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Master Seminar on
Opportunities and Challenges for Marketing
of Organic Products in India
 Introduction
 Why Organic
 Advantages and Disadvantages
 Global & Indian Scenario
 Major Indian Organic Brand
 Domestic Market
 Export Market
 Swot analysis
 Opportunities
 Challenges
 Conclusion
2
Content
To give brief overview of Organic Agriculture.
To study advantages and disadvantages of Organic
Farming.
To study the Global and Indian scenario of Organic
Products.
To find out the companies dealing in Organic Products.
To study the market scenario of Organic Products in India
To study the SWOT analysis of Organic Products in India.
To find out the opportunities and challenges of Organic
Product In India
3
Objective
Definition of “Organic”
 Organic foods are foods that are produced using methods
of organic farming– with limited modern synthetic inputs such
as synthetic pesticides and chemical fertilizers.
 Organic food is produced using environmentally and animal
friendly farming methods.
4
“ Organic products are grown under a system of agriculture
without the use of chemical fertilizers and pesticides with an
environmentally and socially responsible approach”.
Organic Agriculture
5
 Organic Agriculture is a sustainable and environment friendly
production system that offers cultural benefits
 It relies on five capital assets for success: natural, social,
human, physical and financial and as such contributes to build
up stocks of these resources over a period of time.
 This helps in dealing with many of the factors that lead to food
insecurity.
Cont..
6
 Healthy food: Contains no toxic substances-safe
 Natural & Good taste
 Takes care of Environmental concerns of Farming
 Better for Human health
WHY ORGANIC ?
7
Main Principles of Organic Farming
Maintain long term Fertility of Soil
Avoid all forms of pollution that may result from
Agricultural Technology
Produce food stuff at high Nutritional quality and
sufficient quantity.
To make it possible for agricultural producers to earn
a living through their work and develop their
potentialities as human being.
8
Four Pillars of Organic Farming
I. Organic standards
II. Certification/Regulatory mechanism
III. Technology package of practice
IV. Market network
9
Indian Organic Certification Agency
Tamil Nadu Organic Certification Department (TNOCD)
Indian Organic Certification Agency
Lacon Quality Certification
Natural Organic Certification Agency
OneCert Asia Agri Certification
Bureau Veritas Certification India Pvt.
ECOCERT India Pvt. Ltd
SGS India Pvt. Ltd.
Control Union Certifications
Uttaranchal State Organic Certification Agency (USOCA)
APOF Organic Certification Agency
Food Cert India Pvt. Ltd
Rajasthan Organic Certification Agency (ROCA)
Aditi Organic Certifications Pvt. Ltd
Vedic Organic Certification Agency
Chhattisgarh Certification Society,
10
Non-organic Farming Organic farming
Against Nature Harmony with Nature
Soil structure destroyed Soil structure improves
More chemical residues
present in crops
No chemical residues
Low quality produce Premium quality
Highly fluctuation in yield Reliable yield
11
Table:1 Difference between organic & non-organic
Organic Farming
Advantages
 Lower Input Costs
 Improved soil structure
 Premium price
 Add value
 Environmental friendly
Disadvantages
 Lower Productivity
 Time consuming
 Required Skill
 Production cost high
12
 Cereals: Rice, Ragi, Wheat, Maize, Jowar, millets
 Pulses: Red gram dal, Green gram dal, and Bengal gram
 Oil seed crop: Groundnut, Sunflower, Cotton, Safflower, Soya bean
 Beverages : Coffee ,Tea
 Spices : Turmeric, Ginger, Black and white pepper, Cardamom
 Vegetables: Onion, Potato, Brinjal, Beans, Garlic, Gourds, Leafy
vegetables etc
 Fruits : Mango, Banana, pomegranate, Pineapple .
 Others: Sugar cane, medicine plant etc.
Major Organic Products in India
13
 Australia has the largest share of organic agricultural land it
33%. followed by Europe (27%) and Latin America (23%).
 The country with the largest organic area is Australia (12 mha).
 0.9 percent of the agricultural land is organic, and 7 countries
have more than ten percent organic agricultural land.
