The Indian consumer mindset is always ready to adopt the new and now it has come off age where buying organic food products was heavy on pockets. With health becoming a priority, MRP has taken a backseat when buying organic packaged food products. This phenomenon is what is driving the organic food market to grow in India.
According to ASSOCHAM in 2011, ‘Organic Products - The Way Ahead’, organic farming in India is likely to be worth Rs 10,000 crore by 2015 from the current levels of about Rs 2,500 crore. Currently, India has about 4.5 million hectares area under certified organic farms and the number is growing fast. Private players including corporates, irrespective of their market size, are performing various roles of producers, consolidators, processors, retailers and certification agents and employing innovative business models to succeed in this behalf.
“Private sector, with facilitation from the government has played a pivotal role in driving organic movement in the country,” said D S Rawat, secretary general of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Are people really buying?
For a certain period organic food was considered to be a costly product only limited to the elites and consumers were not really moved by the fact that these products are healthy to eat. This scenario has changed lately. With better spending power and also with growing awareness, these products are not just becoming popular but are finding a sure place in the buying baskets.
“The market for organic food is everywhere and everyone is a potential buyer. I always say, who doesn’t want to have clean water and clean air, so if we extend everybody wants to have clean food as well,” says Krishan Guptaa, Managing Director and Global CEO, Organic India.
“When we started in 2003, we were skeptical about the acceptance of the product, but it is surprising to know that these products have been well accepted and so quickly. What is amazing to know is that the acceptance of our products has not just been in India but also internationally,” he adds.
“There are number of reasons for people moving towards organic food. For instance, these are healthier; organic plants have not been sprayed with pesticides or fungicides; the farms where organic food is grown have no traces of man-made chemicals; organic animals are treated better than conventional animals as they are given plenty of room and no antibiotics or hormones; there is no chance of having chemicals in your food and organic farming also is better for the land because it uses natural nutrients instead of man-made chemicals,” informs Seema Dholi, Founder & CEO, Farm2Kitchen. Farm2Kitchen is an e-commerce portal selling organic food.
“Eating organic food is not about having quantities, it’s about having quality product. So a person who eats a regular chyawanprash will be eating a smaller quantity when having organic chyawanprash but will get more benefit , as there are no side effects” informs Guptaa.
The organic packaged food market is growing strong and penetrating into cities. The buying pattern suggests that people irrespective of their age or sex, are buying organic packaged products. But just for starters people buy smaller quantities first and then move on to larger quantities looking at the effect of these products.
“In terms of size of an SKU, the smaller packs do sell more than the larger ones. And this phenomenon is not restricted to our industry alone. Every FMCG company including the largest international players have reduced package sizes to cater to the Indian consumer. The shift to organic products happens as a result of trial induction, and hence consumers prefer to purchase smaller packed sizes for the same,” says Mukesh Gupta, Chief Executive Officer, Morarka Organic Food Ltd.
Promoting and creating awareness
The Indian consumer segment has reached a point where the information and awareness is only what drives them to purchase products. A direct interaction with consumers is becoming a core, which makes them feel closer to the product and also gives them a better understanding.
Various brands are taking up various steps to get the information correctly to consumer. Farm2Kitchen being an online portal, finds social media like Facebook the best place to make people aware. Talking about other marketing strategies Dholi says, “We do not spend on marketing really as our customers are our brand ambassadors in India. We ensure quality products which call for repetive buys from us. We make sure that we maintain the high standards when it comes to quality and that’s the only way we can retain our customers. We offer only and only certified organic foods and grocery to our customers.”
What has been the most interesting fact in terms of organic packaged food is, that brands are striving to get into direct consumer interaction in terms of both creating awareness as well as marketing.
“For the consumer to accept organic as a lifestyle, our presence in mass media is essential. The marketing must be done at every level. We are currently marketing our products through e-commerce portals, local level marketing, events and non-conventional marketing methods,” says Gupta.
“My motive firstly is not to sell products. It’s about educating the customers and leaving the buying decision to them. We have a team of people who go to doctors and people who inform people about the benefits of organic products. Moreover, we also have our customer care where people selling on their own and educating people and we also have exclusive stores. The queries for exclusive stores come across from smallest of the cities which shows how aware people are getting.” says Guptaa.
|Company||Target Audience||Target Audience||Price Point||Retail Presence|
|Morarka Organic Food Ltd||Sec A & Sec B||Pulses, food grains, spices, condiments, and breakfast cereals||
Present in 17 states, with over 650 touch points across the country. Present in various formats of retail including the DTE franchise stores, modern retail outlets and local mom and pop stores and ecommerce.
|Organic India||Sec A & A+||Tusli green tea, Tulsi sweet rose, Bowelcare, Sugar Bbalance, Flexibility, Osteoseal, Immunity, Lipidcare, Chyawanprash and Desi ghee||Rs 98 – Rs 325||Present across all modern trade stores and other retail stores pan India. Exclusive stores which are franchised.|
|Farm2Kitchen||Women||Organic cereals, Organic pulses and beans, Organic spices and condiments, Organic Indian masala mixes, Organic nuts and Dry fruits, Organic chutneys and snacks, Organic edible oils, Organic tea and coffee, Organic health food and juices, Organic Ready to Eat, Organic herbs, Organic pasta and flakes, Organic pregnancy teas||Rs 20 – Rs 625||E-commerce. Plans to come in physical trade stores.|
Moving from here on, the brands now plan to penetrate further in cities which still remain untapped. “I am seeing a overwhelming response from cities like Merrut, Lucknow and even some Southern cities. There is a strong market that lies in the tier II and tier III cities. The awareness is reaching them and they are willing to invest in products like these,” says Guptaa of Organic India.
Organic products of the future