The organic food industry has emerged as a significant segment within the global food market, driven by increasing consumer awareness about health and environmental sustainability. Organic foods are produced through farming practices that avoid the use of synthetic pesticides, fertilizers, genetically modified organisms (GMOs), and irradiation. Instead, these practices emphasize the use of natural inputs and processes, such as composting, crop rotation, and biological pest control.

Key Drivers of Growth

1. Health Concerns: Consumers are increasingly wary of the potential health risks associated with chemical residues in conventionally grown foods. Organic foods are perceived as healthier options due to the absence of synthetic additives.
2. Environmental Sustainability: Organic farming practices are designed to reduce pollution, conserve water, enhance soil fertility, and promote biodiversity.
3. Conscious Consumerism: There is a growing trend among consumers to make purchasing decisions that reflect their values, including support for sustainable and ethical food production methods.

Organic Food Industry: A Growing Trend

Rise in Demand

• Increased Awareness: Growing concerns over the hazards of pesticides and fertilizers.
• Conscious Consumerism: Consumers are increasingly seeking organic options.
• Market Growth:
  • Data from IMARC: Organic sector in India expected to grow at a CAGR of 21.2% to $8.9 million by 2032.
  • Market Expansion: Companies and quick commerce apps are capitalizing on this demand.

Challenges in the Organic Food Market

High Certification Costs

• Certification Expenses: Obtaining organic certification is expensive.
• Impact on Prices: High costs lead to higher prices for consumers.

Limited Availability

• Supply Shortages: Insufficient availability of organic produce.
• Farmer Participation: Not enough farmers are involved in organic farming.
• Primary Stakeholders: Lack of primary level stakeholders in the sector.

Customer Literacy

• Awareness: Consumers lack understanding of the benefits and standards of organic products.

Infrastructure and Supply Chain Issues

• Inadequate Infrastructure: Current infrastructure does not support the organic food market adequately.
• Supply Chain Expansion: Need for improved and expanded supply chains to reduce costs.

Regulatory and Certification Challenges

Regulatory Framework

• Strong Regulations:
  • National Programme for Organic Production (NPOP).
  • Agricultural and Processed Food Products Export Development Authority (APEDA).
  • Certifications: USDA Organic, EU Organic.
• Enforcement Issues: Effective enforcement of regulations is lacking.

Certification Difficulties

• Scale Disparity:
  • Easier for mid or large-scale producers.
  • Difficult for small-scale stakeholders.
• Integrity Concerns: Loopholes in certification may compromise product integrity.

Global and Export Market

Global Market Value

• Current Value: $253.9 billion in 2024.
• Projected Growth: Expected to reach $643.6 billion by 2033 (CAGR of 15%).

Indian Export Market

• Export Volume: 2.6 lakh metric tonnes in 2023-24.
• Export Value: Valued at around Rs 4,007.91 crore.
• Export Destinations: United States, European Union, Canada, Great Britain, Sri Lanka, Switzerland, Vietnam, Australia, Thailand, Japan, etc.