For every Rs. 100 a customer pays, farmer gets on an average Rs.63 and Healthy Buddha Makes Rs. 8
The above numbers are averages and will vary from produce to produce. It is intended to educate our customers the various cost categories involved in delivering good authentic organic produce.
Price is in general is a function of demand and supply in the market. Currently in organic, this is a bit skewed since there is less demand and in turn less growers. On one hand, we also have cases where organic farmers are forced to sell their produce as non-organic since there are less takers for organic produce. On the other hand, we have good organic farmers who command a higher price because they are are very good in what they do.
Broad level guidelines we use for pricing
- We are not the most competitive when it comes to price and there is a reason to it. We consciously avoid any kind of discounting and price cutting that many retailers undertake. We feel it will take a toll on quality over time and will lead one to even compromise on authenticity. It is s just not sustainable in the long term.
- To ensure good quality authentic organic produce, we have realized it genuinely does costs a bit more. It is unavoidable. The above table is an example of the same.
- Our pricing policy has always been mid point pricing. It won't be very cheap nor will it be very expensive as you would see in some organic shops.
- We typically update our prices once a week. So there might be slight inconsistencies based on market changes during the week.
- Some of our essential produce we sell literally at cost price to encourage more people to go organic. Essential Rs.385 basket is an example. Onion, Potato, & Tomato - we typically sell at cost price, since these are the most essential products in any household. Our objective is also to get more people to go organic.
In the last 2.5 yrs while we have seen a cumulative inflation of 15-20%, our veggies rates in general have remained the same what it was 2.5 years back.
Few Specifics that drives our cost high
- We want to be sure it is from the right source. Most of the produce comes atleast 60-100kms away from bangalore. In case of fruits, we get it from out of state like for instance oranges from nagpur, apple from himachal etc. So it costs more logistically.
- We do NOT let the price to hit rock bottom since we want to ensure farmers depending on us gets some basic return on their efforts. For instance when tomato hit rock bottom of Rs. 5, we continued to sell at 19 Rs. And we paid Rs. 14 to the farmer and 3 rs went to transportation and grading.
- To be sure they are really organic, We physically go and validate the farms physically. Also we handpick farmers. We don't just buy from anyone and everyone.
- But in general, good organic farmers expects a bit more premium. It is a matter of pride. We also prefer to pay them higher so they don't go back to non organic. Typically organic farmers get 25-30% more than non organic produce.
Why should the farmers be paid premium?
Organic is a bit labour intensive. For instance to remove weeds, in non organic, they just spray with a Rs. 500 sprayer and get it over with. In organic, labour is hired for Rs. 5000 to clear it manually.
At times, there is a bit of wastage if there is any insect infestation.
Organic requires constant monitoring to handle any issues that might crop up. It is not formula based like chemical farming where the farmer just goes about spraying chemicals.
Also, we find it unfair to pay dirt cheap prices to our farmers just because the market prices has come down. For instance, let us take Tomato.If the retail tomato of non organic one is Rs.9, imagine how much a farmer will get? Is it sustainable for the farmer and his family?
We believe in giving a reasonable price for our farmers. On an average, 60-65% of the price goes to the farmer.