Project ReportOn

CHALLENGES AND OPPORTUNITY OF ORGANIC FOOD IN INDIA

Submitted to M.D University Rohtak in partial fulfillment of the requirement for the award of degree of Master of Business Administration

Session: 2014 – 2016

Submitted by:

MANU BANSAL

Roll no. 160114015

PDM COLLEGE OF ENGINEERING

(Sarai Aurangabad, bahadurgarh-124507)

MAHARSHI DAYANAND UNIVERSITY, ROHTAK

DECLARATION

I, MANU BANSAL, ROLL NO. 4015 class MBA 4 th SEM of PDM college of engineering,

bahadurgarh, hereby declare that the project entitled ‘CHALLENGES AND OPPORTUNIY OF

ORGANIC IN INDIA’ is an original work and same has not been submitted to any other

institution for the award of any other degree. The interim report was presented to the supervisor

on__________ and the pre-submission was made on . The feasible

suggestion has been duly incorporated in consultation with the supervisor.

Countersigned

Signature of supervisor Signature of candidate

Forwarded by

Director/ Principal of the Institute

ACKNOWLEDGEMENT

I am using this opportunity to express my gratitude to everyone who supported me throughout

the course of this MBA project. I am thankful for their aspiring guidance, invaluably constructive

criticism and friendly advice during the project work. I am sincerely grateful to them for sharing

their truthful and illuminating views on a number of issues related to the project. I have no words

to express my immense gratitude to Dr. Nidhi Mishra who has all along been very kind to

researcher for not suggesting the topic of the project but also offering valuable guidance

particularly at the time of his personal appointments. I am also extremely thankful to the

company management, officers and staff for their cooperation during the study or survey and

their responses Dr. Nidhi Mishra and other faculty members of the institute for their continuous

encouragement and support. I am also indebted to my father, sister and friends for their immense

love and affection, care, concern, and consideration and unstinted support throughout.

MANU BANSAL

 

TABLE OF CONTENTS

DECLARATION

ACKNOWLEDGEMENT

1. INTRODUCTION

Introduction of topic

Overview of current organic food market in India

Growth of organic food in India

Challenges for Organic Farming

Companies marketing strategies for organic food in India

2. Review of literature

3. Objectives of the study

4. Research Methodology

5. Data analysis and interpretation

6. Findings and recommendation

7. Conclusion

BIBLIOGRAPHY

ANNEXURE

CHAPTER 1

INTRODUCTION

INTRODUCTION OF TOPIC

Organic foods are foods produced by methods that comply with the standards of organic

farming. Standards vary worldwide; however, organic farming in general, features practices that

strive to foster cycling of resources, promote ecological balance, and conserve biodiversity.

Organizations regulating organic products may choose to restrict the use of certain pesticides and

fertilizers in farming. In general, organic foods are also usually not processed using irradiation,

industrial solvents or synthetic food additives.

Organic cultivation is particularly suitable for a country like India with a huge population of

small farmers who still use traditional methods of farming with few agricultural inputs. It is

estimated that 65% of the country’s cropped area is organic by default, as the small farmers have

no choice but to farm without chemical fertilizers and pesticides as they cannot afford. This

default status coupled with India’s inherent advantages, such as, its varied agro-climatic regions,

local self-sustaining agri-systems, sizeable number of progressive farmers and ready availability

of inexpensive manpower translate into the potential to cultivate a vast basket of products

organically.

Organic food production is a self-regulated industry with government oversight in some

countries, distinct from private gardening. Currently, the European Union, the United States,

Canada, Japan, and many other countries require producers to obtain special certification based

on government-defined standards in order to market food as organic within their borders. In the

context of these regulations, foods marketed as organic are produced in a way that complies with

India, a country with a huge number of small farmers who still use traditional methods and do

farming with few agricultural inputs. NGOs that promote organic farming and other organizations

support farmers in these aspects. An organic movement is now emerging in India on different

levels (producer groups, trainers and advisors, certification bodies and processors and traders). So

dissemination of information about the opportunities and challenges for Indian organic products on

the domestic and international market is of fundamental concern in order to allow continued.

organic standards set by national governments and international organic industry trade

organizations.

AN OVERVIEW OF CURRENT ORGANIC FOOD MARKET IN INDIA

According to the Indian Competence Centre for Organic Agriculture, the global market for

organically produced foods is $26 billion and is estimated to increase to $102 billion by 2020.

As part of 10th Five Year Plan (2002-07), the government earmarked Rs 100 crore (Rs 1 billion)

for the promotion of sustainable agriculture in the country, but the main components of this

initiative have benefited exports, from the establishing of national organic standards under NPOP

(National Programme for Organic Production), putting in place a system of certification for

products, and establishing APEDA (Agricultural and Processed Food Export Development

Authority) as the nodal agency to promote exports opportunities.

The organic farming is an old concept in India in terms of the extensive farming carried out in

the country. The organic food market is worth USD 129.3 mn and shows huge potential for

growth in future.

Major products produced in India by organic farming

Type of Product Products

Commodity Tea, Coffee, Rice, Wheat

Spices Cardamom, Black pepper, White pepper,

Ginger, Turmeric, Vanilla, Tamarind, Clove,

Cinnamon, Nutmeg, Mace, Chili

Pulses Red gram, Black gram

Fruits Mango, Banana, Pineapple, Passion fruit,

Sugarcane, Orange, Cashew nut, Walnut

Vegetables Okra, Brinjal, Garlic, Onion, Tomato,

Potato

Oil seeds Mustard, Sesame, Castor, Sunflower

Others Cotton, Herbal extracts

Organic Food Consumption in India is on the Rise

Some people believe that organic food is only a “concept” popular in the developed countries.

