China (Lab Testing & Certification)
- Contact: cn.support@sgs.com | www.sgs.cn
- Handles
GACC-mandated food safety tests.
4. Pro Tips for Smooth Export
- Start
Small: Export samples first (e.g., 50kg) to test customs clearance.
- Use
a Freight Forwarder: They handle paperwork (e.g., Maersk for
refrigerated containers).
- Leverage
DTI Support: Attend DTI’s Export
Pathways Program.
Next Steps Checklist
- FDA:
Submit LTO + CPR forms (4-6 weeks processing).
- EU:
Contact DHL/Kuehne + Nagel for TRACES NT support.
- China:
Request GACC checklist from Sinotrans.
- Lab
Testing: Send samples to Eurofins/SGS.
Here are ready-to-use templates for your
FDA application and export contracts, tailored for your sausage business:
1. FDA Cover Letter Template
(Submit with LTO/CPR applications)
[Your Company Letterhead]
[Date]
Food and Drug Administration (FDA) Philippines
Filinvest Corporate City, Alabang, Muntinlupa City
Subject: Application for License to Operate
(LTO) and Certificate of Product Registration (CPR) for [Your Sausage Brand
Name]
Dear FDA Officer,
We, [Your Company Name], a registered meat
processing facility located at [Your Address], hereby apply for:
- License
to Operate (LTO) as a meat processor (Facility ID: [if
applicable]).
- Certificate
of Product Registration (CPR) for the following sausage products:
- [Product
1: e.g., "German Bratwurst (Pork)"]
- [Product
2: e.g., "Lap Cheong (Chicken)"]
(Attach complete list in Annex A)
Enclosed Documents:
- DTI/SEC
Registration
- Sanitary
Permit from LGU
- Product
labels (compliant with FDA AO 2018-001)
- Laboratory
test results (for microbiological safety)
- Good
Manufacturing Practices (GMP) Certificate
We confirm that our facility and products comply with FDA
Administrative Order No. 2018-001 and Philippine National
Standards for Processed Meat.
For inquiries, please contact:
[Your Name]
[Your Position]
[Phone Number] | [Email]
Sincerely,
[Your Signature]
[Your Printed Name]
[Company Name]
2. Export Contract Template
(For EU/China Buyers)
SALES CONTRACT AGREEMENT
This agreement is made on [Date] between:
Seller (Exporter):
[Your Company Name]
Address: [Your Address]
Tax ID: [Your BIR TIN]
Contact: [Email/Phone]
Buyer (Importer):
[Buyer’s Company Name]
Address: [Buyer’s Address]
Tax ID: [Buyer’s VAT/TIN]
Contact: [Email/Phone]
1. Product Details
- Commodity:
Frozen/Vacuum-sealed sausages (Specify: e.g., "Italian Salsiccia,
Pork").
- Quantity:
[e.g., 500 kg per shipment].
- Unit
Price: [e.g., €10/kg CIF Rotterdam].
- Total
Value: [e.g., €5,000].
2. Delivery Terms (Incoterms 2020)
- CIF
(Cost, Insurance, Freight): Seller covers transport/insurance to [Port
of Destination].
- FOB
(Free on Board): Buyer arranges shipping from [Port of Origin].
3. Payment Terms
- 30%
advance via bank transfer, 70% before shipment.
- SWIFT
Code: [Your Bank Details].
4. Compliance & Documentation
Seller provides:
- Commercial
Invoice
- Packing
List
- Health
Certificate (from DA/BFAR)
- Certificate
of Origin
5. Force Majeure
Neither party liable for delays due to customs, natural disasters, or
pandemics.
6. Governing Law
Disputes resolved under [Philippine/Chinese/German] Law via
[Arbitration Body].
Signatures
Seller: ___________________
Name: [Your Name]
Date: [Date]
Buyer: ___________________
Name: [Buyer’s Name]
Date: [Date]
Key Tips
- FDA
Cover Letter: Personalize with your product list and lab reports.
- Export
Contract:
- Use CIF
for safer deals (you control logistics until delivery).
- Specify "Cold
Chain Maintenance" for perishable goods.
- Legal
Review: Have a lawyer vet contracts for EU/China terms.
Here are ready-to-use templates and key
terms for your sausage export business:
1. Proforma Invoice Template
(Use for quoting prices to potential buyers before
shipment)
[Your Company Letterhead]
PROFORMA INVOICE
Date: [DD/MM/YYYY]
PI Number: [Your Reference #]
Seller: [Your Company Name]
Address: [Your Full Address]
Tax ID: [BIR TIN]
Contact: [Email/Phone]
Buyer: [Importer's Name]
Address: [Importer's Full Address]
Tax ID: [Importer's VAT/TIN]
|
Description |
Qty (kg) |
Unit Price |
Total (EUR/USD) |
|
German Bratwurst (Pork) |
500 |
€10.00 |
€5,000.00 |
|
Lap Cheong (Chicken) |
300 |
€8.50 |
€2,550.00 |
|
Subtotal |
€7,550.00 |
||
|
Shipping (CIF Rotterdam) |
€1,200.00 |
||
|
Total Amount Due |
€8,750.00 |
Payment Terms:
- 30%
advance via TT (bank transfer), balance 70% against copy of shipping
documents.
- SWIFT:
[Your Bank Details]
Delivery:
- Incoterms:
CIF Rotterdam (or FOB Manila if buyer arranges shipping).
- ETD:
[Estimated Departure Date]
- ETA:
[Estimated Arrival Date]
Validity: This offer expires on [DD/MM/YYYY].
