India: promising development of the domestic market
by Karin Heinze (comments: 0)
Picture: Stand of the Indian firm Just Organic (Treta Agro) at BioFach India/ India Organic in New Delhi. Photo © Karin Heinze
The positive development on the Indian domestic market and the continuing professionalisation of companies were apparent once again at BioFach India/India Organic . The trade fair brought together 177 exhibitors and over 3,700 visitors. Many companies are no longer relying just on exporting but are now happy to turn their atterntion to the promising home market. The potential of both is far from having been fully exploited. Market actors are convinced the domestic market will continue to grow rapidly. The reasons are the expanding middle class and the increasing awareness of health. In the export business there are trade relations that have existed for decades: the constant high level of demand in the organic markets in the west, and increasingly in the prosperous Arab states and parts of Asia, provide good opportunities for trading in organic products.
Picture: It was a busy time on the stand belonging to Sresta with its brand 24 Mantra Organic that sells well in India. Photo © Karin Heinze
Brand creation for the domestic market?
Until a few years ago it was mainly a question of India exporting raw materials like spices, oil seeds, pulses, cereals and tea. Now the exhibitors at BioFach India / India Organic (BIIO) are showing the predominantly Indian specialist public professionally presented brands, innovative new products and an expanding choice of convenience products. Franziska Geyer, managing director of the Berlin organic tea company Ôkotopia, compared the present situation with BioFach 2014: “Compared with two years ago the fair has become more professional. I've been especially impressed by the fact that many companies have significantly improved their overall self-presentation. What we're seeing is genuine brand creation."
Picture: Franziska Geyer, Ökotopia, in discussion with tea suppliers in the Business Lounge of BioFach India. Photo © Karin Heinze
BIIO: successful debut in New Delhi
After a number of years in the southern Indian states of Karnataka (Bangalore) and Kerala (Kochi), the eighth BioFach together with India Organic was held for the first time in New Delhi. This change of location is down to two factors: first, as a business city, the capital meets the requirements for an international organic trade fair because it is precisely in the big cities that you find high demand for organics. Second, the capital was chosen because from 9 to 11 November 2017 the IFOAM World Congress will be held there, and running in parallel will be the ninth BioFach India together with India Organic (BIIO).
Picture: Many producers visited BioFach and used the opportunity to make new contacts. Photo © Karin Heinze
Manoj Kumar Menon is pleased with Delhi as the new location of the trade fair. The managing director of the Indian organic umbrella association ICCOA and co-organiser of BIIO emphasises the point that “organic farming can be viable for our farmers only if they are linked with each other in the market so that they can always get the best deals when selling their products. The demand for organics is growing especially strongly in the big cities.“
But they mustn't lose sight of the export markets. This is why there are buyer-seller meetings every year: 19 purchasing managers from Europe, the USA, the Middle East and Asia took part at this BIIO. According to the organiser, 190 arranged discussions generated business with a value of 9.8 million US dollars.
Picture: The Business Lounge was the meeting place for buyers and sellers. Dominik Kessler from i+m Naturkosmetik in Berlin was especially interested in fairly traded organic raw materials. Photo © Karin Heinze
Domestic market: organic brands in various sales channels
You see examples of how the domestic market is devloping in the activities of Indian companies like Phalada, Sresta, Terrafirma and Amaara Foods, that appeal to the health-conscious urban population with their brands Pure&Sure (Phalada), 24Mantra Organic (Sresta), tg Terra Greens Organic (Terrafirma) and Dear Earth (Amaara Foods). With 100 to 250 articles, ranging from basics like cereals, pulses, spices and oils to dried fruit, juices and breakfast cereals, snacks and biscuits, the firms are extending their offer in the direction of ready and convenience products. The 24Mantra Organic brand now consists of around 250 products sold in over 10,000 shops of all kinds as well as in their own outlets that have the same name as the brand. The managing director of 24Mantra Organic, N. Balasubramanian, expects the number of outlets to grow to 100,000 over the next three years. (video interview).
The processing companies cooperate directly with small farmers
The above companies and others are businesses that support a large number of small organic farmers and market their products. For example, Sresta in Hyderabad, founded in 2004 by Raj Seelam, works with over 25,000 small farmers who cultivate a total of around 60,000 hectares (150,000 acres) in various federal states in India. The Sresta concept “from farm to fork“ involves not only products that offer consumers the choice of healthy food but also,very importantly, enables more and more farmers to achieve a good standard of living through organic farming and marketing, explains the managing director of 24Mantra Organic, N.Balasubramanian.