They think that when it comes to organic food, India only exports organic food and very little is

consumed. However, this is not true.

Though 50% of the organic food production in India is targeted towards exports, there are many

who look towards organic food for domestic consumption.

Organic agricultural export market is one of the major drivers of organic agriculture in India.

India exports 31 organic products. It is estimated that more than 85% of total organic production,

excluding wild herbs from UP and MP, is exported. India is best known as an exporter of organic

tea and also has great export potential for many other products. Other organic products for which

India has a niche market are spices and fruits. There is also good response for organic rice,

vegetable, coffee, cashew, oil seed, wheat and pulses. Among the fruit crops bananas, mangos

and oranges are the most preferred organic products.

India’s organic export products include, tea, honey, cashew, cotton, processed fruits, coffee,

basmati rice, sesame, spices, walnuts, pulses and wheat. Key organic items of export importance

are fruits and vegetables, sesame, basmati rice, fruit pulp, fruit juices, spices, cashew, tea, coffee,

cotton and wheat. India has production advantages in most of these products.

The domestic market is nascent but has huge growth potential. Presently the domestic market for

organic products are estimated at 1,200 tonnes and there are around 2-3 million potential

customers for organic agricultural produce and is growing.

Who are the organic consumers?

What consumer consider as the “organic consumer” is that person who is responsible for buying

food for the household and who buys organic food at least once or twice per month. So, if there

are people who buy randomly or less than once a month then they are not considered regular

organic consumers.

 

Values and behavior of organic consumers

What do organic consumers think, that is, what is in their minds concerning organic products, is

a determinant factor of consumer preference for organic food. In spite of taking cognizance, a

change in attitude and thinking about organic food is prerequisite, in order to feel confident and

positive about this new direction.

 

An organic consumer has more positive beliefs concerning organic products. For example, this

product tastes better, is more natural, is healthier-they believe that more than non-organic

consumers. They believe that the people who are important to them, people who are close to

them, also by organic products- they believe that it is a good thing that they buy organic

products. The other aspect of what the organic consumer think, as compared to non-organic

consumers, is their moral norms indicate they are doing a very good thing for the environment,

the right thing for society. This is something that differences them from non-organic consumers.

Non-organic purchases do not associate those beliefs to buy organic products.

Consumers’ values to make a choice for organic food can be seen in two terms-use values, such

as utility from taste, health and freshness, i.e., private good attributes which can only be enjoyed

by actually consuming the product. The other non-use values are public good values related to

improved environment and animal welfare. The majority of all consumers-acknowledges and

value organic goods for their non-use values (environmental or animal welfare attributes), as

well as for their use values (health, taste or freshness attributes). The group of consumers having

use values only is negligible. In the same way that most people agree exercise- is important; they

also agree that a sustainable, clean environment is important.

Contract farming for organic crop production in India

Indian agriculture is progressing in all spheres to keep up with the ever-increasing population. In

the Tenth Five-Year Plan (2002-07), the government envisaged at least 4% growth rate per

annum, so that food security is assured and employment opportunities in agriculture are created.

The National Agricultural Policy also aimed to strengthen the national economic growth through

efficient marketing to accelerate foreign exports by establishing Agri-Export Zones for various

crops in major crop-growing areas, where technical know-how and facilities for export will be

provided. Therefore, there is a shift from sustainable to commercial agriculture. Farmers can

increase their income from crop production. Similarly, in several developed countries, demand

for organic food and fibre, and by-products is increasing day-by-day. This change is mainly due

to overuse or misuse of chemicals, particularly synthetic insecticides, fungicides, herbicides,

fertilizers, plant growth regulators, etc. that resulted in undesirable side effects not only in the

agro-ecosystems, but also on human health and life systems of beneficial fauna and

microorganisms. These recent trends in consumerism have opened a new vista for agricultural

production on large scale by adopting contract farming, which can transform small farmers into

viable commercial producers by monitoring quality, quantity and cost of crop production, and

can link production with the consumption. This change can help develop markets and bring

about changes in the present conventional agriculture which is expected in India in near future.

This note therefore discusses the present situation and future strategies of community cultivation.

Need for contract farming in organic agriculture

The organic agriculture includes growing of crops by a set of guidelines that prohibit the use of

synthetic products/chemicals such as fertilizers, pesticides, plant growth promoters and livestock

additives. Therefore, soil fertility and pest management is achieved through cropping patterns

(rotations, inter/mix-crops, pest and disease- resistant genotypes), manure (green manufacturing,

organic manures, compost), biofertilizers, cultural practices (weeding, planting, conventional

tillage) and biopesticides, including plant-derived products. At present, this system seems to be

an ideal and valid solution to produce food and fibre without chemicals and to protect the

environment. Further, consumers are becoming conscious and critical about the quality of food

and by-products that affect their health though the toxicity depends, to some extent, on the type

of food consumed. India being one of the signatories for the World Trade Organization,

liberalization, privatization and globalization has opened new grounds for agricultural marketing.

