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ITC gears up for organic spices through contract farming
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Saturday, 21 July, 2007, 08 : 00 AM [IST]
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MV Chandrashekar, Bangalore
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or in the country, food major ITC has identified farms in Orissa and Andhra Pradesh to cultivate spices and other products. The company did not opt for Karnataka only because of the non-availability of land.
These fertile lands with good rainfall in the tribal regions of the two states of Orissa and Andhra Pradesh have been taken under contract framing scheme supervised by the food major. The lands also received an India Organic Certification.
The farmers receive down payments for their produce from the company which indirectly encourages them to stick to organic farming, Ravi Naware, divisional chief executive, ITC Foods, told Food & Beverage News.
Organic spices are powdered at its Guntur unit which has a capacity of around 400 tonnes a month. Since its entry into the food sector in 2002 with atta, the company has gone on to introduce salt, instant mixes and spices. "Now our focus is on organic products. Over one crore households use Aashirvaad products across the country. We hope to repeat the success with organic spices. From Aashirvaad we provide consumers the highest quality and a wide range of choice," he said.
All products are manufactured under stringent quality norms and packed in environmental friendly conditions with ample care taken to prevent contamination of any kind, he informed.
Present size of the global market of organic foods is estimated at $56 billion. ITC entered the space after it conducted a survey and took a decision to foray the sector following the increased awareness. The company will increase its presence in organic foods with more products including vegetables, pepper, and cumin along with atta. However, it would be possible once the company creates a sustainable supply chain of organic produce.
A visible trend was the inclination towards organic products in the urban areas. This is primarily driven by factors like disposable incomes and exposure to the benefits of organically grown produce. Although ITC Foods has priced its organic spices 25% higher than its ordinary range, it is confident of generating a significant share in the wake of the growing demand. He estimates an annual demand which could generate sales earnings of Rs 100 crore a year.
The company is now engaged in massive long- term consumer awareness drive. Another effort is that it has introduced mandatory use of organic spices at all the ITC hotels. Once the organic spices make a mark, its ordinary spices will be phased out from the Indian spice market which is presently estimated at Rs 1,000 crore, according to Naware.
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