Trends of Organic Food Products
“India currently holds the ninth position among 178 countries that actively practice organic agriculture.”
Organic packaged food and beverages is an emerging niche market in India and its primary consumers are high-income urbanites. According to a study published by ASSOCHAM, the total market size for organic packaged food in India in 2016 was INR533 million, growing at 17% over 2015, and is expected to reach INR871 million by 2021.
Challenges faced by processor:
01. Lack of proper organic supply chain
02. Global competitiveness
03. Lack of proper branding and packaging
India’s exports of organic products increased by 17% between 2015-16 and 2016-17. In India, the majority of the demand comes from tier 1 cities16. Companies are witnessing notable growth as demand from metro cities increase with the entry of several new players in the organic food market such as Conscious Foods, Sresta, Eco Farms, Organic India, Navdanya and Morarka Organic Foods to name a few.
India-based Sresta Natural Bioproducts Pvt. Ltd. has emerged as the market leader; with 37% value share of the packaged organic food market and 7.8% share of the packaged organic beverage market. It has increased its share of the organic food market in recent years, while smaller niche players have taken significant share away from it in the organic beverage market.
“Since the organic food segment is still at a nascent stage in India, both the Government and private players need to develop a strong policy framework that can benefit all involved. The organic farming industry in India holds immense potential to grow, provided it receives steady investment and benefits from both existing and new initiatives like incentivizing organic cultivation, food processing, certification and regulatory ease and tax benefits.”
Key growth drivers of organic cultivation and market in India:
1. Increasing Health Awareness
2. Urbanization & working population
3. Increasing support from Government of India
4. Technological advancements
5. Rising disposable income
In addition to the growing domestic market, India is the second largest exporter of organic products in Asia after China. The increasing export market coupled with the Government’s support is making organic cultivation in India highly successful. Indian organic food exports were estimated at US$299 million during 2015-16 with total volume of 263,688 MT.
The key trends that are emerging in the Indian organic food industry are:
- Increasing demand for organic food
- Increasing use of online marketing channels
- Increasing number of organic food restaurants & cafes
- Increasing awareness regarding organic food
- Increasing investment in organic food companies
- Increasing retail shelf space for organic food products
- Introduction of new product categories and varieties such as organic RTE meals, organic cookies, etc.