Seller Signature: ___________________
[Your Name], [Your Position]
2. Letter of Credit (LC) Terms Guide
(Secure payment for high-value orders)
Key LC Clauses to Negotiate:
- Type
of LC:
- Irrevocable
LC: Cannot be changed without your consent.
- Confirmed
LC: Adds a second bank’s guarantee (safer for new buyers).
- Documents
Required:
- Commercial
Invoice
- Packing
List
- Bill
of Lading (or Air Waybill)
- Health
Certificate
- Certificate
of Origin
- Inspection
Certificate (if buyer requires pre-shipment checks)
- Critical
Terms:
- Issuing Bank: [Buyer’s Bank, preferably a reputable
international bank]
- Beneficiary: [Your Company Name]
- Amount: EUR/USD [Total Value]
- Expiry Date: [DD/MM/YYYY] (minimum 30 days after shipment)
- Partial Shipments: Allowed/Not Allowed
- Transshipment: Allowed/Not Allowed
- Port of Loading: Manila, Philippines
- Port of Discharge: [Buyer’s Port]
- Special
Conditions:
- "Documents
to be presented within 15 days after shipment date."
- "LC
payable at sight" (avoid deferred payment terms).
- "No
third-party documents accepted" (prevents fraud).
- Red
Flags to Avoid:
- "Soft
clauses" (e.g., "Payment subject to buyer inspection").
- Unclear
description of goods (should match your proforma invoice exactly).
3. Next Steps
- For
Proforma Invoices:
- Attach
product specifications (e.g., "100% pork, nitrate-free").
- Include HS
Codes (e.g., 1601.00 for sausages).
- For
LCs:
- Work
with your bank (e.g., BPI, Metrobank) to review LC drafts.
- Use SWIFT
MT700 format for international standards.
Here’s a ready-to-use LC draft template and HS
code guidance for your sausage exports:
1. Sample Letter of Credit (LC) Draft (SWIFT MT700
Format)
(For a €10,000 sausage shipment to Germany)
text
:27: SEQUENCE OF TOTAL
1/1
:40A: FORM OF DOCUMENTARY CREDIT
IRREVOCABLE
:20: DOCUMENTARY CREDIT NUMBER
LC2023-12345
:31C: DATE OF ISSUE
23092023
:31D: DATE AND PLACE OF EXPIRY
23112023 IN MANILA, PHILIPPINES
:50: APPLICANT (BUYER)
German Foods GmbH
Berliner Straße 123, 10115 Berlin, Germany
TIN: DE123456789
:59: BENEFICIARY (YOU)
[Your Company Name]
[Your Address], Philippines
TIN: [Your BIR TIN]
:32B: CURRENCY CODE, AMOUNT
EUR10,000.00
:41D: AVAILABLE WITH/BY
ANY BANK BY NEGOTIATION
:42C: DRAFTS AT
SIGHT
:43P: PARTIAL SHIPMENTS
ALLOWED
:43T: TRANSSHIPMENT
ALLOWED
:44E: PORT OF LOADING
MANILA, PHILIPPINES
:44F: PORT OF DISCHARGE
HAMBURG, GERMANY
:44C: LATEST DATE OF SHIPMENT
31102023
:45A: DESCRIPTION OF GOODS
500KG FROZEN PORK SAUSAGES (GERMAN BRATWURST STYLE)
HS CODE: 1601.00
UNIT PRICE: EUR20.00/KG CIF HAMBURG
AS PER PROFORMA INVOICE NO. PI-2023-001
:46A: DOCUMENTS REQUIRED
+ COMMERCIAL INVOICE (3 COPIES)
+ PACKING LIST
+ CERTIFICATE OF ORIGIN (PHILIPPINE CHAMBER OF
COMMERCE)
+ HEALTH CERTIFICATE ISSUED BY PHILIPPINE DA/BFAR
+ FULL SET CLEAN ON BOARD BILL OF LADING CONSIGNED TO
APPLICANT
+ INSURANCE POLICY COVERING 110% OF INVOICE VALUE
:47A: ADDITIONAL CONDITIONS
+ ALL DOCUMENTS MUST SHOW LC NUMBER
+ THIRD-PARTY DOCUMENTS NOT ACCEPTED
:71B: CHARGES
ALL BANK CHARGES OUTSIDE GERMANY FOR BENEFICIARY'S
ACCOUNT
:48: PERIOD FOR PRESENTATION
DOCUMENTS MUST BE PRESENTED WITHIN 15 DAYS AFTER SHIPMENT
DATE
:49: CONFIRMATION INSTRUCTIONS
WITHOUT
Key Notes:
- Replace
ALL CAPS fields with your actual data.
- For
China shipments, change:
- Port
of discharge to e.g., Shanghai
- Add GACC
registration number in docs required.
2. HS Code Lookup Guide
A. Standard HS Codes for Sausages:
|
Product |
HS Code |
Description |
|
Pork Sausages |
1601.00.90 |
Prepared/preserved pork (most common) |
|
Chicken Sausages |
1602.32.90 |
Prepared poultry products |
|
Quail Meat Sausages |
1602.39.90 |
Other prepared meat products |
B. How to Verify:
- Philippine
Customs Website:
- Check BOC HS Code Search
- EU
TARIC Database:
- Search EU
TARIC for destination-specific codes.
- China
Customs:
Pro Tip:
- Always
confirm with your freight forwarder – some countries have sub-categories
(e.g., Germany uses 1601.00.20 for smoked sausages).
3. Next Steps
- For
the LC Draft:
- Email
this template to your bank (e.g., BPI/HSBC) for review.
- Insist
on "Sight LC" (payment upon document
submission).
- For
HS Codes:
- Provide
the exact code to your buyer for their import declaration.
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