Starting today, we will increase our wholesale price premium per litre by another ₹2—from the existing ₹3 to ₹5. I owe an explanation to various stakeholders like our sales force, distributors, wholesalers, retailers, and consumers about this decision.

During a casual conversation, a friend once asked me if Cocoguru was the “Apple” of coconut oil. That was two years after we had started the business, struggling with operations and trying to find our footing in the market. I couldn’t lie and say “yes,” but I was hesitant to say “no” as well. I didn’t give a proper answer then, but the question sparked an idea—what would it take to truly become the “Apple” of coconut oil? At the time, with cut-throat competition and intense price sensitivity, it felt impossible.

The coastal Karnataka market mainly comprises two types of coconut oil suppliers: small millers and re-packers. Small millers use a couple of rotary machines, offer job-work services, and cater to small local areas. Re-packers bring oil in tankers, pack it in consumer packs, and aggressively compete on price. Some age-old mills (50 to 100 years old) cater to niche premium markets. With no fixed costs such as bank loans or professional salaries, and no ambition to grow, they maintain a comfortable status quo.

In such a market, for a newcomer like us—with high fixed costs, loan repayments, and a fledgling market presence—increasing prices is a bold and risky move. There's always the threat of traders alienating us, but we choose to focus on consumer demand and long-term value. It’s a path less traveled, but we’re here to make a difference.

It's a myth that higher prices automatically mean higher profits. If short-term profits were our goal, we could have increased volumes by reducing price, lowering quality, using adulteration, or evading taxes. That’s not our path. Brands that deliver the full value of coconut oil to consumers typically command a 20% premium over mass brands. Our ₹2 increase now is simply a step toward that goal.

Until now, we increased the price premium by ₹1 every six months, and as per plan, the next hike was due in January. However, we’re implementing it now due to prevailing challenges. Despite forming an association in coastal Karnataka, some millers continue to undercut prices below the agreed base rate. In response, the price-setting members of the association have resorted to deep discounting.

We’ve received several complaints about manufacturers selling below association rates. Let this serve as a warning: if undercutting continues, we may be forced to reduce our prices further and keep them low until it stops. But realistically, undercutting may never stop. We don’t have deep pockets to compete on price, nor do we wish to compromise on quality. We refuse to alienate our loyal consumers.

Instead, we remain committed to delivering more value to our consumers. Here’s how:

• Sweet Taste and Aroma – We purchase high-quality copra with an FFA (Free Fatty Acid) content below 0.5%. This copra costs about 5% more than ordinary copra with 1% FFA.
• Long Shelf Life – Once raw material quality is ensured, every step in the manufacturing process is carefully controlled to ensure the product has a shelf life of 6 to 12 months.
• Consistent Availability – Our products are stocked regularly across rural and urban areas, regardless of seasonal or market fluctuations. This requires efficient supply chain and inventory management.
• Branded Identity – A brand must stand for something and relentlessly exceed customer expectations. Consumer demand should drive sales, not trader push.
• Food Safety – As a food product, coconut oil deserves the highest standards of purity, hygiene, and safety.

Copra prices fluctuate daily—sometimes multiple times a day—while association oil prices are updated weekly. Even this weekly cycle is too short for a stable supply chain from manufacturer to consumer. That’s how commodities trade, not how branded consumer products should be distributed. Our goal is to raise our prices sufficiently high to stop price comparisons altogether. Once we have full control, we aim to change prices less frequently—perhaps monthly or quarterly.

In summary, the intention behind this price increase is not to raise profits but to increase customer value. Thank you all for your continued support and understanding.

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