How do businesses balance the increased costs of cashew processing and trying to hold retail and customer prices?

01 Oct How do businesses balance the increased costs of cashew processing and trying to hold retail and customer prices?

Balancing rising cashew processing costs while maintaining competitive retail prices is a strategic juggling act. Here’s how processors and exporters typically manage it:

Cost Management Strategies

• Automation & Efficiency Gains: Investing in automated shelling, peeling, and grading equipment reduces labour costs and improves throughput.
• Grade Optimisation: Focusing on high-yield kernel grades like W320 (widely traded and cost-efficient) allows processors to serve mass-market demand without sacrificing margins.
• Sourcing Advantage: When raw cashew nut (RCN) prices dip—as seen recently—processors can lock in lower input costs to buffer against other rising expenses.

Pricing & Market Tactics

• Tiered Product Lines: Offering multiple grades (e.g., W180 for premium, W450 for value) lets businesses target different price-sensitive segments.
• Bulk Export Focus: Selling in bulk to international buyers helps maintain volume and reduce per-unit costs, even if retail margins tighten.
• Brand Positioning: Strong branding and quality assurance allow some processors to justify stable or premium pricing despite cost pressures.

External Levers

• Government Support: In countries like Vietnam, processors benefit from subsidies and streamlined export policies, helping them stay competitive.
• Market Diversification: Expanding into new geographies or channels (e.g., direct-to-consumer, online retail) spreads risk and opens pricing flexibility