Mumbai, August 19, 2013
The lifestyle of software engineer Karan Suri, 37, changed after he underwent a surgery to remove a cancerous cyst in his stomach. After the surgery, Suri decided to purchase only organic foods – rice, cereals, pulses and even pasta – for his family. “One needs to develop a taste for organic foods. But I feel safe that I am eating pesticide-free, natural food.”
Many other consumers have started buying organic foods that have not been farmed using synthetic pesticides and chemical fertilisers. Nearly 62% of high income households prefer organic products due to rising awareness, higher disposable incomes and easier availability in the market, according to an Associated Chambers of Commerce and Industry of India (ASSOCHAM) survey. “Organic farming was one of the fastest growing industries last year,” said DS Rawat, secretary general, ASSOCHAM.
A growing list of farm-fresh and organic foods is hitting retail shelves briskly. The demand for them has grown sharply in recent years; in earlier years, they were primarily exported to Europe and the US.
And then there is Tata Chemicals which offers farm-fresh, unpolished dal varieties and besan made from unpolished channa dal, under the Tata I-Shakti brand. The pulses, says the company, are directly procured from reputed Indian farms supported with Tata’s Good Agricultural Practices, or from NCDEX-associated farmers.
Ashvini Hiran, COO consumer products business, Tata Chemicals, said, “Consumers, increasingly health conscious, choose food products that not only taste great but are also fortified with health benefits. To reach out to them and let them know of I-Shakti dals’ delicious taste and quick cooking, we roped in Sanjeev Kapoor, one of India’s quintessential faces for high quality cooking, as our brand ambassador.”
From very few categories, natural and organic foods have extended to tea, coffee, biscuits, pasta and sauces, among others, indicating growing consumer interest. Most big retail chains stock these products, including Godrej Nature’s Basket, Food Bazaar, More, Nilgiris, Spencers and Tesco-Starbazar.
Sresta Natural Bioproducts started producing organic foods in 2004. For the first two years, it found no buyers. “Then retail chain Spencers agreed to sell our brand. Now we sell across 36 cities, growing at over 70% annually,” N Balasubramanian, Sresta’s CEO, said. Sresta works with 12,000 farmers across 14 states.
“Urban, more mature people, 30-55 years old, are the primary consumers who are shifting to organic foods,” said Mohit Khattar, MD, Godrej Nature’s Basket. “The number of categories will continue to grow as people develop a taste for organic foods. But they will not attract many youth customers in the near future.”
Besides modern retail networks, organic foods are also available through exclusive, producer-owned stores in the bigger cities. “Awareness and acceptance of organic products has increased manifold in urban India. Many organic food suppliers are now opening stores across the country,” pointed out Ankur Bisen, VP retail of leading management consultancy, Technopak.
For instance, Organic India, which does organic farming in Uttar Pradesh, is setting up its own chain of exclusive retail stores.
The high prices of organic foods – around 40-60% higher than regular foods – could be a deterrent in runaway growth. Dr. Divya Choudhary, former dietician at Fortis Hospital, said, “I prescribe organic food to most of my patients but they don’t follow the advice as the food is not yet pocket-friendly.”
The cost of production of organic foods over traditional foods is higher, as the yield per acre is lower because the crops do not use fertilisers or pesticides. “As more consumers gravitate towards organic foods, in time, costs will come down,” Balasubramanian predicted