Organic staples food category in India
The organic staples market in India is slowly and steadily growing over the past decade or so. India is one of the top 10 countries in the world in terms of cultivable land under organic certification and has a potentially
vast and growing organic food market. According to a study prepared by industry body Assocham and TechSci Research, the Indian organic food market is growing at a strong 25-30 per cent rate, and is set to touch
the $1.36 billion-mark by 2020. As India gears for the organic food industry to treble within the next two to three years, it signals tremendous growth opportunities for existing and new entrants into this currently
niche category. The organic food consumption is still only at 0.25% and is expected to grow to 2% by 2020! The headroom for growth is definitely there in a category like this. Besides, in the market for categories
like kitchen staples which are like raw materials for cooking, branded organic provides that much needed differentiation to create a niche.
The government policy framework is increasingly more aligned to promote organic farming and the consumer mindset is also swiftly shifting towards organic food choices. This has created tremendous opportunities for growth
and the segment has even begun to attract private equity and venture capital firms. Organic food manufacturer 24 Letter Mantra, for instance, got $15 million from Peepul Capital in 2011, while rival Suminter India
Organics got $3 million from Nexus India Capital in 2008. In March this year, leading retailer Fabindia acquired a 40 per cent stake in Organic India for Rs15 crore.
Branding & Brand Strategy and Packaging Design - Our Perspective:
This growth in the domestic market is a result of the impetus provided by the various organised players within the segment. Some of the notable brand names and companies operating in this segment are:
Organic India, Pro Nature, Organic Tattva, JoyByNature, 24 Mantra Organic from Sresta Natural Bioproducts, Down to Earth from Morakra Organic, Ecofarms and Pronature. Besides, large online food platforms like bigbasket have also begin to offer their in-house label of organic staples.
The two brands, that seem to have really created and grown the market and also acquired a loyal base of customers appear to be 24 Mantra Organic and Conscious Food.
24 Mantra Organic claims to have the largest share with 65% of market in the organised organic food segment. The brand aims to reach 1 million households by 2020 by bringing organic food into the mainstream so that people can eat them from morning to night. The brand currently has a catalogue of more than 90 products, is launching ready-to-eat and ready-to-drink organic products. Till around 6 years ago, Sresta natural wold get 75% of its revenue from the international markets, the domestic market’s share is equal now.
Conscious Food, perhaps the oldest in the business, has grown at a compounded annual growth rate of nearly 35% in the last four years to reach revenues of Rs120 crore. It sells organic sweeteners - honey, raw sugar, jaggery - along with cereals and pulses.
Morarka Organic, which mainly focuses on the domestic market, attributes it to rising disposable incomes and improved awareness about.
Branding and positioning - leveraging the growth opportunities
The organic staples market in India is moving into its growth phase. The growing health consciousness, the global trends and the environment created by brands are leading this growth. In this scenario, a differentiated, strong positioning is the key to creating prepeference, trust and loyalty for the increasing number of households who will be making a shift towards organic. Some of the factors influencing this growth are:
• The level of awareness about organic food products in India is extremely low and is limited to consumers in metro cities. While the tier II and III cities are catching up, the next crop of brands need to play a significant role in creating the environment of awareness
• 5-7% of the consumer base globally is believed to have gone fully organic and Indian metro households are expected to move in a similar direction, led by branding and communication that provides effective nudge for the shift
• Culturally, Indians have a natural tendency towards natural, herbal and organic, successful brands need to leverage this association
• The connection between what we eat, how it’s produced and the health is a lot more in the consumer’s consciousness today, and brands need to leverage that. For some of the early brands like Conscious foods, it was a struggle to establish preference for Organic foods, especially at significantly higher price points.
• At a price level, competing with non-organic foods have been difficult across the world, therefore brand and positioning led preference coupled with awareness is the key
Branding and packaging have a significantly higher role to play in creating success at organised modern retail and online/App based shopping:
• For brands like 24 Mantra, online sales are growing every year and in percentage terms it is higher than the regular sales.
• According to the market research firm, 6Wresearch, the online grocery market is set to grow at a CAGR of 62% between 2016-2022
• The key cities for online grocery are Bengaluru followed by Mumbai and Delhi
• For non-organic products, online is just another channel of distribution; whereas for organic, eCommerce is more about market creation and customer acquisition
• With dedicated organic grocery portals, including Farm2Kitchen, MyGreenKart, GreenNGood, Down2Earth and GrocBay, vying for a share in the organic food market, the bigger online grocers are not far behind
• 45 per cent of BigBasket’s product portfolio is consumed by kitchen staples and fruits and vegetables, and of this, 20 per cent is from the organic range.
