Organic Market IndiaOctober 2014

Structure

Organics – raison d'être

Market insights

• Trends and growths

• Key players

Consumer trends, facts and figures

Retail insights

raison d'être

Organics

Why Organics?

1. They’re safer. Fruits and vegetables labeled as organic are generally grown without chemical fertilizers and pesticides. Livestock raised under organic practices aren’t fed antibiotics or growth hormones.

2. They’re kinder to the environment. Organic farming practices are designed to be more sustainable, emphasizing conservation and reducing pollutants.

3. They’re healthier. A few studies have suggested organic foods might be higher in nutrients than their traditional counterparts.

Cont...− As per the study conducted by Research on India “Organic Food Market – India” in April 2010,

organic foods may have benefits over conventional foods. Some of these are listed below

Organic market very buoyant

From 2007 to 2012, the average middle class income in India has shot up. The consumer is willing to pay more for

good quality food." The demand for organic foods will only grow in India, organic food producers claim, with the

implementation of the Food Safety and Standards Act from February this year. The new law sets more stringent

standards of food safety - raising the bar on the quality of food manufacture, storage, distribution, sale and import.

The stress on quality under the new Act will push up prices of foodstuff made using conventional techniques, reducing

the price differential with organic food, and boosting sales.

Mukesh Gupta, Director of Morarka Organic

Trends, growth and companies offering organic solutions.

Market

Market – Size and growth

The domestic market for organic products was estimated at 

Rs. 1,000 Crore (or approximately 190 million US $) in 2011-12, 

and is expected to grow to 1 billion US $ by 2015. 

Reasons for Growth

−India is fast emerging as one of the largest potential markets for Organic Food products−Completely natural

−Contains no chemicals or preservatives

−Healthy alternative to conventional foods

−Growing awareness towards health foods

− Surging income levels

Regulation and certification

In India, APEDA (Agricultural and Processed Food Products Export

Development Authority) regulates the certification of organic

products as per National Standards for Organic Production.

Organic products marketMajor organic produces in India include plantation crops, sugarcane, cotton, Oil Seeds, basmati rice, spices, cereals, pulses, oil-seeds, fruits, tea, fruits, dry fruits, vegetables, coffee and their value added products.

Top Selling Products in the domestic market (in M.T.)

−Tea 1500−Coffee 750−Spices 500−Rice 5000−Jaggery, Sugar 6000−Wheat & flour 3000−Pulses 2500−Fruits and vegetables 5000

Why Organic Food costs more?

The Organic circle in India

Restaurants and cafes

Home-stays, hotels

Retail produce

India

Exports

Analysis basis market visit and secondary research

Key players

1. Organic India2. Conscious Foods3. Ecofarms4. Morarka Organic Foods5. 24 Mantra6. Navdanya7. Fab India8. EcoTokri9. Biona Organics10.Biofair Organics

Organic India − Presence  - In 40 countries including  India, Australia, Belgium, Canada, Germany, Indonesia and so on.

− Turnover

− has seen its revenue rise from Rs 25 crore in 2008 to Rs 175 crore in 2013. 

− Looking at three-fold growth in turnover to Rs 200 crore by 2015-16. 

− Product Offerings 

− Tulsi Tea, Herbal Supplements, Chawanprash, Husk, Coconut Oil, Ghee, Spices, Grains, Beans and Lentils, Fruits and Vegetables.

− Plans to launch organic grocery items such as rice, dal and spices by next year.

− Price Range - Rs. 200/- to Rs. 3000/- depending upon the product.

− Channel/ format present in -  Online, Standalone Outlets, Fab India, MT stores such as Food Bazaar, Modern Bazaar. 

"We have opened two stores in Lucknow and aim to have 20 stores across the country by the end of 2015," says Krishna Gupta, CEO and Managing Director

Packaging

Standalone Outlets

Conscious Food− Presence  - Also sold in the UK and Europe through Conscious Food Ltd, UK, apart from India.

− Turnover - Looking at three-fold growth in turnover to Rs 200 crore by 2015-16. 

− Product Offerings 

− More than 100 natural and organic products including whole cereals and their flours, pulses, spices, 

natural sugars, honey, coffee, green and herbal teas, cold-pressed oils, alfalfa, flax, sunflower and other 

seeds, spirulina powder, awla powder and healthy snacks made with various cereals, seeds, nuts, dried 

fruits and herbs. 

