Organic Food Industry of United State of America(USA) w.r.t. Business opportunities in Gujarat

Organic Food Industry
of
United State of America(USA)
w.r.t.
Business opportunities in Gujarat
Presented by:
Group No. 7
Deep Shah 47
Janaki Vara 59
Pranav veerani 60
Guided by:
Dr. Kaushal Bhatt
Asst. professor of
GSMS-GTU
Graduate School of Management Studies
Country Study Project
Gujarat Technological University

Content
● Introduction of USA
● Government of USA
● BUSINESS CULTURE, PRACTICES &
ETIQUETTE
● List of MOU between India and
USA
● Main Industries
● Agriculture Sector
● Justification of Organic food
Industry
● STEEPLED analysis on organic
farming in Gujarat and USA
● SWOT Analysis on organic farming
in Gujarat and USA
● Reference

Introduction of USA
•USA located in the northern part of America continent
•It has 50 states and 1 district: District Columbia
•The country bordered with Mexico on the South, and Canada on the north
•Capital: Washington DC
•President: Donald Trump
•Area: 9,826,675 km2 (3rd largest country in the world after Russia and Canada)
•United States is about 3 times bigger than India.
•3rd most populated country in the world after China and India
•Currency: US Dollar ($1 = 69.27 INR) 03/05/2019 10:00am
•Independence Day: 4th July 1776

North America between Canada and
Mexico. The State of Alaska is in the
northwest corner of North America,
bordered by Canada to the east and
across the Bering Strait from Russia to
the west. The State of Hawaii is an
islands in the mid-Pacific Ocean.

Flag of USA
Blue represents consistent
dedication, truth, equity, and
fellowship.
Red symbolizes courage, zeal,
and enthusiasm.
While white means virtue and
integrity of direct; normally
alluded to by its epithet of Old
Glory.
The banner's width-to-length
proportion is 10 to 19.

National Seal
The Great Seal of the
United States is used
to authenticate
certain documents
issued by the federal
government of the
United States. The
phrase is used both
for the physical seal
itself, which is kept
by the United States
Secretary of State

Economy of USA
● The United States has an advanced industrialized economy with the largest GNP in the world.
● The country is more than self-sufficient in terms of its economic needs and is the world's
leading exporter of food.
● New York City, the financial center of
the United States.
GDP rank 1st (nominal)
2nd (PPP)
GDP per capita rank 7th (nominal)
11th (PPP)
Ease-of-doing-business
rank
8th (2019)
Exports $1.553 trillion (2017)
Imports $2.361 trillion (2017)
GDP - composition, by sector of origin
Agriculture 0.9% (2017)
Industry 19.1% (2017)
Services 80% (2017)

USA Culture
The Family:
● The nuclear family is commonly viewed as the family unit, and is normally little
● Extended family relatives live in their own homes, regularly at incredible separations from their kids.
● Individualism is prized, and this is reflected in the nuclear family.
Food:
● Americans as a country eat a ton of food.
● They devour a lot of prepared and quick sustenance, for example, burgers, franks, subs, and so on.
● As an outcome, the eating routine is one that is high in fat, salt, sugars, additives and refined starches.
Arts, Humanities and Popular Culture:
● Sport is prominent in the USA with American football, baseball, b-ball and ice-hockey being the most famous.
● The USA generally does great in the Olympics.

SOCIAL CUSTOMS & PROTOCOL
Meeting & Greeting:
● American greetings are generally quite informal and casual.
● It is becoming more common in social situations not to shake hands upon meeting and simply smile or nod.
● Within business handshakes are generally expected when meeting and leaving.
● Rather than say “bye” Americans may also use terms such as “call me some time,” “let’s do lunch” or “see
you around” as politer ways of departing.
Communication style:
● Americans can come across as self-interested, aggressive and rude to some outsiders.
● The US communication style which is influenced by the need to be direct, clear, transparent and open about
matters.
● Plain and simple talk is very much valued in America.
● Americans are much more open in conversation about private affairs than many other cultures and do not
shy away from asking direct questions.

