Mts 01 report @ arvind ltd.

“Market Research for Organic Staple Business in Domestic and
Global markets for Arvind Ltd”

Submitted to
Mr. Mahesh Ramakrishna
Head Agribusiness,
Arvind Ltd, Ahmadabad

“A REPORT SUBMITTED IN THE PARTIAL FULFILLMENT OF
THE REQUIREMENTS FOR MASTERS IN RURAL
MANAGEMENT”

Submitted by:
Anjaney Kumar

Sunil Kumar

KIIT SCHOOL OF RURAL MANAGEMENT
BHUBNESWAR
Management Traineeship Segment (MTS) I

Approval page

SCHOOL OF RURAL MANAGEMENT, KIIT UNIVERSITY
Bhubaneswar

The MTS Report of

Anjaney Kumar
Sunil Kumar

Candidates for the degree of MBA Rural Management
Are hereby APPROVED

Prof. H.S.GANESAHA
Faculty Guide
MBA-Coordinator

Arvind Ltd KiiT School of Rural Management MTS 01 Page 2

Executive Summary

Project title:

Market research for organic staple business in Domestic and Global markets for Arvind Ltd

Host Organization: Arvind limited

Reporting officer: Mr. Pramod Awatade

Project location: Akola District, Maharashtra

Authors: Anjaney Kumar and Sunil Kumar

Project period: 4th July 2011 to 3rd September, 2011

Objective of the project:

 Estimation of production potential of organic staple food in Akola district of Maharashtra

under ARVIND Ltd.

 Current scenario of organic staple business in domestic and global markets.

 Strategy formulation for sustainable growth of the business

Methodology:

Primary data collection from field and management information system (MIS) office

Secondary data collection from internet


Major findings:

Based on our research we found that 3538 farmers spread over 132 villages of Akola district are

registered under Arvind organic projects and growing organic staple food on 11387.50 acres of

land including pigeon pea, Sorghum, Sunflower, Safflower, Ajwain Etc. under strict internal and

external inspection agency. In year 2010-11, 80978 quintals of organic food were produced and

their major markets are metro cities like Mumbai, Delhi, Hyderabad, Pune, etc. At domestic

market, the major players are Namdhari fresh, Sumintar, Fab India etc. Farmers had formed

SHGs for better coordination among them. With course of globalization and health

consciousness among people there is huge demand of organic food both at domestic as well as

global level. Market research study shows that US AND EUs country are the major destination

for our export. In Indian context we can say that Organic farming is as an important livelihood

option for small, resource-poor farmers with low-input costs and quality food production. We

assumed 10% premium for the business at domestic as well as global markets.

Recommendation:

We find that organic staple business is in nascent stage in Indian market and consumers are

unaware about the organic food but it is increasing rapidly in domestic as well as global markets.

.it is a good opportunity for the ARVIND Ltd. to promote organic contract farming in terms of

market sustainability of the business as well as sustainability of the environment. Even though

ARVIND LTD involved in organic staple business but it is not registered under any companies

acts so registration is important for gaining brand image. ARVIND LTD has vast infrastructure

(warehouse, dal mill, and procurement center) as well as skilled human resources so in this point

of time it is very necessary to promote the organic business by different electronic as well as


print media. Warehouse of ARVIND Ltd. is not registered by government so before full fledge

business of organic staple business it is necessary that it should get registration. During our visit

to warehouse we found that nearby area of warehouse is not clean sometime there might be

chance of insect may infect the stored food. So storing of commodities is pure hygiene condition

is very important. Farmers had formed the SHGs for better coordination among them so it is

necessary that it should be registered.


ACKNOWLEDGEMENT

In preparing this report a considerable amount of thinking and informational inputs from various

Sources were involved. We express our sincere gratitude to everyone who contributed towards

Making this report possible.

First of all we would like to thank dignitaries of Arvind Limited, Ms. Mili Dash, Manager,

Human Resources Learning & Development, for giving us opportunity to work in this

prestigious organization. We would like to thank our reporting officer Mr. Pramod Awatade,

senior manager, project for valuable support and feed back for the successful completion of this

report.

We would also like to thank all our respondents for their response without which this study could

not have been possible.

We also take a special mention of faculty guide Prof. H.S.Ganesha and MTS coordinator of

KSRM, Prof. Prasun Kumar Das for his valuable inputs.

We extend my sincere gratitude to all other people, my friends and my family and to God, who
made all things possible.

Date: September 13th, 2011 Anjaney Kumar

KSRM, Bhubaneswar Sunil Kumar


Table of contents

CHAPTER -01 .......................................................................................................................... 14

1. BACKGROUND OF STUDY: .............................................................................................. 14

1.1 Organization overview: ....................................................................................................... 15

1.2 ARVIND Ltd: Organgram ................................................................................................... 16

1.3 Project Overview: ................................................................................................................ 17

1.4 Objective: ............................................................................................................................ 17

1.5 Significance of the study: .................................................................................................... 17

1.6 Methodology: ...................................................................................................................... 18

2 OBJECTIVE: ......................................................................................................................... 19

2.1 District overview: AKOLA ................................................................................................. 19
2.1.1 Geographical location and boundaries of Akola district: ................................................ 19
2.1.2 Climatic condition of Akola District: ............................................................................ 19
2.1.3 Type of soil in Akola district (Area in 000 hectors) ....................................................... 20
2.1.4 Land holding pattern in Akola district: .......................................................................... 21

3 ORGANIC PROJECTS: ARVIND LTD ................................................................................ 22

3.1 Area under Arvind Ltd ........................................................................................................ 22

3.2 Distribution of land under different crops: ........................................................................... 23

3.3 Seasonality of agriculture: ................................................................................................... 23

3.4 Capacity building of farmers through SHG: ......................................................................... 24

3.5 Inspection and certification:................................................................................................. 25

CHAPTER: 2 ............................................................................................................................ 26

4 OBJECTIVES: 02 .................................................................................................................. 26

4.1 Domestic Scenario: India ..................................................................................................... 26


4.2 Domestic market: ................................................................................................................ 27

4.3 States wise Demand of organic food in India ....................................................................... 29

4.4 Cities wise demand of organic food in India ........................................................................ 30

5 INDIA‟S MAJOR PLAYERS: ............................................................................................... 30

5.1 Namdhari fresh: ................................................................................................................... 30

5.2 Eco-farms: ........................................................................................................................... 32

5.3 Fab India: ............................................................................................................................ 34

5.4 Suminter India organics: ...................................................................................................... 35

5.5 Moraraka Organic Food Pvt. Ltd: ........................................................................................ 37

6 LIMITED PENETRATION OF ORGANIC FARMING IN INDIA: ...................................... 38

7 WORLD SCENARIO OF ORGANIC AGRICULTURE ........................................................ 40

7.1 Development of organic agriculture land worldwide: ........................................................... 41

7.2 Top ten countries have more organic certified land: ............................................................. 41

7.3 Country with highest no of organic producer: ...................................................................... 42

7.4 Global market trend of organic food: ................................................................................... 42

7.5 Market forecast: GLOBAL .................................................................................................. 43

8 EUROPEAN UNION: ............................................................................................................ 43

8.1 Segmentation....................................................................................................................... 44

8.2 Market value forecast: European Countries ......................................................................... 45

