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Mahindra Agri Solutions bets big on organic food

IBEF:  March 12, 2020

Tractor-to-software conglomerate Mahindra Group is planning to introduce its own brand of organic food to tap into the increasing urban market of conscious eaters.

The Mahindra Agri Solutions, a group company, may use the brand name Mahindra in order to gain consumer’s trust in the authenticity of organic food products.

In India, the major two barriers in the market are developing consumer trust in the authenticity of an organic product and the stark price difference between organic and regular food, said Mr Ashok Sharma, managing director of Mahindra Agri Solutions. The introduction of the brand like Mahindra can aid in gaining that trust, he said, whereas the price differential will be narrowed as the business scales.

To explore this business, investment in Mera Kisan, an organic food manufacturing start-up has been made by the company. It is targeting to scale to a supplier base of 25,000 farmers over the next three-four years to source at least 2 lakh tonnes of organic food. Currently, it has about 8,000 certified organic farmers in its fold, Mr Sharma said.

He added, “India itself is a big opportunity,” pegging the domestic organic food market at Rs 1,000 crore (US$ 143.08 million) annually. “There is also demand in exports and there also we want to contribute.”

Currently, the company sell its products through partners like Haiko Supermarket and online retailers like Big Basket, Amazon and Flipkart. Cricketer Mr Ajinkya Rahane has been signed as Mera Kisan’s brand ambassador. The Indian test cricket team vice-captain also picked up a minority stake in the company.

The Mahindra-backed start-up is aiming at break-even by 2024 with revenue of Rs 150 crore (US$ 21.46 million). Its target is to be among the top three organic food brands in India, added Mr Sharma.

Mahindra Agri Solutions sells seeds, micro-irrigation systems, agricultural chemicals, and is also one of the leading exporters of fruits from India to European markets.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.