KoRo | Overview

KoRo is an online platform for natural foods such as dried fruits, nuts, and juices, which links farmers and customers directly.

As a growth company, KoRo doubled its annual sales compared to the previous year to EUR 2 million in 2017. KoRo generates this revenue with more than 80,000 customers, of which 50% are regulars.

Consumer’s shopping options are constantly changing through rapid digitalization. In upcoming years, groceries in particular will be increasingly purchased online. Stationary retail will focus primarily on fresh, refrigerated, and convenient groceries (= instant meals).

KoRo, on the other hand, focuses on non-perishable foods in bulk packaging and distributes these through our own brand.

Our business model is based on Günter Faltin’s campaign principle, especially through the focus on the product itself and the sale of bulk packages.

KoRo also skips several retail levels by omitting middlemen and thus creates advantages for all participants:

The customer receives quality products at low prices, the farmers receive fair wages, and KoRo achieves greater profit margins than conventional retailers.

Customers are increasingly asking: Where do my groceries come from? Why do they cost more here than at other providers?

KoRo answers these questions and gains customer’s trust through transparent communication, e.g. about origin, production, and price fluctuations of the individual products.

KoRo is active in Germany, as well as other European countries like France, the UK, and Austria.

With more than 250 products at present, KoRo can tap into huge growth potential for the European market.

Our investors include the renowned media operators Dr. Georg Kofler and Michael Börnicke, the founders of the TV channels Pro7 and Premiere.

Using the Companists’ investment, KoRo can strengthen its customer acquisition channels like Amazon and more entrepreneurial partnerships in recommendations and influencer marketing and also expand its assortment.

KoRo’s goal is to become Europe’s number one online portable for non-perishable goods.

KoRo’s product range currently comprises 280 items. The focus of our assortment is on non-perishable, healthy and untreated, unsulfured, unsweetened food: this includes dried fruits, nuts, grains, rice, legumes, snacks, and juices. The products are exclusively offered in bulk packages with our name brand and offer quality and/or price advantages.

Transparency

We value the transparent communication of essential product features to the outside. We publish all product specifications, background information, and origin of our products on the product detail pages of our shop.

This way, every customer can learn about the product’s content and origin directly. We visualize price developments in a pricing graph on the product page.

Changes in sales price are displayed by year. When hovering over the grey highlighted circles, a brief informational text pops up and provides an explanation for the price increase or decrease. The customer can thus understand the sales price. One reason for a price increase for example can be a bad harvest. A price decrease on the other hand can be traced back to skipping a retail level.  

Price Advantage

We pass on the price advantage from larger and direct purchases to the end customer. The aim of our strategy is to create direct and long-term business relationship with the product origin and to control the entire supply chain. This is the only way for us to ensure that farmers are being compensated fairly.

Product Knowledge and Quality

A short story with the example of our pistachio mousse:   

We tried conventional pistachios, which had a better color than their organic counterpart and tasted better. Organic pistachios are often rather yellow and bland, rather than green and flavorful. Organic pistachios cost around twice as much as conventional pistachios.

The second step was roasting and making the mousse: If the nuts are roasted too much, they lose their nut-specific flavor. As a result, the roast aromas dominate and the customer cannot distinguish which nut was originally roasted.  

We had to obtain in-depth knowledge and understanding of the product until we found the right nuts, the perfect roast, and the optimal degree of grinding.

A combination of vertical integration and product development allows us to offer the pistachio mousse for € 27.90, which is equivalent to € 55.80 per kilo. This puts us well below the retail raw material price – with a margin of 50%.

Finally, we round off our assortment with high-quality products that fit to our products. These include high-quality bowls made of solid olive wood from Tunisia, the popular Ball storage jars, and our high-performance mixer "Sir Mix-A-Lot," all of which not only look fantastic but also aid in the storage and preparation of the food.

We create transparency and simplify customer’s purchasing decisions by consistently monitoring price and quality.

The KoRo FoodJournal inspires with diverse and creative recipes and also contains more in-depth information on all of KoRo’s products.

