Mr. Subrata Dutta is the Group Managing Director of ORGANIC INDIA, a leading manufacturer and exporter of organic teas, infusions, herbal supplements and food. Over the course of his career, Mr. Dutta has held various senior positions with top global brands across diverse sectors of FMCG, Retail, Lifestyle and Travel in companies such as PEPSICO, Wimco, Himalaya, and Samsonite. He has been instrumental in steering the companies he has worked with through transformational and path-breaking initiatives, he is known as a “turnaround specialist” in the industry.
India’s organic food and beverage industry has experienced a consistent growth over the past couple of decades. Backed by the widening middle class, gradual improvement in purchasing power, elevation in quality of life, and more disposable income, more Indians than ever before are consciously choosing organic food. The sector is also enabled by increasing policy focus and a number of government measures, which includes schemes such as Mission for Integrated Development of Horticulture (MIDH), National Food Security Mission (NFSM), National Mission for Sustainable Agriculture (NMSA), the National Programme for Organic Production (NPOP), which involves an accreditation programme for certification bodies, standards for organic production, promotion of organic farming, so on and so forth.
Moreover, improved infrastructure and market linkages of producer clusters with agribusiness, phytochemical, and more organized retail and e-commerce formats have contributed to this change. However, the most important emerging differentiator in recent years has been the growing health awareness amongst the masses and changing outlook towards the entire process of organic food, beverages, and farming, which are important factors propelling growth in the sector. This is evident from the fact that the year 2019 had a record US $69 million retail sales of organic food and beverages.
While the COVID-19 outbreak did bring about uncertainties and cause sudden disruptions in the market, transport and logistics, food processing units, and overall farming, the pandemic also made individual and public health central to the world discourse. Subsequently, organic food and beverage gained more importance in India. In the new normal, over the next few decades, environment and sustainability factors will force a stronger public, government, and policy inclination towards organic farming, food and beverage manufacturing. India’s organic food sector is expected to reach US $10.75 billion by 2025. Therefore, the sector is going to witness a steeper growth in years to come.
However, with opportunities there are certain challenges. India’s organic cultivation potential is really underutilized. Over 30% of total certified organic producers in the world are Indian, but the country accounts for only 3.3% of global organic cultivated area. Other major challenges include transforming farming behaviour and culture within the country towards sustainable and organic farming practices, and higher storage and transportation costs. These factors make leveraging latest technologies at all levels of organic food and beverage production essential for the industry to undergo a complete transformation and usher in the future of organic industry that can meet future demands, widen product range, expand reach, ensure rapid seamless delivery, and reap dividends for the agriculture and food processing sector. Organic food and beverage industry has already begun adopting technologies at a number of levels, ranging from farming, cultivation, storage, to supply chain and logistics, to food processing and sales.
Organic agriculture
Agriculture in India is impacted by a variety of factors and influences. The overall agriculture and specifically organic cultivation process has become increasingly scientific today to the extent that various technologies are being used to gain different insights on specific aspects related to agriculture. New-age technologies have begun addressing age-old challenges of unpredictable climate changes, monsoon and irrigation, crop-pests, crop protection, soil enrichment without fertilisers, so on and so forth. Not only is technology addressing traditional challenges, its opening new frontiers and making future possibilities a reality. Organic farming has begun adopting smart farming. Ushering in the era of Agriculture 5.0, the sector has begun using IoT, data analytics and machine learning for precision agriculture. Modern agriculture has already employed geospatial and IoT sensor driven technologies for mapping cultivation areas, which is especially effective for small holding farmers. Advance technologies are enabling production from side streams and waste along with main commodities and enhancing sustainable cultivation through drip irrigation processes. Organic produce needs careful storage and handling post cultivation, and technologies are helping us design and construct smart storage systems.
Food processing and Integrated value chain
Ensuring quality and safety is the most important factor for food processing industry. While the F&B industry is highly mechanized, it is at the forefront of adopting digital technologies to ensure undifferentiated quality of products. Digitalisation is revolutionising the food processing sector across primary, secondary and tertiary processing stages. Integrated with the entire value chain, from procurement and storage of raw ingredients to retailing, digitalisation is reshaping the industry altogether. AI, IoT and advance data analytics are recording and assessing data and providing data driven business insights, building in efficiency and sustainability in the system.
The organic food and beverage industry has complex forward and backward linkages in the entire value chain, from growing, processing, logistics, wholesale trade, retail trade to exports. As organic product range, especially consumables like food and beverage, is more natural with a shorter shelf life than others, the industry has adopted various value chain technologies to seamlessly manage the flow from farm to food processing units to market place to customer shelf. Several technological tools are available to effectively plan, manage, and optimize production and sales. The ongoing COVID-19 pandemic has further pushed the sector to use digital technologies to automate and establish direct-to-consumer channels, which with support of ecommerce players have disrupted traditional retail models. Integrated, connected, and smart value chain models.
Sales and marketing
Digital technologies have revolutionized sales and marketing across sectors and food industry is no different. Backed by e-commerce and online marketplace, the technologies have empowered the sector with greater accessibility to masses, enabling brands to drive various strategies across the consumer journey from customer awareness and consideration to purchase and delight. Grocery delivery applications have replaced the local kirana-wala and the trend is not limited to metros or tier 1 cities but is rapidly shifting to tier 2 cities and beyond. The direct-to-consumer channels have blurred the lines between sales and marketing, making real-time conversions possible.
The rise in advance technologies is empowering the organic food industry achieve greater possibilities, and more transformations are in the offing. The new age food and beverage industry are witnessing emergence of 3D food printing technology, cloud kitchen, robotics and intelligent processing solutions, e-commerce and other home delivery solutions, blockchain in entire value chain matrix, and increasing role of AI and IoT across domains. In its endeavours to be self-reliant, it is imperative for India to capitalise on its vast organic cultivation potential and food processing industry and allow advance technologies to pave the way to the future of organic food industry.