The National programme for Organic Production of the Commerce Ministry and the State

Governments are actively promoting investment in support of promising ventures in organic

agriculture.

Considering the present socio-economic status of Indian farmers, contract farming seems to be

an ideal option because this system would have certain advantages over the present crop

production and marketing systems, such as:

1. Profit in produce sale is possible by capitalizing the scientific research in post-harvest

technologies.

2. Indian agriculture is becoming commercial due to global demand for a variety of foods and

fibre, and food products.

3. Any crop can be cultivated on a large area to obtain produce of uniform quality by adopting

appropriate technology. Crop production is also possible on small land-holdings through

cooperative/ corporate farming to enhance productivity and avoid admixture or inferior quality

produce.

4. Technology transfer becomes easier due to large-scale adoption.

5. Risk involved due to fluctuation in market price is minimized. This point is relevant to the

present strategy of farm economics as the Minimum Support Price is generally declared at the

end of crop season and it often remains ambiguous.

6. Commercial and nationalized banks are coming forward to finance contract farming through

soft loans and are revising prime lending rates.

7. Additional income from intercrops is certain due to crop diversification. Consolidation of

small and marginal lands can make farming economically viable, resulting in higher (>30%) net

returns than traditional/conventional farming systems.

Growth of organic food in India

ACNielsen, a leading market research firm, recently surveyed about 21,000 regular Internet

users in 38 countries to find their preference for functional foods – foods that have additional

health benefits. The survey revealed that India was among the top ten countries where health

food, including organic food, was demanded by the consumers.

The most important reason for buying organic food was the concern for the health of children,

with over 66 percent parents preferring organic food to non organic food. Though organic food is

priced over 25 percent more than conventional food in India, many parents are willing to pay this

higher premium due to the perceived health benefits of organic food.

The increase in organic food consumption in India is evident from the fact that many organic

food stores are spurring up in India. Today (2006) every supermarket has an organic food store

and every large city in India has numerous organic food stores and restaurants. This is a huge

change considering that the first organic food store in Mumbai was started in 1997.

However, the Indian organic food consumer needs education. There are many consumers who

are unaware of the difference between natural and organic food. Many people purchase

products labeled as Natural thinking that they are Organic. Further, consumers are not aware of

the certification system. Since certification is not compulsory for domestic retail in India, many

fake organic products are available in the market.

Challenges for Organic Farming

(i) Organic farming on basis requires a long-term approach as it is based on the trust of farmers,

for which grass root intervention is critical for its success.

(ii) If it is not profitable to both parties, the written agreement becomes a useless effort. Thus,

responsibilities of both parties should be fulfilled. The agreements differ according to the

commodity produced by contracting farmers. Generally, farmers may not take cognizance at the

time of signing of the clauses that might be exploitative in short or long term; such agreements

can jeopardize investments and interest.

(iii) Although 44% of the country’s GDP comes from retailing, retail marketing of organic food

is limited compared to other countries, e.g. 85% in USA, 40% in Thailand, 35% in Brazil, 20%

in China and only 2% in India

.

(iv) Convincing farmers about the economic benefits of contract farming through field

demonstrations should be taken up urgently. This may consist of educating farmers about new

farming techniques, marketing skills for organic food and fibre, seeking cooperation from

business communities and firms, informing consumers about the ill-effects of chemicals, etc.

(v) Certification cost for organic produce is comparatively high and needs to be reduced

drastically.

(vi) Facilities for storing and verification of quality of agricultural commodities at village level

are lacking.

(vii) Participation of processing firms/ purchasers is limited, as they are not aware of the long-

term benefits and they also need large areas, which is difficult in regions where small and

fragmented land-holdings are common.

(viii) Banks are ready to finance contract farming in organic agriculture to only those farmers

who are not defaulters.

(ix) Under unfavorable climatic conditions, the quality of farm produce cannot be maintained or

the whole crop may fail. Crop insurance initiated by the Government needs to be implemented

on a large scale.

India can take advantage of the growing opportunities in this sector making use of its

varied agro-climatic conditions and traditional organic resources and farming practices.  There

are certain challenges to be met before India takes on to the world organic markets. The Indian

produce has to create a competitive niche in global markets. The challenges in international

marketing of organic food are standardization of products according to the customers’ tastes and

preferences, certification, consumer education, branding and promotion. Production of organic

products also face challenges with regard to availability of right and quality inputs, research and

dissemination of appropriate technologies, processing, certification, production information and

infrastructure support and also policies of the government need to be revisited to fulfill its

objectives to tap global organic markets. Therefore, the study is based on the strategic analysis of

Indian organic product industry with respect to global markets.

Companies marketing strategies for organic food in India

Organic food as a product is the most important marketing-mix variable. Before organic food

producers enter the organic product market, they should be prepared to correspond best to the

wishes of their consumers by the design, purpose and function. What organic food consumers are

most interested in are the following items: production program, product quality, packaging

material, packing, product labeling, and price setting. This is closely related to the product image

that implies everything a consumer creates about the product as an image, atmosphere or a

feeling. Orientation towards consumers intensifies problems regarding relevant factors in the

design of the production program as a means to satisfy consumers in a demanding and

competitive battle on the market and achieve goals in that way.