− Price Range - Rs. 50/- to Rs. 500/- depending upon the product.

− Channel/ format present in -  Online, Exclusive Retails Outlets ( Bombay), Fab India, MT  Outlets like Foodhall, 

Spencer's in other cities.

Packaging

24 Mantra− Presence - Also sold in the UK and Europe through Conscious Food Ltd, UK, apart from India.

− Turnover - Looking at three-fold growth in turnover to Rs 200 crore by 2015-16.

− Product Offerings

− Over 800 products including Fresh Fruits & Vegetables, Cereals, Pulses, Flour, Spices, Culinary Pastes, Oils, Snacks,

Breakfast Cereals, Juices, Cookies, Processed and personal products .

− Price Range - Rs. 50/- to Rs. 500/- depending upon the product.

− Channel/ format present in - Online, Exclusive Retails Outlets ( Mumbai), MT Outlets like Foodhall, Spencer's, Food

Bazaar, Modern Bazaar etc in other cities.

− Also have a Organic food court at Hyderabad store named ‘Purity Prayag’

− Serve healthy salads, filling sandwiches, tasty vegetable and fruit juices and yummy fruit and nut ice creams. You can even try different types of cookies 

here. Sandwiches cost Rs. 30-40, juices Rs. 30-45 and a single scoop of ice cream comes for Rs. 38.

Packaging

Standalone Store

Online contest

Morarka Organics− Presence - Available across various states and cities in India.

− Turnover -  Around 70  to 80 Cr.

− Product Offerings

− Offers a range of food products including cereals, pulses, spices, condiments, masala mixes, oils, ready-to-eat snacks, various kinds of cookies, etc., along with English herbs.

− Price Range - Rs 100/-  to 500/-  depending upon the product.

− Channel/ format present in

− Morarka organic products are available at the Down to Earth stores.

− Products are also available at major supermarkets, modern trade outlets and stand alone organic stores across the India.

− Also offers Online Shopping through company website.

Packaging

Standalone Stores

Event Promotion

BioFach Mumbai 2009 BioFach Mumbai 2010

Ecofarm

Ecofarms Organics

− Presence - Started in Maharastra and some parts of Orrissa.

− Product Offerings

− Offers a range of products including Clothing & Home Furnishing, Fruits & Vegetables, Cereals, Oils, Spices, Flour, RTE Snacks and Medicinal Herbs.

− Price Range – Rs. 50/- to 500/- depending upon the product.

− Channel/ format present in

− The food products are sold by the company under its brand name 'Ecofarms' in the domestic retail market, available at all major retailers such as Big Bazaar, Reliance, Aditya Birla(More), Shoprite, Le Marche, Piramyds(Tru Mart), Apna Bazaar, Metro Cash and Carry etc.

Packaging

Standalone Outlets

Fab India

Fab India− Presence - Across 74 cities in India, as well as in 6 other countries such as Bhutan, Italy, Mauritius, Nepal, 

Singapore and UAE. 

− Turnover - Rs. 20 to  Rs. 30/-  Cr

− Product Offerings

− The major portion of Fabindia’s product range is textile based. 

− Non- textile introductions to this range are Home Products , Organic Food Products &  Range of authentic Personal care products. 

− Organic Range carries several types of cereals, grains, pulses, spices, sugar, tea, coffee, honey, fruit preserves and herbs.

− Price Range – Rs. 50 to 500/- depending upon the product.

− Channel/ format present in – Standalone company outlets and through online orders.

Packaging

Packaging

Standalone Stores

Online stores

A click away

Ecotokri.com

Ecotokri.com− An e-commerce site that sells only organic products

− The most popular items would be organic lipsticks and organic kajal, followed by organic coconut oil. 

− Sells everything from organic tea and flour to organic soaps and accessories and solar Nuru lights, but organic 

cosmetics contribute 60 to 70 per cent to its overall sales.

− Site is growing at 30 to 40 per cent month-on-month. 

− "More and more people are looking for green and healthy alternatives. Traffic to my site has increased 200 per

cent in the last six months. What's still more amazing is that 40 per cent of my orders are coming from Tier II

and III towns."

Organic Shop

Organic Shop− A one-stop shop for the largest product range of over 6,000 100% organic certified products in India. 

