Organic food startups: Massive opportunity, but high costs remain a challenge

According to an EY Report on Indian Organic Market, the current market in India is set to increase by Rs 100,000–120,000 million by 2020.
Organic food startups: Massive opportunity, but high costs remain a challenge
Organic food startups: Massive opportunity, but high costs remain a challenge
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By Rishabh Chokani

As per reports by FICCI, ‘India has made a strong name for itself and ranks amongst top five countries in the world in terms of number of startups founded’. The organic food industry in India is a specialty classification and is yet to sweep countrywide. But these organic startups have managed to create and innovate several food and beverage, cosmetic and healthcare products that are 100% natural.

The country has witnessed a rise in the demand of the organic products. These products provide a healthy choice of lifestyle to consumers and ensure that any harmful pesticides, genetically modified organisms (GMOs) or synthetic fertilizers are not utilized in cultivation.  Due to the increasing number of food adulteration cases and continuously rising income, the conscious consumers in India want to turn completely natural in their nourishment requirements, hence making organic products their preferred choice.

Another factor that has contributed to the surge in the demand for organic products is development in e-commerce sector and retail value chains, which serves as a facilitator for the small startups to reach out to their potential consumers. In recent years, a handful number of these ecommerce websites have emerged as fully dedicated platforms to cater these products in the market.

The organic sector in India offers numerous doors of opportunities that can be leveraged, hence turning out to be a perfect venture for the budding startups. The sector that is still at nascent stage is being seen as an extremely encouraging sector. Various initiatives taken by Indian government is further acting as a catalyst for change from traditional farming to organic farming. According to an EY Report on Indian Organic Market from March 2018, the present Indian local market assessed at Rs 40,000 million is probably going to increase by Rs 100,000–120,000 million by 2020 with a similar incremental trend in exports. With the constant and thorough advancement, the Indian Government has figured out how to urge farmers to take up cultivating organic produce and customers to decide on better natural nourishment for themselves. Besides, In the Union Budget of 2016, the Government of India proposed to allot 500,000 ha  in the nation under organic farming and develop value chains in the Northeastern Region (NER).


In spite of the empowering condition made by a zenith of the previously mentioned components, there exist a few difficulties for every one of the stakeholders required at each phase of the value chain. From higher certification costs and lack of knowledge of organic cultivation to global competitiveness and lack of awareness among masses are some of the major challenges the organic food industry faces. The cost of operating and producing natural products is higher than the regular food products available in the market. Producers of these items are persistently attempting to expand the size of their produce while maintain the profitability. This is basically a direct result of the holes in the administrative structure for organic products in India.

However, government of India has already started taking initial steps required to give a push to organic farming. Government bodies like Agricultural and Processed Food Products Export Development Authority (APEDA) and National Programme on Organic Production (NPOP) have been set up to promote the export of agro-products from India and to provide information around required standards of organic production respectively. NPOP also looks into policymaking for development and certification of organic products.

There has also been system like PGS India (Participatory Guarantee System) that certifies that its members are engaged in growing organic food and it is completely free for the farmers. Besides this, there are various other programmes such as the NMSA, Paramapragat Krishi Vikas Yojana (PKVY), Rashtriya Krishi Vikas Yojana (RKVY), Mission for Integrated Development of Horticulture (MIDH),National Mission on Oilseeds & Oil Palm (NMOOP) that have been started to develop a strong ecosystem for organic farming in the country

With such policies and framework we can clearly say that organic farming is already being seen as a massive opportunity for entrepreneurs, farmers and consumers. More initiatives from the government can definitely give further boost and lay a strong foundation for the budding players from related industries to explore the potential hidden in organic farming sector.

Rishabh Chokani is the CEO and Founder of Naturevibe Botanicals

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