While organic is trendy and sold at a premium, retailers have a bigger opportunity in alternatives to organic food products like residue-free and safe-to-consume products
Mumbai: The popularity of organic and environment-friendly produce has been rising in India. More than half (54%) of Indians are ready to pay more for environment-friendly products.
This changing consumption pattern is more prominent among the younger consumers— 65% of Gen Z and 74% of millennial can spend more on environment-friendly products. At the same time, these consumers are also increasingly becoming health conscious with 50% of them looking for healthy food options, and its ripple effects have increased the demand for organic food. This begs the question: Is organic food really sustainable?
The tenet of organic produce is that they are cultivated using farming methods that do not use any chemicals and are also processed and packaged using organic methods. We’ve all seen retailers in urban India selling produce labelled ‘organic’ at a higher price. For consumers who are looking for organic foods, the challenge lies in figuring out whether the products on the shelves are truly organic and the lack of differentiation from conventional products.
In simple words, consumers don’t really know whether the premium they are paying is actually worth it. This knowledge gap stems from a lack of awareness regarding certified standards for authentic organic products.
While the allure of chemical-free produce leads environmentally-conscious customers to pay more, is it really sustainable?
The cost of production in organic farming is significantly higher than other farming methods. While organic farming relies on reuse of harvested seeds and bio-fertilizers, the yields are low, requiring larger tracts of land for greater production. This lack of sufficient volume and higher production costs result in wider profit margins, forcing food producers to charge more and are ultimately accessible to a limited number of consumers who can afford them.
These increased production costs and limited reach is perhaps why only a small portion of Indian farmers take the organic route. India has 14.6 crore farmers and only 27.6 lakh are organic farmers. Herein lies the issue of sustainability — organic farming does not democratize access to environment-friendly and healthier food options to all of the 1.4 billion people in India.
Are there healthy and sustainable alternatives?
The access to organic produce is limited by higher prices. The potential for this sector to grow is also low, owing to its inability to sustainably scale. Consumers are driven by the premium nature of organic produce but when it comes to products they use on a daily basis, most aren’t willing to pay a premium. For instance, consumers may choose organic millets but would not pay a premium for staples like potatoes, onions, tomatoes etc.
Given the lack of awareness about what makes products environmentally-friendly and healthier, most customers are at a loss when it comes to choosing the right product. Herein lies the opportunity for retailers to create awareness about healthy alternatives to organic produce — like residue-free and safe-to-consume products.
While the residue-free method of farming uses chemical-free fertilisers, the yields are higher compared to organic farming and hence, the prices are relatively cheaper too.
This method of farming is also growing popular in India and is currently being practised in 11 out of 28 states and Namdhari’s have been one of the pioneers and early adopters of this.
To serve the current eco-friendly, health-conscious urban customers, retailers can help create awareness about what types of produce are sustainable and cost effective. For instance, at Simpli Namdhari’s stores, there are certified organic brands in a separate sections and also provide residue-free options.
Educating customers on organic v/s residue-free can go a long way in creating awareness about sustainability. This can be done by ensuring that the store design and in-house shopping experiences are strategized to create awareness including in-store communications, experiential store design, on-ground activation, interactive visual merchandising and using AR/VR to give the ‘farm to fork’ experience right from the store.
While residue-free is being practiced in India, achieving sustainability comes when these methods of cultivation are more widespread than they are. With the information gap impeding the generation of demand, retailers have an opportunity to act as conduits of awareness and also democratize access to residue-free produce. In a highly concentrated retail market, this not only enhances customer experiences but also differentiates retailers from their competitors, ensuring their customers keep coming back for more.
The author is the Head, Brand Marketing, Simpli Namdhari, which is a 100% vegetarian online grocery store in Bangalore.
This article is published in the June edition of Progressive Grocer. To read more such articles, subscribe to the magazine.