9 STATUS OF ORGANIC STAPLE BUSINESS IN USA: ....................................................... 45

9.1 Segmentation....................................................................................................................... 46

9.2 Market Forecasts: USA ....................................................................................................... 47


CHAPTER: 03 .......................................................................................................................... 48

OBJECTIVE: 03 ....................................................................................................................... 48

10 VALUE CHAIN: FARMERS TO CONSUMER: ................................................................. 48

10.1 MAJOR STEPS ................................................................................................................. 49

10.2 Business at domestic level: ................................................................................................ 50

10.3 Business at Global level: ................................................................................................... 51

10.4 European Regulation for Import from India ....................................................................... 51

10.5 USA regulation for import from India................................................................................ 52

10.7 warehouse registration ....................................................................................................... 57

11 COST ANALYSES .............................................................................................................. 60

11.1 Cost Analysis for Domestic Market ................................................................................... 63

11.2 Cost Analysis for Global Business ..................................................................................... 65

ASSUMPTION FOR COST ANALYSIS:................................................................................. 67

12 SWOT ANALYSIS OF ORGANIC BUSINESS .................................................................. 68

12.1 Situation Analysis ............................................................................................................. 69

12.2 Internal /within us.............................................................................................................. 69

13, 4PS MODEL FOR ORGANIC BUSINESS ......................................................................... 70

CONCLUSION ......................................................................................................................... 71

RECOMMENDATIONS .......................................................................................................... 72

14 ANNEXURE........................................................................................................................ 73

14.1 Certified organic land (Acre) ............................................................................................. 73


14.2 Distributor of USA ............................................................................................................ 74

14.3 Distributor of European Countries ..................................................................................... 75

14.4 distributor of India ............................................................................................................. 76

BIBLIOGRAPHY ..................................................................................................................... 77


List of Figures

Figure 1 Types of Soil (In %) .................................................................................................... 20
Figure 2 Cropwise land distribution........................................................................................... 23
Figure 3 % of organic Food Production Based on Value in year 2009-10 .................................. 28
Figure 4 Development of organic Agriculture Land (1999-2009) .............................................. 41
Figure 5 Top ten Countries with Highest certified organic Land ................................................ 41
Figure 6 Top countries with highest no of certified producers.................................................... 42
Figure 7 Global market trend (Year 2001-2011) ........................................................................ 42
Figure 8 EU market (2006-2009)............................................................................................... 43
Figure 9 Market Segmentation EU Countries ........................................................................... 44
Figure 10 Market Segmentation of EU Countries ...................................................................... 44
Figure 11 Market Segmentation US........................................................................................... 46
Figure 12 Market Share Of EU And USA Of Organic Business................................................. 46


List of Tables

Table 1 Land Use Pattern .......................................................................................................... 20
Table 2 Types of Soil in Akola District ..................................................................................... 20
Table 3 Land Holding Pattern.................................................................................................... 21
Table 4 Center Wise Organic Land............................................................................................ 22
Table 5 No of Farmers and SHGs Centerwise............................................................................ 24
Table 6 Indian organic Status .................................................................................................... 26
Table 7 Different types of organic Staple Produced in India ...................................................... 27
Table 8 Production of organic food (Year 2009-10)................................................................... 27
Table 9 Domestic Market, Present And Forecasted .................................................................... 28
Table 10 Stateswise Demand of Organic Present and Forecasted ............................................... 29
Table 11 Citywise Demand of Organic Food in India ................................................................ 30
Table 12 Overviews of organic status worldwide ...................................................................... 40
Table 13 Market Forecast For Global Business (2010-2015) ..................................................... 43
Table 14 Market Forecast of EU Countries (2010-2015) ........................................................... 45
Table 15 USA Organic Market Status (2006-2010) ................................................................... 45
Table 16 USA Organic Market Forecast (2010-2015)................................................................ 47
Table 17production of Organic Staple Food Under Arvind Organic Project ............................... 62
Table 18 Cost Analysis for Domestic Market ............................................................................ 63
Table 19 Cost Analysis For Global Market ................................................................................ 65
Table 20 Annexure Organic Certified Land ............................................................................... 73
Table 21 Annexure List Of Distributor Of Usa .......................................................................... 74
Table 22 List of distributor of European Countries ................................................................... 75
Table 23 List of distributors Of India ........................................................................................ 76


List of Abbreviations
APEDA Agricultural & Processed Export Development Authority
IFOAM International Federation Of Organic Agricutlture Movement
CUC Control Union Certification
USDA United States Departmwent Of Agriculture
MAPMC Maharastra Agriculture Produce Market Committee
NOP National Organic Program
WTO World Trade Organisation
FAO Food And Agricutlture Organisation
EU European Union
OTA Organic Trade Association
EIA Export Inspection Agency
ICS Internal Control System
MSP Minimum Support Price
NAFED National Agriculture Co Operative Marketing Federation Of India
NAP National Agriculture Policy
NPK Nitrogen Phosphate Potassium


Chapter -01
1. Background of study:
Organic foods are foods that are produced using methods that do not involve modern synthetic
inputs such as synthetic pesticides and chemical fertilizers, do not contain genetically modified
organisms, and are not processed using irradiation, industrial solvents, or chemical food
additives .Organic farming is being practiced in 100 countries of the world. The ill-effects' of
chemicals used in agriculture have changed the mindset of some consumers of different countries
who are now buying organic with high premium for health. Policy makers are also promoting
organic farming for restoration of soil health and generation of rural economy apart from making
efforts for creating better environment.
As demand for organic foods continued to increase, high volume sales through mass outlets such
as supermarkets rapidly replaced the direct farmer connection. Today there is no limit to organic
farm sizes and many large corporate farms currently have an organic division. While organic
food accounts for 1–2% of total food sales worldwide, the organic food market is growing
rapidly, far ahead of the rest of the food industry, in both developed and developing nations.
The world organic market has been growing by 20% a year since the early 1990s, with future
growth estimates ranging from 10%–50% annually depending on the country. The total organic
area in Asia is nearly 2.9 million hectares. This constitutes nine percent of the world‟s organic
agricultural land. 230‟000 producers were reported. The leading countries are China (1.6 million
hectares) and India (1 million hectares). According to the Indian Competence Centre for Organic
Agriculture, the global market for organically produced foods is $65billion and is estimated to
increase to $102 billion by 2020.
Basmati rice, pulse, tea, spices, soybean, toor dal, Green gram and their added products are
produced organically in India. Apart from the dibble sector, organic cotton fiber, garments,
cosmetics and functional food products are also produced.
Although organic farming is picking up pace in India, the sector has been jostling with lack of
awareness, knowledge and confidence. Besides, there is a limited expertise in marketing of
organic products and the government should engage NGOs to close linkage with farmers.


