How does KoRo buy from producers?

We explain how we buy our products, and as an example we take our Brooks mangoes from Burkina Faso.

Do you still avoid ordering 1 kg of big packaging from KoRo because you do not know how we can offer high quality with lower prices than the competition? Or are you an unconditional fan of KoRo and interested in knowing how we are doing? We have the answer in numbers for you. We will explain exactly what trade routes we have, all using our best selling product: Mango Brooks from Burkina Faso.  Indeed, a customer of the supermarket pays on average € 2.99 a small bag of 100 g of exotic fruits. In the KoRo online store, however, an entire kilogram of Bio Mango Brooks currently costs € 19.00 per one kg, or € 1.90 per 100 g. The "Mango Brooks" is a particularly sweet and high quality variety.   

But what is the difference in price and how is it related to quality?

A conventional retail dried mango goes through seven intermediate stages in total, from producer to consumer. After the cultivation and harvesting of mangoes in Burkina Faso, the fruits are chopped and dried and then resold to an exporter. According to the Ministry of Foreign Affairs of the Netherlands, producers and exporters receive an average of 27% of the retail price of their work, which equates to € 0.81 per 100 € / 100 grams. The exporter then hires an external agent to transport the exotic fruits to Europe by freight.    

For this service, the service provider receives about 8% of the ultimate selling price, which corresponds to an approximate retail price of € 0.24. Once in continental Europe, dried mangoes are picked by an importer and checked for quality. If the quality of the products is correct, the importer will send the original large packets to a bottler who will fill the mango strips in the usual small packs of 100 grams. In general, the inclusion of an importer and a bottler together accounts for about 20% of the retail price of mango, which increases it by about 60 cents per 100 grams. At this point, the dried mango is bought by a trader, who then passes it on to a wholesaler.  It is then given to the retailer, who finally makes it available to the consumer in his sales area. On average, the distribution of dried mangoes passes through three different traders which makes around 45% of the price, almost half of the final price of mango on the shelves of supermarkets, which corresponds to a total of 1.35 €. In total, the seven cost points amount to a retail price of € 2.99.  

What does KoRo do differently to have its Dried Mangoes cheaper on its website?

KoRo's mission is to bring sustainable foods such as superfoods, dried fruits, nuts and snacks directly from the producer to the consumer. It therefore focuses mainly on direct imports. As a result, the internal purchasing team is working tirelessly to buy new products for online distribution as close to the producer as possible. As a result, four of the usual trading levels can be bypassed and the KoRo dried mango can be routed from the farmer to the consumer after just two stages of trading. Like the dried mango from the supermarket, the "Mango Brooks" is also sourced from KoRo online store from Burkina Faso, where fruits are grown, harvested and dried. Since KoRo cooperates directly with an importer and thus bypasses both the exporter and the external agent, 7% of the costs can already be saved at this stage, which corresponds to around € 0.21. Ideally, bottling and labeling are handled directly by the producer. It is therefore generally possible to preserve the commercial level of the bottler and protect the products from oxidation and loss of quality.  

As a result, only about 35% of the usual price for product import and distribution through the e-commerce channel. On average, KoRo is able to save 37% of the retail price of dried mangoes by effectively bypassing trading levels and offering them for only € 1.90 per 100 grams in an advantageous 1 kg package. However, it should be noted that price fluctuations are possible. Due to the current market situation, this can happen again and again. We communicate these open and product specific price fluctuations on our website. As a result, you are always well informed about the price you pay and you can have dried mangoes delivered at the lowest price on your doorstep!  

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Sources:

  • CBI Ministry of Foreign Affairs (2018): Exporting Mango to Europe. https://www.cbi.eu/node/1891/pdf (03.07.2019).
  • Van Melle, C. & S. Buschmann (2013): Analyse comparative des chaînes de valeur de la mangue au Bénin, au Ghana et au Burkina Faso. In : Reconstruire le potentiel alimentaire de l’Afrique de l’Ouest, A. Elbehri (ed.), FAO/FIDA
  • CBI Ministry of Foreign Affairs (2018): Trade channels and Market segments for dried mangoes. https://www.cbi.eu/sites/default/files/market_information/researches/tailored-information-dried-mangoes-west-africa-trade-channels-market-segments-west-africa-europe-processed-fruit-vegetables-edible-nuts-2014.pdf (01.07.2019).
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