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Durian Prices Have Fallen: Why Are Dessert Shops Not Reducing The Prices Of Their Durian Desserts?

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Durian season has made its way to Singapore —which explains why some of us have been frantically buying durian almost every day before prices suddenly rise again.

But why have dessert shops not lowered the prices of their durian desserts, even though some durian sellers are selling the fruit at a reduced rate of $12 per kg? If these dessert shops are buying durian in bulk, they should enjoy even greater cost savings.

You might think that if the cost of the main ingredient (i.e. durian) goes down, consumers should get to enjoy a cheaper price for their durian snowy ice or durian ice-cream, right?

Not exactly.

Here are four reasons why dessert shops are not slashing the prices of durian desserts – and will likely not do so.

Read More: Here’s What Singaporeans Are Spending On And How They Can Save More

#1 Length Of The Durian Season Is Unpredictable

If you buy durian often, you should know how durian sellers price their fruit. They would first invite you to pick a durian, before quoting you a price. If you agree, the seller will open the fruit, remove the flesh, and pack them into boxes. There are also pre-packed boxes of durians lined up at the front of the stall.

But unlike durian sellers who can adjust their prices by quoting customers a different price every day, it is not possible for dessert shops to do the same.

It is hard to estimate when exactly will the durian season end. If dessert shops were to lower prices now, they will have to reflect the price change on their menus. If the supply of durians were to drop rapidly a few days later, these shop owners will have to adjust prices up again.

This can be especially difficult for larger companies with many outlets — such as Ji De Chi Dessert— which will have to reprint every single menu to reflect the price changes. Even if the entire menu is not reprinted, it will be a hassle and waste of time to inform every customer about the change in prices.

For the case of Ji De Chi Dessert, a serving of Durian Pomelo Sago remained unchanged at $8.60 while a bowl of Durian Snowy Ice still costs $7.90, as reflected on the company’s website.

#2 Durian Price Is Just One Component Of The Cost Of Producing Durian Desserts

Even though durian might be the main ingredient in a durian dessert, there are other ingredients and operating costs to consider.

Ingredient cost: Ingredients such as coconut milk, eggs, flour, sugar, and sago are necessary to make durian desserts. The prices of these ingredients might fluctuate based on demand and supply. It is not only time-consuming to make desserts such as durian mochi, but specific ingredients such as glutinous rice flour are required. These factors can drive the cost of durian mochi up.

Operating costs: Unlike durian sellers, most dessert shops operate within shopping malls. For stalls in neighbourhoods, most have air conditioning as well. Electricity costs money. Shops that use fresh durian might have to pay a higher price to suppliers. This is because durians are large, heavy, and thorny fruits, which makes daily transportation cumbersome, compared to bananas or dragon fruits. Rent and labour is another component of operating costs as well.

#3 Because… Frozen Durians

Not all dessert shops are willing to burn their revenue on fresh durians daily. Some turn to the frozen version of the fruit.

Larger chain dessert shops might be inclined to use frozen durians due to the large volume of customers they have to serve compared to neighbourhood dessert shops. Frozen durians can also be easily stored and kept for a longer time compared to fresh durians. Not every business has the time to pry open each durian and remove the flesh.

Some companies even buy frozen durian in bulk that can last for months. Yes, frozen durians can be kept fresh for a few months.

This means that, often, prices of desserts are determined based on the cost of frozen durian acquired, independent of current durian prices.

For instance, if a company bought a consignment of frozen durians in January to last for five months, even if durian prices were to fall sharply in February, customers will still be charged based on the frozen durian price as of January.

#4 The Law Of Demand And Supply Still Applies

In times of the year when durian is expensive, dessert stalls might not necessarily raise prices. This means that in times of the year when durian is cheap (like now), dessert stalls cannot afford to slash prices either.

Businesses need a stable flow of revenue to pay workers’ salaries and marketing and advertising fees. These costs are constant and ongoing.

Business is all about earning revenue and profit maximisation. If the cost of ingredients were to go down, the benefits are not necessarily reaped by the customers.

Stalls have no incentive to reduce prices because they know that you might be unwilling or unable to make your own durian desserts. Even if durian is cheap, the opportunity cost of buying the other ingredients and spending time creating your own dessert is not worth it compared to spending $8 in a dessert shop where you get to enjoy a bowl immediately.

You either buy your own durian and make desserts from scratch yourself or buy from these dessert stalls.

Read More: 7 Useful Apps And Services Every Savvy Singaporean Should Already Be Using To Save Money

Enjoy The King Of Fruits

Durian has become one of Singapore’s most favourite fruit — even our very own Esplanade is shaped like a durian shell! So, for durian lovers out there, enjoy this spiky fruit while prices are still low. If you absolutely detest its smell and taste, try your hand at making your own durian desserts if you have the time. Who knows, you might be blown away by the taste.

Besides the usual D24 and Mao Shan Wang, be sure to check out the other varieties of durian, such as S17, Black Gold, and Golden Phoenix!

The post Durian Prices Have Fallen: Why Are Dessert Shops Not Reducing The Prices Of Their Durian Desserts? appeared first on bitcoin social trading.

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