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Organic food market size likely to top $2.6 billion by 2026.
Aug 04, 2022
Demand for organic food in India is likely to witness a 20.5 per cent CAGR (compound annual growth rate) over the next few years with the market size likely to top $2.6 billion by 2026, says Sujit Jain, Chairman and Managing Director (CMD), Netsurf Communications Pvt Ltd.
India’s organic food market size was $849.5 million in 2020 but since then it has been influenced by the outbreak of the Covid pandemic resulting in exponential growth in demand, said the CMD of the Pune-based firm, which was among the first in the country to launch organic farm brand products under the Biofit brand.
Cutting input costs
'Organic farming practices offer farmers better quality and quantity which can be sold at a premium. Plus, it also helped them reduce the costs of farming. In a nutshell, it’s the most profitable and sustainable way for farming ahead for farmers,' he said.
Netsurf has been selling its product through direct distribution since 2000. These 'solutions' reduce the dependence on agro-chemicals and make the produce 100 per cent organic. About 35-40 lakh farmers are claimed to be using Biofit products. They make up 60 per cent of Netsurf’s annual turnover.
Jain said organic farming was gaining attraction in recent years and its practice has resulted in the fertility of soil improving and better development of crops, besides the quality of the yield. According to Agricultural and Processed Food Products Export Development Authority (APEDA) data, production of organic crops was 3.2 million tonnes during 2020-21, up 36 per cent from a year ago. The area under organic farming increased to 2.3 lakh hectares in 2020-21, he said.
Adding to demand
'In the post-pandemic situation, the consumer is looking for clean and healthy food options and organic food is one of them. Organically grown vegetables, staples, fruits and seeds, etc. have started witnessing demand in the market. Industries have started introducing organic products which add to the demand even more substantially,' the Netsurf CMD said.
In view of these developments, the agriculture sector has begun using bio-fertilisers and implementing other organic farming practices. 'Urban consumers are ready to pay a premium for such certified organic foods. State and central governments have come up with schemes like Paramparagat Krushi Vikas Yojana, the National Mission on Oilseeds and Oil Palm, the National Food Security Mission, etc. Farmers can avail of financial assistance from government bodies as an encouragement for using organic products instead of synthetic-chemical-based fertilisers,' he said..
Jain said demand from the industry and consumers, besides government support and better profitability for farmers, are the factors supporting organic farming practices in India.
The Netsurf CMD said in view of this the biofertilizers market is expected to grow from $110.07 million in 2022 to $243.61 million by 2029 at a CAGR of 12.02 per cent in the forecast period. 'Sikkim has converted to organic farming totally since 2016. Kerala, Mizoram, Goa, Rajasthan, and Meghalaya intend to follow the same route. Andhra Pradesh is also promoting Zero Budget Natural Farming,' he said.
Another factor driving the growth of organic farming is an integrated approach. 'Many farmers have now opted for integrated farming where they have started complementing their chemical fertilisers with biofertilisers. This has helped them improve yield and fertility,' he said.
Though India had the largest number of organic farmers (30 per cent of global organic growers) in 2018, the country is still in the early stages of implementing organic practices.
Potential in Manipur, UP
Netsurf sees good potential for its Biofit brand of products in the North-East, especially Manipur, where farmers are into organic and integrated farming. In Manipur, the State government is implementing the 'Manipur Organic Mission' programme to promote organic farming in the region.
'Uttar Pradesh has also taken initiatives to make the State a hub for organic farming in India. It has introduced cluster farming and the government has also decided to fund each cluster over the next three years to encourage organic farming,' Jain said, adding that the company is helping farmers to become direct sellers of products.
Stating that health, fitness, immunity and organic food have become buzzwords after the pandemic, he said that post-pandemic the concept of healthy living and eating has seen tremendous growth. Pointing to studies, he said the demand for organic food is higher in emerging nations than in developed nations.
'Consumers believe that organic foods are more nutritious and healthier than conventionally grown foods. Because of all these factors, the retailers have seen a huge surge in the demand for organic foods,' the Netsurf CMD said.
Jain said his company plans to introduce new products in all categories, including under the Biofit brand.
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Agricultural & Processed Food Products Export Development Authority
(Ministry of Commerce & Industry,
Govt. of India)
NCUI Building 3, Siri Institutional Area, August Kranti Marg, New Delhi - 110 016
Phone : 91-11-26513204, 26514572, 26534186
Fax : 91-11-26526187