1.1 Organization overview:
Arvind Mills was established in 1931. It was founded by the three brothers Kasturbhai Lalbhai,
Narottambhai Lalbhai and Chimanbhai Lalbhai one of the leading families of Ahmadabad.
Arvind Mills, the flagship company of the Lalbhai Group, is one of India's leading composite
manufacturer of textiles. It manufactures a range of cotton shirting, denim, knits and bottom
weights (Khakis) fabrics. It is India's largest denim manufacturer apart from being world‟s
fourth-largest producer and exporter of denim. Today it not only retails its own brands like
Flying Machine, Newport and Excalibur but also licensed international brands like Arrow, Lee,
Wrangler and Tommy Hilfiger, through its nationwide retail network. Arvind also runs a value
retail chain, Mega mart, which stocks company brands.
The original budget for the company totaled $ 55 thousand, at present it is $ 500 million Arvind
feature is that its enterprises are equipped with highly advanced equipment of a full cycle – from
painting the fiber to the finished product.
Arvind is working closely with the farmers of the Vidarbha region in Akola to grow organic
cotton and staple food like green gram, Pigeon pea, black gram, soybean, sunflower, sorghum,
ajwain etc. This initiative has helped to improve the livelihood of the farmers by dramatically
increasing their per-acre income. A direct buying-at-doorstep policy and a seven day payment
cycle, along with an elimination of all forms of exploitation by middlemen, have further helped
improve the farmer‟s income levels. What started out as a small project now encompasses
26395.35 acres of farmland employing nearly 3538 farmers? All the organic cotton produced at
these organic farms is certified by the Control Union Certification, Netherlands.


1.2 ARVIND Ltd: Organgram
Senior Project Manager

Office team
Core Team

Logistic Accounts MIS
Production Manager Pest and Social Development
Disease control Officer
Office assistant Manager
Assistant

Driver

Assistant Assistant Assistant Assistant Assistant

Extension team

Extension officer Extension officer Extension officer Extension officer Extension officer Extension officer

Technical officer Technical officer Technical officer Technical officer Technical officer Technical officer
Extension officer

Technical Technical Technical Technical
Technical officer Technical Technical Technical Technical Technical Technical Technical Technical
Assistant Assistant Assistant Assistant Assistant Assistant Assistant Assistant Assistant Assistant Assistant Assistant

Technical Technical
Assistant Assistant
Technical Technical Technical Technical Technical Technical
Assistant Assistant Assistant Assistant Assistant Assistant
Technical
Assistant


1.3 Project Overview:
Pure farm is brought to this region by ARVIND Ltd. Pure farm works with the farmers to help
them adopt natural, organic method of cultivation. In the region where ARVIND work with the
farmer, these practices are ensuring that farmer gain progressively better crop yields. The land is
not depleted of rich soil, nor poisoned with dangerous pesticides and herbicides.
Pure farm then helps farmers reach market all over the country using its extensive marketing
network.

1.4 Objective:
The study was focused to these assigned activities:

 Estimation of production potential of organic staple food in Akola district of Maharashtra

under ARVIND Ltd.

 Current scenario of organic staple business in domestic and global markets.

 Strategy formulation for this sustainable growth the business

1.5 Significance of the study:
The significance of the study is to find the suitable market for organic food and to make strategic
formulation for the business of organic food so that marketing of the organic food can run in a
sustainable manner and producer can get better return through the business.


1.6 Methodology:
Our research work was divided in 3 phases. In every phase we worked on objectives assigned to
us. During last phase of study we completed our draft and report writing.

Methodology
Phases

Phase 1 Phase 2 Phase 3 Phase 4
Objective 1 Objective 2 Objective 3

Literature review Secondary Data Data interpretation Draft writing
Primary data collection from Internet Strategy formulation Report writing
MIS


2 Objective: 01: Estimation of production potential of organic staple food in Akola

district of Maharashtra under ARVIND Ltd.

2.1 District overview: AKOLA
1st July 1998 Akola district was divided into two separate districts as - Akola & Washim in new
Akola district there are 7 blocks that are divided into two sub divisions for agriculture
department as Sub Division Akola includes 3 blocks as Akola, Barshitakli & Murtizapur & Sub
Division Akot includes 4 blocks as Akot, Telhara, Balapur, and Patur.

Akola District is a one of the major cotton producer district of Maharashtra. Nearly 69%
population of the district is depends on agriculture. Geographical area of the Akola district is
5417 sq. Km. and the density of population is 300. The district consists of seven talukas. As per
2011 census the total population of Akola district is 1818617 l. The male population is 51.40%
and female population is 48.60 %, there was change of 11.60% in the population as per census
2001. The average literacy rate of the district is 87.55 % compare to 81.42% of 2001 and the
rural literacy rate is 78.80%. The working population of the district in the age group of 15 to 59
is 43.27 %. And the child population of the district in the age group of 8 to 14 is 33.26%. There
were 3,413 out of school children in 2007-08 according to Sarva Shiksha Abhiyan.

2.1.1 Geographical location and boundaries of Akola district:
Akola district is situated at latitude 20.7° north and longitude 77.07° east. Melghat Hills and
forest region surround the Akola district. Akola is blessed by numerous water bodies like Morna
River, Purna River, Vaan River, Aas River, and Shahnur River etc. There are several dams in the
district. Akola has encountered three floods since 1978. The portion covered by forests in Akola
stretches to an area of 467 square kilometers. Akola is surrounded by Amravati district in the
north, Washim district in the south, Amravati and Washim districts in the east and Buldhana
district in the west

2.1.2 Climatic condition of Akola District:
District falls in assured rain fall zone hence receives monsoon rains during June to October. The
Avrage annual rain fall of the district is 714.1m.m.spread over 47 rainy days in normal condition.
The district characterized by warm & humid climate in June to October and later on there is
gradual decline in temperature from November onwards. Cool & dry climate is observed during


Nov to Jan. March, April, May is the hottest months The Average- Max & Min Temp of the
District is 47.9 & 12 degree Celsius.

Table: 1, land use pattern

Geographical Area 5.42 lakh hact.
Total area under cultivation 4.96 lakh hact.
Average area under fallow land 0.18 lakh hact.
Number of total cultivator 290165
Average Area under Rabi crops 0.46 lakh hact.
Average area under kharip crops 4.82 lakh hact.

Average area under summer crops 0.02 lakh hact.

Source: District Superintendent of Agricultural Office, AKOLA

2.1.3 Type of soil in Akola district (Area in 000 hectors)
Table: 2 types of soil in Akola district
Types of soil In Ha(000)
Light soil 87
Medium soil 149
Heavy soil 255
Figure 1 types of soil (in %)

Light soil
18%

Heavy soil
52%
Medium soil
30%



2.1.4 Land holding pattern in Akola district:
Table: 3, Land holding pattern

Sr. No Description Size of holding No. of Area In ha. Remarks
hectors Holders

1 Marginal < 1. 00 55979 38944

2 Small 1.00 --1.99 97618 142925 Ava. Size of
holdings is 2.83
3 Semi 2.00 -- 3.99 76775 212486 ha.
medium
4 Medium 4.00 -- 9.99 50802 304353
5 Large > 10.00 8991 123711


3 Organic projects: ARVIND Ltd
Modern organic farming has made up only a fraction of total agricultural output from its
beginning until today. Increasing environmental awareness in the general population has
transformed the originally supply-driven movement to a demand-driven one. Premium prices and
some government subsidies attracted farmers .There are different factor motivating the farmers
for the production of organic staple food in the Akola district, Discussed in following category:

3.1 Area under Arvind Ltd
For the cordination and promotion of organic farming there are six center working across the
district.136 village comes under these center.this helps the bidirection flow of information from
ARVIND LTD to the each and evry farmer registred under this project.

