Consumer demand for organic foods has been spurred by a number of factors including concerns over pesticide residues on foods, food produced using genetically modified organisms (GMOs), and hormones in dairy and meat products .It has been observed that people have become circumspect about the usage of various harmful chemical in various products, this has lead to the launch of various online e-commerce ventures which are associated with the selling organic products.
Chief Executive of Natural Mantra, Mr. Anand Agarwal said all those who favor organic goods like clothing, haircare, Homecare and food has witnessed a considerable boom in the past four years.
The recent allowance by USDA for the labeling of meat and poultry as organic will accelerate already heightened demand for organic grain and feed from the organic dairy industry. Although the fastest growth in organic foods has been in categories other than produce, clearly produce plays an important role in the consumers decision on where to shop, and demand should increase with the overall increase in the number of organic consumers. Market outlets now include sophisticated natural food store chains, gourmet specialty stores, and e-commerce, allowing for a broadened array of products.Inevitably, these changes in food products offered and in retail outlets Online will lead to an organic agriculture that increasingly resembles the conventional food industry.
Mr. Anand, who has a past experience of working with software companies like Accenture and Infosys, chose organic sector when he purchased a half stake in the Mumbai-based start-up that started in 2011. He added that the sales rose to 40% on a monthly basis. He anticipates that the company, supported by initial stage investor Freemont Partners, is all set to touch a revenue of 50 crores by 2016. Leading grocery portals which comprise of GreenNGood, GrocBay, Farm2Kitchen, MyGreenKart and Down2Earth are competing for a share in the organic food sector that industry body Assocham approximates will reach to Rs. 6,000 crore by 2015.
In addition to the metropolitan cities, the demand for the organic foods is on the rise in smaller towns and cities as well. As per a research by Morarka Rural Research Foundation, 1,000 users in 10 cities comprising of Gorakhpur, Nagpur and Allahabad, found that 30% are in the favor of the organic products. The liking was such that they are willing to pay up 20% more for these products.
According to Pragya Singh, Associated Director of retail at Technopark, the main reason behind the rising demand for organic products is the growing awareness regarding the well-being of the health.
According to Mr. Mukesh Gupta, Director-operatioins at Morarka Organic Foods, various online groceries are concentrating hard on the expansion of their customer base. They are mainly concentrating on young couples and couples with young siblings. This Jaipur-based company, last year, received total order worth Rs. 70 crores out of which a tenth were online orders. Mr. Gupta is positive to see a significant rise as the company is eyeing a profit of Rs. 150 crore by 2014. As per the entrepreneurs, the supply is not enough to meet the growing demand.
Mr. Hari Menon, Chief Executive and Cofounder of BigBasket.com (a well-known online grocery portal), said that they have taken optimistic steps in this direction by joining hands with some of the leading organic farms and brands. Mr. Menon, an alumnus of BITS (Birla Institute of Technology and Science) Pilani, which has successfully raised Rs. 63 crore from Ascent Capital, they will make use of future rounds of capital to cater to their customers in smaller cities.
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