Product

– High Quality Natural and Organic Food

– Offerings vary based on store size and tastes of local clientele

– Private label products

– Emphasis on daily foods

Price as marketing-mix of organic food

Price makes the second element of marketing-mix, which brings income, while other marketing-

mix elements represent costs. The product price must be in line with product’s basic

characteristics and features. Thus, it must closely correspond to product’s quality, design,

packaging, etc., exemplifying at the same time the realized productivity.

Price

– Goal is competitive price at highest quality

– Organic foods are 25 – 75% more costly to grow and market

– Price and Quality are competing forces

– Near2Nature chooses to focus on Quality, therefore prices are higher than

conventional grocers

Place

– No standard store design. Layout customized for site and product mix.

– Presentation

• Highly regarded food displays, cleanliness, wide aisles

Promotion of organic food

Due to the easier and quicker access of potential consumers to the relevant information on

organic food entering the market, i.e. in order to help customers decide on the purchase of certain

organic products, producers advertise their products in media.

Promotion

– Primarily rely on word-of-mouth recommendations

– 0.5% of revenue spent on advertising

– Most marketing spend is for in-store signage and events

– Store personnel is knowledgeable and personable

STRENGTHS AND WEAKNESSES OF ORGANIC FOOD COMPANIES IN INDIA

STRENGTHS

Highest Quality Organic Foods Seller

Huge selection/variety

Free Home delivery

First Mover in organic products

Eco-Friendly

The export of Indian organic products is progressing. The Government support to organic

agriculture, awareness for healthy food harmful effects of pesticides and presence of their

residues. International and national certification bodies in India- these four facts are the

dominating strengths.

WEAKNESSES

Price – up to 75% higher

Locations – only in affluent areas

Advertising Budget very low (WOM approach)

Promotional Offers – no coupons

Certification

Major weaknesses are on the level of information/awareness: most farmers have only small

holdings and quality consciousness is low besides lack of marketing skills (e.g. disjointed sector

for the domestic market). Another weakness to be noted is that the organic market is not

consumer demand -based, but supply driven. From this fact a lot of threats can be derived.

OPPORTUNITIES

Expand private label selection – lower price for customers

Advertise more, create coupons and promotions to get people in the store

Hype right now is to eat healthier and protect the environment

Rewards program – frequent buyer cards

Back to Basics – buy more local products that people will pay more for.

To quantify the potential of the organic products is not simple because the fast development of

the Indian society and economy. For further progress, more information should be gathered on

the market opportunities. Nevertheless, the need assessment shows that on the level of the

opportunities, a considerable potential for the organic market exists, even though the size of the

potential cannot be quantified exactly.

THREATS

Conventional Supermarkets

Bad Economy

Local Farmers Markets/Independent Retail Chains

Some of the major threats are really dangerous. The awareness about pesticide residues is to be

considered as strength. However, a bigger threat is that all kind of products are offered under

declarations like “without pesticides”, “eco-friendly” or even “organic”.

HISTORICAL PROSPECTIVES

In 1939, Lord North borne coined the term organic farming in his book Look to the Land

(1940), out of his conception of "the farm as organism.

This is different from the scientific use of the term "organic," to refer to a class of

molecules that contain carbon, especially those involved in the chemistry of life.

It was with the advent of the ‘green revolution’ that the natural way of growing crops

started becoming unpopular and economically less feasible.

Organic food farming continued in small, mostly family-run, farms or kitchen gardens

where people grew food for their own requirements.

The produce was sold in farmer’s markets. Large scale organic farming was begun by

farmers and scientists, as a mark of protest to the agriculture industrialization.

Now, organic food is widely available and has become very popular, with soaring sales.

LIST OF ORGANIC FOOD COMPANIES IN INDIA

1. Fabindia Overseas Ltd.

Address: New Delhi, Gurgaon

2. Sapthsathi organic agriculture project (Surendra Kumar Tiwari)

Manufacturers of Organic Food Grains

Address: 414, 5th Floor Onam Plaza A.b. Road Old Palasiya, Indore, Madhya Pradesh

3. Ishan herbotech international (Nidhi Maheshwari)

Manufacturers of Herbal Tea and all types of tea like Assam, Green, Organic, Black,

White, Organic Food.

Address: D-10, Export Promotion Industrial Park, Site-V, Kasna, Greater Noida, Gautam

Budh Nagar, Uttar Pradesh

4. Nblc stores (Arun Bagga)

Manufacturers of Fibre Biscuits, Herbs, Aloe Vera Juice, Roasted Namkeen, Organic

Foods.

Address: D-144 Shankar Rd. Mkt. New Rajinder Nr. New Delhi-60

5. Value plus (J.p.chauhan)

Manufacturer of Organic and Natural Food.

Address: G-92, Time Square, Vidhyadhar Nagar, JAIPUR, Rajasthan

6. Jayvin organic foods (Mr. Nitin Bhad)

Manufacturers of Organic Food, Wheat, Raw Cotton, Maize, Soya, Vegetable, Banana,

Orange, Pomegranate, Mango, Sugar and Jaggary.

Address: LG- 46, Orbit Mall, AB Road, Indore, Madhya Pradesh

7. A plus inc. (Manager)

Manufacturers of Straw Furniture, Terracotta Paintings, Wooden Carving, Spices, Pulses,

Organic Food, Tin Food and Pickle

Address: A-99, New Palam Vihar, Gurgaon, Haryana

8. Himalayan healthfood (Gutzeit)

Manufacturers of Organic Health Food.