 The total organic area in Asia is 2.9 mha. This constitutes 7% of
the world’s organic agricultural land.
 Global organic sales reached $54.9 billion in 2009, up from,
$50.9 billion in 2008.(Acc.to Organic Monitor estimates 2010)
Current Global Status of Organic Products
14
 1.6 million organic producers in the world.
 160 countries of the World. (BioFach 2010 at
Nuremberg ).
 Europe contributed to the largest share it revenue
of USD 27.8 billion in 2010.
The Asia-Pacific organic food market had a total
revenue of USD 3.5 billion in 2010 and had a
CAGR of 16.2 per cent between 2006-2010.
Cont..
15
Source: Report of YES Bank, Food and Agribusiness Dept. 2010
Table:2 Distribution of organic agricultural
land 2010
Country Land(%)
Northern America 7%
Africa 3%
Asia 7%
Australia 33%
Latin America 23%
Europe 27%
Source: FiBL-IFOAM Survey 2010
16
7%
3%
7%
33%
23%
27%
DISTRIBUTION(%)
Northern America
Africa
Asia
Australia
Latin America
Europ
Fig:1 Distribution of organic agricultural land 2010
Source: FiBL-IFOAM Survey 2010
16
Current status of organic products in India
India ranks 10th among the top ten countries in terms
of cultivable land under organic certification
The market for organic foods is annual growth rate
(CAGR) of 20-22 per cent.
The market for organic food including exports is
currently valued at Rs 1,000 crore.
The country produced around 3.88 million tones of
certified organic products in 2012, that includes
basmati, pulses, tea, coffee, spices and oilseeds.
Global organic food and beverages market is
expected to grow from USD 57.2 billion in 2010 to
USD 104.5 billion by 2015 with a CAGR of 12.8%. 18
cont…
Organic foods industry presently is metro-based, with about 95
per cent of the brands existing in top 10 metros like
Delhi, Kolkata, Mumbai, Pune, Chennai, Bangalore and other
tier II cities.
With rising spending power of the growing middle class in the
country and increased awareness towards chemical free food,
organic and natural products sector will grow significantly in
the coming years.
Government is promoting organic farming under National
Project on Organic Farming ( NPOF), National Horticulture
Mission (NHM) and Rashtriya Krishi Vikas Yojana (RKVY).
19
Source : Yes Bank 2011
20
Domestic Market
 The total area under organic certification is 5.21 million
hectare in India.
 The states organic farming are Madhya Pradesh has largest
area of organic farming are 4.40 lakh ha., Maharashtra 1.50
lakh ha. and Orissa 95,000 hector.
 The state Gujarat has a 70538 ha. Organic land.
 India is the largest organic cotton grower in world, and
accounts for 50 percent share of total world organic cotton
production.
 Estimated Market size of organic fruits and dairy products at
present is USD 80 million and USD 20 million respectively.
21
Cont…
 The market for organic food is extremely backward in
India at present, with very few active brands and low
penetration even among urban consumers.
 The growth in the market is also being contributed by
the foray of several retail giants and online retailers in
the Indian organic food market. Over the last few years,
several players have started to offer organic food
products through online channel. Some of the major
online organic food retailers include: Farm2Kitchen,
Big Basket, Best Organic, etc.
22
23
Source : Yes Bank 2011
Vaidyasala Herbal Food
Ekom Exim Pvt Ltd
Rapid Organic Pvt. Ltd
Ecofarms
M.J. exports
Aksagrotech Pvt Ltd
Turn Organic
Kolli Projects
Seamoon International Exports & Imports
Organic Food Brands
24
25
Export Market
 India organic producers and exporters are well aware
of the demand for organic products in developed
countries.
 Major Products available for the export market are
rice, wheat, tea, spices, coffee, pulses, fruits &
vegetables, cashew nuts, cotton, oil seeds and
medicinal herbs.
 The channels adopted for the export of organic
products, expect for tea, are mainly trough export
companies.
26
 Value of total export -USD 157.22 million .
 Share of Exports to total Production :- 4% approx.
 Increase in Export Value over previous year :- 33%
approx.
