As you probably already know, one of KoRo's core values is transparency: this is why we wanted to be transparent about price changes and their reasons, from day one. On our product detail pages you can always find a price development graph (in the "Statistics" tab), and our CFO Daniel is always happy to sit in front of the camera to explain how a product price is determined, and would also like to explain to you now how price adjustments are part of KoRo's regular business operations — just like all other food brands. However, I'll take over this one, because, as a mathematician through and through, I am and feel responsible for pricing at KoRo – sorry Daniel!
For me, as pricing analyst at KoRo, what matters the most is that our price-performance ratio is right! The advantage we have with the online shop is that we can translate cost-efficient measures (streamlined transportation, for instance) directly into flexible and always up-to-date pricing. We also don't factor in future price increases in advance, which gives us the freedom to raise prices only when absolutely necessary. This is the case now, and will have the following impact on our prices:
We took a closer look at 350 products; for 200, the prices had to be adjusted, while for the remaining 150, the price remains the same.
We were able to reduce price of 50 products.
We had to increase prices for around 160 products.
For around half of these products, the increase amounts to less than €1.
Why do prices change?
Here's a brief digression into the basics of pricing: our prices are based on the purchase price and/or our production, logistics, and administrative costs. We've been able to reduce some product prices to ensure we remain competitive.
But what's probably even more interesting to you is the answer to the question: why are products becoming more expensive? This is primarily due to the increased raw material prices for various products. Rising food prices? You're probably hearing about this a lot in the news these days. Unfortunately, KoRo is affected by this too – here are a few specific examples from our product range:
The price of cocoa has more than doubled worldwide since the beginning of last year, and even tripled at one point. This is due, among other things, to poor harvests caused by extreme weather conditions, primarily attributable to climate change. Since many of our sweet treats contain some cocoa/chocolate, this has had an impact on our product range.
Nut prices, such as those for almonds, Brazil nuts, cashews, and pistachios, have also risen by around 20% since our last price analysis about a year ago. This is due to reduced availability caused by increased demand. More and more people around the world are turning (to) nuts! As nut trendsetters, we predicted this several years ago. While you've been able to buy nut butter from KoRo for a long time, you can now find it at almost all retailers and brands. The change in these raw material prices is naturally having a significant impact on our product range, as many KoRo products are nut-based.
As you can see, future developments depend, among other things, on the price of raw materials. We only have a limited influence over this – through, for example, larger purchase volumes, long-term partnerships, or direct trading relationships. Should the global market situation for the above-mentioned products ease again, we will of course respond with a price reduction and, as always, communicate this openly with you!