Mr Narayana Bhat was a Production Supervisor with us and retired from service on 31 August 2023. This is an event worth writing about as it evokes mixed emotions, including pride and voidness.
He joined Cocoguru almost 10 years ago, in February 2014. He was referred by Keshava Ram’s classmate Shivashankar Shastry, his brother-in-law. He travels 40 km every day from Kanyana to work. He worked in various departments like Stores, Logistics, Purchase, Oil Extraction, Canteen, Campus, etc. His notable contributions have been

• Developing and maintaining a beautiful green campus by planting 150 trees and conserving water
• Significant changes in company logistics, selling old vehicles
• Implementing commission/piece work-based payments to labourers
• Getting work done efficiently by people yet having fun doing them
• Organising events like Independence Day, birthday celebrations, Ayudha Pooja and Deepavali
• Maintaining cordial relations with land neighbours and Karpadi temple management
• He helped maintain a very jovial and productive work environment throughout.

He will be 57 years old in about 15 days. His son completed Mechanical Engineering at Nitte and was placed at a private firm in Bengaluru. He announced his decision to retire during his last birthday celebration on 23 September 2022, and he was waiting for his son Ashlesha to start working. He would like to improve and expand his present agricultural farm and build his dream house, as the old house is not in good condition. He ultimately leads a happy and peaceful life in the village with his dear wife, Mrs Uma, and pet animals.

The company is proud to have an employee who has worked with them for almost 10 years and leaves only for an unavoidable reason like retirement. Many people leave for better prospects or when they are not happy working there. But it is difficult to replace him with someone who can do all the jobs with a can-do attitude. It is an aspect of nature, and we need to move on.

We organised a small event on the closing hours of 31st August to honour him and celebrate his contributions to us. Many employees who worked closely with him spoke eulogies of him. Murali (Operations Head) is his direct boss, Keshava Ram (Managing Director), Naresh Kumar (Sales Manager), Shiva Kumar (Finance Manager), Suprabha (Brand Manager), Karthik Rai (Financial Accountant), Shreekrishna Shastry (Public Relations Officer), Jagganath (Expeller Operator) and Shivashankar Bhat (Chairman) all spoke for a couple of minutes with their heartfelt messages and wished well for his retired life. Narayana Bhat likes to be jovial with ladies, and they were all emotional when they realised that he would not be working with them the next day. Shivashankar Bhat honoured him with his wife, Mrs. Uma. He spoke briefly with usual humour and ended with a small Kannada poem. A cupboard was given to him as a compliment as he built a new house. The event ended with dinner supplied by Cocoguru Adigemane. People he was leading were looking up to him to guide him for work even after working hours.

We all at Cocoguru would like to thank him for his contributions to us and wish him a happy retirement with his family.

A business friend gave me a book “The 80:20 Manager“, I didn’t read it for 6 months thinking it is just another self-help book that is good to read but tends to be forgotten after a week. But this was something that was inline with my established beliefs and it was not hard to follow. It rather, gave me confidence to implement what I believed.

In essence, book is about Pareto Principle applied to management. 20% of selected inputs leads to 80% of outputs. For business, 20% of customers can give 80% business and profits.

Since starting 3 years back, business has been journeying in various ways. Here are a few ways in which we got back our focus in the last 3 months.

Other edible oils trading
With coconut oil getting dearer, consumers were shifting from coconut oil to other edible oils. So, our business within the existing market was getting reduced. Demand was shifting from bigger SKUs like 1-litre pouches to, say, 500, 500-ml pouches. So, we started trading in other edible oils like Refined Palmolein Oil, Refined Sunflower Oil and Lamp Oil. With this, we could

• Provide our existing Coconut Oil customers, i.e. Retailers, with a full range of edible oils so that they can source more from a reliable vendor
• Get more income from the same customer at the same distribution expense and more sales turnover
• Use vehicle load fully, keep a better tab of fluctuations in other edible oils

But with it,

1.The focus started shifting away from our core business of manufacturing and marketing coconut oil.
2.Adequate service could not be given to our customers because of supply disruptions from our vendors.
3.Lot of works were to be done in transportation, unloading, loading, accounting, leakage processing, payment, selling in credit, managing working capital etc.

What seems like busy work and turnover was actually not contributing towards building Cocoguru brand or increasing bottom-line. So, we just stopped them altogether. That provided a lot of relief and we closed Sullia godown, released a rented vehicle and saved on a few resources.

Distribution
Wholesalers/Retailers were given a supply of coconut oil through our Sales Van. For this, we had to arm the vehicle with a driver and salesman. To account for those transactions, an accountant was required, and an officer was required to manage the delivery team. These are unrewarding work for a manufacturer but had to be done initially to sell our products. The cost was very high, 40% of our company expenditure was going towards sales and distribution. We had five delivery vans to supply all over Dakshina Kannada district.

I always had a dream to stop doing line-sales ourselves and get distributors to do it for us. However, distributors will take it up only when the brand is popular, and they are confident about selling it. The margins should also be sufficient to sustain their business by only selling coconut oil.

The tough decision of increasing our selling price has made it possible and very soon. We left out less productive salespeople, made enthusiastic salespeople as distributors, and gave away our existing vehicles to them at a reasonable price. With this, we could leave out about 12 people from our payroll, stop renting two vehicles, sell 2 of our own vehicles, and save the work of 2 accountants, a Logistics officer and Top Management. Expenses are very low and under control, and the selling price is predictable. When the distributors have to sell to earn their living, their performance is even better, and sales improve.

