Organic foods are, as its name suggests, organic – right from the grass root level. They are cultivated without the use of preservatives, pesticides, insecticides or any other chemical components or synthetic substances. As a result, organic cuisine is healthy, safe and highly nutritious. Organic farming, for domestic consumption as well as exports, is one of the largest industries today. Approximately 1.4 million farmers worldwide, with a total of 35 million hectare are engaged in organic farming. As on March 2010, India registered over 4.4 million hectares of organic farm land. In the early 1990s, a company called Organic India introduced organic farming methods to a set of farmers who had been witness to their crops falling prey to the adverse effects of chemicals used in the soil. Now India has over 44,000 certified farms that are reaping the benefits of the domestic, as well as export demand. In 2010, the organic market was estimated to be USD 129.3 million.
The first organic store Greenway opened at Mumbai in India in 1997 and started a trend that is here to stay. The domestic demand, followed by the export orders, for organic food continuously grew, and soon India became one of the largest markets for organic foods in the world.
“India has had organic food since the beginning of time. It only needs to be taken to a new level. Our regional Indian cuisine itself is a great unique selling proposition (USP), providing new options for the new generation. The customers are now more aware, more finicky and more health conscious, which automatically increases the demand for a healthier cuisine,” said Kamlesh Barot, Director, VIE Hospitality.
History
India has always been an agricultural land and organic farming has been in existence here for thousands of years. Traditionally, India used organic techniques for agriculture which served as the backbone for its economy before the British rule. In the 50s and 60s, when faced with famine, free India was forced to import food grains and increase food production as well. As a result, chemical farming came into existence in the country.
The increased dependence on chemicals eventually had its adverse effects on the land. It began losing its fertility, which led to an increased demand for synthetic fertilisers to keep the land reaping benefits. The increased costs that were a result of these necessities, leading to a gradual move back into organic farming.
The Ministry of Agriculture, Government of India, instilled guidelines known as the ‘National Programme for Organic Production’ which provided schemes, assessments and certifications to ensure the genuineness of the products. Certification agencies were set up as well to monitor and supervise the producers and their farmlands to ensure their adherence to the set standards. They also provide easily identifiable logos that increase assurance among customers.
The challenges
“Organic food has all the advantages. As it is healthy and safe, people prefer to eat organic food, be it pulses, spices or vegetables. However, the cost factor does deter people from opting for it. Certified organic foods are more expensive by as much as 50 to 100 per cent. Another issue is credible certification. A lot of food is said to be organic, when it is not,” said Kamal Meattle, CEO, Paharpur Business Centre.
The last few years have seen a steady increase in demand for organic food, especially owing to a better-educated customer base that has understood and embraced a healthier lifestyle. However, the organic food market is still considered a very niche one. A few years ago, when India had registered 70,000 hectares of organic farm land, only one per cent of the Indian population were found consuming it. This may have been due to the price difference between organic and main stream cuisines or scepticism on the consumer’s part, as far as the genuineness of the product goes. Organic food is priced at nearly 25 per cent more than its non-organic equivalent. These prices are mainly owing to the process of acquiring the required certification for an organic farm to ensure its genuineness, along with years of intensive farming invested to convert the land to organic suitability. Additionally the labour, soil and care required to cultivate the organic crop, as well as the high price for the required certification, adds to the costs. The burden is borne by the customers.
Dismissing the common belief customers have about burdensome pricing on organic cuisine, Manjunath PR, Managing Director, Lumiere Organic Restaurant stated that the price difference between the organic and non-organic food may sound substantial when the numbers are shown individually but altogether a meal price difference is not as high as people believe it to be. “According to our logistics, the cost of most of the raw materials is 30 per cent, dry fruit 50 per cent, and pulses 10 to 20 per cent higher than their non-organic counterparts. However, if you consider one kilogram of organic rice, the cost price would be no more than Rs 10 higher, which for a family meal will not be much of a cost burden,” revealed Manjunath.
In 2010, the nation recorded 4.4 million hectare of certified organic farmland. In 2008-2009, 18.78 lakh tonnes of certified organic products were manufactured, of which 54,000 tonne food items were exported. In the domestic market, however, organic food demand is yet to reach these heights. Even the number of organic restaurants seems to have decreased over the years, although the cuisine entered the industry with a bang. Several organic restaurants have either switched to serving mainstream cuisine or stopped their services, including the much-praised organic restaurant Pure at Taj Lands End, Mumbai, a part of Indian Hotels Company (IHCL).
“ To execute an organic food operation in the hospitality industry is difficult in India, owing to the lack of easy availability, proper infrastructure and the customer’s trust in the product. While there are several certified organic farmers they are not geographically close to most big cities. There is also no proper infrastructure provided for the manufacturing of organic food products. In addition, customers are unable to put faith in the genuineness of the product or even in the genuineness of the certification for it. If these issues were solved it would have been easier and more profitable to run an organic restaurant and the popularity of the segment would have increased automatically with an increase in the available options for the cuisine,” added Manjunath.
Speaking on the topic, Amol Nirbhan, Business Development Manager, ECOCERT said, “The restaurants which claim to sell organic food must demonstrate that the raw materials procured are indeed certified organic, the menus they prepare should constitute the certified organic ingredients etc. Ecocert guidelines have been designed considering these important issues, but the response by this industry is still very low.”
“Although service is the main aim of the hospitality industry, profits are given equal attention. There is, thus, an evident lack of passion for organic food, possibly due to the fact that it is not yet as highly profitable as mainstream restaurants. There is also a difficulty in identifying genuine organic farmers and products, especially due to the lack of logistics for the same,” stated Manjunath.
Advantages and limitations of organic food industry
Advantages
•Health-consciousness and increased awareness among consumers
•Available government aid
•Large market for exports
Limitations
•High prices for products
•Difficulties and heavy costs incurred by farmers for cultivation and certification
•Lack of trust in authenticity of products
The market today
According to Nirbhan, “India is certainly emerging as both a producing and consuming country for organic foods. In the next five years, the population in major cities in India will have an easy access to certified organic fruits, vegetables, milk, ghee etc. at an affordable costs.”
“In India we have access to all the organic food raw materials, including spices and condiments, which takes our organic cuisine to a whole new level. At our establishment Revival Indian Thali in Mumbai, one of the most popular dishes is a basic khichdi, which shows that even the simplest meal is tasty in organic cuisine owing to its light weight and health benefits. Most of our customers are those who are aware of the benefits of organic foods, such as those who demand trans-fat free food to escape cholesterol-related problems etc. The industry is dependent on the suppliers of raw materials and since our market has those in abundance, there is an expected increase in demand as well,” added Barot.
According to Jackie Lobo, Executive, Down to Earth, an organic food store across India, there is a definite increase in the demand for organic food in the market. Customers are more aware and have more spending power, and these have overpowered the price difference between the organic and non-organic food items, which used to pose a problem in earlier years. Among the middle class and above segments of society, consumers are insisting on organic food materials, which is a definite indication of its gaining popularity.
Speaking about the future of the organic food industry Meattle opined, “According to newspaper reports, India currently exports an estimated USD 500 million worth of organic agricultural and horticulture produce and products. This can be increased several fold. The global organic food industry continues its unprecedented growth path with sales expected to cross USD 100 billion this year. As stated by experts, in the remote interior parts of rural India’s agricultural land is still untouched by the excesses of chemicals and fertilisers, because the poor and marginal farmers could not afford fertilisers. This has resulted in such land being untouched by pesticides and artificial fertilisers and can be channelised towards organic farming.”
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