With a growing awareness and the benefits of organic food; over the last decade, sales of organic food products have grown severely in the supermarket. It has grown by 20 percent annually targeting at two percent to roughly 3.5 percent by the end of the decade.
Today, the consumers see organic food supplements as a healthy and nutritious option to to keep up a pace with the fast moving lifestyle.
“A shift in the consumer mindset more towards the West is trending in India these days. People even from small towns are looking for a healthier lifestyle and choices”, believes Robin Chatterjee, Founder, Yogurtbay.
In India and abroad, organic food is a popular trend which has taken health enthusiasts by storm. Indians are slowly opening up to the idea of buying food that has been produced naturally without the use of pesticides and chemicals.
Anun Dhawan, Director, Mentor Hospitality (Master Franchise Holders of Pita Pit in North & East India) says, “There was a time when healthy food was a matter of choice. Today, with increased awareness about the ill effects of an unhealthy lifestyle along with the newer options available in the market, eating healthy is becoming a way of life. Consumers are shying away from high carb, high fat fast food and willing to experiment with other concepts”.
Meanwhile, retailers like Foodhall, Nature’s Basket and grocery portals like Big Basket.com, Local Banya.com is targeting at getting double-digit revenue from these products segment.
Top served brands
Organic food brands may be spending millions to endorse an eco-friendly-image. Top food retailers like Future Group, Reliance Retail, and Spencer's Retail say sales from organic vegetables, fruit and food products is increasing day by day.
“The young working population are independent and do not have much time to prepare every meal at home, which is why they look to eat out. They are eating out more often than earlier, which is why the demand for nutritious and healthy meal is constantly increasing because they don't want to repeatedly have heavy, fat filled and/or unhealthy junk food”, shares Arjun Khera, Chief Brand Officer, Smoothie Factory.
So, not only India, people across the globe are becoming more and more conscious about their health and lifestyle.
Thanks to the various awareness campaigns, people are now realizing the ill effects of junk food and empty calories.
Even brands like ITC and Amira has pulled a range of organic spices from the market and food products by expanding their current range of offerings.
Supply Chain Challenges
The organic food industry is steadily moving from position markets i.e. small specialty shops, to mainstream markets, large supermarket chains.
The chief importance of organic food concept is the distance food is transported from the time of its production until it reaches to the consumer. Currently, the production of produce in small to medium farms is rather limited, amounting to a few hundred tons. Such farms are not very profitable for mainstream grocery chains and many buyers seem to be unsure about channels of distribution. As there is a large knowledge gap spanning the marketing system in place, the value chain i.e. activities that a firm performs to deliver a valuable product or service for the market and the value delivery network i.e. supply chain network in the organic food system.
Additionally, over the past few years to organic stores and supermarkets, a variety of other retail channels has emerged. Studies gives an overview of the broad variety of supply chain models and retail formats and looks at the specific features of each of them in detail. Like online retail and home delivery are picking up fast, it enables more consumers to access organic products, as organic stores are scattered across large cities with high traffic volumes and inadequate transport infrastructure. Another pioneering approach is the community- supported agriculture and consumer cooperatives are trying to bridge the widening gap between rural producers and urban consumers.
The supply chain challenges are not exclusive to organic food; even conventional food also is affected by factors such as problems with the supply chain or inventory management. Moreover, organic farming has unique challenges related to the cost and logistics of moving locally or regionally produced organic produce to the market.
The reasons for consumers to go organic are many. One of the reasons is that it is not only fashionable but also organic in nature which has goodness in it. Organic products are mainly made up of natural substances, which in turn have been grown eschewing the use of artificial chemicals, fertilizers and pesticides. That is why; the Indian organic food market has begun growing rapidly.
According to a study by the Organic Trade Association (OTA), consumers are increasingly buying organic products when grocery shopping, with 89 percent of organic buyers purchasing organic dairy products and 25 percent always buying organic dairy products.