Address: Main Road, Kullu, Himachal Pradesh

CHAPTER II

Review OF Literature

Literature review

Introduction1. (Woese et al.1997) – Organic consumers demand and market issues

Interest in organically produced food is increasing throughout the world in response to concerns

about conventional agricultural practices, food safety and human health concerns important

organic consumer demand and marketing issues, including: (i) the implications of an economic

definition of organically grown food for consumer demand; (ii) attributes that shoppers consider

most when comparing organic with conventionally grown products; (iii) level and characteristics

of consumer knowledge and awareness about organic food; (iv) assessment methods and

characteristics of organic consumer attitudes and preferences; (v) size of organic price premium

and characteristics of consumers’ willingness-to-pay for organic products; and (vi) profile of

organic consumers. Such a comparison across studies, and for various countries, is not only

important in its own right, but also provides a better understanding of the economic and

noneconomic variables to include in organic consumer demand modeling and estimation. An

economic perspective of organic products as economic goods precedes a comparison of selected

consumer decision-making dimensions of organic product.

2. (Vindigni et. al, 2002) - Comparison of Organic and Conventionally-Produced Food

Although the attributes associated with organic foods may be difficult to identify by visual

inspection alone, most consumers purchase organic products because of a perception that these

products have unique (and in some cases superior) attributes compared to conventionally grown

alternatives. On the other hand, a major reason why some consumers do not purchase organic

foods is linked to a perception that such foods are not better than their conventionally produced

alternatives. There is, thus, a continuing debate about whether organically produced products are

superior to and/or different from conventionally produced alternatives and, if so, in terms of what

characteristics. Several studies have assessed whether there are differences between organic and

conventional foods from the perspective of both the producer (or supply-side) and the consumer

(or demand-side). Supply-side evaluations have generally focused on yield, producer price, and

profitability comparisons. In contrast, demand-side studies have investigated the differences in

terms of biophysical and chemical (e.g., nutritive, sensory, and food safety) characteristics, as

well as consumer preferences and retail prices. An assessment of key findings from various

studies is provided in this section.

3. (Gunter and Furnham, 1992) - Production, Producer Price, and Profitability

Comparison

A supply side assessment of the differences between organic and conventional products is

important especially for environmentalists and humanists or for consumers who have an

“external orientation” and tend to respond to the social benefits or impacts of increased organic

production. Such consumers believe that conventional production systems can generate off-site

effects, with negative impacts on society. Other consumers choose to reward producers who such

consumers perceive to be using, environmentally friendly production methods. Increases in the

supply of organic products will, ceteris paribus, lower price premiums, thereby affecting

consumer demand and profitability of the organic industry.

4. (Bourn and Prescott, 2002) - Nutritive, Sensory and Food Safety Comparison

Nutritive, sensory and food safety attributes influence consumer choice between organic versus

conventionally produced foods. Several studies have therefore compared organic and

conventionally produced foods using such attributes. There are several noneconomic attributes

that shoppers consider when comparing organic produce with conventionally grown alternatives.

Although shoppers generally link produce quality with its appearance reported a relationship

between consumer willingness to accept blemishes and organic produce purchase behaviour. In

general, appearance tends to be less important among consumers with a high preference for

organic and pesticide-free products. Product taste (i.e. flavour), freshness and shelf life are other

characteristics that shoppers consider in their purchase decisions.

5. (MacEachern 1990) - Consumer Awareness and Knowledge about Organic Food

The environmental ethic that gained worldwide prominence with Earth Day 1990 placed

emphasis on individual responsibility (for personal health) and social action (on environmental

quality and animal welfare). Personal responsibilities include making informed consumer

choices. This, in turn, requires consumer knowledge and awareness about competing products.

Knowledge and awareness have other direct and indirect effects on attitudes toward consumer

products, and the willingness to pay a price premium.

6. (Grossman, 1972) - Willingness-To- Pay for Organic Products

The willingness-to-pay (WTP) for particular food attributes is linked to an observation that

consumers make trade-offs for improved attributes associated with consuming particular

products. A WTP also reflects an observation that individual preferences are unique. Given that

yields are generally lower for organic production than for conventional production, consumer

willingness-to-pay a price premium for organic products is an important determinant of organic

farm profitability and long-term financial sustainability. The magnitude of the price mark-up is

also important because it helps in assessing the value consumers place on particular product

attributes. A price premium on organic produce can signal differences in product attributes and

characteristics and, therefore, is an important search attribute for hedonists

REFERENCE

Woese, K., Lange, D., Boess, C. and Bogl, K.W. 1997. A comparison of organically and

conventionally grown foods - results of a review of the Relevant Literature. Journal of

Science Food and Agriculture. 74: 281-293.

Vindigni, G., Janssen, M.A. and Jager, W. 2002. Organic food consumption: A multi-

theoretical framework of consumer decision making. British Food Journal. 104(8): 624-642.

Gunter, G., and A. Furnham. 1992. Consumer Profiles: An Introduction to Psychographics.

Routledge: London16 (1): 63-72.

Bourn, D. and Prescott, J. 2002. A comparison of the nutritional value, sensory qualities and

food safety of organically and conventionally produced foods. Critical Reviews in Food

Science and Nutrition. 42(1): 1-34.

MacEachern, D. 1990. Save Our Planet – 750 Everyday Ways You Can Help Clean Up the

Earth. New York: Dell Publishing Co. 10(3): 108-113.

