Sunday, April 10, 2022

Consumers will continue to trust and rely on all-things organic | FNB News –

FnbNewsThe onset of the Covid-19 crisis left an enormous impact on people’s daily lives. The world as we know it has witnessed a great deal of alterations in the past two years amid the pandemic. Working professionals had no choice but to work remotely. Kids were glued to the TV screens and mobile phones. And everyone, in general, was persistently looking to bring about a drastic change in their lifestyle, causing them to fortify their quest for clean and healthy food.

As a consequence, the organic food market emerged as a highly-coveted choice for people, and this has boosted its demand in India and the world over. One could argue that this sudden urge to learn and introduce healthy foods was a temporary revocable phase, but the reality at present seems quite the opposite. Brands dealing in organic products attest to the fact that the pandemic has truly brought the organic food industry to the spotlight more than ever before.

One cannot be too sure about the ground data. On the other hand, organic food products have become a hit, because people now would like to have food for brains and tongue. Keeping these preferences in mind the market is adapting the organic products sale steadily not just in major cities but especially in small cities as well.

Let Data Do the Talking
With people’s rising interest in healthy lifestyle habits, natural ingredients, and sustainable products, the sales of organic foods have increased multi-fold. And even though at least half the population has resumed physical office visits, their added sense of awareness towards health and fitness has maintained the demand for organic produce.

A recent observation concluded that the organic food market in India is slated to grow at 25% to 27% CAGR between 2022 and 2027, which is record-breaking. Taking into consideration the favourable government policies promoting organic farming coupled with increasing land area under organic cultivation, the industry is showing clear signs of growth of approximately 23% by 2023.

Some of the biggest reasons cited behind the demand for organic food products in India are the online availability of organic food products and changing consumer preference for organic food. The widening marketing and distribution channels are also a major factor that is anticipated to fuel organic food consumption in India by FY2027. Looking at the global numbers, WHO claimed that the total organic food market worldwide accounts for $37 billion at present. What is even more interesting is that the International Fund for Agriculture and Development (IFAD) recorded that India, alone, is home to over 15,000 certified organic farms. In fact, recently, India topped the charts globally by adding more than 4 lakh hectare of organic land and the Agriculture Ministry has planned to bring additional 25 lakh hectare under organic farming in the next five years. An investment in this quantum shows that things are looking bright for the organic food industry.

Setbacks in the Organic Food Market
The data suggests that the market potential for organic foods is good, but at the same time, organic food retailers and producers are facing some challenges. Let’s find out what these challenges are:

  • Short Shelf Life–Ironically, the absence of chemicals, which makes the produce organic, works against it. Preservatives and chemicals help keep the food fresh for a longer duration, especially during the transition and whilst on the shelf. But organic foods spoil quickly since decaying is a natural process as soon as it is harvested. Thus, organic food products have a shorter shelf life as compared to conventionally sourced or grown foods. This, in turn, brings huge losses to retail merchandisers, since they have to reduce their stock of organic produce and restrict huge inventories.
  • Consumer Preference for Lower Pricing – India is a price-sensitive country, with a high disparity in earning potential. Organic food, owing to numerous factors, is sharp in price. Those unaware of the benefits that organic food offers are wary of spending that much. Consequently, a huge gap between the pricing of conventional and organic products has formed disfavour towards organic food in some sections of society.
  • Counterfeit Products – Like many other industries, the organic food market, too, battles competing with fake products. Through incorrect labelling, even non-organic food products are endorsed as organic. Producers and distributors have now started applying measures to eliminate the risk of counterfeit organic claims. But in reality, it is a long battle to be won and demands regulatory intervention at different stages.

Despite these trying challenges, the organic food industry is attaining good grounds as it braces to win and provide a bounty to the world.

Opportunities Existing in the Organic Food Industry
From an industry standpoint, the risen demand for organic food products offers enormous opportunities. Though the food market averages growth of merely two to three percent on an annual basis, the organic food industry is witnessing growth many times that. Businesses that achieve and extend support towards producers, farmers, and distributors to meet the growing consumer demand for organic foods can expect substantial growth.

Several studies have indicated that organic food products deliver real and long-term economic benefits to those involved in the production cycle. This means that higher consumer demand is able to aid businesses to acquire the triple bottom line: good for people, the planet, and profits.

Putting It All Together
While there were several categories experiencing growth even amidst the pandemic, the organic food marketplace, particularly, rose to fame like no other. Looking at the demand and opportunities for growth, it is certain that the consumers will continue to trust and rely on all-things labelled “organic”. To maintain a steady demand-supply cycle and leverage the benefits that this unrecognised industry brings with itself, organic food producers and processors, or rather the whole supply chain should work round the clock to keep shelves and lives filled with toxic-free, healthy, and sustainably produced organic food products!

(The author is founder, Naario, a brand providing chemicals- and preservative- free breakfast cereals, beverages, condiments and more)

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