Table 4 center wise organic land

Sr.No Name of the No of village No of Area under organic
center farmer farming[Acre ]
1 akharwada 28 591 4134.75
2 Chohotta 39 623 5022.9
3 Nimba 20 470 3314.50
4 Mazod 33 619 4697.9
5 Paras 30 610 4490.8
6 Ramgon 22 625 4734.5
Source: MIS, Arvind Ltd

Above table show that there are 3538 farmer reistered under ARVIND for oranic farming in six
different center across the district of akola covering 26395.35 Acre of land.out of all organic land
11387.5 Acre of land used by cultivation of staple food other than Cotton cultivation.


3.2 Distribution of land under different crops:
Following figure explain the distribution of land under different organic production

Figure: 2. Crop Wise land Distribution

11 1962.52 34.45
69.3
205.5 Moong
Pigeon pea
BlackGram
2429.6 7730.06 Soyabean
Sunflower
Seasame
1123.15
2867.9 Safflower
Sorghum
Ajwain

Moong is cultivated in 7730.06 Acre of the land followed by pigeon pea in 2867.9 Acre of the
land.safflower is cultivated in only 11 Acre of land

3.3 Seasonality of agriculture:
There are 3538 farmer registered under the ARVIND LTD COMPANY for the organic staple
production in the district covering 11388 acre of land

Sr.No Name of the Scientific name Sowing Harvesting Production[qt] Average
crop period period yield/Acre.
1 Green gram Vinga Radiata July August – Sept 36201.39 4.6832

2 Pigeon pea Cajanus Cajan June -july Dec - Jan 11593.4 4.0425
3 Black gram Vigna Mungo July –Aug October 5417.85 2.8238
4 Soyabean Glycine max June -July Sept – Oct 14951.03 6.1537
5 Sunflower Helianthus annuus May -June Sept –Oct 962.05 4.6815

6 Sesame Sesamum indicum July October 333.8 4.8167
7 Safflower Carthamus June – july Sept -Oct 47.64 4.3307
tinctorius

8 Sorghum Sorghum bicolor Feb- march April -may 11309.22 5.7626
9 Ajwain Trachyspermum June -july Sept - Oct 162.02 4.7031
Copticum



production /Acre
q 7
u 6
i 5 6.16
5.77
n 4 4.68 4.83 4.7 4.82 4.7
4.04 4.33
t 3
a 2
l 1
0
Moong Pigeon peaBlackGram Soyabean Sunflower Seasame Safflower Sorghum Ajwain
staple food


3.4 Capacity building of farmers through SHG:

Organic farming production is based on contract farming model where there is agreement
between ARVIND LTD COMPANY and producer.in turns ARVIND committed to provide
support through supplying farm inputs, land preparation, providing technical advice and
arranging transport of produce to the ginning mills.
All this activities are carried out by the SHG [self help group] formation.SHG activities not only
support in agriculture activities but also promote saving habit among group member, sanitation
in the communities‟ .Each SHG member select their president, secretary for smooth running of
activities

Following table explain the no of SHG formed under different extension center.

Table: 5. No of farmers and SHGs center wise
Sr.No Name of extension center No of SHG No of
farmers
1 Akhatwada 36 591

2 Mazod 36 619
3 Nimba 30 470
4 Chohotta 45 623
5 Paras 37 610
6 Ramgon 32 625


3.5 Inspection and certification:
In order to faciliatate the farmers in the certification process and to reduce the costs, farmers
group had been organised by ARVIND within internal control system.for this each farmer had
signed a contract with the ARVIND in which they had declare their rediness to follow the
organic staanderds.the organic ectension worker of the project advice the farmer in organic crop
production technique and support them in necessory record keeping.Internal inspector inspect the
farmer at least once a year and an internal certification committee decide about the sanction
against defaulting farmers.
In year 2009-10, Out of 3538 organic staple producing farmer 2156 farmers were in second
phase of certification are under in conversion year 2 and rest 1362 farmer are organic
certified.But in year 2010-11 all farmers are completelty certified by “control union
certification.’’through Agricultural and Processed Food Products Export Development
Authority [APEDA]
Organic internal control system structure

PROMOTERS

EXTENSION SERVICE
CONTROL UNION
CERTIFICATION
(CUC)
INTERNAL
CONTROL SYSTEM

FARMERS FARMERS
FARMERS


Chapter: 2
4 Objectives: 02
Current scenario of organic staple business in domestic and global markets
Overview of domestic market and Global market

The demand for organic foods in India is estimated to be $8,423.8 million in 2010. The
distribution of the latent demand (or potential industry earnings) in India, however, is not evenly
distributed across regions. Maharashtra is the largest market with $1,145.3 million or 13.60
percent, followed by Uttar Pradesh with $976.9 million or 11.60 percent, and then Gujarat with
$693.0 million or 8.23 percent of the latent demand in India. In essence, if firms target these top
3 regions, they cover some 33.43 percent of the latent demand for organic foods in India.
The demand for organic foods is estimated to be $113.0 billion in 2006. The distribution of the
world latent demand (or potential industry earnings), however, is not evenly distributed across
regions. Asia is the largest market with $35.8 billion or 31.68 percent, followed by Africa,
Europe & the Middle East with $37.2 billion or 32.92 percent, and then North America & the

4.1 Domestic Scenario: India
According to organic trade association in year 2009 there are 2.5 million Ha of land was organically
certified. 115238 tons organic products as certified. There was 158 processing unit was in India. 35
products exported to the foreign countries.
Table: 6, Indian Organic Status
Sr. No Particulars
1 Area under certified 2.5 million Ha

2 Total certified products 115238 ton

3 Total project certified 332

4 No of processing unit 158
5 Accredited and certifying agencies 11

6 No of product exported 35


Source: organic trade association

Following table shows the organic staple food produced in the country .it is categorized in spices,
pulses, fruits, vegetable, and oil seeds.

Table 7, different types of organic staple produced in India
Sr.No. Types of staple Name of the staple
1 Commodity Tea, Coffee, Rice, Wheat ,sorghum , ajwain
2 spices Cardamom, Black pepper, White pepper, Ginger, Turmeric, Vanilla,
Tamarind, Clove, Cinnamon, Nutmeg, Mace, Chili
3 pulse Red gram, Black gram, pigeon pea
4 fruits Mango, Banana, Pineapple, Passion fruit, Sugarcane, Orange, Cashew
nut, Walnut
5 Vegetable Okra, Urinal, Garlic, Onion, Tomato, Potato
6 Oilseeds Mustard,Sesame,Castor, Sunflower ,safflower
7 Others cotton, Herbal extracts, soybean
Source: APEDA
Production of organic food in India in year 2009-10

Table 8 production of organic food (year 2009-10)
Sr.No. crop Quantity produced in MT(2009-10)
1 Cotton 837293
2 Rice 17762
3 Wheat 113570
4 Other cereals and millets 271042
5 Pulses 53227
6 Oil seeds and soybean 315067
7 Tea /coffee 40614
8 Spices 168507
9 Fruits and vegetable 889844

10 Herbal and medicine 189193
11 other 24661
Source: APEDA

4.2 Domestic market:
Consumption of organic food in India is not very much comparing to other EUs countries and USA.
Following table show the market of organic food in India from year 2004 to 2011.forcasted
market size of organic food in India in year 2012 to 2014 is 10,129.539 , 11,111.761 ,
12,192.130 US $ million. The organic products available in the Indian domestic market are rice,

tea, coffee, pulse and vegetable .these products also exported as organic cashew nuts, cotton,
oilseeds, various fruit ,medicinal herbs but the majority of total organic production in India is
exported (75%-80%) with the balance consume or sold locally. Below pie chart shows the % of
organic agriculture production in India which is based on total production value.

