Last Updated on May 25, 2022 by The Health Master
Retailers have often grappled with this issue: why do consumers shy away from making organic-first markets their regular point of purchase?
Is it because organic food is considered to be expensive? Is organic food only an indulgence reserved for a minority of urban families?
Given the impact of our farming practices on the planet and people, it is imperative that the adoption of organic farming and consumption of organic foods keep pace.
However, for the transformation to be truly effective and sustainable, it is important that organic food becomes a lot more accessible, and affordable for a larger set of Indian consumers.
Reality check
According to industry estimates, the organic food market in India is expected to grow at a CAGR of 20.5% from 2021 to 2026, to become a USD 2601 million market.
There is no denying that the demand for organic food in India has been steadily growing for the last few years.
This can be attributed to several factors, including an increasing awareness about the harmful impact of chemically-grown food.
At the same time, there have been other reasons that have led to the emergence of “expensive” organic foods. These include unethical practices and extravagant marketing strategies adopted by brands and grocers.
Lack of adherence to standardized certifications, preference for stocking foreign foods which incur high logistics costs, and focus on exotic superfoods translate into huge hype and attract high profits.
In order to address this, it is important to analyze the reasons for the relatively higher price tags associated with organic food – currently at around 1.3 times the price of non-organic food.
Limited supply or small-batch production, which is typical of organic farming, is only one such reason. Moreover, it only makes produce marginally more expensive as compared to standard produce.
Reinventing the supply chain
A massive way in which brands and grocers can make organic food more affordable is by reinventing the supply chain.
Integrated farmer contracts, direct sourcing, and predictive technology-based optimization can go a long way in bringing down costs.
Going ahead, there is also a need to invest in restoring the appeal of locally-grown foods, and seasonal produce, which are high on nutrient value, and low on logistics and cold storage costs.
These can help address concerns around supply volumes, costs, as well as the overall health of farming ecosystems.
Integrated technology-based operations, intelligent, omnichannel store networks, plastic-free packaging and green delivery, are critical to reducing costs at all stages of operations. They are also imperative for sustained growth in a consumer-led economy.
Changing consumer perceptions
For organic food to become more affordable, all stakeholders, including consumers, need to play an active role.
Instead of buying from brands and grocers that are focused on growth and profits alone, consumers must support ‘responsible’ sellers – those who are committed to creating a difference for everyone, including farmers, whose business approach prioritises responsibility towards all stakeholders within the ecosystem.
Buying from grocers who facilitate better choices in a transparent manner, and at an affordable price point, can go a long way in encouraging more purpose-driven businesses.
The need of the hour is for retailers to educate and encourage consumers to change the way they see organic food; they don’t need to replace everyday favourites with exotic alternatives.
Opting for traditional, local, and seasonal foods, grown the organic way, is making a better choice – financially, environmentally, and health-wise.
The way forward
Given the nature of organic farming, mass supply, as per the traditional definition, is not feasible.
However, by setting up innovative operational models, adopting sustainable practices, building transparent supply chains, and leveraging technology for optimization at all stages, businesses can change the potential of the organic food market.
Not just in terms of growth, but also variety, accessibility, and impact. And once the demand increases, supply will have to keep pace, thereby encouraging more players to come into the organic space and increasing production volumes, thereby lowering costs.
At the grassroots level, we need to educate and align a greater number of farmers with organic farming, especially by way of integrated contracts.
At the end of the day, their enrollment will remain the key to higher production and optimally-priced produce.
As consumer behaviour continues to change and the food industry continues to adopt sustainable practices, organic food will become the norm rather than the exception.
Consumers will no longer shy away from making organic-first markets their regular point of purchase.
Organic food is not a fad. It’s the better choice.
by Gaurav Manchanda, The author is Founder and Managing Director, The Organic World.
(DISCLAIMER: The views expressed are solely of the author and The Health Master does not necessarily subscribe to it. The Health Master shall not be responsible for any damage caused to any person / organisation directly or indirectly.)
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