Organic food is invariably catching up fast with the Indian Retailers more so with the niche retailers for teh simple reason that there is an awakening in Indian consumers to eat healthy so the natural bent towards food which do not include foreign material that are added to traditional foods which tend to be toxic.
Out of total food business that is around 10 lakh crores per annum, only 1500 crores make the organic share. It is still nascent, and makes only .001 per cent of the total food markets share. But there seems to be a large opportunity for this category as demand is increasing day by day.
This is niche retailing and organic food is expensive than the traditional food. Therefore, it caters to the rich and more so the higher middle class people because the latter is the working class that believes in staying fit for that promotion and in becoming more productive. According to Raghuveer of 24 Letter Mantra(Sresta Group), that apart from one store in Delhi, mainly distributes to 15 major departmental stores like Food Bazaar, Spencers etc , “ People with 50,000 as their monthly income can afford it. Moreover, people with medical needs are our main target. For example, Brown Rice is ideal for obese people and Wheat Grass for detoxification”.
Cereals, pulses, spices, condiments, masala mixes, fruits, vegetables, oils, dairy products, ready-to-eat snacks, cookies, pickles, eggs, meat, fish, wheat grass, baby food, honey etc. MR. Mukesh Gupta, ED, Morarka Organic Foods Ltd., Jaipur have 50 Down-to-earth stores in India, also distributes to nearly 500 food chains including Big Bazaar, Food Bazar etc shares that they offer 90 per cent of the Indian Kitchen Grocery apart from regular vegetables and fruits.
With the low number of organic foods and the high demand for them on the market the prices hitch up. Here the laws of economics are put into play, where sellers see that a product is high in demand and the amount is low, they will increase the prices because they know that buyers are willing to pay anything to buy quality products. In comparison to traditional food, price is high by 30 to 70 per cent.
Conclusion: Due to lack of accurate report, it is difficult to know exactly what the future holds for this business. Chennai and Hyderabad seems to be doing pretty well with store numbers increasing day by day. As most of them say that the demand will definitely increase in the coming 6 months to 1 year, they also advice that specialty stores still haven’t caught up that much in comparison to food chains and departmental store. The market will surely grow but how fast, is still uncertain unless there is an organic revolution in India and people are more dedicated to come back to the organic way.Moreover, there is a need for government support also in terms of subsidy and land so that there is an increase in production and subsequent supply.