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Not Just a Food Fad: The age of organics is here to stay

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The market for products is changing dynamically with demand exceeding supply across major cities of India. Progressive Grocer brings you a lowdown on how the category is becoming more accessible and customer friendly and what the major players are doing in terms of product innovations, value additions and new offerings to take the market to the next level of growth and expansion

In recent times, the organic food category has emerged as a predominant trend around the world. Awareness about the benefits of , and its ethical and safe production has become a raving consumption trend, spurring consumers to start purchasing differently than they have been doing so far.

According to the U.S. Department of agriculture,”Organic agriculture is an ecological production management system that promotes and enhances biodiversity, biological cycle and soil biological activity. It is based on minimal use of off farm inputs and on management particles that restore, maintain and enhance the ecological harmony.”

However, the use of chemicals and other artificial agents to ripen fruits and retain the freshness of vegetables is rampant and all pervasive. Organic food companies are trying to change this trend by offering a wide range of organic, natural and healthy products, by increasing the awareness about organic and its health benefi ts and by interacting with customers and explaining to them about organic products and its production methods, by identifying organic labels, etc.

Read: 5 organic retail outlets health nuts must try!

Thanks to such efforts, slowly, organic produce is becoming a lifestyle choice and an ideological statement. The spurt in the interest toward organic food is also simply because it tastes better. Farmers use traditional varieties of seeds, and organic food is grown in traditionally suitable cultivation areas, delivering the true taste of the product, unlike the synthetic taste of crops grown with artificial inputs.

Though organic foods are evidently more expensive than the regular variants of synthetic produce, market numbers show that consumers do not mind spending the extra buck for better nutrition. In keeping with this growing trend for consuming organic products, organic producers in India have taken to making products with the help of local villagers and farmers in a big way.

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11 Organic Producers taking giant strides

Take,for example, Sresta Natural Bioproducts, which has about 200 organic products under its brand Organic. An integrated organic food company engaged in farming, processing, R&D, exports and domestic retailing, Sresta’s vision is to promote sustainable livelihood for farmers, sustainable lifestyles for consumers and a sustainable Earth. Its supply chain covers more than 25,000 farmers growing organic ingredients like cereals,pulses, oilseeds, spices to fruits, vegetables and herbs on 150,000 acres of land across Andhra Pradesh, Orissa, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Gujarat, Rajasthan, Uttarakhand, Uttar Pradesh, Uttaranchal and the Northeast.

The farms, products and facilities are certifi ed for EU, USDA NOP & Indian NPOP standards. “Sresta’s inclusive model involves partnering with local NGOs in mobilising farmers and training them in organic agriculture. Our team of agronomists and field staff work closely with the farmers, ensuring total control on the seed, soil, farming and harvesting,” CEO, Sresta Natural, Balasubramanian N.,says. Bioproducts Pvt. Ltd., which has products in categories such as rice, dal, flour, spices, honey, juices, sparkling drinks, breakfast cereals, snacks, ready to cook products, etc.

Kolkata-based is another company taking big strides to promote farmers of organic products and evolving best organic agriculture practices to improve agricultural productivity, farm sustainability and quality of the produce.

Starting off in 2006 with the brand name ‘Naturanna’, the company spent the first couple of years developing two farms and standardising its cultivation practice before setting about to market its products. “We first took on the tougher job of growing organic vegetables, herbs, condiments and fruits in diverse agro-climatic zones and then slowly added on a range of local varieties of rice, pulses, spices and oilseeds. Ever since, the company has introduced several local varieties of fruits and vegetables to the urban consumer, thereby keeping alive the crop diversity, which is slowly disappearing. Over the past eight years, we have systematically added on interested organic growers – big or small – be it for fruits and vegetables, staples, oilseeds or spices, mushrooms, tea or jute,” Partner, Natureway Organic Fresh, Dr. Haimanti Dhir says.

