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Organic food business grows four-fold in 3 years

Times of India:  August, 2015

Mumbai: Growing health consciousness and awareness about harmful pesticides has nearly quadrupled the size of organic foods in India in the last three years. Organic foods, which started out by occupying fewer shelves at retail stores, is now a Rs 300 crore business in the domestic market. The export market from India is even bigger at Rs 700 crore, according to industry experts.

Consumers are opting for healthier eating habits which is driving entrepreneurship in organic foods, prodding retailers to offer greater shelf space to brands in this category. As per industry estimates, the category is currently growing at 50 per cent per annum.

Industry experts believe with growing talk about the bad effects of chemicals and pesticides used in the food industry, products that are believed to be free of such substances will grow exponentially.

"Three years back, this market was approximately Rs 70 crore. We are growing at a very healthy rate year on year. In the last 5 years, shelf space given to organic foods has tripled. However, retailers are yet to realize the full potential," said N Balasubramanian, CEO, Sresta Natural Bioproducts, who claims its brand 24 Mantra is the largest player in organic foods in India.

The company is present in key categories like atta, brown rice, honey, tur dal, turmeric, juices and breakfast cereals in organic foods.

Given the growth of this market, 24 Mantra, which is present in more than 125 cities across India, is planning to extend to ready to cook traditional products like pongal, poha, khichdi and millet dosa as well.

Mohit Khattar, MD & CEO, Godrej Nature's Basket said awareness around polluted ground water near industrial area, increasingly chemical laden environment in general or the harmful impact of chemicals in day to day food has added to the consciousness of consumers. "It definitely makes them want to change simple things around them. And one of the things they can change easily is adopting a healthier and more sustainable way of life. It is this context that organic products are seeing increased acceptance and growing popularity," said Khattar.

Godrej Nature's Basket, which has been a pioneer in bringing and selling organic products like tea, pasta, sauces, across its stores, plans to enhance the range of organic options further and making the availability of these more consistent.

Organic packaged food comes at a premium to the regular variety of packaged commodity. If the monthly household expense for a family of four on grocery is in the range of Rs 4,000 to Rs 5,000, a switch to a brand of organic food would cost Rs 1,200-1,500 more per month. "This is almost the same as what a family would spend on a movie outing over a weekend," said Balasubramanian.