The company is looking to broaden its value-added product offerings by launching new coconut-based categories, such as instant food items, fragrances, and personal care products
Bengaluru: Kerala-based 80-year-old legacy brand KLF Nirmal is a trusted name for coconut oil and coconut-based products in this part of the country.
The company, KLF Nirmal Industries Pvt. Ltd., was founded by K L Francis in 1943. Today, its in-house factory processes over two lakh coconuts daily, producing a range of coconut products like oil, vinegar, and soaps. This expansion has led to the creation of six sub-brands: Nirmal, Nirmal Virgin, Coconad, Ellunad, Tilnad, and Cocosoft.
The company is now looking to broaden its product offerings by launching new coconut-based categories, such as ready-to-eat food items, fragrances, and personal care products.
“Most people associate coconuts primarily with coconut oil, which is how it gained popularity in India. But coconuts offer so much more beyond just oil,” said George John, business head of KLF Nirmal. “Our success lies in showcasing the full potential of coconuts and the impact we make by introducing its diverse benefits to people’s lives.”
Journey of KLF Nirmal
KLF originally started as a coconut oil milling business and introduced its consumer brand, KLF Nirmal, in 1992. It expanded into the global export market in 2001.
When third-generation entrepreneur John joined 12 years ago, the company focused solely on coconut oil. “Being at the centre of the coconut industry in South India, we realised that if we didn’t promote coconut products here, no one else would. So, we decided to explore everything beneficial that coconuts offer,” he explained.
Over the past 12 years, the company has primarily focused on diversification. In 2013, KLF launched a campaign to highlight coconut’s health benefits, with South Indian actor Mohan Lal unveiling the Coconad brand.
At present, the brand offers 250 stock-keeping units (SKUs) and coconut oil comprises only 60% of their business, with the remaining sales coming from various other coconut-based products.
Distribution
Previously, KLF primarily relied on traditional distribution channels in India, with around 700 distributors covering approximately 10 states, supplying products to retail outlets.
In 2020, KLF launched its direct-to-consumer (D2C) e-commerce website, offering nationwide delivery. Post the COVID-19 pandemic, e-commerce experienced rapid growth, and KLF expanded its presence on quick commerce platforms like Blinkit, Swiggy, and Zepto, as well as pure-play e-commerce sites such as Amazon, Flipkart, and .
“The majority of our business comes from South Indian states, where coconut consumption is higher and a significant portion of its export business comes from the Middle East, due to the large Malayali population in that region,” said George.
Currently, KLF has approximately 70,000 direct retail touchpoints where its frontline salesforce engages with retail outlets. Additionally, through wholesale channels, this number exceeds one lakh.
The company also runs two exclusive experience outlets at Cochin Airport—one at the international terminal and another at the domestic terminal—called Coconut Story. Launched in 2022, these stores feature approximately 70 SKUS.
As of now, 80% of its sales are generated from offline channels, while 20% come from online sales. The brand anticipates that within two years, this ratio will shift to 60% offline and 40% online.
Challenges
Sourcing is increasingly becoming a challenge with every passing year. “In the past, if our requirement was, say, 100 units, we could obtain 150, allowing us to grade the products and sell any surplus. This approach generated trading profits during sourcing. Now, it is a struggle to meet our entire requirement,” said John.
Given the difficulties in sourcing only copra, the brand has implemented a policy that accepts both copra and fresh coconut. However, this requires more processing within its facility. While Kerala presents more obstacles, sourcing from Tamil Nadu remains easier. However, for many products, the brand specifically declares that it sources only from Kerala because the taste of items directly correlates to the quality of Kerala coconuts.
“We recognise the need to innovate continuously and adopt various strategies to address these sourcing issues,” he added.
Additionally, coconut pricing has a large impact on the brand’s profitability and earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins. Consequently, its primary product—coconut oil—is treated more like a commodity. In contrast, newer products tend to have less price elasticity, allowing the brand to command a premium.
“By increasing the mix of value-added products, we expect our EBITDA margins to improve from their current levels to double-digit percentages,” added John.
Future goals
“Our current focus is on increasing the number of SKUs available per store,” said John. “In our one lakh outlets, there are typically only four to five SKUs available. Given that we have around 250 SKUs, our emphasis will be on enhancing the assortment in these locations.”
At this time, the company is not planning to expand into any new geographies through direct distribution. Any expansion into new areas will primarily occur through partnerships, e-commerce channels, or modern trade.
The brand has a strong presence in all GCC countries, primarily through modern retail. The focus is now shifting to the USA. “We are already present there, but we are looking to refine our product combinations to better suit local preferences. We have significant room for growth in that market,” he added.
In FY24, the brand’s revenue was approximately Rs 240 crore, and it anticipates reaching Rs 260 crore by the end of the current fiscal year, with a target of Rs 300 crore by FY26.
