How will India’s organic food market shape up after the coronavirus

How will India’s organic food market shape up after the coronavirus

How will India’s organic food market shape up after the coronavirus

By Sunil Kumar


We have been hearing a lot about organic food, especially since the past 10 years or so. During this time, the market for Organics worldwide, as well as in India, has grown steadily. As per an ASSOCHAM study, the Indian Organic market stood at over Rs 1,200 crore last year and this year the market is expected to cross Rs 2,000 crore. This appreciable markup is on account of the fact that the demand for organic food has been climbing consistently ever since the outbreak of the coronavirus pandemic and the lockdown in its wake.

Going ahead, this momentum is expected to gather more strength and power. That’s because people are now increasingly leaning towards healthy and organic food – a trend that has now caught fire and whose flames are being fanned further and wider by the health insecurities stoked by the corona contagion. People are clinging to the health bennies intrinsic to organic food – they are free from pesticides and chemicals and considered to be safe, healthy, nutritious.

And it’s not just the domestic demand for organic food that has seen an explosion in recent days. There has also been a boom in the demand for organic food from several of India’s trading partners, leading to an appreciable growth in the export of organic food from India. Industry experts believe that the resurgence in the demand for organic food is no flash in the pan phenomena that will subside once the virus scare recedes. It is here to stay even when we become corona-free. In that sense, the consumer behavior in favor of organic food appears to have become more deeply entrenched and ingrained and a part of the consumer buying habit over a durable time horizon. 

According to industry observers, there is a possibility of at least 20-25 percent increase in the compounded growth of organic food in India for the year 2020-21. Taking this estimate into consideration, I foresee the Indian market for organics at about Rs 3,000 crore and the International organic market over US$ 100 billion even if global economy tips into a depression. With the chances of the world getting rid of the Covid pandemic before September this year looking increasingly slim, mankind and humanity will have to learn to live with this virus. Under the circumstances, the concerns for health and environment will remain a priority, and it will keep the demand for organic food in a high orbit for the times to come.

Already, the excessive use of pesticides has caused unprecedented damage to our ecology, creating large scale distortions and imbalances, while badly damaging the soil health and topology. Organic, therefore, seems to be one of the best ways to sustain and revive the lost ecological balance. One of the most important learnings for people during this time of COVID 19 across the world has been the need to build ‘strong immunity’ as a possible shield against deadly viruses. Organic food being full of antioxidants and nutrients provides one of the best ways to boost immunity. Hence, instead of risking their health further, people will be willing to buy and even pay extra premium for organic food.

In terms of individual categories, there will be a good demand for millets and its flours, which are full of vitamins, minerals, and other nutrients. Another segment to benefit from the rise in demand is herbs and spices based value- added products. In the basic grocery category, products such as rice, pulses, and cereals will continue to see expanding growth.

India will be looked upon by world by as an alternative to China for the supply of organic agricultural products and hence there is a great opportunity for the country to double its organic exports from the current Rs 5,000 crore to Rs 10,000 crore. As per APEDA statistics, Indian Organic exports rose to Rs. 5,151 crore in 2018/19, up 50 percent from the previous year. Considering this CAGR of 50 percent in organic exports, I foresee exports doubling to Rs 10,000 crore by 2021-22 . But this jump in export value will not be possible without government support. To begin with, the government must take more proactive steps to make the certification system and organic practices more foolproof by bringing in greater efficiency and consistency in policies, etc. To start with, we need to reap in the organic efficiencies of our north-eastern states.

The hill regions and the northeastern parts of the country have seen minimum cases of corona so far and they happen to be India’s frontline organic States. Currently, the north-east regions account for about 15-20 percent of the country’s total organic produce and they have a tremendous scope to raise their contribution. Looking ahead, I foresee a big jump in the demand for organic products from these regions to other parts of India and abroad. For instance, there is already a huge jump in the demand for high curcumin organic turmeric from these regions, and this demand is likely to climb further in the days ahead.

At the retail store level, modern store chains are already seeing a big rush in the demand for organic food products, especially after the enforcement of the lockdown across the country. As per various media reports, supermarkets across India are witnessing a huge demand for organic food. According to these reports, the demand has increased by 100 percent, especially for rice, wheat and pulses. Nourish Organic, an Indian online retailer, experienced a 30 percent rise in sales last month. Its founder Seema Jindal Jajodia attributes most of this surge to the pandemic. “Our breakfast cereals as well as bars have seen a surge in demand as people have stopped eating from restaurants due to the health scare.”

Looking ahead, there is definitely a great opportunity for the organic food market to take a big leap and corner a bigger share of the Indian grocery market. FBOs and entrepreneurs have a lifetime opportunity to come forward to fill in the gaps in the organic fruit and vegetable and other organic categories and meet the fast growing and unfulfilled needs of this expanding market.