The KoRo Handels GmbH is an online retailer for natural foods and generates income through its own online shop https://www.korodrogerie.de and via Amazon.

The business model is based on Günter Faltin’s campaign principle, especially in terms of the focus on the product itself, the sale of bulk packaging, the omission of intermediary trade, and the constant automation of internal operative processes in all areas of the business.

Major parts of the company are outsourced to professional partner companies (external logistics service provider, automated bid management in marketing) in order to save fixed costs and focus on the main company strengths.

The calculation of our mango product is a good illustration of the advantage of vertical integration:

In retail trade, unsulfured and unsweetened mangos are sold in 100g for around € 2.49 (lower limit, sulfurized and sweetened goods are often more expensive). With a retail margin of 30-40%, the purchase price for retailers ranges from €1.49 to €1.74 per 100g.

KoRo has developed a supplier relationship with the farmers in Burkina Faso through direct contact and has thus skipped several retail levels.  KoRo can purchase the mangoes sealed and labeled for € 0.75-0.85 per 100g (depending on harvest volume). The time-consuming process of repackaging in small packages is no longer necessary.

Not only does this lower the price, the quality also increases. A renewed "handling" of the product for packaging at home is not necessary and the flavor is retained.

The distribution via the online shop is completely automated. All processes starting with the customer’s order up to the product shipment are operated through a combination of shop and merchandise management systems; the orders are processed directly in accounting and logistics.

The company's main focus is on purchasing and therefore on the continuous expansion of our supplier network on the one hand, as well as on supporting purchasing and assortment decisions through tangible data and analyses on the other.

The analyses are based on online and offline sales figures for the products in question to maximize margins and inventory turnover and minimize purchasing risk.

Beyond that, KoRo is a pioneer in influencer and content marketing. With more than 100 active monthly partnerships and a cumulative reach of more than 3 million people, we are constantly broadening our recommendation network and are always on the lookout for motivated brand ambassadors.

Influencer marketing is one of our distribution channels. Building a community strengthens customer loyalty and sustainably increases customer lifetime value (the value that a customer creates for a company throughout the duration of his or her customer relationship), which is reflected in sales and reduces marketing expenditure in the long-term.  

Thanks to the constant expansion of its content strategy, KoRo is now ranked first in Google with relevant search terms such as “Trockenfrüchte” (“dried fruits”).

The packaging flexibility, both in terms of size and material, allows KoRo to collaborate with the producers directly.

KoRo thus differentiates itself from competitors and addresses a growing online-savvy customer group. KoRo has positioned itself competitively as follows:

Targeted advertising and sophisticated supplier contracts allow new unique selling propositions to be strengthened through product exclusivity, depending on the product. For example, targeted advertising significantly increased the turnover of our Coquitos (mini coconuts) to a volume of 350 units per month within a few weeks. This has garnered the attention of even major media magazines such as Cosmopolitan.

KoRo has a customer base of 80,000 customers. KoRo’s aim is to convert customers into returning customers. The current share of returning customers in daily order averages is 50%. Customers visit KoRo’s shop and regularly stock up on weekly or monthly rations of groceries.

Even though time hardly allows it, we enjoy mutual supplier visits. We use the meeting of our manufacturers at trade fairs such as Biofach, Anuga or Fruit Logistica to cultivate partnerships.

Together, we test new products and grow continuously. For our partners, KoRo is also a market to enter and introduce customers to new, innovative products.

We are able to respond to the many requests from the processing industry and major customers through vertical integration. From nut mousses for smoothie production to superfoods for the hip café: the broad product assortment offers a wide range of sales and cooperation opportunities.

After all, successful brand development can only be achieved through long-term, stable relationships with customers, suppliers, and partners.

KoRo’s target group is broad because its product assortment speaks to a range of different people. From penny-saving students to health-conscious mothers, KoRo does not commit itself to any specific age group or social class.

In terms of marketing, KoRo has focused primarily on the health and fitness industry the last two years and has established itself as a main resource for dried fruits, nuts, and superfoods among many young sports enthusiasts between the ages of 18 and 25.