Grossman, M. 1972. On the concept of health capital and the demand for health. Journal of

Political Economy. 80(2): 223-255

CHAPTER III

OBJECTIVES OF STUDY

Objectives of the study

1. To analyze the potential for organic products in the Indian domestic market;

2. To identify the necessary steps to develop the Delhi domestic market

3. To assess demand and requirements in the international market and identify measures to

improve the quality of Indian organic products in line with international market

requirements.

4. To formulate strategies for both domestic and international market with the specific

purpose of market access for small and medium size farmers and enterprises.

CHAPTER - IV

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

Since it is basically a market research project along with some marketing and selling of organic

products, various market research methods were used to accomplish its goals. I conducted a

market survey to know about the consumer behavior towards organic foods in India.

The stepwise methodology that was used is: RESEARCH DESIGN USED: DESCRIPTIVE

SAMPLE SIZE USED: 100

SOURCES OF DATA: PRIMARY (Questionnaire & Interview method) SECONDARY (Newspapers, Brochures, Manual report)

EVALUATION & ANALYSIS PROCESS: Studying the company’s process of job satisfaction of employees, questionnaire is designed for that purpose. Analysis is done graphically & evaluated in terms of percentage.

The findings, conclusion, suggestion, analysis of the report is based on the primary data collected through survey method and the secondary data collected by me.

For the survey of “job satisfaction to employees in the methodology adopted is of “Personal Interview ”.For the purpose of survey, interviews were taken personally of the employees both on the basis of structures & unstructured from. Then further analysis & interpretation of collected data were made & finally report is being prepared.

The secondary data is collected through various magazines, books, company’s personnel manual, annual

reports and the calendar of event published by the various training agencies

A pilot survey was conducted before finalizing the questionnaire.

Data collection was also done with the help of personal observation.

After completion of survey the data was analyzed and conclusion was drawn.

At the end all information was compiled to complete the project report.

SAMPLE AREA: at Delhi.

Secondary Research: Company description was obtained through websites, business

magazines, and journals and from the organization itself

Sampling:

Selecting the sample: Population that was taken as a sample included randomly selected

customers of organic foods.

Sampling Technique: Simple Random Sampling

Primary Research: Primary research was conducted through surveys via:

a. Interaction with customers at Malls and other market places.

b. Interaction with customers at their homes.

Preparation and tabulation of data: After the data has been collected, it was entered into

Microsoft Excel and was prepared for analysis.

Data Analysis: The data so collected was analyzed in Microsoft Excel with the help of bar

diagrams, pie charts, etc.

Finally, the information thus obtained from the survey was used to discover the potential

segment for generating new business for the organization and thereby devise strategies to

generate new business from that potential segment.

CHAPTER - V

DATA ANALYSIS AND INTERPRETATION

DATA ANALYSIS AND INTERPRETATION

PART A: General Information

AGE GROUPS

Particular Percentage

Below 20 yrs. 20%

20 yrs. to 50 yrs. 60%

Above 50 yrs. 20%

20%

60%

20%

AGE GROUP

Below 20 yrs.20 yrs. to 50 yrs.Above 50 yrs.

AnalysisIn this survey I found that 60% of population age between 20 yrs.to 50 yrs., 20% of population

age between 20 yrs. to 50 yrs. and 20% of population age above 50 yrs.

OCCUPATION

Particular Percentage

House wife 25%

Business man 25%

Doctors 20%

Others 30%

25%

25%20%

30%

OCCUPATION

House-wife

Businessman

Doctors

Others

Analysis

In this survey 25% of House-wife, 25% of Businessman, 20% of Doctors, 25% of Employers and

30% others fill-up the questionnaires.

MONTHLY HOUSE-HOUSE INCOME

Particular Percentage

Below 40,000 32%

40,000-80,000 36%

Above 80,000 32%

AnalysisIn this survey Below 40000 income earning is 32%, 40000-80000 income is 36% and above

80000 is 32% monthly house hold income person fill up the questioners.

PART B: Information about Organic food

Q.1 Have you heard about organic food?

Particular Percentage

Yes 60%

No 40%

32%

36%

32%

MONTHLY HOUSE -HOLD INCOME

Below 4000040000 -80000 Above 80000

60%

40%

YESNO

AnalysisIn this survey Researcher founded 60% of population are heard about organic food, only 40% of

population not heard about organic food. In this way Researcher say that most of population

heard about organic food.

Q.2 If YES, then what do you perceive /think about organic food?

particular Percentage

1. More nutritious 43%

2. Pesticides/chemical free 40%

3.Eco friendly 11%

4. Costly 6%

43%

40%

11%6%

More nutritiouspesticides/chmical freeEco friendlycostly

AnalysisIn this survey 43% perceive the organic food is more nutritious , 40% perceive the organic food

for pesticides/chemical free , 11% for ecofriendly, 6% think its costly, overall the researcher

have to say that 94% population knows organic food good for our body.

Q.3 Do you purchase organic food?

Particular Percentage

Yes 41%

No 59%

41%

59%

YesNo

AnalysisIn this survey 59% population purchased organic food, 41% not purchase organic food yet its

costly or many reasons. Overall researcher can say that 59% population purchased organic food

and its increase day by day.

Q.4 what types of organic food do you purchase?