− A platform for brands in the organic industry to access the internet consumers of India. 

− An endeavor to support the unorganized retail of organic products in the country bringing together the consumers 

and suppliers on one platform. 

− Effort to bridge the gap between the farmers who produce products in small quantities and lack market exposure 

for their products and bring their products close to the consumers.

− The brand offers a range of organic products, organic clothing, food, cosmetics and wellness products, textile 

products like yoga mats, towels & comforters, organic spices, green tea, grocery, organic cosmetics, herbal and 

health products to name a few.

isayorganics

− Within a year, Kapoor has managed to reinstate the faith of farmers in the agricultural industry and achieve a 

monthly turnover of Rs 5 lakh. 

− With a team of young minds using new age online stores to re-brand organic vegetable sales, Kapoor now has a 

bigger dream.

− This new-age business model is sure to woo consumers with its fresh and healthy vegetables at subsidised rates. 

Placing orders online for daily vegetables is a culture soon catching up, making the rounds to sabzi bazaar a thing of 

past.

Farm2kitchen

Seema Dholi, founder says soon we would be launching Farm2Kitchen Organic Stores all over India. These outlets will offer certified organic foods and farm produce – which follow food safety standards.

“Building healthy India. One kitchen at a time”. 

Stand alone and online options

Organic Stores

The Altitude Store, Delhi− A one-stop shop for all the organic needs ranging 

from organic baby food, clothes and soaps to juices, preserves, chutneys, butters, shitake, pickles, jams, pasta, soups, teas, infusions, snacks, rice, flour, meat products, fruits, vegetables, cosmetics, and so much more.

− The Altitude Store produces a variety of organic food products and undertakes deliveries across Delhi/NCR.

− Her annual growth rate is between 150 and 200 per cent.

− Other Brands stocked include: Rustic Art cosmetics, SOS Organics, Societe Naturelle, Organica, Down to Earth, Conscious Foods, German Bakeshop, French Farm meats and foods, Soja, Naturo, Nirvana and so many more.

The Altitude Store

Navdanya

− Navdanya Organization, a network of seed keepers and organic 

producers spread across 16 states in India, which started out as a 

research initiative, led by renowned scientist and environmentalist Dr. 

Vandana Shiva. 

− They sell a wide range of products ranging from fruits and vegetables, 

staples, spices, condiments, jams and spreads, dry fruits, tea and 

coffee to seeds for cultivation. 

− Have also set up an organic foods café at Dilli Haat, Delhi. 

Store-front

Organic Garden (12 locations, Mumbai)

−Has a whole range of vegetables and fruits grown organically, certified by ECOCERT. 

−It’s a small store, stocking only fresh and small quantities of different fruits and vegetables grown in the region.  

−Despite being higher priced than the regular vegetable seller, the price differential is no longer the 25-50% that it used to be, it was only about 10-15% higher.

Store

Advt

Organic Haus− They have a wide range of products and all of them are 

vegetarian. 

− One of the main points of difference between Organic Haus and other Indian organic brands is that the former does not deal in fresh produce  since they are a representative of the pioneering organic-food companies from Germany. 

− The other organic stores in the country complement their offerings. Together, the customer gets a full basket.

− One of the main points of difference between Organic Haus and other Indian organic brands is that the former does not deal in fresh produce since they are a representative of the pioneering organic-food companies from Germany. The other organic stores in the country complement their offerings. Together, the customer gets a full basket.

Organic Haus (contd.)

− The products in the store are definitely much higher priced, 

but the variety of products is huge as well as the type of 

products stocked are quite different from the regular organic 

fare (such as an organic slimming kit which is a rage in 

Germany, nutrition supplements, beauty cosmetics, etc.).

−  Also, Organic Haus has been heavily marketing – with 

billboards all along Marine Drive as well as creating a buzz 

through Facebook.

Shop Interiors

Mother India Farms, Bangalore

− Used to export the organic fruit pulp, dehydrated fruit and 

vegetables and a variety of spices it produced to France, Germany 

and The Netherlands. 

−Now it has a growing Indian market as well. 

− "Sensing the market gap in organic fruit juices in India, we launched a 

mango-flavoured organic fruit beverage in 2012, under the brand name 

Organa. We now sell organic guava juice, organic apple juice and organic 

mango pulp here as well," says Gopinath R. Durairaj, Director of Operations, 

Mother India Farms.