Leave Customers
With the eagerness to sell more and acquire as many customers as possible, we tend to serve any customer at any cost. But some customers are not worth our attention. Some need discounts, credit, or pampering, are difficult to supply, need a different quality, put restrictions on us, and still never get satisfied. Bolding and leaving them out is a win-win situation for both the customer and us. We can cater to profitable customers better; others can get their desired service from a competitor. For every customer lost, there are a couple of them to be gained.

Piece Work/Contract Labour
If we believe in Theory X, labourers are lazy, they tend to take away maximum wages for minimum work. While employers looks to get maximum work for minimum wages. Mostly the labourers have their say. It is cumbersome for supervisors to get maximum work with quality from them always.
So, to align their work output with their income, we have made a piece work system, where they get paid only for the units of work done and not on attendance. This is system is fair for all workers, they are not paid on seniority, experience or any prejudice, only on output they produce.
In any annual appraisal discussion their only focus is on the revised salary, without any regard to their past performance or skills to be developed, responsibility to be assumed in future. For such people giving instant reward is the way to go.

After doing this their performance have increased multiple folds. Example, for a 5 member team segregating 6 tons of copra a day was very difficult, now 3 members are doing it very comfortably and with better quality.
For bulk quantity loading and unloading, in house labourers weren’t willing to do, so external labours had to be called. Now for 10 paise per kg, they are willing to do.
In packing section, where 9 people couldn’t finish all packing jobs, now after leaving 3 people, the 6 people are having enough time to go for other jobs.

Overall, we could leave about eight fewer performing people, and better-performing people are getting handsomely paid. Form 30 labourers, we have brought down the count to about 20; work is getting done faster and better, and existing labourers are fully engaged and satisfied.

With all these steps, the amount of administration work has come down drastically. Again, a couple of people who have become redundant were left out. With this lean an organization, it is possible to even double the business without having to add any headcount. Any decline in business can also be managed with minimum overheads. With operations focused and streamlined, the way forward is to grow sales through advertising and appointing distributors to cover more areas. From accumulating losses for 2 years and not knowing the way forward, this is a very pleasant situation to be in.

Company Facts
Name – Cocoguru Coconut Industries Private Limited

Registered Office
IV-616, Sri Rama Building, Main Road,
Yelmudi, Puttur Taluk, Dakshina Kannada District,
Karnataka State, India. PIN – 574201

Business Activity – Manufacturing of Coconut based products, Presently Pure Coconut Oil

Promoters –
Shivashankar Bhat – Chairman
Keshava Ram – Managing Director
Santhosh – Director
Gayathri Devi – Director

Incorporation Date – 2nd September, 2010 (World Coconut Day)

Why Cocoguru Coconut Industries?
Cocoguru’s brand vision is simple: “spreading the benefits of coconut to people.” The brand was launched in early 2010 to direct Sri Rama Industries’ focus on manufacturing coconut-based products. Now, the business activities of Cocoguru are separated into a new company. Having the same product brand and corporate brand simplifies the branding process.

Dissecting each aspect of the name, we have

• Cocoguru – Trademark, brand name
• Coconut – Vision, brand essence is about coconut.
• Industries – Business activity is not just about trading/marketing; it also involves manufacturing

Why a Private Limited company?
Forming a company is not compulsory as

The cost of incorporation and the procedures and regulations are high in a company.

All the promoters and top management personnel are in the same family

The company has no external equity investors as of now

Yet we have formed a company because

• It enables the separation of personal and business activities
• It enables us to raise funds through the sale of equity when chances of raising debt funds have exhausted
• It enables professional management by bringing in professional managers on merit, and families can cede day-today management activities to them.
• Promoters are very serious about the business and want to scale it to a high level and become a Public Limited company.

What is the future of Sri Rama Industries?
Sri Rama Industries is a proprietorship concern that started in 1987 with Shivashankar Bhat for coconut oil manufacturing.

• The existing manufacturing setup at Parladka will be tailored to provide job work services. Whereby local farmers can get oil extracted from their own copra using our facility.
• The existing retail outlet cum copra collection centre at Yelmudi will be used to distribute Cocoguru Company’s products to the local, Puttur market and collect copra on behalf of Cocoguru Company.
• The 1st floor of the building at Yelmudi will be rented out to the company for its Registered Office.
• Sri Rama Industries being the owner of trademark Cocoguru, will license it to the company for marketing its products.
• Sri Rama Industries will also carry out non-coconut-based businesses like trading in Til Oil, Pepper, and Honey.

What now/next for the Company?
The company has the following agenda for the next 1 year.

• A new factory, a new site, to manufacture and pack coconut oil
• The factory will be highly mechanized/automated/modern, with ISO 22000 Food Safety Management standard.
• Have a copra crushing facility of 15 tons in 24 hours
• Acquire all the necessary licenses and commence production in 6 months.
• Spread the market/distribution network for Cocoguru products from Puttur to Dakshina Kannada.
• Begin supply of edible copra and by-products like Oil cake and 2nd quality copra. 

Company got incorporated on 2nd September, recognized as World Coconut Day. For the company that does its business with coconuts, its truly a great day to be born. Seek the blessings and everything (kalpa) of ‘Kalpavrisksha’ for the company’s great future.