Organic Food Industry Research Objective Organic Food Category and Products Contaminants and Pesticides Regulations and Certifications Market Size Market Geography Market Penetration Frequency of Purchase – Trends Perception of Organic Food – Trends Driving Market Needs Building on GAPs SWOT Analysis

1. Organic Food Industry
Presented by Chandresh Dedhia
XMBA – Batch 54
ITM - Matunga

2. Index
• Organic Food Industry
• Research Objective
• Organic Food Category and Products
• Contaminants and Pesticides
• Regulations and Certifications
• Market Size
• Market Geography
• Market Penetration
• Frequency of Purchase – Trends
• Perception of Organic Food – Trends
• Driving Market Needs
• Building on GAPs
• SWOT Analysis

3. Organic Food Industry
• India today is on the threshold of an organic revolution and Indian Organic
Food industry though at a nascent stage, has experienced steadfast growth in
past few years. The country’s budding organic food market is transforming
into world’s fastest growing organic food market backed by a shift in
consumer behaviour and spending patterns.

4. Reports
• According to a YES Bank report in 2012, it was estimated at Rs 1,000 crore
($170 million) - of which Rs700 crore came from exports - and is growing at
30 to 40 per cent annually. The country has 4.43 million hectare under
organic cultivation with a total organic certified production of 171,100
tonne. In comparison, the US organic foods market is worth $26 billion, the
European, $10 billion.

5. Research Objective
• To uncover the market potential of Organic food in India, understand the
consumer attitudes around
• organic food products in India and to detail the current market dynamics and
consumer behaviour specific
• to organic products fruits and dairy products.

6. Organic Food Category and Products
ORGANIC FOOD CATEGORY ORGANIC FOOD PRODUCTS
Organic Cereals Wheat, rice, maize or corn
Organic Pulses Red gram, black gram
Organic Fruits
Banana, mango, orange, pineapple, passion fruit, cashew nut,
walnut
Organic Oil Seeds and Oils Soybean, sunflower, mustard, cotton seed, groundnut, castor
Organic Vegetables Brinjal, garlic, potato, tomato, onion,
Organic Herbs and Spices
Chili, peppermint, cardamom, turmeric, black pepper, white,
pepper, amla, tamarind, ginger, vanilla, clove, cinnamon, nutmeg,
mace,
Others Jaggery, sugar, tea, coffee, cotton, textile

7. Contaminant and Pestisides
Food product Contaminant pesticides
Apples Diphenylamine, Captan, Endosulfan, Phosmet, Azinphosmethyl
Cabbage Methamidophos, Dimethoate, Fenvalerate, Permethrin, BHC
Carrots DDT, Trifluralin, Parathion, Diazinon, Dieldrin
Cauliflower Methamidophos, Endosulfan, Dimethoate, Chlorothalonil,Diazion
Grapes Captan, Dimethoate, Dicloran, Carbaryl, Iprodione
Onions DCPA, DDT, Ethion, Diazinon, Malathion
Potatoes DDT, Chlorpropham, Dieldrin, Aldicarb, Chlordane
Tomatoes Methamidophos, Chlorpyrifos, Chlorothalonilo, Permethrin,Dimethoate

8. Regulation & Certifications
• For producing exclusive organic foods and marketing we need certification…
Organic certification is a certification process for producers of organic food
and other organic agricultural products. In some countries, certification is
overseen by the government, and commercial use of the term organic is
legally restricted. In India, APEDA (Agricultural and Processed Food
Products Export Development Authority) regulates the certification of
organic products as per National Standards for Organic Production.

9. Research Tools
Quantitative consumer study was conducted in the following cities of India. A total of 1000
consumer interviews were conducted.

10. Market Size:
• The market for organic food is extremely nascent in India at present, with very few active
brands and low
• penetration even among urban consumers. Estimated Market size of organic fruits and
dairy products at
• present is US$ 80 million and US$ 20 million respectively. Organic fruits and dairy products
are expected
• to grow at a CAGR of 13-14% and 10-11% respectively over the next five to six years

11. Market Size by Geography:
This pattern is expected to
continue over the next five to ten
years, post which the trend may
percolate to smaller cities in India
(primarily Tier I cities).
Cities classified as Metro and Mini metro, together are major contributors to both
organic fruits and organic dairy products (85-90%).

12. Market Penetration

13. Frequency of Purchase - Organic Fruits & Dairy Products

14. Frequency of Purchase - Organic Dairy Products

15. Types of Organic Food Preferred

16. Knowledge about organic food for non-users

17. Branded vs. Non-branded purchase

18. Indian vs. International brands preference

19. Deriving Market Need Gaps: Basis Key Decision Parameters

20. Critical aspects to be addressed

21. Important aspects to build on

22. Place of Purchase
• Consumer behaviour varies in terms of place of purchase between regular and
organic varieties.
• While regular varieties are commonly purchased from any of the local retail options,
the organic varieties on the other hand are purchased from organised stores – this
pattern is a likely result of local stores not stocking organic varieties.
• Consumers themselves prefer to purchase organic varieties from organised stores –
they are sceptical about local neighbourhood stores selling authentic products.
• They also enjoy the experience of shopping in organised stores for these organic
products.

23. Purchase Process
• These categories are characterised by high personal involvement from the
consumers in deciding and
• buying – only a few products such as milk or other daily use dairy products are
delivered regularly to the
• consumers’ doorsteps by milkman or local retailers. For other products such as
fruits, consumers prefer to
• touch & feel before purchasing them. This behavior is similar across regular and
organic varieties of fruits
• and dairy products.

24. Need Gap Assessment
• The organic food market has three key areas of addressable need gaps
1. Key Areas of consumers’ decision making namely– availability, price points,
certifications and information. This area is currently characterised by ‘high
importance and low satisfaction’ for consumers of organic food.
2. Concept of organic food – health benefit, freshness and taste. Currently they are
placed by consumers at‘high/ moderate importance and high/ moderate
satisfaction’.
3. visual appeal and portion size/ quantity – can play an increasingly important role
in future to enable multiple brands to differentiate themselves. Currently as it is
characterised by ‘low importance and lowsatisfaction’.

25. SWOT Analysis
Strength:
Safe Food
High Quality and improved nutrition
Improved soil health
Environmental Sustainability
Preserves traditional varieties
Favourable Climatic Conditions
Young Customer Base
Double Benefits
Weakness:
Premium Pricing
Lack of awareness among farmers
Lack of awareness in Rural areas
Less Incentive from Government
Intensive in nature and high labor cost
Productivity gaps
Oppourtinities:
Rising Middle Class
Rising Modern Retail
Rising Urban Drift
Surge in Disposable Incomes
Growing Health Awareness
Reduce heavy subsidies on Food and Fertilizers
Earn High Export earnings
Threats:
Substitutes
Competition
Costly and complex certification process
Lack of Infrastructure and certification bodies
Low awareness about Organic inputs
Introduction of GM crops.

26. Reports

27. Thank You
Chandresh Dedhia – XMBA 54
Sources: Tecnopak, Economics Times, AEPDA