Is or­ganic food an op­por­tu­nity in wait­ing?

The In­dian Or­ganic Mar­ket is a ‘Sun­rise In­dus­try’ and has been grow­ing at over 20 per cent CAGR.

Progressive Grocer (India) - - Contents - By Su­nil Ku­mar The author is Gen­eral Man­ager, Ke­jri­wal Bee Care In­dia Pvt Ltd.

Or­ganic prod­ucts like rice, spices, tea and other value adds con­trib­ute over 60 per cent of both do­mes­tic and In­ter­na­tional sales. The emerg­ing buy­ing cities and mar­kets in In­dia in­clude Ban­ga­lore, Delhi NCR, Chen­nai, Hy­der­abad, Mum­bai, Pune, to name a few. The to­tal mar­ket con­sti­tu­tion of or­ganic food: Ban­ga­lore has over 120 or­ganic stores, Chen­nai has chains sell­ing or­ganic food, Delhi-ncr has over 40 or­ganic stores sell­ing or­ganic food and so on.

Emerg­ing In­ter­na­tional mar­kets like Canada, Ja­pan, New Zealand, Aus­tralia and fast grow­ing mar­kets like the USA, Ger­many, Switzer­land, Aus­tria, etc., con­sti­tute over 70 per cent of In­ter­na­tional or­ganic pur­chase com­pared to In­dia, where it still hov­ers below one per cent.

There are many rea­sons for this small and low share, but no­table enough are:

• High prices - Con­ven­tional prod­ucts are three to four times more ex­pen­sive.

• Lack of trans­parency and cred­i­bil­ity - Con­sumer is con­fused on how to trust or­ganic prod­ucts. They think cer­ti­fi­ca­tions in In­dia are eas­ily ma­nip­u­lated. • In­con­sis­tent and ir­reg­u­lar sup­plies -There are many or­ganic prod­ucts which at times go out of stocks. • Fake or­gan­ics-as per reports about 30 to 35 per cent of or­ganic prod­ucts avail­able on shelves are fake and du­bi­ous or­ganic. • Dual and in­con­sis­tent reg­u­la­tion - There are too many reg­u­la­tors - APEDA/FSSAI/ Third party cer­ti­fi­ca­tions that make the avail­abil­ity even more dif­fi­cult.

• Lack of aware­ness due to low in­vest­ments in mar­ket­ing. This is the main cause and most ne­glected fea­ture of In­dian or­ganic mar­ket. There are hardly any in­vest­ments on con­sumer aware­ness to in­crease the size of mar­ket. Can we make or­ganic a $2 bil­lion op­por­tu­nity for In­dia? The an­swer is YES. But how? In case a firm de­cides to fol­low the sug­gested strate­gies then the chances are very much high for it to be suc­cess­ful in the long run.

Use of trans­parency me­tre in pric­ing: This in­cludes ex­hibit­ing clearly what is paid to farm­ers as pro­cure­ment cost? What is spent as wages and salaries? What is be­ing spent on pro­cess­ing?

Re­duce trade mar­gins on or­ganic so as to im­prove off take: All or­ganic com­pa­nies should take out joint pro­gramme to con­vince re­tail­ers/dis­trib­u­tors on health and off take as­pect to keep trade mar­gins within 30 per cent as com­pared to cur­rent trend of 40 to 45 per cent.

Im­ple­ment and fol­low FSSAI reg­u­la­tions: The du­bi­ous or­ganic, which is worth over Rs. 250 crore in do­mes­tic mar­ket, should be dealt with firmly. Hence, Jaivik logo should be en­forced very strictly by the FSSAI.

Fol­low FPO & farm to fork ap­proach: This will help im­prove and make sup­plies reg­u­lar as well as con­sis­tent. De­clare de­tails of farms and farm­ers to win trust of the con­sumers.

Con­trol of Or­ganic cer­ti­fi­ca­tion should be in the hands of one Govern­ment au­thor­ity: It should be ei­ther the FSSAI or APEDA or NCOF.

In­vest heav­ily in mar­ket­ing: We should pro­mote or­ganic food the way Na­tional Egg Com­mit­tee has pro­moted eggs. We have to spread aware­ness.

As per a study con­ducted by ASSOCAHMICCOA re­cently, the or­ganic sec­tor is ex­pected to touch Rs. 9,000 crore in the next two years in In­dia.


Since health and well­ness is a new trend and is grow­ing very rapidly due to the out­burst of dis­eases, there is no doubt that or­ganic is the way for­ward pro­vided we en­sure trans­parency and value for money.

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