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CHAPTER I

THE PROBLEM

Introduction

Condiments are among the country's essential food products. In a country where
eating and dining is an important social activity, these products are constantly
profitable and will continue to experience high levels of demand as the population
increases. In this regard, the Philippine condiments industry can enhance its
competitiveness in specialty products, as well as explore other export markets in order
to increase sales and accelerate growth. Philippine-made vinegar, soy sauce,
mayonnaise, ketchup, and fish sauces are some of the more competitive products of the
domestic industry, with the United States, United Arab Emirates, and Saudi Arabia as
its largest markets. Its competitiveness is attributed to its relatively low export prices,
availability of technologies in the production of condiments and sauces, and relatively
low labor costs in urban and rural areas.
For the past century, ketchup has reigned supreme as a popular condiment and
is found in 97% of all household (World Mysteries, 2017). Ketchup is one of the
demanding condiments of fast food industry. It is a commonly consumed and popular
foodstuff that has been more often discussed in recent years, particularly because of its
lycopene content and related beneficial properties (Tauferova et al., 2014). It is mainly
used with burgers, chips, French fries and even as a base for other sauces. Another
condiment that has long been used worldwide as a basic seasoning in the preparation
and cooking of certain foods is the paste. Paste is sauce that has been reduced until
thick. Pastes are often highly spicy or aromatic, frequently prepared well in advance of
actual usage, and are commonly made into a preserve for future use. It is what to
expect after reducing canned sauce into a dark-crimson spread (Bui, 2017). Intensely
flavored, a small dab of the paste adds a hit of flavor to a dish without the excess liquid
that comes with using fresh squashes as they are the main raw material of this study.
Primarily, the focus of this study is about the processing potential of squash as a
substitute for tomato ketchup which is cheaper and more nutritious than the leading

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brands of ketchup in the market. Aside from ketchup, squash is also a sustainable
ingredient in producing pastes. According to FNRI in the Philippines, squash is also
considered as an underutilized crop. Meaning, this study will not only encourage and
increase the intake of this nutritious vegetable among the consumers, but it will also
solve the problem of farmers about a surplus harvest of squash that end up rotting.
Moreover, squash ketchup and squash paste are new natural merchandises to the
society. This will promote the consumers to use natural product than utilizing
commercialized merchandises that contains chemicals. It will give the consumers an
alternative condiment in cookery. Consumers can also guarantee the alimentary value
of the product because of its chief ingredient. What concern about innovating these
products is that squash ketchup and paste are made out of squash which has never been
introduced in the market.
SQ Condiments Corporation will remark the birth of a refreshing and new flavor
of ketchup and paste called “Squash Ketchup & Paste.”

Brief Background of the Study

This study will be beneficial for the heath-conscious people in providing proper
nutrition and played an important role in the development of most cultures around the
world. There are potentially various raw materials that can be used in producing
ketchup and paste such as tomato and banana. Each material possesses different
nutritional benefits and other advantageous matters which make them suitable as the
main ingredient of a product. Tomato and banana are indeed acceptable when it comes
to the production of condiments such as ketchup and paste, but squash has also its own
advantageous properties. This study focuses on the utilization of squash as a major
substitute in making ketchup and paste. This will be beneficial for the income of those
farmers who produce and cultivate the used ingredients in the product, most especially
the squash growers. According to Staughton (2019), squash has a very rich nutritional
profile that consists of various organic compounds, nutrients, vitamins, and minerals,
which are responsible for providing all its impressive health benefits. This list
includes a huge amount of vitamin A, as well as significant amounts of vitamin C,
vitamin E, vitamin B6, niacin, thiamin, pantothenic acid, and folate. In terms of

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minerals, squash contains magnesium, potassium, manganese, copper, phosphorus
and iron.

Squash ketchup and squash paste as the main products of SQ Condiments


Corporation are much convenient and much beneficial compared to other raw
materials, allowing the proponents to provide additional knowledge and healthier
products that can compete in the market. Health claims about the benefits of
condiments for disease prevention or health improvement need to be science based and
extensively supported by evidence; data on their preventive or protective potential in
humans are currently limited. The condiments market has been growing continuously
over the last few years, with the quantity of products sold under the category of sauces,
dressings, and condiments during the period 2008–2013 increasing from 31,749,000 to
35,795,000 metric tons.
Moreover, this study greatly contributes to the future entrepreneurs and the
farmers. It will help them in providing opportunities regarding the production of
squash. This study promotes the implementation of food safety as well and can be of
great help for future preferences for the students and researchers who will conduct a
related study about this product.

