◊ By Rajan Patel

Note: To find organic products and organic ingredient suppliers in India, buy the Organic Directory 

In recent years, organic farming and the organic food industry have gotten a lot of attention. The awareness of organic food has increased rapidly as health has come into focus for people, especially after Covid 19.

People have realised the importance of paying the extra price for organic food now as opposed to paying hefty medical and hospital bills in the future. But India being a price-conscious market, demand was moving at a 30% Y-O-Y compounding rate (As per ASSOCHAM), which has now gained momentum.

A year or two ago, mostly only organic cereals, grains, spices, fruits and vegetables, etc, were available in the market. But now, due to the surge in demand, other alternatives within the organic segment, such as organic processed foods, organic bakery products, organic dairy items, organic snacks, organic clothing, etc, have also become widely available.

Recognising the opportunity within the sector, many entrepreneurs have taken the plunge into organic business to plug the gap that essentials were not able to fill.

India currently has a major consuming young population of 25-45 years of age. Therefore, there is huge potential for organic product startups.

Even farmers are increasingly opting for organic farming as the opportunity to earn for the long haul from producing organic produce is way higher than in conventional farming.

The government, too, is encouraging farmers to go organic as it well knows the advantages it offers in terms of saving the soil, air and water from the degradation brought on by chemical fertilisers and pesticides, besides sparing people from chemical-laden food.

In the current scenario, the best way to economise and cover maximum market is by selling online and supplying to local stores and hyper stores. Maintaining one’s own brick and mortar store is quite capital-intensive and requires tremendous effort compared to selling online, which attracts lower costs and covers a larger market.

Patience is the key in organic business as the demographic is niche – upper middle- and upper-class working women mostly. But the good part is the size of this demographic is growing at a rapid pace.

One also has an opportunity to export if the produce is of high quality and certified as the demand in Europe, USA and other developed countries is huge. At the same time the quality checks required to export are also very stringent. The best way to enter the export market is through online marketplaces and B2B channels.

Furthermore, many brands in India are present through the omnichannel business model (online and offline both). That can be a great way to tap the market as it fulfils both the offline experience and also the convenience of home delivery. But the omnichannel model requires significant working capital to manage both verticals effectively and I personally wouldn’t advise one to take this route from the very start.

It would be prudent to focus on fewer products or sub category of products if one is launching finished products with value addition, as the cost will come down over a period of time and margins will increase.

Moreover, with fewer products, one can gain deeper insight to gain competitive advantage over a period and marketing strategies can be tweaked to become more focused and effective.

Proving the authenticity of the organic produce to consumers is the biggest challenge that sellers face. If this most important hurdle can be crossed and consumers’ trust won, the brand has cracked the code and can succeed.

From the list of current players in the Indian organic market, a few have been very successful and many are on the right path to solve this puzzle effectively. The key is transparent sourcing from genuine farmers and effective branding on packaging material and promotions.

TIPS FOR ORGANIC BUSINESS ENTREPRENEURS

– Start with online business first to gain foothold

– Start with a small range of products to test the market and gain insight

– For export, enter the market through online marketplaces and B2B platforms

– Sourcing authentic organic products and effective branding to win consumer trust are key to succeeding in organic business

– Like most enterprises, organic business requires a lot of patience

– The organic consumer demographic in India comprises mostly working women

The author is Co-Founder, Greenobazaar, an omnichannel organic business comprising an e-commerce platform, as well as, three brick and mortar organic stores in Ahmedabad. He is also Co-Founder of Farmse, an organic food brand.