 India has 5,70,000 producer in 2011 increasing up to
4,00,551 Organic producer in 2010 .
Present status of Organic Export from India
27
Source: APEDA 2013
 India exported 135 products year 2012-13 with the
total volume of 165262 Mt including 4985 Mt
organic textiles.
 The organic agri export realization was around USD
374 million including USD 160 million organic
textiles registering a 4.38% growth over the previous
year.
Cont..
28
Source: APEDA 2013
Exports destination
 Europe: Netherlands, United Kingdom, Germany, Belgium,
Sweden, Switzerland, France, Italy, Spain;
 Americas: USA, Canada;
 Asia : Japan, Singapore
 Middle East: Saudi Arabia, UAE;
 Australia
 Africa: South Africa
29
Organic Products Export
 Oil seeds (41%) lead among the products exported
followed by Sugar Cane (26%), Processed food
products (14%), Basmati Rice (5%), Other cereals &
millets (4%), Tea (2%), Spices (1%), Dry fruits (1%)
and others.
30
44%
28%
15%
5%
4% 2% 1%
1%
organic products(%)
Oil seeds
Sugar Cane
Processed food products
Basmati Rice
cereals & millets
Tea
spices
dry fruits
Fig-3: Organic Products Exported
Source: APEDA.GOV.IN 2012
31
32
 Wide variety of fruits and
vegetables and other
commodities can be grown
organically
 Safety food
 Differentiation can be easily
created.
 Farmers as well as
Government interests are
rising in organic
 Short shelf life varieties
 Lack of farmer awareness about
agricultural practices, products
and technologies for organic
farming
 Lack of market information.
 Inadequate post harvest
management and related
specialized infrastructure to
support organic food production
 Certification
Strengths Weaknesses
33
Opportunities Threats
 Favorable government vision
 Price –premiums in different
markets
 Export opportunities in new
product/market( section ).
 Big retail stores/chains opening
up
 Rising demand for organic
products
 Private sector keen to join
organic chain value chain
 Non-tariff barriers may
be imposed by developed
nations
 Threat of inflation and
recession
 Costly and complex
organic certification
process
 Low awareness about
organic inputs
34
Opportunities
Growing health awareness
Environmental improvements
Public health improvements
Combat global warming
Local supplies of organic foods
Big and growing market potential
Growing purchasing power of consumers
35
Challenges
Quality and safety standards
Market intelligence
Brand promotion
Farmers’ knowledge
Capacity building of stakeholders
Demand and supply balance
Lack of access and non-availability of inputs
Supply chain linkages
Certification 36
Government Initiatives
Training programs for producers and certification agencies;
Setting up set of guidelines , referred to as “National Programme for
Organic Production (NPOP)”
Improving the quality of research and development;
Setting up a research institution aimed at improving different
aspects of organic production;
Promoting certification programs;
Developing national policies for organic production;
Improving the quality of products, packaging, logistic infrastructure
and technical support.
Providing subsidies for promoting organic farming
Promoting Indian organic products at international fairs (e.g. Bio-
Fach) and promotional programs in the media (e.g. video films);
37
Conclusion
The Indian Organic markets is at infant in it’s growth.
India can take advantages of growing opportunities in
Organic sector. Making use of varied agro climatic
condition and traditional Organic resource and
Farming practice. The major challenges in market of
Organic product are quality and safety standards,
certification and supply chain linkages. India is a
potential one of the largest producer of Organic
produced. But there urgent need to overcome the
challenges of markets and take the advantages of
emerging opportunities.
38
Books:
 Joshi M.(2012),”New Vistas of Organic Farming”
, Scientific publishers (INDIA) Jodhpur ,P:383-392.
 Modi H.A.,(2012)”Sustainable Organic
Agriculture”, Avishkar Publisher (India), Jaipur, P 1-
10.
 Singh A.K.,(2007), “Conversion to Organic
Agriculture”, International book Publisher Co.,
Lucknow, 317-327 P.