We are also seeing a revenue peak among 45-55 year old women, who generally discover KoRo through direct recommendations or organic searches according to customer surveys.

The online penetration of food retail, which exceeds a total market volume of more than EUR 180 billion in Germany alone, is only just starting off at 1-2%. The total market is about EUR 1 billion in size with an annual growth of more than 15%, resulting in a dynamic and constantly expanding market potential, which we are growing into.

As a comparison: The online food market in Great Britain is EUR 8.67 billion and EUR 2.89 billion in France.

2017 was a year of trial and testing at KoRo. We learned what works and what does not as much and can apply this experience in 2018. We have achieved a lot in the last two years:

KoRo wants to use the momentum of entrepreneurial and industry growth to invest primarily in the following areas:

We plan on reaching the following milestones with this strategy:

The capital invested will be strategically allocated to the following areas:

Investment Level 1: EUR 100,000

We plan on expanding our strategic purchasing. Existing products will be integrated vertically and new products will be established with the operating cash flow. This will require 40% of the investment.

The remaining 60% will be used as working capital, in particular to finance goods.

Investment Level 2: EUR 400,000

In addition to the measures of level 1

In addition to vertical integration, we will pursue measures to acquire new customers through existing and new marketing channels. Beyond that, we will expand our B2B sales in order to tap into new customer groups. 

Investment Level 3: EUR 700,000

In addition to the measures of level 1 and 2

Upon reaching this level, we plan on making additional investments in strategic purchases and working capital in order to manage business operations even with increasing turnover and a significantly larger product range.

KoRo will use another share of the capital for new customer acquisition. We will emphasize expanding upon functioning customer acquisition channels (Amazon) and entrepreneurial partnerships for recommendations and influencer marketing. The former will be scaled through the growing product portfolio. We are aiming for top search engine rankings for the most competitive products through PPC (pay per click) campaigns.

Our anchor investor is the Social Chain Group GmbH, which is backed by the successful media operators Dr. Georg Kofler, Michael Börnicke, and Holger Hansen.
Dr. Kofler was the founder and long-time CEO of the ProSieben Media AG and Premiere AG. Beyond that, Kofler’S HSE24 founded and established teleshopping in Germany.
Since fall 2017, he is a member of the jury in the successful founder show “Die Höhle der Löwen” (“The Lion’s Den”, equivalent to “Shark Tank”).

With over 60 million followers worldwide, the Social Chain Group (SCG) combines social publishing, social marketing, and social commerce with a successful e-commerce business model. SCG was founded in December 2017 by the companies Glow Media Group, Media Chain, and Social Chain and has offices in Berlin, London, Manchester, Munich and New York.

The company has many years of experience in the media and event industry and stands behind Germany's largest beauty convention GLOW - The Beauty Convention by DM. Both online and offline, SCG uses the reach of influencers and the power of large social communities in a trendsetting marketing mix.

We have almost doubled our turnover and gained new customers within one year thanks to SCG's existing sales and marketing contacts and many years of industry experience, combined with our successful business model.

Team from l. to r.:

Robert Thiele (Accounts), Michelle Calios (Head of Operations), Mariel Möller (Influencer Marketing & Cooperations), Constantinos Calios (Managing Director), Alexandra Scholz (Sales Intern), Piran Asci (Managing Director), Yannick Müller (Head of Sales), Max Danzer (Sales Intern), Clarisse Benoît (Country Management France), Nathalie Karschunke (Design + Content Intern)

Not on picture:

Thi-Ngoc Bich Le (Performance Marketing & Process Management), Tarek Mandelartz (Strategic Business Advisor B2B), Lucie Müller (Content), Sophie Wieland (Office Management)

KoRo Handels GmbH
Zehdenicker Str. 21
10119 Berlin

Telephone: +49 (0)30 / 60984976
Email: service@korodrogerie.de

Website: www.korodrogerie.de
Facebook: https://www.facebook.com/KoRo.Shop.DE/
Instagram: https://www.instagram.com/koro_de/