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Market Research Report: Organic Food Market In India 2010

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The organic farming is an old concept in India in terms of the extensive farming carried out in the country. The organic food market is worth USD 129.3 mn and shows huge potential for growth in future. The increasing export market coupled with government’s support has driven the market.

The report begins with an introduction to the organic food products highlighting their benefits over the similar conventional food. The report also provides a detailed overview of the status of organic farming in India and the status of certification process of organic food products in India. The market overview section compares the global and domestic organic food market.

An analysis of the drivers explain the factors for growth of the industry including the huge export market, organized retail enhancing distribution network, government initiatives and increasing health consciousness among consumers. The key challenges identified encompass high prices of organic food, lack of integrated supply chain and difficulties for farmers, certification barriers.

The competition section provides an overview of the competitive landscape including brief profiles of key domestic producers and promoters of organic food products. The key developments section provides an insight on sector related developments in last one year.

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Market Research Report: Organic Food Market In India 2010

  1. 1. Organic Food Market - India April 2010
  2. 2. Executive Summary Total market for organic food in India was valued at USD X mn in 20-- Organic foods offer more health benefits as compared to the conventional food Market Government of India is leading from the front to ensure multi-fold growth in organic market Exports of organic food products are expected to grow further in the near future Certification PLE Certification of organic food products is a major concern for the producers to prove the authenticity of their product and generate consumer confidence Regulations M Government has shown positive signs by improving the status of the certification agencies A The process of certification is well defined, although it is costly for the small farmers Drivers: S Challenges: – Huge export market – High prices of organic foods Drivers & – Organized retail enhancing distribution – Lack of integrated supply chain and difficulties network for farmers Challenges – Government Initiatives – Certification barriers – Increasing health consciousness among consumers The market is highly competitive with large number of producers and promoters India enjoys the comparative advantage of being an agricultural country at a predominant stage Competition with larger quantities of production Major share of the market is occupied by the promoters who are involved in distribution of these products to the end consumers through various retail outlets ORGANIC FOOD MARKET IN INDIA 2010.PPT 2
  3. 3. •Introduction •Organic Farming •Certification Process •Market Overview •Drivers & Challenges •Competition •Key Developments ORGANIC FOOD MARKET IN INDIA 2010.PPT 3
  4. 4. Organic food products are healthy and environment friendly Organic Food Products • Organic food products are those that are cultivated by methods that do not involve the use of artificial inputs like chemicals to either enrich the soil, fight pests or increase productivity • This method of cultivation provides for food produce that is healthy for consumption and at the same time protects the soil and the environment Parameters Organic foods Conventional Foods Pesticides and • Grown without use of any synthetic pesticides and • Grown with extensive use of synthetic pesticides and Chemicals synthetic chemicals chemicals which may lead to diseases like cancer • Around n additives are used to improve the • Only x additives are permitted which include Iron, appearance and taste of the food Food Additives Thiamine, Nictonic acid and are beneficial for health • Use of artificial colorings and sweeteners leading to allergies and headaches • Contains fatty acids which increases risks of heart Hydrogenated Oils • Does not contain any fatty acids and oils attacks Vitamins • Contains higher levels of vitamin • Does not contain higher levels of vitamins • Contains essential minerals such as calcium, Minerals • Does not contain higher amounts of minerals magnesium & Iron Source: SAMPLE ORGANIC FOOD MARKET IN INDIA 2010.PPT 4
  5. 5. Various steps taken by the government has enhanced the organic food certification process Certification of organic food products is one of the major initiative that has been undertaken by the government after realizing the potential of these products to reach the foreign market and also for domestic consumption • Setting up of a set of guidelines, referred to as the "National Programme for Organic Production (NPOP)“ by The National Steering Committee (NSC) in the year 20-- under which the accreditation and certification procedures have been prepared and Government steps approved • Development of the national organic logo ‘A’, denoting compliance with NPOP regulations, which is required to be used on all certified organic products • Setting up of X major accrediting bodies for certification in India • Monitor and supervise the producers and their farmlands so that the standards of organic farming are adhered Role of certification • Provide an identifiable label (logo or symbol) to the product agencies • Provide an assurance to consumers that the product is truly organic and generate consumer confidence Source: SAMPLE ORGANIC FOOD MARKET IN INDIA 2010.PPT 5
  6. 6. Domestic consumption of organic food is still in a nascent stage in India with a huge potential market Overview Organic Food - Market Size (20--) •Organic food cultivation in India has been a USD X bn traditional concept which exists from centuries •Products used for domestic consumption are generally uncertified PLE •Increasing health consciousness of consumers, their changing preferences coupled with support from the government have driven the market USD Y mn AM •A strong correlation exists between the growth of organic food and development of the retail S formats such as supermarkets and exclusive stores Global Market India Share of Organic Production (20XX-XX) •Organic cultivation in our country ranges from Other Organic Products organic food products to other organic products like cotton, body care products, garments, and Y% cosmetics Organic Food Products X% Source: ORGANIC FOOD MARKET IN INDIA 2010.PPT 6
  7. 7. Drivers & Challenges Challenges Drivers High prices of organic food Lack of integrated supply chain and Huge export market difficulties for farmers Organized retail enhancing distribution network Certification barriers Government initiatives Increasing health consciousness among consumers ORGANIC FOOD MARKET IN INDIA 2010.PPT 7
  8. 8. Organic food market is dominated by the promoters involved in distribution of products to the end consumers Overview Distribution Structure • India has a comparative advantage over many other Producers / Farmers countries in terms of farmlands used for organic food cultivation • The market is highly competitive with a large number of producers and promoters Wholesalers/ Supermarkets Exclusive Stores • Majority of the farming is done by small and marginal Traders/Promoters farmers • Many intermediaries have flourished who are promoting organic production • The large consumer base of these products lie in the Consumers Tier 1 cities where consumers are aware of health benefits of organic foods Major Players Company Store Name State SAMPLE Company 1 X - Company 2 M - Company 3 A - Source: ORGANIC FOOD MARKET IN INDIA 2010.PPT 8
  9. 9. Major Domestic Producers (1/4) Company Business Description Company A • It is a certified organization by X and has its own certified farms near Mumbai • It cultivates, sources and supplies nearly x certified organic botanical products including organic Indian herbs, spices, food, fruits, vegetables, extracts, oils, teas and other botanical products • Organic food products are exported to more than x countries in North America, Europe, SE Asia, Australia and Japan Company B • Farms are located in Punjab and certified by Y • Specialize in cultivation of specific organic spices & guavas and also cultivate chillis, garlic, turmeric, lemon and Haricot beans Company C • Based in Mumbai and also present in Australia • It works with marginal farmers from various parts of India to collectively grow, collect, process and supply a wide range of organic products • Products includes cereals, pulses, spices, herbs, flours, Oil Seeds, Beverages and processed foods Source: SAMPLE ORGANIC FOOD MARKET IN INDIA 2010.PPT 9
  10. 10. Thank you for the attention The Organic Food Market - India report is a part of Research on India’s Food & Beverage Industry Series. For more detailed information or customized research requirements please contact: Gagan Uppal Gaurav Kumar Phone: +91 22 4098 7530 Phone: +91 33 4064 6214 E-Mail: gagan.uppal@netscribes.com E-Mail: gaurav.kumar@netscribes.com Research on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick insights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries on About Netscribes Netscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives. Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Netscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. ORGANIC FOOD MARKET IN INDIA 2010.PPT 10

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