Spirituality on the path of marketing:Cashing in on the craze

−If Osho slippers are a craze among fashionable youngsters, Baba Ramdev's Patanjali line of personal care and packaged food products and Art of Living's body lotions and Ayurvedic Energizers too are finding takers beyond their followers.

Spirituality on the path of marketing: Widening reach

−Some of them plan to widen distribution of their products-so far largely sold at their ashrams - through kirana stores, supermarkets and online retailing. 

−Some are entering into back-end integration for commodity sourcing and are building distinct brands.

−Spencer's plans to sell such products at its outlets - there are more than 200 of them, and is open to offer larger shelf space than even some mainstream brands.

Spirituality on the path of marketing: Profits for charity

−Baba Ramdev started retailing his Patanjali line of FMCG products via through kiranas and modern retail. 

−Acharya Balkrishnan, promoter of Patanjali Ayurved Products and a close aide of Ramdev, said this would allow the firm more than quadruple its sales to Rs. 2,000 Crore this fiscal from Rs. 455 Crore in 2011-12. 

−If achieved, this would make Patanjali larger than Fair & Handsome and Boroplus-maker Emami and at nipping distance of Colgate-Palmolive. 

−Patanjali Ayurved says it achieved a net profit of 100 crore last fiscal.

Organic restaurants and yes even hotels !

Lumiere, Bangalore− Lumiere tries to get as close to fine dining as possible, 

although it is primarily a Kerala seafood menu. 

− Is the restaurant bringing in profits. Not yet, although 

Rs 2 crore was invested in setting it up and regular 

cash infusions to keep it running. 

− That does not seem to bother Manjunath, 46. “I sat 

16 years in an office as a software professional. Now I 

am doing something that invigorates me, and it is 

environmentally sustainable.”

The dining area

Green Path, Bangalore−  Green Path is a 50-bedroom service apartment in Bangalore. 

− Each apartment at Green Path has two-or-three completely furnished bedrooms 

with all facilities for a comfortable, homely, and eco-friendly stay. 

− These service apartments are ideal for both short and long term stays. 

− “The cost of organic produce has come down in the last six years, now it is more

affordable than what it was before. To reduce the cost further, we need more supply

chains. As people ask for organic, more supply chains will be created. The only way to

beat the price is to buy organic.” – Mr Jayaram, owner.

Reception area

Room Decor

Organic Retailing

Modern trade

Organic Speciality stores

Individual stores which also stock other ‘brands’ of organic produce.

Online

Godrej Nature's Basket, Hyper City, Food Bazaar, More, Nilgiris, Spencers and Tesco - Starbazar. 

like Fab India, high end gyms (Fitness First) which attracts the similar mindset

E.g.: The Altitude store, Delhi

Work on the home-delivery mechanism.

Key pointers− Most organic stores do not sell exclusively organic but also a number of conventional and “natural” products.

− Most stores in India sell only packaged, dry organic food products.

− Organic fresh produce – fruits and vegetables – is not as readily available, because many retailers avoid the risks of selling these highly perishable products under uncertain market conditions. 

− Lack access to separate facilities for transport, storage and processing of organic produce.

− These logistical challenges make it difficult to bring a reliable flow of fresh produce to urban consumers and it is also one of the reasons that drive up the prices of organic produce.

− Online retail and home delivery are picking up fast.

− This enables more consumers to access organic products, as organic stores are scattered across large cities with high traffic volumes and inadequate transport infrastructure.

Foodhall – GurgaonSpencers – GurgaonFood Bazaar – DelhiModern Bazaar – DelhiFoodhall - Delhi

Market Visit

Spices

ASA Spice Specialists – Standalone Store at Foodhall Saket, that specializes in organic and home made spices

Spices

Pastas

Pulses & Cereals

Flakes & Muesli

Trail Mixes

Organic Quino

Wheat Grass

Mayo

Milk

As awareness, interaction and conversation keeps increasing

Consumer POV

− In the survey, about 1,000 retailers cited that health and environment grounds are the main reasons for purchasing organic products by customer.

− The majority of the respondents said that "parents are more concerned about the health of their children and willing to spend more to ensure they get better and safer food, adding that organic products are 30% to 40% more expensive than usual food".