Figure: 3, % of organic food production based on value in year 2009-10

tea rice
23% 24%
coffee
4%
fruit & vegetable
wheat 17%
10%
nuts,oilseeds,puls
cotton spices es& herbs
8% 5% 9%

Present and forecasted domestic market:
Present market size of Indian organic staple is 9236.32US $ million and forecasted to reach
12192.123in year 2014.

Table 9 Domestic Market, Present and Forecasted
Year India Market US $ mln
2004 4,768.592
2005 5,242.764
2006 5,765.965
2007 6,343.475
2008 6,981.161
2009 7,680.681
2010 8,423.843
2011 9,236.322
2012 10,129.539
2013 11,111.761 Forecasted
2014 12,192.130
Source: www.icongrouponline.com


4.3 States wise Demand of organic food in India
State wise demand of organic food in India in year 2009 and 2010 and forecasted demand in year
2014
Maharashtra had highest demand of organic food in India in year 2010

Table 10 states wise demand of organic present and forecasted
States Demand 2010 9US $ Demand 2011 US $ Demand
Mln Mln 2014(forecasted)
Andaman & Nicobar Islands 4.315 4.701 6.077

Andhra Pradesh 612.199 666.899 862.110
Arunachal Pradesh 7.764 8.513 11.223
Assam 130.344 141.521 181.138
Bihar 147.770 156.747 187.084
Chandigarh 25.427 28.152 38.211
Chhattisgarh 171.610 193.061 274.886
Dadra & Nagar Haveli 1.096 1.186 1.503
Daman & Diu 1.276 1.380 1.750
Delhi 296.925 324.509 423.612
Goa 29.355 31.872 40.794
Gujarat 692.952 777.146 1,096.227
Haryana 261.681 286.934 378.275
Himachal Pradesh 60.218 65.598 84.800

Jammu & Kashmir 51.120 54.773 67.372
Jharkhand 137.826 176.409
Karnataka 432.577 469.671 601.151
Kerala 276.190 297.899 373.809
Lakshadweep 0.783 0.848 1.074
Madhya Pradesh 483.059 543.441 773.767
Maharashtra 1,145.331 1,251.732 1,634.003
Manipur 12.940 14.050 17.983
Meghalaya 15.324 16.584 21.019
Mizoram 9.396 10.336 13.759
Nagaland 19.150 20.929 27.321
Orissa 244.508 275.071 391.655
Pondicherry 22.259 24.486 32.595
Punjab 242.477 261.536 328.180
Rajasthan 390.890 439.752 626.131
Sikkim 1.683 1.816 2.279
Tamil Nadu 788.881 850.887 1,067.710
Tripura 15.422 16.579 20.599


Uttar Pradesh 976.935 1,064.224 1,375.736
Uttaranchal 67.195 71.997 88.558
West Bengal 657.850 723.668 963.333

4.4 Cities wise demand of organic food in India
Following table shows that demand of organic food in metro cities in year 2010 .greater Mumbai
had highest demand of organic food followed by Delhi Municipal Corporation, Ahmadabad,
Kolkata, and Chennai.
Table 11 city wise demand of organic food in India
City States Rank US $ mln % of India
Greater Mumbai Maharashtra 1 335.318 3.98
Delhi Municipal Delhi 2 227.386 2.70
Corporation
Ahmadabad Gujarat 3 142.283 1.69
Kolkata WB 4 135.642 1.61
Chennai Tamilnadu 5 123.637 1.47
Hyderabad M. Corp Andhra Pradesh 6 106.921 1.27
Bangalore Karnataka 7 105.733 1.26
Surat Gujarat 8 98.506 1.17
Kanpur UP 9 74.165 .88
Pune Maharashtra 10 71.487 0.85

5 India’s Major players:

5.1 Namdhari fresh:
Namdhari's Fresh handles more than thousand tons of fresh vegetables and fruits at domestic and
International market. it produces are mainly destined to Europe, Australia and the Middle East.
Namdhari's Fresh is India's first company to receive the GLOBAL-GAP (European Retailers
Certified Vegetable Growing and Exporting Firm) certificate, which is an assurance for our high
quality standards. Namdhari Seeds has made a mark with itself in the Seed Industry widely as
one of the largest distributors of vegetable seeds in India. Namdhari Seeds is also a leading
Exporter of Vegetable and Flower seeds to Europe, Japan, U.S.A, Western Asia and South East
Asia. Companies are also a proud recipient of Best Exporter Award from Govt. of Karnataka &
Govt. of India and are designated as an "Export House".


After the success in seed world, Namdhari have diversified into the production, distribution and
export of fresh vegetables & fruits under the name "Namdhari's fresh".Namdhari's Fresh is also
involved in natural farming to produce and supply Organic Vegetables and Fruits in the
International market. At present the EC directive is being followed and the produce is grown in
an Environmentally Friendly way. The natural gift of suitable climate, availability of sufficient
infrastructure, technical manpower and the applications of advanced technology in Production,
Processing, Grading, Packing, storage, Transportation, Communication and with dedicated
skilled laborers enables this company to produce and sell one of the best quality vegetables and
fruits for Fresh Market to meet the International Standards.

Uninterrupted Cold Chain:

To ensure the freshness of the vegetables till it reaches the consumer, the company is having a
continuous cold chain network right from the produce is harvested. The harvested vegetables are
transported in refrigerated trucks, which also help in the removal of field heat. From the
refrigerated trucks, the vegetables are transferred to the pre-cooling room.
Then the vegetables are transferred to the grading hall, which is also air conditioned and packed
under cool climate. The packed vegetables are stored in the cold rooms before being air lifted to
the destinations and during the transit in the air also, the product is stored in reduced
temperature. Thus the uninterrupted cold chain network makes Namdhari's Fresh to deliver the
quality vegetables with optimum freshness.

Quality Assurance:

The quality control systems are such that the products are checked and rechecked right from the
field, grading and packing and during shipment, which makes it possible to meet the high quality
standards of Europe and other developed nations. If required, Dutch KCB quality standard will
be applied and will be possible for us to deliver the quality produce on a daily basis. Namdhari
also performs shelf life test of the produce under different temperature conditions, whose results
will be used to improve the shelf life of the produce. The packing section is being geared up to a
hygienic handling so that the consumers receive a clean, hygienic product.

Certifications:
it is also working on a certification from Dutch accredited certifying agency SKAL, which


certifies the quality of organic vegetables, with a symbol EKO which is recognized in most of
EEC and North America.