Similarly, Orgaroot, an organic brand promoted by Kolkata-based Balajee Tea Company, is engaged in growing organic fruits, vegetables and spices and also procuring other organic products from its own pool of farmers in Sikkim, West Bengal and Bihar.
“Our model is to cultivate some products, make a model farm, show it to the farmers in the region, guide them to cultivate them with technological support, seeds support, procedures, organic compost and organic ingredients with formulas to prepare the soil and seeds. We further ensure the growth of plants with organic growth enhancers and organic insecticides and finally we go on to buy all the products of farmers using our model of cultivation,” Partner, Balajee Tea Company,Sachin Mitruka says.

He adds:”We also support the farmers in getting organic certifications. We off er a helping hand to farmers at every point. All our ingredients are made by the farmers with locally available products and are a part of zero budget farming. This ensures lower cost of inputs and higher realisation leading to more disposable money in the hands of farmers. This way, we ensure the products are pure organic and also the farmers are secure as we buy all their produce and we get to plan what we want to cultivate. It’s a win-win for all the stakeholders.”

1. Organic Producers taking giant strides

22 Why organic?

Today, as harmful effects of the increasing use of chemicals in farming are becoming obvious and apparent, environmentalists and health professionals are flagging many of these concerns. “Ever since the environmentalists began increasing the awareness, consumers’ tastes and preferences have started shifting, which have led to the domestic as well as global rise in the demand for organic products,” say Aditi Gokhle and Aman Singal, Co-Founders, All Things Organic, an online platform focusing on the best organic brands and also selling its own home brand ‘Organic Origins’ encompassing fruits, vegetables and groceries.

Echoing a similar sentiment is Jatin Khurana, Director, A.T.P. Mart, an organic, gluten- free and nature store in Delhi, which operates both offline and online: “Nowadays, many people are getting health-conscious and are shifting to a disciplined and healthy lifestyle. People want to have chemical-free food on their plates and hence many of them are shifting their complete grocery shopping to organic and natural products.” At the same time, consumers are also getting conscious and selective about edible products.

“Organic is a natural fit with the burgeoning health and wellness sector in India, as witnessed in the rising number of health gyms, spas, nutritionists, dieticians, ayurveda centres, etc. Natural & Healthy is in demand, and organic is a natural fit with both these concepts,” say Varun Gupta and Nidhi Gupta, Founders of Banglaore-based Organic Foods Pvt. Ltd., which has introduced a range of organic superfoods such as quinoa, flax seeds, wheat bran, wheat grass powder, among other products.

The rise and growing popularity of superfoods is the gathering trend in the food industry today and there are evident signs of an increased use of super foods in people’s diet as well as for healthy breakfast options.

“The organic breakfast cereal is an area of focus. We are seeing a huge following for, and growth in products such as quinoa, moringa, chia, etc.! Looking at these trends, we have introduced a new line of products under our superfoods category, which is registering consistent growth,” says Surya Shastry, MD, Research Foundation Pvt. Ltd, which operates the ‘Pure & Sure’ brand. Based out of Bangalore, the company also provides end-to-end solutions for organic agriculture – right from manufacturing organic fertilisers to sales of certified organic food products, which include its range of 110 plus products spawning organic spices, pulses, grains, oils, sweeteners, beverages and superfoods.

2. Why organic?

33 Organic industry in India

“The organic industry is just opening up and currently constitutes a small segment of the overall food industry in India. But organic is becoming a big new opportunity and everyone is joining this bandwagon, says Mukesh Gupta, Director, Operations, at Jaipur-based Morarka Organic Foods Ltd., which entered this business way back in 1995 and operates the popular organic brand ‘Down To Earth’. Like many other entrants to this category, it began by introducing organic farming with small and poor farmers. Gupta says that only after 10 years of such dedicated efforts did the healthy food business in the name of organic came into being as an organised business. But as a distinct category, organic has gained tremendous momentum in the past five years. “As consumers become more aware and health-conscious, the category is poised grow rapidly over the next few years. Still, the market is highly unorganised. There are very few players with the capabilities and wherewithal to provide quality organic produce to the consumers in terms of distribution reach. We are the largest in the category with a presence in more than 150 cities across India,” says Balasubramanian of 24 Mantra Organic.

