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How the Organic Food Industry is Witnessing a Natural Growth

Walk around in a retail store and the foods section is sure to have bright banners with the words “Organic”, “Superfood”, “Gourmet” shouting right at you. These are also the counters where there are herds of people all recommending one organic brand to each other and often discussing the authenticity of being a superfood.

Welcome to the craze of diets and healthy living which has taken over the country. People are making a conscious effort to take charge of their food choices and catering to them are numerous brands in the industry who are all selling the idea of healthy living. So it comes as no wonder that the organic food and superfoods market has grown multiple folds in the past few years in India.

This has also paved the way for entrepreneurs to experiment with the food industry. Entrepreneur India spoke to startup founders who have found the “organic” love for business in the sector and how it’s projected to grow.

Growth Over The Years

There was a time when you said organic food or superfoods, it was almost considered to be an alien subject and one thought of only relatives who are going abroad will be able to get back home some goodies. But now, every kiraana store in the country promises an organic food section whereas farmer markets boasting of fresh produce are often held across different parts of the country.

So from a not-so-known segment to today known in every household, how has the industry grown in India? Rishabh Chokhani, CEO & Founder, Naturevibe Botanicals answers that the organic food market in India has witnessed an immense growth over the past decade. He cites an EY report to say that the market has grown from INR 675 crore in 2009- 10 to INR 40,000 million in 2016-17, with an annual growth rate of 25%.

Meanwhile, Aakas Sadasivam, Founder & CEO, Prolgae Spirulina Supplies Pvt. Ltd. said that even as close to 5 years ago, there was no market for spirulina, chia seed, millets etc but now even these products have a good customer base.  “There are also many youngsters who have started organic agriculture farming, so this shows the interest in the industry,” he said.

How The Internet Played a Role

Like in everything today, the World Wide Web has played an important role in the growth of this industry. The market found its initial customers in the fitness-savvy technologically conscious millennials. These youngsters turned to the social media to post stories of progress and how these products have resulted in better skin, hair… or even weight-loss. This added to the craze of organic products. Everyone wanted to try these products and then post their own success story.

From celebrities swearing by these superfoods and organic food products, the common man is only more excited to try out these products. Rizwan Thakur, CEO & Founder, Chevon Agrotech said, “Indian consumer is now aware of international trends almost immediately due to connected social media & is willing to try similar products locally.”

At the same time, it was also associated with class, the elite were the first to appear as customers but soon enough, it became a common commodity. Pankaj Agarwal, MD, Just Organik said that the per capita income in India has seen a sharp rise in the last two decades. Earlier, the majority of the organic food brands targeted the upper strata of the society. “However, the middle-class population has now become a major target for us as they are not shying away from spending money on organic food. The middle-class people are aware of the benefits of consuming organic food over regular food in the long run,” said Agarwal.

Having said that it is people’s conscious effort to stay healthy that remains as the number one factor that has pushed the industry’s growth. Chokhani believes that the rise of awareness among people through mass information channels and Internet about the benefits of organic food over conventional food have come to light. “People are being careful and mindful towards their health due to which today’s consumer is choosing the products which are better, safe and convenient,” he said.

A Few Hurdles But The Future is Bright

The market and demand for healthy foods is only set to grow. With more and more diets too coming into the picture that endorse these food products, the conversion rate to healthy living is only increasing for the better. Thakur too said that the demand for healthy foods is growing strongly in urban Sec A/A+ segment & is expected to continue.

However, he believes there are a few hurdles as well. “Organic food segment still needs to build credibility & increase transparency to grow their market consistently, while the superfoods products have an immediate advantage there. This segment needs to shake off the fad label & bring its pricing to a reasonable premium level to truly create impact  & take market share,” he said.

Agarwal too agrees. While he says that he definitely believes in the growth of the industry obstacles like the supply-demand disparity, lack of organic inputs and seeds, high-price of organic foods etc. are what players will definitely face. “However, with support from the Government along with a proper supply chain mechanism, the organic food industry can reach its potential and even exceed. After all, consumption of organic food is not only beneficial for one’s health but it is also better for the environment,” he said.

India being the second largest exporter of organic products in Asia after China, the industry of Organic food offers a bright future to all its investors. Chokhani said that the current Indian domestic market has achieved an estimation at INR 40,000 million and as per the annual growth rate, it is expected to increase by INR 100,000 million — INR 120,000 million by 2020.

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