Namdhari's Fresh is a certified ORGANIC PRODUCER. It has become India's first vegetables
growing and exporting firm, which has received EUREP-GAP Certificate. The pack house is
under implementation of BRC and HACCP, however all the norms, essential for the same are
practiced. Ethical trading is its corporate philosophy and implementation of SA 8000 is part of its
commitment.
Retailing: Our backward integration has enabled us to produce and supply quality produce to our
end customers. We are pioneers in providing international ambience and quality in fresh
vegetables and fruits retailing. Majority of the vegetables and fruits are grown by us, ensuring
optimum freshness and quality of the produce. Presently we are operating in Bangalore and we
are planning to open our outlets in other metros very shortly.

Wholesale:

Apart from the export and retailing, we are also supplying fresh vegetables and fruits to
Institutional customers like star Hotels and retail chains. Presently we are catering to India's
oldest and largest five star Hotel group across the country. Our produce is also sending to other
retailers through our channel partners. We have also started channel development across the
country.

Export:

Namdhari Fresh takes pride to be India's first EUREP-GAP compliant company. It is one among
few who are in the business of fresh vegetables from India to Europe. Produces are destinated to
different countries across the globe. This has been possible by using efficient Cold Chain
Management. It also export different kind of fruits among them few is organic.

5.2 Eco-farms:
EcoFarms (India)ltd was the founded in 1995 with a goal to develop and promote organic
methods of sustainable farming. The project over the year spread to the neighboring district of
Amravati ,jalgaon,and wardha.


Looking at the dedication and commitment towards the promotion of organic farming, in 2004
the government of Orissa invited the company the company to start a similar project in Orissa.
Today the project has spread across the district of Kalahandi, Bolangir,and Ganjam.

Today 20000 growers ,who in addition to cotton, raise 40 different crops in 60000 Ha ,are part of
our ever –growing family. Apart from the common cash and food crops, today It market healthy,
ready to eat snacks.

Not only that ,guided solely, by customers, company have launched Earth conscious „a brand of
organic clothing that includes shirt, undergarments, baby cloths ,bed linen and the like in its
product fold.

Ecofarm initiative:

1.Mainstreaming of organic consumption by sustaining the supply of a very large number of
provisions in a vast network of retail outlets that cater to diverse consumer segments

2. Designing farming production to meet consumption needs.

3. Reaching out to the common man

4. Growers are business partners earning bonus as per company performance.

Certification:

Farm certification:

Fair Trade Certification - by FLO-Cert.

NPOP (National Programe for Organic Production) - by Ecocert and MO Control.

NOP (National Organic Program) - by Ecocert and IMO Control

Regulation (EEC) No. 2092/91 - by Ecocert and IMO Control.

Product certification:

Textiles - GOTS (Global Organic Textile Standards) - by Control Union Certifications

Food Products - ISO 22000 - under process.

Product and service:

Fair trade ,organic &biodynamic spices (black pepper ,white pepper,
Nutmeg,Turmeric,Chilly,Ginger,Clove) grains(cereals, pulse)edible oils, cashenuts..

Distribution setup:


EcoFarms sustains a supply chain that carries a very large number of provisions to a vast
network of retail outlets that cater to diverse segments of organic consumers. The food products
are sold by the company under its brand name 'Reconfirms' in the domestic retail market. At
present it is supplying to around 300 stores all over India. It has tied up with all the major
retailers such as Big Bazaar, Reliance, Aditya Birla (More), Shoprite, Le Marche, Piramyds (Tru
Mart), Apna Bazaar, Metro Cash and Carry etc. to market the products under its own brand
name.

5.3 Fab India:

Fabindia is India's largest private platform for products that are made from traditional
techniques, skills and hand-based processes. Fabindia links over 40,000 craft based rural
producers to modern urban markets, thereby creating a base for skilled, sustainable rural
employment, and preserving India's traditional handicrafts in the process .Fabindia promotes
inclusive capitalism, through its unique COC (community owned companies) model. The COC
model consists of companies, which act as value adding intermediaries, between rural producers
and Fabindia. These are owned, as the name suggests, by the communities they operate from; a
minimum 26% shareholding of these companies is that of craft persons. Fab india's products are
natural, craft based, contemporary, and affordable

Products:

Organic Food Products (introduced in July 2004). Fabindia is Retail Company having a pan –
India presence with 128 stores across the country. the range includes certified organic food
products like tea, coffee, flours, grains, rice, pulse, sweeteners like honey, jiggery, spices, oil,
pickles, concentrates, pastas, seeds, herbs etc.

Organic Certification:

Products displaying Green logo are 'Fully Certified' Organic. All processes, from growing to
preparing to packing have been done according to National and International standards, verified
by accredited agencies.


Products displaying our Blue logo are 'In Conversion'. This means that the farmer is using purely
organic techniques, and has registered and is complying with set standards. Farmland must be
managed organically for about 3 years before it can be fully certified.

Products displaying our Yellow logo are 'Natural'. This category contains products produced by
small farmers who use purely organic techniques, but who have decided to not yet register for
certification. It also includes some processed foods, which do not contain any synthetic
preservatives, colours, flavours or additives.

5.4 Suminter India organics:

Suminter India Organics, a Mumbai-based company, was founded in 2003 on the notion that
organic farming contracted out to small farmers in India would not only help to fulfil the
worldwide growing demand for organic produce but also lead the participating farmers to greater
economic stability.

Although it started out as a small trading company with the aim of helping local farmers, the
rapid growth and technological advances. Suminter has experienced in such a short time span is
truly impressive. Suminter opened a base in the Netherlands in a bid to supply the entire
European market with greater efficiency and we can now supply products to our European
customers almost immediately. Now a leading exporter of organic produce from India with a
unique organizational structure, Suminter aims to stay at the cutting edge of technological
advances in food safety, processing and preservation and has recently installed an organic
fumigation system (Eco2) and a dry steam sterilization facility (SteamLab) in Central India
(Indore). It is the first certified organic food processors in India to provide dry steam sterilized
products.

All of the farms where it work are certified to international standards, ensuring not only quality
produce but also fair labour and distribution practices. In fact, Suminter is only the third
company in India to be Fair Trade certified for cotton and is one of the only companies in India
to be exporting Fair Trade goods to the international market.
Despite its rapid development, whereby Suminter now works with over 7,500 farmers and
represents over 38,900 acres of farmland that has been or is in the process of being converted to


organic, the company has continued to bring about social, economic and environmental benefits
for its workers and consumers. Integrating certification, training, farming, monitoring,
processing and distribution as Suminter has, assures of a high-quality organic supply chain and
guarantees the farmers a market for their crops.

Suminter firmly believes that organic farming is a strong alternative for small and marginal
farmers in India and aims to expand its farmland to 100,000 acres within two years as well as
further develop its product range. With a business model that emphasizes the well-being of
farmers, high quality products and the environmental benefits of organic farming practices,
Suminter will play a more and more prominent role in the organic food and textile industry, both
in India and abroad.

Products:

Grower and processor of certified organic food ingredients and fiber from india .working with
approximately 13000farmers across india for organic farming which further gets processed in
house with state of art technology in central India.

Oilseeds CerealsFiber (organic cotton) ,Spices(Ajwain) ,Ready to eat products(rajma
masala,palak ,veg pulav ,Paneer butter masala)

Certification:

All products are certified through control union cerfification, Neatherland.

Operation:

Suminter is an integrated company that aims to involve itself in each step from training farmers,
growing the produce and then processing and packaging these goods.