As a new and high growth category in the food industry, the opportunities are aplenty to grow and build a brand in the organic segment. “The demand far exceeds availability and therefore there is enough business to pick up, which is encouraging the influx of a larger number of suppliers in the field of organic foods,” says Dhir of Natureway Organic. “Most of the new brands are still regional and there are just about three or four brands that have a pan-India distribution network and our brand is one of them,” states Shastry of Phalada Agro. Among the more recognised brands in the category – nationally and regionally – are , 24 Mantra, Pro Nature, Pure & Sure, Down To Earth, Fabindia (private label), Conscious Food, Naturanna, , All Things Organic, A.T.P, Vedantika, Organic Tatva, Amira, Orgaroot, among others.

3. Organic industry in India

44 Market size

 

According to a study prepared by Assocham and TechSci Research, the size of the organic food market was $0.36 billion in 2014, and organic pulses and foodgrains took the lion’s share of the market. The study says that India’s organic food market has the potential to grow more than 25 per cent annually to touch $1.36 billion by 2020, provided there is more awareness about organic products and the government incentivises region-specific organic farming to ensure consistent growth in future.

“The Indian organic products industry is forecast to grow at a CAGR of 20 per cent and above, subject to an increasing demand for beverages like tea and coffee, organic rice, organic wheat/flour, organic millets/ flour, organic pulses, organic ghee, and organic cold pressed oils,” observes Ashmeet Kapoor, Founder and CEO of I Say Organic, an organic concept store at the upmarket Select Citywalk mall in Delhi, which sells 200 organic products including but not limited to locally sourced essential fruits and veggies, exotics and salads, variety of flours, cereals, nuts, spices, and sweeteners, condiments like sauces, dips, and organic snacks by other brands.

“We have recently launched our own line of artisan breads, pickles, ketch-up, and a variety of preserves. In addition, we offer a café menu listing for the consumer to experience cooked organic food comprising of cold pressed juices, wraps, and baked goods,” he informs.

“Today the natural products’ market is expanding rapidly and the demand for natural products is increasing manifolds as there is a continuous increase in the awareness of health, well-being and good quality of life. Market research shows that in certain markets – specially in the metros and urban areas – growth of natural products’ sales is as much as 40 per cent,” say Leena Tated, Director,
Vedantika Herbals.

According to Mukesh Gupta of Morarka Organic, “the current Indian market for organised and branded organic food business is estimated to be about Rs. 150 crore, and another Rs. 150 crore is the estimated size of the unorganised organic food market.”

Adds Jatin Khurana of A.T.P. Mart: “The present market for organic products is limited to metropolitan cities and localised to the health conscious people. With the awareness spreading through government channels, it is now reaching the general public. For instance, in November last year, the Union Ministry of Women & Child Development organised a mega event on organic & natural products in Delhi, in which 21 states participated. Government has started encouraging farmers for producing more and more organic food, which will ensure regular availability of produce in the market. This will definitely boost the market at different levels and make the future bright for this segment.”

Concurs Shastry of Phalada Agro: “The key markets are still the metro cities. But Tier 1 & II cities are also opening up and showing big growth opportunities. We have started setting up a strong distribution network in these regions.” He contends that the industry is growing at over 30-40 per cent, while his own company has been growing over 100 per cent year on year.The domestic market size should be anywhere about Rs. 400-450 crore, and the market will continue to grow at this rate or more for the next five years before consolidation starts.”

Pointing to the major regions that are the biggest contributors to organic produce, Khurana of A.T.P. Mart says: “While south India has always been a pioneer in organic spices, north Indian states like Rajasthan, UP and MP are good contributors to the organic market. Sikkim is now a 100 per cent organic state in India. Environment-friendly states like Himachal Pradesh are the upcoming regions with a great potential for growing organic products.”

