How global brands like GIs ensure local trade and development: the example of premium Kampot pepper from Cambodia (2023)

key messages
Kampot pepper has not only expanded export volume to new high-value markets, but has also achieved a significant price premium after the introduction of the Geographical Indication (GI). The Department of Commerce has strict mechanisms in place to maintain the credibility of GI status for export markets.

General information on the geographical indication (GI) of Kampot pepper
Kampot province is located in the south of Cambodia and is home to large pepper plantations. Renowned for their mild spiciness, freshness and complexity of flavors, and exceptional, persistent flavor, Kampot peppers have earned international recognition as one of the best peppers in the world. The geographical indication (GI) for Kampot pepper includes green, black, red and white peppers. Kampot pepper has enjoyed a great reputation since the 13th century, mainly for its quality, and it still does today. For example, at the 2022 Great Taste Awards, of the nine spices that received the highest rating of three stars, six brands were Kampot pepper.1 Its quality was especially recognized for its quality by British chef Rick Stein and is used in many cases. Good restaurants around the world. It is also considered part of Cambodia's historical and cultural heritage.

A unique characteristic of Kampot pepper is its association with the agri-environment: the influence of weather, the coastal climate and unique soil conditions. The Kampot pepper production area is located in the urban districts of Kampong Trach, Dan Tong, Toeuk Chhou, Chhouk and Kampot in Kampot province and in Kep city and Damnak Chang Aeur district in Kep province ( see Figure 1). Production techniques (ie irrigation and natural fertilization) vary depending on the environment of the production area.

Core issues/problems/challenges
Kampot pepper has had limited international brand recognition in high-value international markets and was considered a low-volume, niche product previously only known domestically and in neighboring countries. Although the company has a unique heritage dating back centuries, processes focused on product quality were limited, as were international marketing and quality standards.

A major challenge was setting the standards and coordinating with the manufacturers and changing their methods to meet the required standards.

Key interventions to address the challenges
The Kampot Pepper Promotion Association (KPPA) was founded in 2009 with the support of the Ministry of Trade and the AFD (Agence Française de Développement), GRET (Groupe de Recherche et d'Echanges Technologiques) and CEDAC ( Center d'Etude et der Entwicklung).

achievements and impact:
A strong mechanism and implementation of the GI Law by the Royal Government of Cambodia, as well as close collaboration with the private sector, development partners and producer association, have resulted in great achievements in promoting the brand and protection of Kampot pepper.

Data from the Kampot Pepper Promotion Association (KPPA) shows that membership has grown from 118 growers in 2010 to 386 growers today, of whom around 80 percent were smallholders with less than 1,000 pepper sticks. bell pepper (according to the latest data from the KPPA website). This suggests that smallholder farmers benefited significantly from GI certification for Kampot pepper and the consequent improvement in poverty alleviation. GI significantly contributes to effective value chain development and better access to markets, which translates into higher income for smallholder farmers. According to the Geographical Indication, producers must maintain the reputation of their pepper products as organic and of high quality, which allows for great success in marketing the brand. The introduction of good organic agricultural practices is an effective way to promote sustainable agricultural production.

The area devoted to Kampot pepper cultivation has increased from just 1 hectare in 2010 to 264 hectares today, all of them in Kampot and Kep provinces. Annual production has also increased significantly from around 20 tonnes per year in 2013 (before GI certification) and continued to increase after EU GI certification in 2016, with production stabilizing at the 100-tonne level since 2019 (see Figure 2).

According to Sok (2021) and MAFF (2017) figures, Kampot pepper exports after GI accreditation to the EU in 2017 also increased significantly by more than 250 percent compared to the average export level of 2013. -2016. Access to new, higher value markets, in particular Germany and the United States of America, has been made possible by taking advantage of the existence of key export partners such as France, Taiwan Province of China and Vietnam.

Prices have also increased significantly after GI certification. In 2010, the price per kg of Kampot black pepper was USD 5.75/kg, while in 2020 the price increased to USD 10/kg (+74%). For red Kampot pepper the increase was from USD 10/kg in 2010 to USD 25/kg in 2020 (+150%) and for white Kampot pepper the increase was from USD 12/kg in 2010 to USD 28/kg in 2020. (+). 133%). Data from 2018 cited by Sok (2021) shows that GI certified Kampot pepper commands a price premium of more than two-thirds over non-GI pepper.

Similarly, the same study shows that GI pepper growers have a much larger production of higher-priced red and white peppers, which account for about 30 percent of volume, while non-GI pepper growers focus their production in the higher priced varieties. The black pepper variety represents 95 percent of its production.

The Kampot pepper story shows that the investments required to implement the GI program have generated significant benefits for growers. Kampot pepper also has the potential for further growth through public-private partnerships and increased international marketing.