One of Suminter's greatest advantages is the extensive network of over 13,000 organic farmers
with whom we currently work. Suminter's primary supply of organic products comes directly
from its farm projects in 6 states in India: Gujarat, Maharashtra, Uttaranchal, Orissa, Kerala and
Rajasthan. Having such a broad and diverse supply chain ensures that Suminter always provides
its customers with the best quality products.


In all of its projects, Suminter promotes organic agriculture through training and certification. It
encourage the concept of 'zero-cost' farming by providing seeds to farmers and training them to
use various bio-manures, bio-pesticides, and composting methods. This platform relieves the
farmers of the upfront cost of seeds and other inputs, and also ensures a high-quality, certified
organic product.

Impact: To the farmers with whom it work, Suminter pays a premium for the farmers' organic
crops, the quality and consistency of which Suminter monitors throughout the growing period.
Prices for organic goods average 10-15% higher than those for conventional goods and so
Suminter guarantees to its farmers purchase of each crop at the organic market price, allowing
them to earn a profit on their production. By guaranteeing a premium price to the farmers,
Suminter is helping these farmers to gain economic stability.

5.5 Moraraka Organic Food Pvt. Ltd:
A non- profit voluntary organization, The Morarka Foundation was set up by Mr. Kamal
Morarka in 1993.the Morarka Foundation promoted small entrepreneurial initiatives in organic
agri-businesses, it also facilitated linkages between organic producers and traders. In the year
2006-07 it set up its marketing arm, Morarka Organic Foods Pvt. Ltd., to facilitate direct linkage
between the consumer and producers. Beginning with just about 500 farmers about 10 years ago,
today there are now over 1,00,000 farmers spread all over India cultivating over 2,50,000 acres
land under organic management. These farmers are producing over 300 different crops, out of
which over 100 crops have already been brought under the organic value chain management.

Retail brand:

From being in the back end of the value chain for over 10 years, Morarka Organic has now got
into the front end, i.e., retailing of certified organic products under its own brand name ?Down to
Earth?. While this initiative is expected to provide direct linkages to the thousands of certified
organic producers, it will also enable quality conscious consumers to access the very best quality
of food deserved by them at reasonable prices

Certification:


All Down to Earth products undergo the strictest quality standard checks and are certified by the
most stringent certification agencies in the world. Down To Earth is certified by OneCert Asia
Agri. Certification Pvt. Ltd. (a subsidiary of One Cert Inc. USA) as per NOP (USDA), NPOP
(Government of India) and EU Standards for Organic Certification.

Products: Cereals, Pulse& beans, Spices, Fruits, Nuts, Oil seed

6 Limited penetration of organic farming in India:
There are different problem associated with the penetration of organic farming and business in
India. Low level of market information, time lag from conversion from conventional to organic
status, limited positive government interventions, underdeveloped infrastructure and lack of
proper marketing channel are the main problems associated with the organic farming in India.


Limited penetration of organic farming in India

Conventional Agri-Inputs Limited positive government Under developed
Low levels of Market Time lag & high costs of infrastructure &
information considered more effective Conversion of Conventional interventions & high negative
than Bio-inputs subsidies marketing
to organic farming channels for green
outputs

No designated agency
at Central State & Low Quality of Non-availability Relatively longtime Subsistence High Costs involved
local levels which bio-inputs of bio-inputs period needed farming by large certification &
reaches farmers with For bio inputs to be number farmers Limited no. of certifying
information effective agencies

Limited financial No strategic attention
Subsidies to for greening
commercial inputs
outlays for Bio-
inputs by agriculture & No
No Quality Monitoring Existence of spurious & low government coordinated effort at
Control Systems in place quality brands in market Centre & State Level

Price premiums reach more for No & limited Storage facilities No easy quality
Limited Shelf life of Limited R & D efforts & Intermediaries than producers assurance
bio-inputs Investments on Bio inputs mechanisms

Small farm holdings

Low levels of networking
Formal associations of among
traders, farmers & others Farmers and other
are stakeholders
Not paying adequate
attention
Mostly geographically
dispersed organic farmers;
Small numbers with
organic produces

7 World Scenario of Organic Agriculture
According to the latest survey on organic agriculture (published in The World of Organic
Agriculture), carried out by the Research Institute of Organic Agriculture FiBL and the
International Federation of Organic Agriculture Movements IFOAM, organic agriculture is
developing rapidly.

The main results of the most recent global survey on certified organic farming (data end 2007)
show that 32.2 million hectares of agricultural land are managed organically by more than 1.2
million producers, including smallholders (2007).

In addition to the agricultural land, there are 0.4 million hectares of certified organic aquaculture.
The area for wild harvested products accounts for 30.7 million hectares.

Table: 12 Overviews of organic status world wide
Indicator Global total Leading country
Country with certified 160[2008,154;2000:86
organic agriculture
Organic agriculture land 37.2 million .ha Australia(12 million .ha)
Argentina (4.4),US(1.9)
Country with 24 Falkland35.7%, Liechtenstein (26.9), Australia (18.5%)
>5%organic agri land (2008:22)
Producer 2009 1.8 million India(677257)Uganda(187893)Mexico(128826)
2008:31 million
Organic market size 54.9bn USD US(25.5USD),Germany(8.3 USD),France(4.3 USD)
(2008:50.9),(1999:15.2)
Organic per capita 8 Bn. USD Denmark(190 mil USD),Switzerland(180),Australia(76)
consumption per year
Country with organic 74
regulations 2008:73
Organic certifier 523 Japan(59),US(57),South Korea(33)
(2008:489)
No of IFOAM affiliates 2010:757 Germany (98),US(45),India(44)
(2008:734)
Source: FiBL
The regions with the largest areas of organically managed agricultural land are Oceania, Europe
and Latin America as well as North America. Australia, Argentina and Brazil are the countries
with the largest organically managed land areas


7.1 Development of organic agriculture land worldwide:
Survey of FiBL reveals that from last 10 year land under organic farming has increased from11
M.Ha. In 1999 to the 37.2 M.Ha. In 2009.during2004-05 land under organic cultivation has
decreased.

Figure: 4.Development of organic agriculture land (1999-2009)

L 40 37.2
35.2
a 35 30.5 32.1
29.7 28.9
n 30 25.5
d 25
19.7
20 17.3
14.8
M 15 11
. 10
H 5
a 0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Year
Source: IFOAM

7.2 Top ten countries have more organic certified land:
Australia has 12.04 M Ha of organic land; India has 1.02 M ha of organic land

Figure 5 Top ten countries with highest certified organic land

germany 0.91
uruguay 0.93
Italy 0.99
india 1.02
spain 1.13
Brazil 1.77
USA 1.82
china 1.85
argentina 4.01
Australia 12.02

0 2 4 6 8 10 12 14
M.Ha

Source: IFOAM


7.3 Country with highest no of organic producer:
India has highest no of organic certified producer 677257 worldwide, followed by Uganda,
Mexico Ethiopia Tanzania.

Figure 6 Top countries with highest No of certified producers

Spain 25291
c burkina F. 27748
Turky 35565
o
Italy 43029
u
Peru 54904
n
Tanzania 85366
t Ethiopia 101578
r Mexico 128862
y Uganda 187893
India 677257
No of producer

Source: FiBL

7.4 Global market trend of organic food:
Global trend of organic food is increasing continuously. In year 2001 market size was 80660.25
US $ million .in year 2006 it increased to 113026.80 US $ million and in year 2011 forecasted
market size is 166172.22US $ million.