Mukesh Gupta of Morarka Organic says that the organic market began to grow initially from the southern states of Bengaluru and Chennai as well as from the western cities of Mumbai, Pune and Ahmedabad. “But, in between, the northern belt comprising Delhi, Gurgaon, Chandigarh and Ludhiana took over and began performing much better than the south. But now, once again, southern cities are showing better results. In south India, now even Tier II & III cities and towns are showing good demand for organic food products.”

However, Gupta puts in a word of caution as well: “The earlier 20-30 per cent growth of this market is not happening now. The reason is that no new player is investing increating the market. The new players are more focused on capturing the market share from other existing brands. If this trend continues, then the organic market will further get divided between low-end, low-priced organic and high-end, authentic organic food market. While the low-end will stagnate, the high-end will grow at 30-50 per cent, as the demand is there but the consumer expectations on authenticity of products need to be satisfied. Also, this category of consumer is not expecting any discounts.” He says that the lower demand now in northern India for organic produce is due to the intense competition among new brands and their strategies to offer discount, which is weaning away the consumer from organic food.

As the category is currently at a nascent stage, many players are restricting their focus to key metros and Tier 1 cities at the moment. Based on its own market research, I Say Organic has identified Mumbai, Delhi/NCR, Chennai, Bangalore, and Pune as major markets for natural and organic produce. “Demand from Tier II cities is expected to be insignificant leading up to 2020, although, there is sufficient opportunity in the B2B/HoReCa space where numerous institutions have requested for bulk sourcing of organic produce,” points out Kapoor.

According to Pro Nature’s Varun Gupta and Nidhi Gupta, “The target market for organic category are the customers who are Sec A+/A, living in the metros, and who are willing to spend some extra time and money for the benefit of their health. Modern Trade is important for us and this is clearly reflected from our presence in key modern trade stores across India. General Trade, being a major sales contributor in India still, we have plans to be in A class GT stores across key metros.”

4. Market size

55 Best-selling organic products

The products that will see a higher growth within the category are baby products, cosmetics, cereals and other non-perishables, as well as vitamins and health supplements. Most research points to the direction of high growth in both fruits and vegetables and non-perishable products, including organic cotton fiber, garments, cosmetics functional food products, and body care products. “Globally, fresh produce (fruits and vegetables) will continue to dominate as the highest-selling organic food category, contributing as much as 37 per cent to the overall organic foods segment in terms of revenue,” informs Kapoor of I Say Organic, adding that fresh fruits and vegetables are responsible for about 13 per cent of the overall revenue at his company, which also operates as an online retailer of organic products.

“Since opening our retail store at Delhi’s Select Citywalk last year, we have observed that first time consumers tend to purchase increasing quantities of sweeteners like honey and/or seeds, spices, including turmeric powder, red chili powder and cinnamon sticks. Increasing disposable income and health consciousness, coupled with easily available knowledge and information on organic honey and the benefits of consuming these seeds may have had a direct impact on the demand for such organic products,” opines Kapoor while revealing that the fastest moving products in the organic foods category tend to include dry produce items such as honey, cooking oils – sunfl ower and mustard, ghee – and flour. “In terms of seeds, we observe that chia and flax are the top performers, while tea and coffee continue to dominate the beverages category.”

According to Mukesh Gupta of Morarka Organic, “Currently, the fastest moving products are in the pulses and beans category. In the initial years, sales of grains, pulses and spices was nearly the same, but pulses are now Number One, followed by grains while spices are now way behind in sales. Other product ranges like oils and specialty products are just getting introduced, so commenting on their sales performance might be premature at this stage.”

5. Best-selling organic products

66 Value addition and new offerings

A lot of companies have started innovating to differentiate their organic products and gain a bigger share of the consumer wallet. Companies are getting their products certified as per USDA, NPOP standards to ensure organic integrity and traceability; they are expanding their range and coming up with new offerings for providing enhanced value and convenience to customers.