Picture: N.Balasubramanian presenting the 24Mantra organic product range at BioFach India.
The firm Phalada cooperates with about 1,500 small farmers in a number of federal states. The initially predominantly export-oriented company – founded in Bangalore in 1999 – turned its attention to the domestic market as well and since 2004 it has been steadily extending its Pure& Sure brand. Because of its export orientation in the past and the continuing importance of exporting, the company has numerous certifications for the European, Japanese and American markets. Modern facilities in Bangalore process spices, herbs, coconuts and finished products for both the domestic and export markets.
Picture: Phalada founder and CEO
Another example of cooperation with farmers is Wayanad Social Service Society (WSSS) a registered charitable society and a secular voluntary organization established in the year 1974. WSSS works together with 15,000 organic farmers and 10,000 are certified by the certification body Lacon. It has been a major objective of WSSS to form village level Peoples Organizations in order to empower the poor and weaker sections in the society, explains the website. The Community Based Peoples Organization (CBO) organize and undertake development interventions and initiate the process of empowerment of the people. The target groups for socio-economic empowerment are tribals, women, small and marginal farmers. WSSS are the manufacturer and exporter of farm produce like spices , coconut oils,coffee and freeze dried fruits in organic and Fair trade certified quality .
Picture: Wayanad Social Service Society (© WSSS)
Successful: Terra Greens Organic
Terrafirma is a very good example of the model of direct cooperation with small farmers. Founded as recently as 2013, the brand Terra Greens Organic is already firmly established in the Indian market: the product range (roughly 100 articles) is available in 13 federal states in around 500 outlets and also in online shops. The young firm cooperates with 7,000 small farmers. The founder of the firm, Likitha Bhanu, is anticipating turnover of more than two million US dollars for 2016 and intends to grow her business at all levels.
Picture: Terra Greens Organic presented ready mixes for quick meals at BioFach India.
Start-up Dear Earth
The successful model is being followed by the start-up Amaara Food & Wellness Pv. Ltd. with its brand Dear Earth. The company in was founded in New Delhi in April 2014 by Ramandeep Singh and Aman Deep Singh. The products, plus an appealing background story that talks about “protection of our environment” and “responsibility for our planet”, come from 15 projects that employ about 15,000 small farmers. With organic certifications for India (NPOP) and the USA (USDA-NOP), the focus of the brothers is on both the domestic market and the biggest export market.
There is demand for natural cosmetics and natural textiles in India too
There is rising demand in India for more than organic food – natural cosmetics firms are also reporting growth in sales. For example, Vishal Bhandari from Soul Tree was delighted with the way his business has developed. Last year he gained numerous new trading partners for his BDIH-certified ayurvedic natural cosmetics at home and abroad. At BioFach in New Delhi the firm, that is domiciled in Delhi, presented new products and its relaunched packaging for the Soul Tree face and body care line.
Picture: Vishal Bhandari, Soul Tree (left) presenting the new packaging for his BDIH-certified face and body care line. Photo © Karin Heinze
Cultivators Natural Products (CNP), that specialises in plant extracts and plant waters, has increased its product portfolio considerably and has brought to market a wide range of hair dyes, hair care and plant waters in attractive packaging. Using the latest machinery, the products are manufactured in the new factory in Jodhpur (federal state of Rajasthan). They grow many of the organic plants themselves, and the factory uses 100 % renewable energy.
CNP has had Ecocert certification since 1999, and COSMOS since 2016. They export over 90% of their products. Tarun Prajapati, the son of the founder of the firm, was very pleased with the discussions he had at BioFach and with the feedback about the new products (video interview).
Picture: Among other things, Suminter India Organics markets organic cotton clothes under the Satva brand. Photo © Karin Heinze
Suminter: the Satva brand stands for organic food and natural textiles
The company Suminter India Organics cooperates with 20,000 farmers in nine of India's federal states and operates two factories for processing. As well as an extensive portfolio of food products, organic cotton features in the Suminter assortment. The project in Gujarat with almost 5,500 small famers is FLO-zcertified. Organic, fairly traded yoga and fitness clothes are marketed under the Satva brand in, for example, the USA via Wholefoods Market. At BioFach Suminter presented the collection that will soon be available on the Indian market. (video interview)
Impressions from Biofach India India Organic 2016. Photos © Karin Heinze