SOCIAL CUSTOMS & PROTOCOL
Gift Giving:
● Americans do not really have any customs or taboos concerning gifts.
● If visiting a house, bring flowers, a potted plant, a fruit basket, chocolate, wine, a book or a small household
ornament like a vase.
Dining & Food:
● Americans socialise and do business over breakfast, lunch and dinner.
● Feel free to refuse specific foods or drinks without offering an explanation.
● Do not begin eating until the hostess starts or says to begin.
● Remain standing until invited to sit down.
● If you invite someone to a restaurant, you should pay.
Taboos:
In public:
● Do not spit.
● Do not discuss race, religion, politics or sex.
● Do not assume you can smoke anywhere, even outside.

BUSINESS CULTURE, PRACTICES & ETIQUETTE
What to wear:
● Dress code depends on where in the USA you are doing business. The weather and local culture will
determine what is appropriate or not.
● Men should wear shirts with suits and shoes. Ties are generally worn but not in all States. Colours should be
traditional such as black, blue, grey, etc.
● Women should wear modestly with not too much make-up or jewellery. Low-cut blouses, short skirts and
tight clothing are not appropriate.
Titles:
● Most Americans move to a first name basis pretty quickly.
● Always start by addressing people using Mr/Mrs/Miss + surname until you are invited to call them
otherwise.
● Some, such as Doctors, will use their professional titles.

BUSINESS CULTURE, PRACTICES & ETIQUETTE
Meetings:
● Arrive on time for meetings since time and punctuality are so important to Americans.
● In the Northeast and Midwest, people are extremely punctual and view it as a sign of disrespect for
someone to be late for a meeting or appointment.
● In the Southern and Western states, people may be a little more relaxed, but to be safe, always arrive on
time, although you may have to wait a little before your meeting begins.
● Meetings may appear relaxed, but they are taken quite seriously.

List of MOU between India and USA
1.Cabinet approves MoU between India and USA to access tip line reports on Missing and Exploited Children
2.Agreement on terrorist screening policy
3.MoU on Energy Security, Clean Energy and Climate Change
4.MoU on Wildlife Conservation and Combating Wildlife Trafficking
5.MoU on the Development of an International Expedited Traveller Initiative
6.Technical arrangement on unclassified Maritime Information Sharing
7.MoU on cooperation for gas and hydrates
8.MoU concerning Aircraft Carrier Technologies
9.Logistics Exchange Memorandum of Agreement

USA trade with India (In billions US$)(2017)
Category Exports to India Imports from india
Goods 25.7 48.6
Agriculture 1.6 2.6
Manufacturing 21.1 44.4
Service 23.7 28.1

Main Industries of the USA
1. Construction
2. Manufacturing
3. Wholesale trade
4. Retail trade
5. Agriculture & Fishing
6. Transportation and warehousing
7. Information
8. Finance and insurance
9. Real estate and rental and leasing
10. Health care and social assistance
11. Accommodation and food services
12. Professional, scientific, and technical services

Major players of each industry
Manufacturing Companies
1. Apple Inc.
2. General motor co.
Agriculture & fishing
1. Cargill ltd
2. Advanta Limited
Finance and insurance
1. Berkshire Hathaway
2. AXA ltd
Health care
1. McKesson Corporation
2. CVS health Corporation
Textiles Industry
1. Lbrands, Inc
2. Urban outfitters, Inc
Oil Industry
1. ExxonMobil Ltd
2. Chevron Ltd
Industries Name Contribution in GDP (Billion
USD)
Financial Industry 4112.5
Manufacturing 2245
Agriculture & fishing 165.9
Health care and social assistance 1472.3
Textiles industry 120.5
Oil and Gas Industry 220.4

GUJARAT INDUSTRIES
Industries names Companies name
Gems and Jewellery Industry Sanghavi Exporters
Venus Jewel
Pharmaceutical Industry Sun Pharma
Torrent Pharma
Chemical Industry J B Chemicals
TATA Chemicals
Textiles Industry Arvind Ltd
Raymond Ltd
Agriculture Industry KRIBHCO
GNFC
Banking and Insurance HDFC Group
SBI Group
Oil and Gas Industry IOCL
ONGC
Manufacturing Industry Jyoti ltd
Larsen and Tourbo