Particular Percentage

1. Meats,poultry,seafood 40%

2. Processed food 35%

3. Vegetables 25%

4. Produce 20%

40%

35%

25%

20%

Meats,poultry,seafoodprocessed foods vegetablesProduce

AnalysisIn this survey 40% population purchase meats, poultry, seafood organic food, 35% purchased

processed food, 25% purchase organic vegetables and 20% produce organic food, and overall

researcher have to say that 40% of processed organic food are purchased by population.

Q.5 How long have you been interested in organic foods?

Particular Percentage

1. 0 to 6 months 0%

2. 6 to 12 months 11%

3. 1 to 3 yrs. 22%

4. More than 3 year 67%

11%

22%

67%

0 to 6 Months 6 to 12 Months 1 to 3 yr.More than 3 year

AnalysisIn this survey 67% population are interested in organic food is More than 3 yrs. , 22% are

interested 1 to 3 yrs., 11% interested 6 to 12 months only , overall researcher can say that in

this survey 67 % population interested inorganic food for life time .

Q.6 How did you first hear about organic foods?

particular Percentage

1. Magazine 24%

2. Friends 20%

3. Newspaper 15%

4. Advertisement 4%5. Internet 22%

6. others 15%

AnalysisIn this survey, Most of population heard about organic foods from magazine 24%, 20% from

friends , 15% from newspaper, 22% from internet,15% from others source and only 4% from

advertisement , overall, 46% of population are heard from magazine and internet its good but

further ways like advertisement increase its useful for organic food .

7. In your opinion, what are the most important motivations that will persuade you to buy

organic foods instead of non-organic foods?

24%

20%

15%4%

22%

15%

Magazine FriendsNewspaperadvertisement InternetOthers

1. Most

important

2. Important 3. Neutral 4. least important 5. Not

important

(A) Benefits (52) (23) (13) (12) ( 0 )

(B) Packaging ( 0 ) ( 0 ) (10) (80) (10)

(C) Price (55 ) ( 30 ) ( 15 ) (10 ) ( 0 )

(D) Taste/quality (80 ) (10 ) ( 10) ( 0 ) ( 0 )

(E) Concern about health ( 70 ) ( 30) ( 0 ) ( 0 ) (0 )

Benefits Packaging Price Taste/quality Concern about health

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1. Most imp. 2. Important 3. Netrual 4 Least imp. Not important

AnalysisA. Benefits In this survey, 51% prefer most important benefits of organic food , 23% population prefer

benefits at 2 no., same 13% prefer benefits at 3 no or 4 no. , % from newspaper, only 4% from

advertisement overall, 51% of population are most important motivations that will persuade to

buy organic foods instead of non-organic foods a benefits.

B. Packaging

In this survey, 100% of population prefer organic food not for packaging.

C. Price

In this survey, 58 % consider most important price of organic food , 26% population prefer

prices at 2 no., 4% consider prices at 3 no , 4% consider prices 4 no. , overall, 58% of

population are most important motivations that will persuade to buy organic foods instead of

non-organic foods a prices.

D. Taste / Quality

In this survey, 80 % consider most important Taste /Quality of organic food , 10% population

prefer taste/quality at 2 no., 10% consider taste/quality at 3 no , 0% consider taste/quality 4no or

5 no , overall, 80% of population are most important motivations that will persuade to buy

organic foods instead of non-organic foods a taste/quality .

F. Concern about health

In this survey, 70 % concern about health to prefer organic food , 30% population prefer

Concern about health at 2 no., 0% consider Concern about health.at 3 no ,same as 4 no or 5 no ,

overall, 0% 100% of population are most important motivations that will persuade to buy organic

foods instead of non-organic foods a Concern about health.

8. Primary reasons you do not purchase organic foods?

1. Most 2. Important 3. Neutral 4. least important 5. Not

important important

(A) High price (70 ) ( 22 ) ( 6 ) ( 2 ) ( 0 )

(B) Taste is not good (0 ) ( 0 ) ( 0 ) ( 8 )

( 92 )

(C) Availability ( 50 ) ( 38 ) ( 6 ) ( 6 ) ( 0 )

(D) Low trust ( 0 ) ( 0 ) ( 20 ) ( 35 ) ( 45 )

(E) Poor appearance ( 10 ) ( 5 ) ( 40 ) ( 40 )

( 5 )

High price Taste is not good Availability Low trust Poor appearance0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 Most imp. 2. important 3. netural 4. least imp. 5. Not imp.

AnalysisA. High price

In this survey, 70% do not purchase organic food for their high prices, 25% population not

purchase organic food for their prices at 2 no., 5% at 3 no, overall, 95% of population are does

not purchase organic food for high price .

B. Taste is not good

In this survey, 90% take a least important at 5no. Taste is not good, 8% at 4 no., 0% at 3 no,

overall, 98% of population taste of organic food not good not considered.

C. Availability

In this survey, 50% do not purchase organic food for their no availability, 38% population not

purchase organic food for their availability at 2 no. , 6% at 3 no, overall, 75% of population are

does not purchase organic food for no availability.

D. Low Trust

In this survey, 45% do not purchase organic food for their low trust, 35% population not

purchase organic food for their low trust at 2 no. , 20% at 3 no, overall, 60% of population are

does not purchase organic food for no availability.

E. Poor appearance

In this survey, 40% do not purchase organic food for their poor appearance, 40% population not

purchase organic food for their poor appearance at 3 no. , 10 % at 1 no, overall, 80% of

population are does not consider poor appearance of organic food.