39
Bibliography
Web sites:
 www.organic-world.net
 www.fibl.org
 www.popularkheti.info
 www.apeda.com
Links:
 http://www.exportersindia.com/
 http://www.apeda.gov.in/apedawebsite/organic/Organic
_Products.htm
40
Cont…
41

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Opportunities and challenges for marketing of organic products in india

  • 1. 1 Master Seminar on Opportunities and Challenges for Marketing of Organic Products in India
  • 2.  Introduction  Why Organic  Advantages and Disadvantages  Global & Indian Scenario  Major Indian Organic Brand  Domestic Market  Export Market  Swot analysis  Opportunities  Challenges  Conclusion 2 Content
  • 3. To give brief overview of Organic Agriculture. To study advantages and disadvantages of Organic Farming. To study the Global and Indian scenario of Organic Products. To find out the companies dealing in Organic Products. To study the market scenario of Organic Products in India To study the SWOT analysis of Organic Products in India. To find out the opportunities and challenges of Organic Product In India 3 Objective
  • 4. Definition of “Organic”  Organic foods are foods that are produced using methods of organic farming– with limited modern synthetic inputs such as synthetic pesticides and chemical fertilizers.  Organic food is produced using environmentally and animal friendly farming methods. 4
  • 5. “ Organic products are grown under a system of agriculture without the use of chemical fertilizers and pesticides with an environmentally and socially responsible approach”. Organic Agriculture 5
  • 6.  Organic Agriculture is a sustainable and environment friendly production system that offers cultural benefits  It relies on five capital assets for success: natural, social, human, physical and financial and as such contributes to build up stocks of these resources over a period of time.  This helps in dealing with many of the factors that lead to food insecurity. Cont.. 6
  • 7.  Healthy food: Contains no toxic substances-safe  Natural & Good taste  Takes care of Environmental concerns of Farming  Better for Human health WHY ORGANIC ? 7
  • 8. Main Principles of Organic Farming Maintain long term Fertility of Soil Avoid all forms of pollution that may result from Agricultural Technology Produce food stuff at high Nutritional quality and sufficient quantity. To make it possible for agricultural producers to earn a living through their work and develop their potentialities as human being. 8
  • 9. Four Pillars of Organic Farming I. Organic standards II. Certification/Regulatory mechanism III. Technology package of practice IV. Market network 9
  • 10. Indian Organic Certification Agency Tamil Nadu Organic Certification Department (TNOCD) Indian Organic Certification Agency Lacon Quality Certification Natural Organic Certification Agency OneCert Asia Agri Certification Bureau Veritas Certification India Pvt. ECOCERT India Pvt. Ltd SGS India Pvt. Ltd. Control Union Certifications Uttaranchal State Organic Certification Agency (USOCA) APOF Organic Certification Agency Food Cert India Pvt. Ltd Rajasthan Organic Certification Agency (ROCA) Aditi Organic Certifications Pvt. Ltd Vedic Organic Certification Agency Chhattisgarh Certification Society, 10
  • 11. Non-organic Farming Organic farming Against Nature Harmony with Nature Soil structure destroyed Soil structure improves More chemical residues present in crops No chemical residues Low quality produce Premium quality Highly fluctuation in yield Reliable yield 11 Table:1 Difference between organic & non-organic
  • 12. Organic Farming Advantages  Lower Input Costs  Improved soil structure  Premium price  Add value  Environmental friendly Disadvantages  Lower Productivity  Time consuming  Required Skill  Production cost high 12
  • 13.  Cereals: Rice, Ragi, Wheat, Maize, Jowar, millets  Pulses: Red gram dal, Green gram dal, and Bengal gram  Oil seed crop: Groundnut, Sunflower, Cotton, Safflower, Soya bean  Beverages : Coffee ,Tea  Spices : Turmeric, Ginger, Black and white pepper, Cardamom  Vegetables: Onion, Potato, Brinjal, Beans, Garlic, Gourds, Leafy vegetables etc  Fruits : Mango, Banana, pomegranate, Pineapple .  Others: Sugar cane, medicine plant etc. Major Organic Products in India 13
