The Future of Organic Products in India An immense growth in organic food segment has been observed and the Indian domestic market is estimated at 40,000 Million INR
By Rishabh Chokhani •
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In recent times, organic products have witnessed a great demand globally especially in the food sector. Continuous use of chemicals and fertilizers, resulting in low-quality food with a harmful impact on human health, has forced people to find an alternative solution which is natural and healthy. This is where organic food is seen as the most sustainable solution. In addition to the health benefits, organic food is produced by the method of organic farming which makes it sustainable for the environment without compromising on the quality of the produce.
According to TechSci Research report, Global organic food market stood at $ 110.25 billion in 2016 and is projected to grow at a CAGR of 16.15%, in value terms, during 2017 – 2022, to reach $ 262.85 billion by 2022. Increasing awareness about health benefits of organic food consumption, rising per capita spending on organic food products and increasing health concerns due to growing number of chemical poisoning cases are expected to drive growth in the global organic food market in the coming years. In addition, continuing product innovations and aggressive marketing strategies adopted by major players and online retailers would positively influence the global organic food market during the forecast period.
Reports suggest that the Indian government is making efforts to increase adoption of organic food, by the way of launching various policies and expanding the land area under organic cultivation over the next five years.
Organic pulses and food grains dominated demand for organic food in the country since 2015 and it is believed that the segment is anticipated to continue dominating the market through 2021.
Back in the 1990s, Indian Organic tea was exported only to European markets but now, India is a major competitor globally, exporting 300 products in 20 different categories to over 20 countries (Source: EY Report-the Indian organic market, 21st March 2018). India has a great potential for expanding the area for organic agriculture due to the factors like good climatic conditions for agriculture, hilly terrain with a good amount of rain in areas such as the Deccan plateau and the North-Eastern zone.
Due to the rich environmental, health and social benefits of organic products, there is an evident increase in demand for connate products in India. This demand has led to the development of e-commerce, storage, processing and supply chain industries.
The Indian organic industry largely includes products in foods and beverages, health and wellness and textile industries. An immense growth in organic food segment has been observed and the Indian domestic market is estimated at 40,000 Million INR which is expected to increase by 100,000 Million INR - 120,000 Million INR by 2020 with a noticeable increase in exports. (Source: EY Report-Indian organic market, 21st March 2018).
Below are some emerging trends in the organic industry in India:
Increasing use of E-Commerce:
Many Organic product companies are taking advantage of E-Commerce sites for expanding their base of customers. Physical stores for organic products are generally in metro and mini-metro cities and e-commerce opens the door for selling the products to the rest of the consumers.
Increasing awareness in Indian Consumers
Due to increasing health concerns amidst Indian consumers, the importance of having a fit lifestyle has been witnessed. People have started to focus on the nutrient content and quality of the food they eat due to which consumption of organic products have increased.
Product-line expansions by organic product companies:
The product line of the organic food industry is not bound to fruits, vegetables, tea, pulses and spices anymore. Some companies have introduced ready to eat snacks, cookies, juices, essential oils, organic powders like moringa, turmeric etc, organic capsules, juices and herbs which has given a variety for the consumers for organic products in India.
Technology Advancements:
Many private companies have come up with solutions like Artificial Intelligence, Imaging and Renewable Energy. Remote places which have irregular power supply is now being facilitated with solar-powered cold storage for fresh farm produce. Introduction of hyperspectral cameras which uses infrared cameras that helps in the calculation of the quality and shelf life of the product. Such technical innovations have solved many challenges which organic sector used to struggle with.
Push in the support from the Government of India
Organic farming and consumption of organic food have got a lot of support from the government of India recently. The farmers are being facilitated with financial support under many governmental schemes like National Mission for Sustainable Agriculture (NMSA), Mission for Integrated Development of Horticulture (MIDH), National Food Security Mission (NFSM) and Rashtriya Krishi Vikas Yojana (RKVY). Development of value chains in northeastern India has also been built.
With the increasing demand for organic products in India, this sector seems to have a bright future. Taking the above points into consideration, it is implicit that the organic industry has been flourished a lot in comparison to the organic industry in the 1990s. Consequently, the future of Indian organic market is an account to be at a thriving pace for a long time.