Says Pro Nature’s Varun Gupta: “Due to the lack of a formal rule or law, the term ‘organic’ has been used very casually. We at Pro Nature are committed to 100 per cent organic certified products and don’t compromise on the quality.” Dittoes Vedantika’s Leena Tated: “Quality, good taste and innovation play a very important role. With advertisements, you can sustain for only a few years but if you do not give quality, taste and innovation, you cannot sustain in the long run.”

Different players have their own playbook of innovation to fall back on and strengthen the brand equity. “Product innovation and value addition is imperative for perishable produce. We have initiated the development of packaged organic products thereby extending shelf life and adding to our range with preserves, pickles, candies, powders, juices, etc. We have also increased our range, from fresh fruits and vegetables to staples and other non-perishables and have plans to foray into fish and poultry products and ultimately to the entire food basket,” lets in Dhir of Natureway Organic Fresh.

“We have introduced a lot of industry-first products, which include organic breakfast mixes, organic coconut-based snacks, organic olive oil, among other products,” avers Shastry of Phalada Agro. Balasubramanian of 24 Mantra says that Sresta is the first organic brand in the country to have launched fruit-based organic carbonated beverages (without any artificial colour, artificial flavour and no caffeine).”We have recently launched organic sparkling drinks, which is fruit-based and contains fizz. Similarly, we have launched ready-to-cook products using traditional recipes of various regions of India. We also have a process whereby we can trace back each pack of our product to the farmer who has cultivated it,” points out Balasubramanian.

All Things Organic too has a unique Farm Traceability Programme for certified fresh products. Called Footprints, the programme helps the company to trace back the fruits and vegetables under its private label Organic Origins to their respective farms using a QR code. “We relentlessly work to develop products under Organic Origins focusing on consumer’s health, nutritional needs and making the environment chemical-free,” say Aditi Gokhle and Aman Singal, whose company not only sells a wide range of food products, but also offers the entire range of cosmetics, clothes, home care necessities, etc.

“It is worth highlighting that in a short span of our existence, we have seen a very high degree of ‘order repeatability’ from customers, i.e. Over 75 per cent of our orders are from repeat customers. Over the next 6-9 months, our aim is to reach 10,000 households across Mumbai, Delhi and Bangalore with an average monthly spend of Rs.5,000 and hit a run-rate of Rs. 40-60 crore through unique offerings that we have in the pipeline,” states Gokhle, whose company is also focusing on three researched need gaps. “We are focusing on International and Indian favourites for children. Our fully organic range of nut butters has received great feedback from our discerning consumers, helping them kick-start an energy filled day. We are also focusing on home-made recipes, which in today’s time most families find difficult to make for themselves, ” he adds.

Similarly, Dr. Naran Limbasiya of Vedantika Herbals, who is a well-known food technologist himself, has been doing research in natural foods, food preservation, food-based supplements, herbs and its effects on the human body for the last 18 years. He has successfully developed 65 innovative products during this period and the outcome of his research has seen the introduction of products that are devoid of all possible chemical preservatives and synthetic colours.

“We have developed energy drinks in powder form, which are natural and pure and without any synthetic chemicals. We have a wide range of energy drinks with high vitamins and minerals: Amla, Lemon Ginger, hashtmarita, Green Mango, Lemon Juice, among others. Apart from drinks, we have developed many soups like lemon coriander soup, bottle gourd soup, Karela soup, etc., says Leena Tated of Vedantika Herbals whose products are available both online and offline at major organic stores.

On its part, ATP Mart has positioned itself as a one stop destination for people to cherish all organic, gluten-free and natural products. “We deal in a complete range of organic products like cereals, pulses, flours, lentils, millets, staples, spices, oils, honey, jams, juices, green tea, green coffee, dry fruits, health supplements, seeds mix, organic wheat grass powder, skin-care, hair-care, bath-care, beauty-care and much more,” discloses Khurana. Sresta from 24 Mantra, whose objective is to provide 90 per cent of the family food basket with organic alternatives, is developing new products with the help of its strong R&D team, which works closely with many research institutions and experienced culinary experts to create lots of new and unique products. “Our development focus is on nutrition, health, great taste and a more pleasurable eating experience in every bite,” says Balasubramanian.