  • 14.  Australia has the largest share of organic agricultural land it 33%. followed by Europe (27%) and Latin America (23%).  The country with the largest organic area is Australia (12 mha).  0.9 percent of the agricultural land is organic, and 7 countries have more than ten percent organic agricultural land.  The total organic area in Asia is 2.9 mha. This constitutes 7% of the world’s organic agricultural land.  Global organic sales reached $54.9 billion in 2009, up from, $50.9 billion in 2008.(Acc.to Organic Monitor estimates 2010) Current Global Status of Organic Products 14
  • 15.  1.6 million organic producers in the world.  160 countries of the World. (BioFach 2010 at Nuremberg ).  Europe contributed to the largest share it revenue of USD 27.8 billion in 2010. The Asia-Pacific organic food market had a total revenue of USD 3.5 billion in 2010 and had a CAGR of 16.2 per cent between 2006-2010. Cont.. 15 Source: Report of YES Bank, Food and Agribusiness Dept. 2010
  • 16. Table:2 Distribution of organic agricultural land 2010 Country Land(%) Northern America 7% Africa 3% Asia 7% Australia 33% Latin America 23% Europe 27% Source: FiBL-IFOAM Survey 2010 16
  • 17. 7% 3% 7% 33% 23% 27% DISTRIBUTION(%) Northern America Africa Asia Australia Latin America Europ Fig:1 Distribution of organic agricultural land 2010 Source: FiBL-IFOAM Survey 2010 16
  • 18. Current status of organic products in India India ranks 10th among the top ten countries in terms of cultivable land under organic certification The market for organic foods is annual growth rate (CAGR) of 20-22 per cent. The market for organic food including exports is currently valued at Rs 1,000 crore. The country produced around 3.88 million tones of certified organic products in 2012, that includes basmati, pulses, tea, coffee, spices and oilseeds. Global organic food and beverages market is expected to grow from USD 57.2 billion in 2010 to USD 104.5 billion by 2015 with a CAGR of 12.8%. 18
  • 19. cont… Organic foods industry presently is metro-based, with about 95 per cent of the brands existing in top 10 metros like Delhi, Kolkata, Mumbai, Pune, Chennai, Bangalore and other tier II cities. With rising spending power of the growing middle class in the country and increased awareness towards chemical free food, organic and natural products sector will grow significantly in the coming years. Government is promoting organic farming under National Project on Organic Farming ( NPOF), National Horticulture Mission (NHM) and Rashtriya Krishi Vikas Yojana (RKVY). 19
  • 20. Source : Yes Bank 2011 20
  • 21. Domestic Market  The total area under organic certification is 5.21 million hectare in India.  The states organic farming are Madhya Pradesh has largest area of organic farming are 4.40 lakh ha., Maharashtra 1.50 lakh ha. and Orissa 95,000 hector.  The state Gujarat has a 70538 ha. Organic land.  India is the largest organic cotton grower in world, and accounts for 50 percent share of total world organic cotton production.  Estimated Market size of organic fruits and dairy products at present is USD 80 million and USD 20 million respectively. 21
  • 22. Cont…  The market for organic food is extremely backward in India at present, with very few active brands and low penetration even among urban consumers.  The growth in the market is also being contributed by the foray of several retail giants and online retailers in the Indian organic food market. Over the last few years, several players have started to offer organic food products through online channel. Some of the major online organic food retailers include: Farm2Kitchen, Big Basket, Best Organic, etc. 22
  • 23. 23 Source : Yes Bank 2011
  • 24. Vaidyasala Herbal Food Ekom Exim Pvt Ltd Rapid Organic Pvt. Ltd Ecofarms M.J. exports Aksagrotech Pvt Ltd Turn Organic Kolli Projects Seamoon International Exports & Imports Organic Food Brands 24
  • 25. 25
  • 26. Export Market  India organic producers and exporters are well aware of the demand for organic products in developed countries.  Major Products available for the export market are rice, wheat, tea, spices, coffee, pulses, fruits & vegetables, cashew nuts, cotton, oil seeds and medicinal herbs.  The channels adopted for the export of organic products, expect for tea, are mainly trough export companies. 26
  • 27.  Value of total export -USD 157.22 million .  Share of Exports to total Production :- 4% approx.  Increase in Export Value over previous year :- 33% approx.  India has 5,70,000 producer in 2011 increasing up to 4,00,551 Organic producer in 2010 . Present status of Organic Export from India 27 Source: APEDA 2013