Q.9 How would you describe your overall opinion of organic brands?

particular Percentage

1. Very favorable 60%

2. Somewhat favourable 15%

3. Neutral 15%

4. Somewhat unfavourable 10%5. Unfavourable 0%

60%15%

15%

10%

Very favourableSomewhat favourableNeutralSomewhat unfavourable unfavourable

AnalysisIn this survey, 60% very favourable overall opinion of organic brand,15% population somewhat

favourable,15 % is neutral ,10% population somewhat unfavarourable their overall opinion of

organic food brands, overall, 60% of population are very favourable opinion of organic brands.

Q.10 would you recommend organic foods to a friend or associate ?

brands?

particular Percentage

1. Definitely 70%

2. Probably 20%

3. Not sure 10%

4. Definitely not 0%

70%

20%

10%

DefinitelyProbablyNot sureDefinitely not

AnalysisIn this survey, 70% of population definitely recommend organic foods to a friend or associate ,

20% population probably recommend organic foods to a friend or associate , 10 % not sure to be

recommend organic foods to a friend or associate overall 70% of population are definitely

recommend organic foods to a friend or associate .

CHAPTER – VI

FINDING AND RECOMMENDATION

FINDINGS

1. India is strong in high quality production of organic food.

2. Indian population are highly motivation from magazines that will persuade to buy an organic

foods it’s good for health and more beneficial instead of non-organic food.

3. India is high production of organic food but their high prices, no availability as compare to

non-organic food.

4. India has no organic food famous company in the market by which same population has not

heard about organic food through their vast advertisement.

5. In future India’s becomes strongly high quality production and consumption country in the

world.

RECOMMENDATION

The Indian organic market is a typical example for a market in the pre-growth-phase. There will

be soon some relevant players on the domestic market. Those players (individual farmers, framer

groups, middleman, supermarkets, traders and exporters) will certainly try to earn better income

as quickly as possible from the organic market. This fact has to be considered positively. In the

pre-growth-phase, there is already some awareness about food quality and pesticides residues

among consumers. The expression “Organic” is still not protected and the awareness is diffused.

It will be a difficult task to find the right approach to transform this improper awareness in the

correct way among Indian consumers. So it is a very important task at the beginning itself to

define what organic products are, how are they different from conventional products and also to

describe the USP (Unique Selling Position) of organic products.

• Lower Price to Compete with Grocery Stores

– Add a customer rewards program for frequent buyers

– Coupons to customers

• Catering

– Offer catering to local businesses & events

• Expand Private Label Selection

– Lowers manufacturing costs, could offer discounts to customer for using organic

brand products

CHAPTER – VII

CONCLUSION

CONCLUSION

The Indian domestic market there are potential for more and more development in organic food

and become a most important factor of national and international economic system development.

In Delhi domestic market enables producers for better understanding of customers’ needs,

serving the purpose of better meeting their needs and it also enables consumers to realize better

organic products supply.

In international market and domestic market the organic food quality guarantee of organic food

products directly influences consumption intensity, absorption power of the market, packaging

material design, advertising messages, choice of the distribution channel.

BIBLIOGRAPHY

Books

• David Miliband 2002“The organic farming manual”

• Alex avery 2006“The Truth about organic food”

Articles/Newspapers

“Hafed to market organic products”may,13,2008

“New tools help developing nations mkt organic products abroad”oct,12,2008

“Increase in consumption of organic food products” Madhvi sally, may,23,2013

Internet Sites:

http:// www.economictimes.com /news/news-reviews/organic food opportunities

study/article42315.ete

www.near2nature.com

www.thedailygreen.com/home/a19703/the-daily-green/

www.dmoz.org/Business/food_and_realtes.../organic/

www.naturalnews.com/organic_foodgs.html

Annexure

QUESTIONNAIRE

Name: Mobile:

e-mail: Occupation:

Age: Above 15yrs 21yrs-50yrs 50yrs above

Monthly Household Income: Below Rs.40,000 Rs.40,000-Rs.80,000 Rs.80,000 above

1. Have you heard about organic food?

Yes No

2. If YES, then what do you perceive/think about organic food?

Pesticides/Chemical free Eco-Friendly

More Nutritious Costly

3. Do you purchase organic food?

Yes No

4. What types of organic food do you purchase? (You can tick more than one)

Produce Processed foods (cereal, etc.)

Meats, Eggs, poultry, seafood Vegetables

5. How long have you been interested in organic foods?

0 to 6 Months 6 to 12 Months 1 to 3 years

More than 3 years

6. How did you first hear about organic foods?

Advertisement Magazine Newspaper

Internet Friends Others

7. In your opinion, what are the most important motivations that will persuade you to

buy organic foods instead of non-organic foods?

1(Most Important) 2 3 4 5(Least important)

Benefits

Packaging

Price

Taste/quality

Friends

Concern about health

8. Primary reasons you do not purchase organic foods.

1(Most important) 2 3 4 5(Least import.)

High price

Taste is not good

Low availability

Low trust

Poor appearance

9. How would you describe your overall opinion of organic food brands?

Very favourable somewhat favourable Neutral

Somewhat Unfavorable Unfavorable

10. Would you recommend organic foods to a friend or associate?

Definitely Probably Not sure

Definitely not