5. Have a cheaper alternative
Both Niko and Lisa say most customers are understanding when it comes to price increases. However, there are always the ones who are price sensitive such as caterers, restaurants and white label clients. For those, the best thing is to offer a cheaper alternative. “The majority of our clients who changed the quality that they buy are restaurants, especially the ones operating night service”, says Niko.
With a background in catering, Niko says this type of customer usually runs on tight margins. In this case, every penny counts. “When we said that we couldn't keep offering the same coffee at the same price going forward, we offered a similar product of slightly lesser quality with a 3% to 5% price increase. By offering a less painful option we made it work. ”He adds that if the quality is such that you don't feel comfortable putting your brand on it, you can offer a white-label service.
6. Cut other expenses
The pandemic taught Dear Green “how to cust expenses, be resilient and quick thinking, constantly analyse the business and make judgments”. The roastery started ordering larger volumes of their packaging to reduce the per-unit rate and changed wholesale deliveries from bags to reusable buckets.