Agriculture Sector of USA
● Agriculture, food, and related industries contributed $1.053 trillion to U.S. gross
domestic product (GDP) in 2017, a 5.4-% share.
● The output of America’s farms contributed $132.8 billion of this sum—about 1 % of
GDP.
● In 2017, 21.6 million full- and part-time jobs were related to the agricultural and
food sectors—11.0 % of total U.S. employment.
● Direct on-farm employment accounted for about 2.6 million of these jobs, or 1.3 %
of U.S. employment. Employment in agriculture- and food-related industries
supported another 19.0 million jobs.
● Imports grew by 6 % in 2018 to $129 billion. Imports have grown at a faster rate
than exports since 2016, driven in part by strong domestic economic growth.

Agriculture Sector of India
● Primary source of livelihood for about 58%
● World’s 6th largest in grocery Market with retail contributing 70 %of the sales.
● India is the second largest fruit producer in the world
● During 2017-18 crop year, food grain production is estimated at record 284.83
million tonnes
● Milk production was estimated at 165.4 million tonnes during FY17
● Total agricultural exports from India grew at a CAGR of 16.45% to reach US$ 38.21
billion in FY18

Agriculture Sector of Gujarat
● Gujarat is significant in terms of area sown at the National Level in bajra, maize, tur,
onions, cabbages, brinjal and okra, bananas, papaya, chiku, groundnut, castor, til,
cotton seed, fennel, cumin, fenugreek, ajwain, garlic, cotton and tobacco
● Gujarat state is at the top position in Fisheries as is at the west coast of India and it
covers 1/5th part of India along the coast as well as it is exclusive economic zone. It
contributes about 20% of total marine production.
● In terms of milk production, Gujarat is ranked fifth with about eight per cent share
across India in total milk production of over 120 million tonnes (mt).
● Gujarat has highest productivity in, Mustard, Castor and Cotton, 2nd highest
productivity in Groundnut and Bajra, 3rd highest productivity in Banana and Isabgul
in India.

Justification of Organic food Industry
● The U.S. organic food market size is expected to reach USD 70.4 billion by 2025 as a
result of increasing demand from consumers.
● Fruit and vegetables continue to be the largest organic food category. Sales in the
category grew 5.3% in 2017 to reach $16.5 billion.

● Imports from Mexico and Canada represent $324 million annually on average.
Imports from South America represent $423 million annually on average from five
main countries: Peru ($92.9 million), Ecuador ($71.6 million), Colombia ($64.4
million), Brazil ($64.1 million) and Argentina ($55.3 million). As with exports,
proximity is clearly a major factor when it comes to trade of organic products.
● India had exported organic food products worth $515 million in 2017-18, about 39
per cent more than the products worth $370 million exported in the previous year.
● The total volume of exports was 4.58 lakh tonnes and it primarily included oilseeds,
cereals & millets, sugar, fruit juice concentrates, tea, spices, pulses, dry fruits, and
medicinal plant products.

● From graph and table, we can say that
Gujarat is the on the 8th position of
organic food production. Gujarat
produce 0.41 lakh. MT (million tonned)
organic food production. But Gujarat
has one of the major benefits of costal
area which is not available for other
state.
● Nearer of the Gujarat state MP &
Rajasthan Produce 50% of the total
organic food production. Both states
have not coastal area and this benefit
are taken by the Gujarat. This way
Gujarat Export their organic food.