6. Value addition and new offerings

77 Retail frontiers

Growing health consciousness and awareness about harmful pesticides has nearly quadrupled the size of organic foods in India in the last few years. Consumers are opting for healthier eating habits, which are driving entrepreneurship in organic foods. Retailers have started treating organic as a growth driver; hence there is lot of focus and willingness on the part of retailers toward building this category.

As for organic brands, they believe that for the industry to grow, they definitely need more support from the retailers in terms of space, margins and also their willingness to carry more brands. Sensing this, quite a few retailers have come forward with helpful initiatives like having a dedicated space for organic food products in their stores. According to Varun Gupta of Pro Nature Organic Foods, “There is a huge scope in the category from the retailer’s perspective. The retailer margins in the organic category are more than the average margins in any other category. Organic products are a little higher priced as compared to the inorganic products and so the overall value outcome is more for the retailers. If retailers provide organic food options in their stores, the customers attracted are SECA+/A, which can help a retailer to develop a loyal customer base. This has a rub-on effect on through out from the other branded players in other categories.”

Shastry of Phalada Agro says: “Most of the modern trade retailers have started to open up and offer more space to the organic food category but they are still hard to work with as they see it as a small category.” This is rather surprising as the category margins are high. However, as Shastry explains, “the high margins also drive end price of products higher for the end consumers, which finally leads to lower sales.”

He says that retailer support is important and would definitely help the category grow further. “Allocation of specific prime space with merchandising has helped the category grow at some of the retailers. “Also, retailers like METRO and SPAR conduct ‘Organic Week’, where there is a lot of promotion of the category with attendant discounts, which helps the consumers to understand the benefits of organic and nudges them to make the shift towards organic food products.”

He says that his Pure and Sure brand of organic products is currently seeing an equal rate of growth in both modern trade and general trade. “While general trade contributes to around 60 per cent of our sales, modern trade contributes around 35 per cent. We are seeing a huge growth in the online space and it currently contributes about five per cent of our sales.” Tated of Vedantika Herbals opines that “today you can get all the products online. So if retailers have some unique organic products on their shelves, they can attract more customers.”

7. Retail frontiers

88 Exclusive organic stores over modern trade

However, Kapoor of I Say Organic is of the view that the market for organic foods at modern supermarkets is still very limited. “We understand that the demand for natural and organic products captured at modern trade and supermarkets is limited, though gradually increasing. Sales of organic and natural products might comprise about 5-10 per cent of an average grocery basket in Tier 1 cities.” He cites the example of his own flagship store which, with increased marketing efforts, has observed a gradual and steady increase in its customer base. “At our exclusive organic store, people are buying an increased amount of dry groceries, followed by fresh fruits and vegetables.”

According to Balasubramanian of 24 Mantra Organic, “Affordability of organic products has also increased along with the rise in the purchasing power of people. For an average family of four that decides to switch its entire grocery basket to organic, the additional cost will just be Rs. 1,200- 1,500 per month.”

Commenting on the efficacy and suitability of retail channels for organic products, Khurana of A.T.P. Mart says: “People go to Modern Trade so that they can get variety, but many times they may not get what they are looking for. At this stage, exclusive organic stores come into play as they deal in just one segment with a variety of stuff to show for. As modern trade outlets and supermarkets do not have awareness drive counters for organic food, their percentage sales may not be significant compared to their other general products.”

Though there exists plenty of room to grow the organic category in both modern and general trade, creating consumer awareness about organic is critical to the growth of the category overall. “By and large, a consumer of healthy and organic food is an enlightened consumer. She is ever willing to talk, discuss and ask questions to increase her knowledge. But this can happen only at standalone stores, where the owners man the shops and can address customer queries, says Mukesh Gupta of Morarka Organic.