Raw Material

Calabaza

Figure 1. Calabaza (Cucurbita moschata)


Source: Shutterstock, 2017

In the Philippines, it is called kalabasa. Uncut, kalabasa is round and


occasionally, the top and bottom may be flattened, the thick hard skin is green and

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sometimes grayish with specks of yellow and yellow green. Inside, the flesh is yellow
orange. The flesh cradles the hollow core where the seeds are loosely stored. Visually,
the inside of the kalabasa is like pumpkin. To the untrained eye, if kalabasa and a
pumpkin that had been cut open were placed side by side, it might be difficult to guess
which is which without peeking at the color of the skin.
The so called kalabasa (calabaza in tropical America) is not a pumpkin but the
common usage can be a source of confusion. The plant family Cucurbitaceae is a huge
family that includes gourds, melons, cucumber and even loofah. The Cucurbitaceae
family is divided into some 95 genera, one of which is Cucurbita.

Calabaza is useful when substituting ingredients. When adapting non-Asian


recipes that include pumpkin among the ingredients, the kalabasa can be used as a
substitute. It is sweeter, creamier and less watery. Plus, pumpkin sold in the Philippines
are imported and they are pricey (Veneracion, 2017).

Related Literature
According to Baessler (2017), calabaza squash (Cucurbita moschata) is a tasty,
easy-to-grow variety of winter squash that’s native to and extremely popular in Latin
America. While it’s less common in the United States, it’s not hard to grow and can be
very rewarding, particularly when used in Latin American cooking. Keep reading to learn
more about how to grow Calabaza squash plants and Calabaza squash uses.
Calabaza squash plants, also known as Cuban squash and Zapollo, are useful
because they’re especially resistant to pests and disease that can devastate other squash
varieties. They’re not totally immune, of course, and can fall prey to downy mildew,
powdery mildew and the slew of bugs that attack squash like aphids, cucumber beetle and
squash vine borer. Compared to their cousins, however, Calabaza squash plants are quite
tough. They’re also long, vigorous and vining, which means they can overpower weeds in
their vicinity.
According to Staughton (2019), squash is one of the most versatile and
delicious foods available throughout the world, and it packs a serious punch in terms of
health and medicinal benefits. Calabaza or squash is easy to grow and reproduce as well.
Different varieties of squash have the ability to improve vision, aid in skin care,

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strengthen the immune system, prevent cancer, manage symptoms of diabetes, build
strong bones, protect heart health, and reduce the symptoms of insomnia. It also helps
prevent inflammatory conditions, relieves symptoms of arthritis, eliminates ulcers,
eliminates parasites and infections, improves prostate health, protects against birth
defects, boosts respiratory health, and reduces blood pressure.

Objective of the Study


The overall objective of the study is to determine the feasibility of squash
ketchup and squash paste in the market. To achieve this, the proponents set specific
objectives as follows:
1. To determine the market feasibility of squash ketchup and squash paste through
the demand and supply analysis situation;
2. To discern the technical feasibility of the product through identifying the most
appropriate manufacturing processes to be used, the production capacity, and
the best location site for the establishment of SQ Condiment Corporation;
3. To distinguish the management feasibility of the product by identifying the
appropriate form of business organization in its compliance with the legal
requirements for the business to operate;
4. To determine the company’s financial position and its earnings performance; and
5. To state the benefits of the business to the society.

Scope and Limitations of the Study

This study mainly focuses on the production of functional ketchup and paste
that will be beneficial to all ages. It will determine the market feasibility of squash
ketchup and squash paste through analyzing the local supply and demand of the
corporation’s products, ketchup and paste. The proponents intend to produce a good
quality food product that will serve as an alternative condiment in restaurants and other
fast food establishments as well as to promote a healthy eating habits for individuals at
a reasonable price. The raw materials for this study will be purchased within Dolores,
Quezon City only. This study will retort the growing demand for squash ketchup and

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squash paste that has the same characteristics as the commercialized ketchup and paste,
but with the comparable cost and quality guaranteed by the FDA. The sensory
evaluation of the product is limited to the population for the survey which is one
hundred (100) untrained panelists.

Marketing Feasibility

The focus of this study is to produce squash ketchup and squash paste. The
product is intended to be tested by sensory evaluation using affective test or consumer
rating. The panelists of the sensory evaluation were the teaching staffs and students of
Chemical and Food Engineering Department. A total of 100 untrained panelists
evaluated squash ketchup and squash paste. Samples were given to them as well as the
questionnaire to be answered to rate the products.
The data gathered from the distribution were tallied and being analyzed in order
to determine the target feasibility of the product. This also covered the factors affecting
the study such as the products’ features, packaging, promotion and the channel
distribution from producers to consumers and retailers. The price of the product is
determined through cost-analysis. The variable, fixed cost and percent markup were
considered for the pricing of the proposed products.
Technical Feasibility
This aspect includes the product, the manufacturing process and the raw
materials. The raw materials are directly purchased from suppliers.
The manufacturing process is comprised of three different parts: the acquisition
process, production process and the packaging process. Production schedule was
discussed briefly; the table representing the production for five years was included as
well. Machineries and equipment were chosen by the proponents according to its
durability and efficiency in functioning for five straight days.
The direct and indirect materials needed in the study were also included; these
materials will ensure the quality and safety of the products during production to
distribution. Plant building construction and site as well as the utilities were discussed
to obtain the needed capital in starting up a business.
Location of the site, the size and layout were decided by the proponents, access
to suppliers and potential market were considered.