STEEPLED
analysis
on
organic farming
in
Gujarat and USA

STEEPLED Analysis on
Organic farming in Gujarat
Social Analysis
● Most of the people of India not use organic
product due to high price
● Demand of organic products is increasing
majorly due to the health benefits, avoidance
of chemical usage
● Most of the people who live luxurious life only
they are purchase the organic products
● Increased demand of the organic product due
to e-commerce
Social Analysis
● People are more choosing to purchase organic
foods
● Greater knowledge about health issues and
food
● Normal people also used the organic products
in their daily life style
Organic farming in USA

Technological Analysis
● Poly houses: poly houses are the growing of
vegetables, floriculture, fruit crop growing
● Multi-layer farming: This is a simple and
effective technique,using this method, farmer
produce vegetables and creeper vegetables
● Greenhouse: Man has developed methods of
growing some high value crop continuously by
providing protection from the excessive cold
or heat, which is called as Greenhouse
Technology.
● Contract farming is also introducing in now a
day
Technological Analysis
● Uses sophisticated technologies Such as
robots, temperature sensor and moisture
sensors, aerial images and GPS technologies
● Precision agriculture and robotic systems are
more profitable
● Advanced equipment has opened up an
entirely new realm of organic farming
● Blue river is one such company offering “see
& spray” technology
● The financial doors have opened to
companies seeking to develop commercially
viable organic agricultural technology.

Economic Analysis
● Gujarat is also no. 3 state in ease of doing
business
● The organic products market in India has been
growing at a CAGR of 39%
● India exported organic products worth $515
million in the financial year 2017-18
● Total volume Export 4.58lakh tone
Economic Analysis
● U.S. organic imports are equaled $1.65 billion
in 2016
● Top U.S. organic imports in 2016 included
bananas, coffee, and olive oil (all of which the
United States does not produce in large
quantities), as well as corn and soybeans
● Organically farmed soil absorbs more
available rainfall
● Diversity provide adverse price changes in
single commodity
● Provide better seasonal distribution inputs
● Organic farms require more intensive
management than specialized conventional
farmer

Environment Analysis
● Need to protect long term fertility of soil
● Need to biological nitrogen fixation
● Organic agriculture is a set of practices in
which the use of external inputs is minimized.
● Synthetic pesticides, chemical fertilizers,
synthetic preservatives, pharmaceuticals, GM
organisms, sewage sludge and irradiation are
all excluded.
Environment Analysis
● Reduced Exposure to Pesticides and
Chemicals
● Organic Farming Builds Healthy Soil
● Soil building practices such as crop rotations,
inter-cropping, symbiotic associations, cover
crops, organic fertilizers and minimum tillage
are central to organic practices.
● Organic Farming Supports Water
Conservation and Water Health
● Organic Farming Encourages Biodiversity
● Organic agriculture reduces non-renewable
energy use by decreasing agrochemical needs
(these require high quantities of fossil fuel to
be produced).

Political Analysis
● Government promoting flagship programs
NPOP(National Programme for Organic
Production) and NPOF
● NPOF(National Project on Organic Farming)
provided with the assistance of 25% to 35%
total cost of project
● Prime minister introduced Paramparagat
Krishi Vikas Yojana (PKVY), under which 2 lakh
hectares has been made suitable for organic
farming thereby benefiting to 5 lakh farmers.
● National Mission for Sustainable Agriculture
(NMSA)
● Rastriya Krishi Vikas Yojana (RKVY)
● National Mission on Oilseeds & Oil Palm
(NMOOP)
● Network Project on Organic Farming of ICAR.
Political Analysis
● FY 2009-Present Organic Agriculture Research
and Extension Initiative (OREI)
● FY 2001-Present Organic Transitions (ORG)
● Safety inspection services
● “A Healthier you”government strategy

Legal Analysis
● All organic foods comply with the food safety
and standards authority of india.
● The Food Safety and Standards (Organic Food)
Regulations checks that the business gets two
systems of certifications
NPOP (National Programme for Organic
Production)
PGS (Participatory Guarantee System)
● The food companies have to approach FSSAI
for food license which is valid for five years.
● FSSAI registration license is given when the
turnover is less than 12 lakhs.
● FSSAI state license is given when the turnover
is more than 12 lakhs
● FSSAI central license is given when the
turnover is above 20 crores
Legal Analysis
● Certification is a USDA-regulated role that
verifies through inspection
● NOP guidelines and permits the sale of goods
carrying the organic seal
● Certification allowed to farm sale label and
represent product as organic
● US Department of Agriculture established
labeling standards in 2002.