  • 28.  India exported 135 products year 2012-13 with the total volume of 165262 Mt including 4985 Mt organic textiles.  The organic agri export realization was around USD 374 million including USD 160 million organic textiles registering a 4.38% growth over the previous year. Cont.. 28 Source: APEDA 2013
  • 29. Exports destination  Europe: Netherlands, United Kingdom, Germany, Belgium, Sweden, Switzerland, France, Italy, Spain;  Americas: USA, Canada;  Asia : Japan, Singapore  Middle East: Saudi Arabia, UAE;  Australia  Africa: South Africa 29
  • 30. Organic Products Export  Oil seeds (41%) lead among the products exported followed by Sugar Cane (26%), Processed food products (14%), Basmati Rice (5%), Other cereals & millets (4%), Tea (2%), Spices (1%), Dry fruits (1%) and others. 30
  • 31. 44% 28% 15% 5% 4% 2% 1% 1% organic products(%) Oil seeds Sugar Cane Processed food products Basmati Rice cereals & millets Tea spices dry fruits Fig-3: Organic Products Exported Source: APEDA.GOV.IN 2012 31
  • 32. 32
  • 33.  Wide variety of fruits and vegetables and other commodities can be grown organically  Safety food  Differentiation can be easily created.  Farmers as well as Government interests are rising in organic  Short shelf life varieties  Lack of farmer awareness about agricultural practices, products and technologies for organic farming  Lack of market information.  Inadequate post harvest management and related specialized infrastructure to support organic food production  Certification Strengths Weaknesses 33
  • 34. Opportunities Threats  Favorable government vision  Price –premiums in different markets  Export opportunities in new product/market( section ).  Big retail stores/chains opening up  Rising demand for organic products  Private sector keen to join organic chain value chain  Non-tariff barriers may be imposed by developed nations  Threat of inflation and recession  Costly and complex organic certification process  Low awareness about organic inputs 34
  • 35. Opportunities Growing health awareness Environmental improvements Public health improvements Combat global warming Local supplies of organic foods Big and growing market potential Growing purchasing power of consumers 35
  • 36. Challenges Quality and safety standards Market intelligence Brand promotion Farmers’ knowledge Capacity building of stakeholders Demand and supply balance Lack of access and non-availability of inputs Supply chain linkages Certification 36
  • 37. Government Initiatives Training programs for producers and certification agencies; Setting up set of guidelines , referred to as “National Programme for Organic Production (NPOP)” Improving the quality of research and development; Setting up a research institution aimed at improving different aspects of organic production; Promoting certification programs; Developing national policies for organic production; Improving the quality of products, packaging, logistic infrastructure and technical support. Providing subsidies for promoting organic farming Promoting Indian organic products at international fairs (e.g. Bio- Fach) and promotional programs in the media (e.g. video films); 37
  • 38. Conclusion The Indian Organic markets is at infant in it’s growth. India can take advantages of growing opportunities in Organic sector. Making use of varied agro climatic condition and traditional Organic resource and Farming practice. The major challenges in market of Organic product are quality and safety standards, certification and supply chain linkages. India is a potential one of the largest producer of Organic produced. But there urgent need to overcome the challenges of markets and take the advantages of emerging opportunities. 38
  • 39. Books:  Joshi M.(2012),”New Vistas of Organic Farming” , Scientific publishers (INDIA) Jodhpur ,P:383-392.  Modi H.A.,(2012)”Sustainable Organic Agriculture”, Avishkar Publisher (India), Jaipur, P 1- 10.  Singh A.K.,(2007), “Conversion to Organic Agriculture”, International book Publisher Co., Lucknow, 317-327 P. 39 Bibliography
  • 40. Web sites:  www.organic-world.net  www.fibl.org  www.popularkheti.info  www.apeda.com Links:  http://www.exportersindia.com/  http://www.apeda.gov.in/apedawebsite/organic/Organic _Products.htm 40 Cont…
  • 41. 41