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Management Feasibility
Management feasibility includes the design-dependent parameters such as
reliability, maintainability, sustainability, usability, disposability, supportability,
affordability, etc. The form of ownership, capitalization, organizational structure, job
description, benefits, wages or compensation and legal requirements are included in
this study.

For the form of ownership chosen by the proponents, partnership form was
adopted. Capital requirements needed by each proponent was included in the study, this
capital was acquired by self-funding.
The organizational structure was composed of upper and lower positions. Job
description and job specification were also discussed.
For compensation and benefits, the proponents will follow the labor code of the
Philippines; included in the law are the monthly salary of the hired personnel, benefits
and the right working hours of employees.
Organizational policies for workers and consumers were also stated in this
study, legal requirements for partnership form of business were briefly tackled.
Financial Feasibility
This is consisted of initial capital, product cost, profitability and capital
recovery. There will be rent expense since the plant was rented monthly. All the
computations were projected for five years starting from 2021 to 2025.
The costs of the equipment, supplies, utilities, and rent expenses were based on
research through the internet and actual canvas in public markets and other authorized
stores. Final assumptions of the company were made as part of the computation in
assessing the financial feasibility of the company. The initial capital of the partnership
was based on the total project cost of the company for two months.
The financial statement of the company was computed to assess the projected
income statement and cash flows. Financial ratios were also measured in evaluating the
strength of the business.
Socio-economic Feasibility
This comprises of the feasibility of the proposed project to generate economic
benefits. The important aspect of evaluating this is the benefit-cost analysis and

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breakeven analysis that is used to evaluate the economic feasibility of the new product.
This also addresses positive influences that this project may have on the social
system in the project environment.

Definition of Terms
For the better understanding of the study, the following terms were
conceptually and operationally defined.
Acetic Acid. Acetic acid is one of the simplest carboxylic acids. It is an
important chemical reagent and industrial chemical that is used in the production of
plastic soft drink bottles, photographic film; and polyvinyl acetate for wood glue, as
well as many synthetic fibres and fabrics. In the food industry acetic acid is used as an
acidity regulator (Human Metabolome Database, 2018).
Calabaza. In the Philippines, it is called kalabasa. Uncut, kalabasa is round
(occasionally, the top and bottom may be flattened), the thick hard skin is green
(sometimes grayish) with specks of yellow and yellow green. Inside, the flesh is yellow
orange. The flesh cradles the hollow core where the seeds are loosely stored
(Veneracion, 2017).
Enzymatic Activity. Enzyme activity is a measure of the catalytic ability and
there are two methods to measure enzyme activity: one of them is to measure the
decrease in substrate concentration in a period of time, and the other is to measure the
increase in concentration of a product after a period of time (Reference Module in
Chemistry, 2018).
Homogenization Process. The process of homogenizing requires the
breakdown of particle sizes to create a uniform emulsion or suspension. Particles or
droplets must be reduced in size and be evenly distributed within some liquid medium
(Sonic Corporation, 2017).
Ketchup. Ketchup is a sauce used as a condiment. Ketchup is a sweet and tangy
sauce now typically made from tomatoes, sugar, and vinegar, with assorted seasonings
and spices (Hang Fat, 2018).
Loofah. Loofahs are virtually a utopia for all sorts of tiny critter (Tetro, 2012).
Paste. Paste is a semi-liquid colloidal suspension, emulsion, or aggregation

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used in food preparation or eaten directly as a spread. Pastes are often highly spicy or
aromatic, are often prepared well in advance of actual usage, and are often made into a
preserve for future use. Common pastes are some fruit preserves, curry pastes, and nut
pastes. Purées are food pastes made from already cooked ingredients (Revolvy, 2018).
Pasteurizing. It is the process of heating, and then rapidly cooling, liquids or
food in order to kill microbes that may expedite their spoilage or cause disease
(Study.com, 2018).

Pathogenic organisms. The definition of a pathogenic organism is an organism


capable of causing disease in its host. A human pathogen is capable of causing illness in
humans. Common examples of pathogenic organisms include specific strains of
bacteria like Salmonella, Listeria and E. coli, and viruses such as Cryptosporidium
(Global Food Safety Resource, 2019).
Republic Act No. 10611. The implementing rules and regulations of Republic
Act No. 10611, “An act to strengthen the food safety regulatory system in the country
to protect consumer health and facilitate market access of local foods and food
products, and for other purposes” otherwise known as the “Food Safety Act of 2013”
(Official Gazette, 2015).
SEC Registration. The Securities and Exchange Commission is the
agency of the Government of the Philippines responsible for regulating the
securities industry in the Philippines. In addition to its regulatory functions, the
SEC also maintains the country's company register (Press Releases, 2007).
Viscosity. A measure of the resistance of a fluid which is being deformed by
either shear or tensile stress (Analytical Technology and Control, 2016).