“As consumers are getting more aware about organic, they are also becoming increasingly suspicious about the authenticity of organic. To an extent, some retail brands are also responsible for this trend. New comers as well as some old players, in their desperation to get a bigger market share (like online retailers), are offering very steep discounts. This expands the gap between the prices offered by different brands to the extent of 20-30 per cent, which then becomes the cause of confusion,” laments Gupta, who feels that modern trade and supermarkets were once the preferred retail destination for organic products with as much as over 70 per cent share of the organic market, which has now come down to about 50 per cent of the overall market.

“Recent trends show that standalone retail stores are performing much better in the organic category,” he opines.

While price variations and discounts could be a factor that raises doubts in the minds of consumers regarding the genuineness of the organic product, a section of the industry feels that the issue of ‘premium’ on organics is an even bigger factor aff ecting the
growth of the category. “Certified organic food is sold at a premium though, according to research, if the industry in modern trade has to grow, the premium charged should not be more than 20 per cent. Right now, the premium charged is around 80-100 per cent, leading to slow growth. Retailers have to ponder on the pricing part and look at the future rather than the short-term benefits. If this can be done, slowly the consumer base will shift to organic food, leading to a greater scope for retailers. This will enable a trickle
down increase in sales, with more profits, though margins have to be kept under check,” opines Sachin Mitruka of Balajee Tea Company.

8. Exclusive organic stores over modern trade

99 Challenges

Apart from the challenge of increasing the consumer awareness for organic, and ensuring authenticity of the product, the industry also faces other headwinds.

“Since it is a new industry, strong regulations are still not in place to define what can and cannot be labelled and sold as organic food and this is a huge challenge! Also, given that the certification of fields and farms as organic is a three year process, we need to plan our supply chain three years ahead based on demand forecasting, which again is challenging in a high growth sector. Since the volumes are still small, the overhead costs are relatively high when compared to the conventional food supply chain, which makes the end product cost high and thereby difficult for the category to attain mainstream access,” says Nidhi Gupta of Pro Nature Organic Foods.

Her views are shared by other players in the industry. Says Aman Singal of All Th ings Organic: “Consistent supply is still a key factor for the category’s performance as the organic food industry works around a complex food supply chain. Also, the overall off erings by most companies still comprise basic food products like pulses and grains. For the category to grow, we need more innovation and value-added products and offerings.

“Maintaining quality, authenticity and ethicality in labelling are the main challenges in this segment. The constant awareness drive by producers/brands towards the benefits of organic food and its pricing is the need of the hour for gaining the confidence of customers. The prompt resolution of queries is also desirable. ATP Mart believes in sharing knowledge with the customers so that they can make an informed decision in favour of buying organic and natural products,” states Khurana. Mukesh Gupta of Morarka Organic feels that the biggest question today before the industry is the motivation behind the entry for new players.

“As of today, a large number of players are getting in with only miniscule investment in market creation. Players are banking on price sensitivity of the consumers and the retailers to succeed. This is just not going to happen. In the long run, only those players will be able to sustain who invest in creating the market. For this industry to grow, it is of paramount importance that consumer sensitivity toward authenticity is addressed.”

According to Kapoor of I Say Organic, “Given the nascent stage at which the organic food industry is in, the right branding strategy would help manufacturers with positioning in the marketplace. Then, it will be imperative to identify the various relevant customer categories that other brands choose to target their communication to, after which, the implementation of the right demand generation strategies will help penetrate various audiences, and ensure inexpensive acquisition and high retention.”

All said and done, what is clear is that in the days to come, as the market expands and multiplies, organic players and retailers will do well to convince consumers and build their trust in organic products, which will help the category to spread and expand rapidly across all major modern trade outlets and establish itself with an equally strong presence in independent organic food stores too. Building the brands, strengthening the distribution and supply base further and expanding into newer categories in the organic food space will determine the success of players in this sunrise sector.

9. Challenges
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