Organic packaged food market to be close Rs90 crore in 2021: Study

The substantial growth of this sector is attributed to an expanding urban population base, rising health concerns, growing consumer spending on food products and deterioration of food quality. These four primary factors are also driving the global organic food market, the study titled, The Indian Organic Market: A new paradigm in agriculture, added.

Organic packaged food and beverages is an emerging niche market in India and its primary consumers are high-income urbanites. As demand for organic food in the metro cities increase, the companies in this sector are witnessing notable growth with the entry of several new players in the organic food market, it said.

India-based Sresta Natural Bioproducts has emerged as the market leader, with a 37-per cent value share of the packaged organic food market and 7.8 per cent share of the packaged organic beverage market. It has increased its share in the organic food market in recent years, while smaller niche players have taken significant share away from it in the organic beverage market.

“In addition to the growing domestic market, India is the second largest exporter of organic products in Asia after China. The increasing export market coupled with the government’s support has made organic cultivation in India highly successful,” said Amit Vatsyayan, Partner, EY.

Indian organic food exports were estimated at $299 million during 2015-16 with total volume of 263,688 MT.

The major export destinations were the US, European Union, Canada and New Zealand. It is assumed that most of the remaining quantity is sold in local markets. Oilseeds comprised half of India’s overall organic food export, followed by processed food products at 25 per cent.

India currently holds the ninth position among 178 countries that actively practice organic agriculture. At present, the country is home to more than 835,000 organic producers, 699 processors, 669 exporters and 1.49 million ha area under organic cultivation. However, with only a meagre 0.4 per cent of the total agricultural land area designated for organic cultivation, the industry presents extensive scope for expansion.

“With Indian consumers’ increased inclination and awareness towards health and nutrition, the outlook for organic products in India has been very positive. Consumers are today accepting organic food and beverages as part of their daily diet, thereby, creating significant growth opportunities for existing as well as new industry players in this segment. With the participation of numerous Indian and multinational companies and their expansion in the market, India is rapidly becoming a production hub for organic foods,” Pinakiranjan Mishra, Partner and National Leader, Consumer Products and Retail, EY, said.

Among the states, Madhya Pradesh has the largest area under organic certification (4.62 lakh ha) followed by, Maharashtra (1.98 lakh ha) Rajasthan (1.55 lakh ha), Telangana (1.04 lakh ha), Odisha (0.96 lakh ha), Karnataka (0.94 lakh ha), Gujarat (0.77 lakh ha) and Sikkim (0.76 lakh ha). 

These states had a combined share of 90 per cent of the area under organic certification in 2015-16.