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What Future Holds for the Organic Industry

Subrata Dutta, Group Managing Director, Organic India

After the pandemic unleashed its wrath upon the world last year, people’s outlook towards health suddenly changed a huge deal. The crisis was enough to disrupt the natural flow of everyday life throwing every routine into complete disarray. This, understandably, had a direct impact on people’s consumption behavior; with the growing awareness around health and healthy habits, consumers have also started looking at labels, and buying only the healthiest options available. As they want to know what they eat, and where does that come from.

Consequently, there was a conscious shift in preference towards organic food products, immunity boosters and food supplements during this period, which is one of the major factors leading to the dramatic growth of the sector recently. As stated in a report by Research and Markets, the Indian Organic Food Market is projected to grow from $ 177.14 million last year to $ 553.87 million in 2026, at a CAGR of 21.00 percent. It is clear that, with the constant encouragement, and favorable government policies supporting organic farming, coupled with the increasing land area allotted for organic cultivation, the organic food market has suitable grounds to rise over 23 percent by 2023.

A large share of credits for the upward trend in demand for organic food can, well, be attributed to the sudden outbreak of the COVID-19 pandemic, and the chaos that followed. With the global health crisis making the concept of healthy living an imperative for survival, people are increasingly falling back to consuming organically produced food options. The conventional food market, although, still has the major market share, the steady growth of the organic food market bears promises of changing the current scenario by accommodating a wider range of naturally produced food products. This has been playing a big role in attracting new-age as well as health-conscious consumers to put their money on this rising sector’s future.

Changing Outlook of the New-Age Consumers
It is also worth noticing that the Millennial demographic has been put at the center of major organic food marketing campaigns. Compared to the older generations, the millennial are comparatively more proactive when it comes to health, and related aspects. They rely on digital sources of information such as online product reviews, blogs posts, and mobile apps to research on new products. With this conscious generation entering parenthood in the recent years, the demand for organic food has also experienced an unprecedented growth. Considering they are now the largest consumer segment, the numbers could rise in the next 10 to 15 years, naturally making them the prime target for organic growers.

Additionally, people’s attitudes towards online grocery shopping is seen to have changed a big deal in the recent years.
Especially, during the extended lock-down period during the pandemic, when safety became the highest priority, people who were used to conventional mode of shopping suddenly switched to online channels, even for groceries. Of course, the tech-savvy generation is responsible for the growth of this trend to a great extent. However, we cannot ignore factors like easy online availability, excellent quality of the organic products, as well as safe and hassle-free delivery at the doorsteps, which increases the popularity, while ensuring a brighter future ahead for the organic market.

Going forward, with innovations like the rapid use of precision data, smart farming, artificial intelligence and machine learning playing an active part in developing the methods of farming, middlemen will increasingly become redundant. This will, in turn promote an independent marketplace for farmers and local vendors, allowing customers to directly get in touch with the sellers to access the best of organic produces, without any third party interference.

"Now with the scope of organic farming gradually being realized by the government, as well as the public, we can surely expect a steady growth of the industry."

Organic Farming in India: What’s Ahead
The total global food market, according to WHO, is presently around $37 billion.

When it comes to organic farming, India is, unsurprisingly, home to the largest number of organic farmers in the world, and has the ninth largest area under organic farming. There are over 15,000 organic farms in the country, as reported by the International Fund for Agriculture and Development (IFAD). Owing to the rising awareness around health and sustainability in the last decade, organic farming has witnessed unprecedented development in almost every crop. The Indian organic market which was once majorly export-led, in 2015, has expanded by 30 and 40 percent in domestic and export market, respectively. The current glory of the sector can be deserving attributed to the conscious consumers of today.

The government also seems to hold a generous outlook for the sector, as in, for future growth of the organic industry, the Ministry of Agriculture has proposed to double the allocation to Rs. 1300 crore per year. Furthermore, in addition to the 28 lakh hectares of currently available land coverage, there is another proposal from the government to add 25 lakh hectares under organic farming within next five years. Apart from providing incentives and support to boost organic farming in India, the government has also introduced several central schemes to promote organic farming.

In addition to that, the Government is planning to further distance itself from pesticide usage in farming, and has accepted zero-budget farming as mainstream. Overall, things are looking bright for the organic food industry. Now with the scope of organic farming gradually being realized by the government, as well as the public, we can surely expect a steady growth of the industry from this point onwards.

Ref: https://www.ceoinsightsindia.com/industry-insider/what-future-holds-for-the-organic-industry-nwid-8290.html