Tyrolean chocolate “3 yen” price increase background September 30, 17:43
Yuji Matsuo, president of Tirol Choco, known for its bite-sized chocolate confectionery,
said, "I woke up one morning and suddenly felt like it might be too late next year."
I looked back at this.
20 yen per piece is now 23 yen.
What was behind the decision to raise the price after worrying about it?
(Ryo Sakurai, Price and Life Report Team)
Sudden decision
"I think we decided on the price increase in late April
. At first, we were thinking about next year, but one morning I woke up and suddenly felt, 'Next year will be too late,' and decided."
President Matsuo looked back on the situation at the time when he decided to raise the price for the first time.
Although we were looking for the right timing to revise the price while watching the trends of other companies, the price of raw materials soared to a level that exceeded our expectations.
It is said that it was a sudden decision that pushed the original schedule forward significantly.
The reason why I was "worried over my troubles"
Tirol Choco raised the price of 5 types of products in September.
Of these, 4 types are the main products with a reference price of 20 yen excluding tax, and the price has been increased to 23 yen.
Although it is small in terms of amount, it is a significant price increase of more than 10% as a percentage.
It is said that he went through a lot of trouble until he made a decision that would affect the fate of the company.
President Matsuo
: “Raw material costs, packaging material costs, factory utility costs, all costs were rising, and at this rate we were in a situation where we would not be able to survive. I didn't know how much I should raise the price, so I was banging on the calculator night and night.I can't say that raising the price is a gamble, but I feel that it is a very risky act for the company."
The company started selling bite-sized chocolates 43 years ago.
Initially, it was 10 yen per piece, but 29 years ago, the size of the product was increased to 20 yen per piece to include a barcode.
Since then, the price has remained unchanged.
President Matsuo, the fourth generation of the founding family.
It is said that behind the decision was a strong desire to protect the company and the employment of its employees.
President Matsuo
"As a company, we have to deliver products to our customers not only now, but also in the future. It is also my important job to protect the employment of employees and not to collapse the company. Raising prices is a necessary management. I think it was a decision."
How to prevent customer churn
The biggest concern for the president of this price increase was "customer turnover."
President Matsuo
``I thought that I had to be prepared to some extent that the number of sales would decrease due to the price increase, and that part was very scary. We've received positive feedback about the price increase, but it's only been one month since the price increase.I think it's necessary to see how sales will change over the next three months."
How do you prevent the loss of customers due to price increases?
The company focuses on developing new products.
The new flavored chocolate will be sold as a limited-time product.
For this reason, the price is often set higher than the main product, in the 30 yen to 40 yen range.
On the day I visited for coverage, a meeting was held to consider what new flavors of chocolate could be made from existing stocks of sauces and creams.
“We have pistachio sauce, so what can we use it for?” “How about chocolate with azuki beans and bread dough, like Ogura toast?”
Thorough discussion from the selection of raw materials
We carefully select raw materials such as cacao mass and cooking oil, which determine the taste of chocolate, while considering the balance between taste and cost.
When I visited for coverage on another day, researchers were discussing which one to use for the next product after eating and comparing three cacao masses from Madagascar, Ecuador, and Vietnam.
Checkpoints include not only the taste but also the strength of the aroma and acidity.
By the way, I also had a bite, but the bitterness was so strong that I could not tell the difference in taste at all.
As expected of all the employees.
This time, the product with the highest taste rating was from Madagascar.
The second was from Ecuador.
However, since the Ecuadorian product is cheaper, there was a difference of opinion as to which one to use, and the decision was left to the next meeting.
Interact with fans through video distribution and events
Another thing the company is focusing on is acquiring fans.
The aim is to minimize the impact of price changes by increasing the number of regular customers.
This year, we started video distribution for the first time on SNS.
Several times a month, employees in charge of marketing broadcast live talks about new product information and behind-the-scenes stories about product development.
Furthermore, in mid-October, we plan to hold our first face-to-face event in Tokyo.
Approximately 120 participants are expected to experience a development meeting where they can eat and compare unannounced products and exchange opinions.
Regarding the presence of fans, President Matsuo said, "Interacting with fans also leads to increased employee motivation. We will continue to focus on communication with fans."
Can you overcome difficulties?
"Price increase is the first management decision I've ever made. To be honest, I'm still nervous.
"
We have more and more chances to hear the announcement of price increases, and we consumers worry every time we shop.
It was a moment when I felt that again.
Will raw material and energy prices continue to rise?
The future is still unpredictable.
How are the companies we interviewed for this article, as well as many other companies facing similar situations, trying to overcome this difficult situation?
I would like to continue the interview and tell you about it.
Economics Department Reporter
Ryo Sakurai
Joined in 2012
After working at the Utsunomiya Bureau, the Economics Department
currently focuses on price increases