- Published: Tuesday, 14 November 2017 03:02
Asia is primed to drive the sales of global organic products between 2020-2030 as consumer understanding and government support grows, claims an industry pioneer in India.
Raj Seelam is the founder and CEO of Sresta Natural Bioproducts which sells organic ingredients and finished products under the 24 Mantra brand.
From its humble establishment in 2004, today the firms works with 45,000 farmers cultivating 225,000 acres in 11 provinces.
“And our goal is to expand this circle of sustainability by reaching 500,000 acres under organic farming by 2020,” he said.
Seelam concedes the consumer awareness of organic products in Asia has lagged behind much of the rest of the world, but he believes it has been gaining traction in the past few years.
“Hence the local markets are small but will grow rapidly in the next decade,” he said.
“I believe 2020 to 2030 will be a decade when Asian markets will contribute significantly.”
The Indian market is still relatively small, valued at around about USD$200 million, but it is growing at around 25% per year.
“We believe that if we are able to convert 5% of the food consumption to organic in the top 300 cities, the market will be USD$10 to 15bn,” he added.
“This can happen in the next 10 to 15 years. We believe the tipping point in India is only a few years away.”
In addition to growth in consumer understanding, Saleem said there had been a change in mindset from officials too.
It went from discouraging organic production because it feared it would hit yields, to now accepting it can contribute to sustainable production.
“This has been a huge journey. Today the central Government and many state governments provide financial incentives for organic farming.
“Though the scale is small, it is a good beginning and should accelerate in the future, and a few organic companies have also now been funded by venture capital,” he said.
Most of the firm’s success in India is coming from finished products, while exports drive the ingredients business.
“Of late, because of the growing number of working couples in urban areas and pressure on their time, convenience food is gaining importance.
“This is mostly ready-to-cook or ready-to-eat food products. It is important that organic should also club convenience, great taste and good health.”
Saleem’s 24 Mantra products are now sold in over 20 countries – something that scarcely could have been imaginable for an Indian firm back in 2004.
“When we started in 2004, no one knew about organic and all the market research told us that we would fail,” he said.
“But my instinct told me that we might be a bit early but we were on the right track.
“We had to travel far and wide in the country to convince farmers to take up organic farming and train them in organic agriculture. Then we had to work on storage and processing technology to give good shelf life.
“No one was willing to sell our products, so we opened our own stores, though it did not make economic sense. But it helped us to educate consumers and also build a brand.
“Then we convinced one of the retail chains to carry organic products. We have made good progress but we have miles to go before we can rest a bit.”
Raj Saleem will be speaking at the Sustainable Foods Summit, held in Singapore from November 28-29.
Source: Gary Scattergood, Food Navigator Asia