Ethical Analysis
● NO Pesticide use on farms
Ethical Analysis
● Organic farmers, as a group, have a serious
moral obligation to come together and agree
on a strong and rich statement of the many
values it provides, or has the potential to
provide, the public.
● Organic farming has the three basic goal
values, the values of its product: sufficient,
healthy and sustainable food supplies.

Demographic Analysis
● 31 march 2018 total area under organic
certification process (registered under
national Programme) is 3.56 million hectares
● Currently 8,35,000 farmers engaged in
organic farming in India
● Gujarat has 54000 hectares area of organic
food production and 19500 total farmers
available
Demographic Analysis
● In Latin America, 2,60,000 producers
managed 8.1 million hectares of agricultural
land organically
● In North America, almost 2.5 million hectares
are managed organically bythe 14,062
farmers
● Organic farmers more likely to be younger,
engage in direct sales

SWOT Analysis
on
organic farming
in
Gujarat and USA

SWOT analysis on
Strengths Analysis
● Comparative advantage in organic food
production
● High quality and improved nutrition
● Improved soil health
● Premium prices
● Environmental sustainability
● High water-use efficiency
● Government policies (like NPOP)
Strengths Analysis
● Organic , high quality food
● Positive employee environment
● Fair Labor wages for the farmers.
● Economies of scale
● Strong cash flow and stock position
● R&D investments on Organic farming
● Strategy for development of organic market
SWOT analysis on

SWOT analysis on
Weaknesses Analysis
● Productivity gaps
● Lack of established markets
● Poor quality management in production and
processing
● Less incentives from Government
● Low R&D investments on Organic farming
● Research Organic market buyers/consumers
driven market
● Lack of strategy for development of organic
market
● Disjointed producers, processors and traders
● Adulteration and poor quality of organic
inputs
● Large number of small farms with weak
organizational building
● Intensive in nature and high labor costs
Weaknesses Analysis
● Weak international operations
● Viewed as luxury shopping destination
● Targets a small amount of shoppers
● Higher priced food
SWOT analysis on

SWOT analysis on
Opportunities Analysis
● Big and growing market potential
● Growing purchasing power of consumers
● Growing health awareness
● 70% of GCA(Global Climate Action) is under
rain fed agriculture
● Reduce heavy subsidies on food and fertilizers
● Control the nitrate losses and Co2 emissions
● Earn high export earnings
Opportunities Analysis
● Market leadership in high demand segment
● Expand Private label brands
● Wide amount of where stores are located
allows for individual farmers to sell to store
regions.
● Increasing demand for organic food
● Introduce new products
SWOT analysis on

SWOT analysis on
Threats Analysis
● Costly and complex organic certification
process
● Lack of infrastructure facilities (like labs) and
certification bodies
● Only export regulated organic market
● Low awareness about organic inputs
Threats Analysis
● Increased competition
● Changes in economic conditions
● Changes in government regulations
● Foreign exchange rates international markets
may open exposure to added costs
● Introduction of GM crops
SWOT analysis on

Reference
https://www.usa.gov/currency
https://www.bbc.com/news/world-us-canada-16761057
https://www.cia.gov/library/publications/the-world-factbook/geos/us.html
https://www.commisceo-global.com/resources/country-guides/usa-guide
https://www.statista.com/statistics/270000/age-distribution-in-the-united-states/
https://statesymbolsusa.org/symbol-official-item/national-us/state-seal/united-states-seal
https://www.worldatlas.com/articles/the-most-spoken-languages-in-america.html
https://www.nationsencyclopedia.com/Americas/United-States-LOCATION-SIZE-AND-EXTENT.html
www.bea.gov
http://www.indianbotanists.com/2014/02/avail-benefits-from-government-schemes.html
https://nifa.usda.gov/program/organic-agriculture-program
https://www.zeebiz.com/india/news-8-agreements-signed-between-india-and-the-us-and-what-they-mean-2069
http://www.dowrorissa.gov.in/TrainingProgramme/2018/FEBRUARY/ICAR/materials/dy3/Overview%20of%20Organic%20Farming.pdf

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