• Organic products contribute up to 10 per cent of the total sales on the website, led by brands like 24 Mantra, Pro Nature and Organic Tattva.
• Most of the big retail chains now stock organic products, including Godrej Nature's Basket, Hyper City, Food Bazaar, More, Nilgiris, Spencers and Tesco - Starbazar
• In the big retail chains, the organic food stocking has grown five-fold in the last six years
From a strategic perspective, it’s a growing market with more consumer households making the shift due to various social, cultural, technological and economic factors. A positioning stance that can effectively align with this consumer mindset will stand to gain.
This growth in the domestic market is a result of the impetus provided by the various organised players within the segment. Some of the notable brand names and companies operating in this segment are:
Organic India, Pro Nature, Organic Tattva, JoyByNature, 24 Mantra Organic from Sresta Natural Bioproducts, Down to Earth from Morakra Organic, Ecofarms and Pronature. Besides, large online food platforms like bigbasket have also begin to offer their in-house label of organic staples.
The two brands, that seem to have really created and grown the market and also acquired a loyal base of customers appear to be 24 Mantra Organic and Conscious Food.
24 Mantra Organic claims to have the largest share with 65% of market in the organised organic food segment. The brand aims to reach 1 million households by 2020 by bringing organic food into the mainstream so that people can eat them from morning to night. The brand currently has a catalogue of more than 90 products, is launching ready-to-eat and ready-to-drink organic products. Till around 6 years ago, Sresta natural wold get 75% of its revenue from the international markets, the domestic market’s share is equal now.
Conscious Food, perhaps the oldest in the business, has grown at a compounded annual growth rate of nearly 35% in the last four years to reach revenues of Rs120 crore. It sells organic sweeteners - honey, raw sugar, jaggery - along with cereals and pulses.
Morarka Organic, which mainly focuses on the domestic market, attributes it to rising disposable incomes and improved awareness about.
Branding and positioning - leveraging the growth opportunities
The organic staples market in India is moving into its growth phase. The growing health consciousness, the global trends and the environment created by brands are leading this growth. In this scenario, a differentiated, strong positioning is the key to creating prepeference, trust and loyalty for the increasing number of households who will be making a shift towards organic. Some of the factors influencing this growth are:
• The level of awareness about organic food products in India is extremely low and is limited to consumers in metro cities. While the tier II and III cities are catching up, the next crop of brands need to play a significant role in creating the environment of awareness
• 5-7% of the consumer base globally is believed to have gone fully organic and Indian metro households are expected to move in a similar direction, led by branding and communication that provides effective nudge for the shift
• Culturally, Indians have a natural tendency towards natural, herbal and organic, successful brands need to leverage this association
• The connection between what we eat, how it’s produced and the health is a lot more in the consumer’s consciousness today, and brands need to leverage that. For some of the early brands like Conscious foods, it was a struggle to establish preference for Organic foods, especially at significantly higher price points.
• At a price level, competing with non-organic foods have been difficult across the world, therefore brand and positioning led preference coupled with awareness is the key
Branding and packaging have a significantly higher role to play in creating success at organised modern retail and online/App based shopping:
• For brands like 24 Mantra, online sales are growing every year and in percentage terms it is higher than the regular sales.
• According to the market research firm, 6Wresearch, the online grocery market is set to grow at a CAGR of 62% between 2016-2022
• The key cities for online grocery are Bengaluru followed by Mumbai and Delhi
• For non-organic products, online is just another channel of distribution; whereas for organic, eCommerce is more about market creation and customer acquisition
• With dedicated organic grocery portals, including Farm2Kitchen, MyGreenKart, GreenNGood, Down2Earth and GrocBay, vying for a share in the organic food market, the bigger online grocers are not far behind
• 45 per cent of BigBasket’s product portfolio is consumed by kitchen staples and fruits and vegetables, and of this, 20 per cent is from the organic range.
• Organic products contribute up to 10 per cent of the total sales on the website, led by brands like 24 Mantra, Pro Nature and Organic Tattva.
• Most of the big retail chains now stock organic products, including Godrej Nature's Basket, Hyper City, Food Bazaar, More, Nilgiris, Spencers and Tesco - Starbazar
• In the big retail chains, the organic food stocking has grown five-fold in the last six years
From a strategic perspective, it’s a growing market with more consumer households making the shift due to various social, cultural, technological and economic factors. A positioning stance that can effectively align with this consumer mindset will stand to gain.