Figure 7 Global Market trend (year 2001-2011)

US $ mln
200,000.00
166,172.22
150,000.00
113,026.80
100,000.00 80,660.25
US $ mln
50,000.00

0.00
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: Philip M. Parker, INSEAD, www.icongrouponline.com


7.5 Market forecast: GLOBAL
In 2015, the global organic food market is forecast to have a value of $88,069.3 million, an
increase of 48.4% since 2010. The compound annual growth rate of the market in the period
2010–15 is predicted to be 8.2%.
Table 13 Market forecast for Global Business (2010-2015)
Year $ million % Growth
2010 59,341.2 12.4%
2011 64,959.5 9.5%
2012 70,641.3 8.7%
2013 76,416.4 8.2%
2014 82,197.6 7.6%
2015 88,069.3 7.1%

8 European Union:
The European organic food market grew by 9.9% in 2010 to reach a value of $25,040.3 million.
In 2015, the European organic food market is forecast to have a value of $36,382 million, an
increase of 45.3% since 2010.CAGR 2006-10 is 9.9%.

Figure 8 EU Market (2006-2009)

U S $ mln
30,000.00
25,040.30
25,000.00

20,000.00 17,141.10

15,000.00
U S $ mln
10,000.00

5,000.00

0.00
2006 2007 2008 2009 2009


.


8.1 Segmentation
Market Segmentation I: % share, by value,2010

Dairy covers 22% of the European market followed by Fruits and vegetable 21% markets

Figure: 9 Market Segmentation EU countries

13.30%
22.10% Dairy

9.90%
Fruit & Vegetable
Prepared food and others

13.90% Grains & Bread
21.60%
Beverage
meet fish and poultry
19.20%

Market Segmentation II: % Share, by value,2010

Germany accounts for 36.6% of the European organic food market value.
France accounts for a further 18.3% of the European market followed by Italy 18.30%.
Figure: 10 market segmentation of EU countries

Germany
18.20%
2.50% France
36.60%
Italy
11.90%
United kingdom

12.60% Spain
18.30% Rest of Europe



8.2 Market value forecast: European Countries
In 2015, the European organic food market is forecast to have a value of $36,382 million, an
increase of 45.3% since 2010. The compound annual growth rate of the market in the period
2010–15 is predicted to be 7.8%.

Table 14 Market forecast of EU countries (2010-2015)
Year $ million % growth
2010 25,040.3 9.9%
2011 27,207.4 8.7%
2012 29,416.1 8.1%
2013 31,679.6 7.7%
2014 33,988.7 7.3%
2015 36,382.0 7.0%

9 Status of organic staple business in USA:
The United States organic food market grew by 15% in 2010 to reach a value of $28,513.1
million. The compound annual growth rate of the market in the period 2006–10 was 13.4%.
Table 15 US Organic Market Status (2006-2010)
Year $ mln % growth
2006 17,221.0
2007 20,410.0 18.5
2008 23,607.0 15.7

2009 24,803.0 15.1
2010 28,513.1 15
CAGR 2006-10 13.4%


9.1 Segmentation
Market Segmentation I: % Share, by value
Organic food and vegetable has 38% share followed by prepared food and others.
Figure 11 market segmentation US

2.00%
11.00%
fruit & vegetable
prepared food and others

13% 38% dairy
beverage
15% bread and grains
21.00% meat fish and poultry

Market Segmentation II: % Share, by value
The United States accounts for 48% of the global organic food market value.
The Europe accounts for a further 42.2% of the global market.
Figure 12 Market share of EU and US of Organic business

united states
6.10%
3.60%
europe
48.10%
42.20% asia pacific

rest of the world



9.2 Market Forecasts: USA
In 2015, the United States organic food market is forecast to have a value of $42,531.8 million,
an increase of 49.2% since 2010.
The compound annual growth rate of the market in the period 2010–15 is predicted to be 8.3%.
Table 16 US Organic market forecast (2010-2015)
Year $ million % growth
2010 28,513.1 15.0%
2011 31,316.7 9.8%
2012 34,113.4 8.9%
2013 36,923.6 8.2%
2014 39,730.3 7.6%
2015 42,531.8 7.1%


Chapter: 03
Objective: 03 strategy formulation for the organic business for Arvind Ltd

From procurement to selling strategy: at domestic as well as global level. First farmer harvested
their Agri-produce and collect in their home and then used to sell after knowing the market price.
We collected their produce at procurement center on market price and then and for value
addition cleaning, Grading and sorting carried out. after cleaning, grading and sorting packaging
(50 kg) process would started after packaging the produce, starching and labeling process will
started and then we would store at warehouse and then we will sell it domestic as well as Global
market according to the purchase order from the clients.

10 Value chain: Farmers to consumer:

Harvesting Storing Selling at farm Procuring /collecting

Stretching/ Labeling Stretching /Labeling Packaging Cleaning, Grading
and Storing

Distributor /wholesaler
Domestic
Organic Retail outlet /Mall

Selling

Global Exporter/Export

For the business at domestic and global level following strategy will be taken for Distribution
channel for the organic staple business. For domestic level we will procure from the farmer and
collect it at center and precede it processing center for cleaning, grading and sorting and then we
can directly supply to distributor/ supplier and organic retail outlet or mall and other way we can
store it in warehouse and then supply according to the demand. And for export market also we
can either store in warehouse or directly supply from the processing unit to exporter or export
market.


The channel of distribution includes the original producer, the final buyer and any middlemen -
either wholesaler or retailer. The term 'middlemen' refers to those individuals or institutions who
facilitates, negotiate or selling in the capacity of an agent or broker. In our case Arvind will acts
as middle man. For efficient marketing there would be more than one intermediary. Most
producers work with marketing intermediaries to bring their products to market. These marketing
intermediaries generally make up a marketing channel.

10.1 Major steps
Producer: these are the farmer produce agriculture commodities in the field. Under arvind
organic project there are 3538 farmer registered for organic commodities production spread in
132 village of different taluka of Akola District. They produce pigeon pea, Soybean, green gram,
safflower, sunflower, black gram in total 11387.50 Acre of land. Year 2010-11 production of
organic crop is approx 8000 metric ton collectively. So they are the main stale holder of the
organic business project.

Procurement center: in Arvind organic project farmers are divided in to six organic production
centers for the well ordination of inspection and procurement of agriculture commodities. For
business channel point of view this organic center will works as procurement center where
organic produce will be collected from different village.

Processing unit: All type of accessory activities like weighing, stretching, grading (as per
qualities of produce) packaging will takes place will at procurement center.

After procurement of produce at procurement center produce either directly go for export or it
may stored at Arvind ware house .produce could be sold in domestic market as well as
international market. Commodities comes under pulse like pigeon pea, green gram, black gram
will be processed according to requirement of demand in processing unit of Arvind mill.
Soybean, sunflower, sorghum well be sell as whole food. Some organic food may without going
in warehouse it may go for export and in domestic market.

Warehouse: after processing Agri-produce will come in ware house of Arvind mill.
Inspection/acceptance, order preparation/picking, dispatching/delivery and inventory


Mts 01 report @ arvind ltd.

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