− High prices of organic food were a deterrent, but given the perceived health benefits they still opted for it. Says Sunitha Morampudi, 35, wife of a Hyderabad-based IT professional and a mother of two: "I prefer to take food that is produced organically. Yes, it is priced higher but I think it is better for our health.“

Health and environment created the boom for organics

Driven by growing concerns over food pumped with poisonous pesticides and processed by artificial means, the consumer movement to live healthy and consume safe and nutritious food has been steadily growing. Adding to that all the bad publicity and alarm generated by poor diet, junk food and rising levels of obesity caused the boom in the organic sector.

The vast majority agreed with the statements: 'organic food is healthier to eat than conventionally grown food because it generally contains no pesticide residues' (98%);

− 'organic foods are better for the environment than conventionally grown foods (97%) 

− 'the amounts of pesticide residues remaining on conventionally farmed produce are not likely to be harmful to health' (5%).

Around 62% said that health related concerns influenced their decision to consume organic foods 

Price is not such a big barrierAccording to a survey of 1,000 consumers in ten cities done by Morarka Organic Foods, around 30% of Indian consumers preferred organic products and were even prepared to pay 10 to 20% more for them.

Among organic consumers, 65% try to eat organic whenever possible & 53 % of consumers are willing to pay more for local food

Organics part of the weekly food budgetOrganic fruit and vegetables have the highest uptake by organic consumers. The average weekly expenditure on organic food is estimated at 50% of the weekly food budget, points out the survey.

Metro upswingIn just 5 years, over 62% of the population in metros has shifted to buying and consuming only organic produce, especially vegetables and fruits, a 95% increase, according to a survey undertaken by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Availability is still a concernThe majority of people said they would eat more organic food if: it is 'more available in convenient locations'(74%)

About 90% of social conversations about organics is regarding food safety fears discussing the questionable process of producing organics 65% said that scientific evidence had a moderate or strong influence on their beliefs about organic food

The average consumer household in 2025 will contain at least one, if not many, organic products on a regular basis. This includes not only food items but organic clothing, household cleaning products and personal care items.

By 2020, consumers will be comfortable buying organic products from their third and fourth screens, namely, the tablets and their mobile phones.

Younger shoppers continued to show motivating interest in organic products, indicating a promising future of the organic industry in India

About 86% consumers of organic products feel that there are less options available in terms of brands and product categories in India

Willingness to Pay (WTP) for organics is more because of the failure of their conventional counterparts, thereby looking to avoid GMOs in their lifestyle

Only 21% of organic food buyers cut down or eliminated organic purchasing during the recession, while 20% have switched to less expensive organic options.

5-10%39%

10-15%19%

15-20%6%

Cant say36%

Premium Amount over Conventional

Among organic consumers, 65% try to eat organic whenever possible & 53 % of consumers are willing to pay more for local food

Need for ‘Organic’ fruit juices high

Among the various types of food categories offering organic options, vegetables (68%), fruits (52%), pulses (51%), food grains (50%), milk (45%) and fruit juices (51%) are the most regularly purchased items by Indian consumers. Packaged food, tea and beverages are amongst the other products for which Indians prefer the organic option.

Source: Organic market surveys

− The survey 'Rising demand of Organic products in Metropolitan cities' is based on the response of 1,500 lead retailers

selling non-organic and organic products. Major metropolitan cities in which respondents were interviewed include

Delhi-NCR, Mumbai, Cochin, Chennai, Hyderabad, Indore, Patna, Pune, Chandigarh and Dehradun.

− Source: Qualitative understanding – research conducted amongst potential and current consumers. Potential: 50

interviews. Current buyers: 20 interviews

http://www.slideshare.net/monikabishnoi/organic-food-value-chain?related=1

− http://articles.economictimes.indiatimes.com/2013-09-26/news/42427055_1_crore-organic-products-ascent-capitalMicrosoft Office PowerPoint Presentation

Adobe Acrobat Document

Books to get

−http://www.amazon.in/Organic-Marketing-Urban-Centres-India/dp/8192522628

Summing up

−India is emerging as one of the largest potential markets for Organic Food products.−Health and environment created the boom for organics products.−More and more players will be entering the segment offering a much wide product

range.−Online retail and home delivery are picking up fast. −There’s huge metro upswing as the urbanites are fast moving towards organic

products.−Though price is not a huge concern for the buyers, it will play a critical role in the

near future.

Next Steps