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Organic beverages have no synthetic pesticides, hormones, artificial flavours
Thursday, 26 November, 2020, 08 : 00 AM [IST]
Divyani Madarkar
Organic beverage is a one of a kind beverage which has no synthetic pesticides, growth hormones, genetic engineering and artificial flavours, colours and preservatives, among other things. The organic beverages market is an upcoming sector as people are now beginning to focus their attention on organic beverages rather than carbonated functional drinks. Organic beverages offer several health benefits. Rising concern of people over health issues is fuelling the growth of organic beverages. Rising interest in organic soda without artificial flavourings and preservatives is, no doubt, in demand today.

People prefer organic beverages over drinks that are high in sugar, full of chemicals and lack nutritional value. All these factors together are fuelling the demand of organic beverages all over the world.Consumers are becoming health conscious in recent times, no matter whether it comes to drinks or food. Organic beverages are being synthetic pesticides free, having neither any flavouring agents nor any preservatives.In a country renowned for its tea drinking, unsurprisingly organic tea accounts for most sales of organic beverages. Local companies such as Sresta Natural BioproductsPrivate Limited and Organic India Tulsi Teas are behind the development of organic tea.

Non-Alcoholic Beverages Leading the Organic Beverage market
The India organic food market is experiencing a robust growth with the rising awareness about the products. The growing level of health consciousness in the country is a key factor driving the demand for organic food. The nutritional content and quality of the food they eat have begun to be paid attention to by Indian consumers leading to the growing demand for organic food. In addition, the consumer spending on health and wellness products has increased dramatically due to factors including strong economic growth, urbanisation, and rising income levels.

In addition, the strong government funding is catalysing the market for organic food in India. The Government of India encourages organic farming through financial assistance to farmers who are implementing organic farming under various government schemes, such as the Mission for Integrated Horticulture Development (MIDH), National Food Security Mission (NFSM), NMSA, and RashtriyaKrishiVikasYojana (RKVY).

Organic fruit and vegetable juices continued to perform well as consumers have become more aware of the growing process as well as certifications such as USDA, which is driving them to go for beverages from organic sources rather than conventional ones. With the number of private-label beverage manufacturers entering the segment, the market for organic beverages is projected to grow further during the forecast period.

Production and consumption of organic products is rising rapidly in India becoming global producers of organic crops
Organic beverages continue to emerge in India with people slowly becoming more aware of these products and seeking them out due to concerns over the harmful effects of the use of pesticides on crops. The most significant consumer base for these drinks is inhabitants of metropolitan cities, with word-of-mouth recommendations becoming a strong element in category growth.

Demand for non-sugary, non-caffeinated organic drinks will also fuel the product demand over the coming years. Availability of organic products with new flavours and ingredients like turmeric, aloe Vera, and activated charcoal in attractive easy-to-carry and -store packaging will also fuel the demand.

Non-dairy organic beverages product segment accounted for the largest market share, non-dairy organic drinks are prepared from sources like legumes, plant materials, nuts, and cereals and hence act as functional drinks.

Certification:
Different certification processes and standards for various commodities to channelise the product in the specific region is one of the major restraints to the growth of the market.

Relatively high prices of organic beverages as compared to regular products are also posing challenges for market growth. However, extensive research and development by major manufacturers to improve the shelf life, texture, flavour, and nutritional value of the products is likely to have a positive impact on market development.

Market:
Based on the product, the market is divided into non-dairy beverages (soy, rice, and oat), fruit beverages, coffee and tea, beer and wine, and others. Non-dairy beverages accounted for the largest market share in the year 2018. These products are made from sources like legumes, plant materials, nuts, cereals, and thus, act as functional drinks.

The coffee and tea segment remains the fastest-growing segment with over 13.0 per cent CAGR and is expected to remain the fastest-growing market during the forecasted period. Factors, such as increasing health awareness, preference for organic and natural drinks, and changing lifestyles, are boosting the segment growth.

Based on the distribution channel, the market has been segmented into offline and online. Online distribution channel is projected to be the fastest-growing segment with a CAGR of 13.6 per cent from 2019 to 2025. This growth is attributed to the rising popularity of e-commerce platforms, the positive impact of social media ads, and the increasing usage of smartphones and internet. The offline distribution channel is expected to have the largest market share by 2025 owing to the increasing number of organic food restaurants and cafes.

The major regional markets for organic food in India are Assam, West Bengal, Tamil Nadu, Kerala, and Karnataka, among others.
The key players in the above industry include:
?    Nature Bio-Foods Limited
?    Organic India Pvt. Ltd.
?    Sresta Natural BioproductsPvt.Ltd.
?    Others

Technological innovation and new product development are the key strategies undertaken by most companies to retain their market shares. Emerging companies are also gaining significant market share through non-traditional sales channels, such as social media and e-commerce.

There is a huge growth potential in developing countries like India to increase organic production owing to the largely prevalent traditional farming techniques which are in accord with organic agricultural practices. Strong institutional support is required to further push the organic beverage industry from a small niche market into a mainstream agricultural industry.

India has a total agricultural land of 143 million hectares, out of which only 5.2 million hectares (3.64 per cent) of land is under organic certification. The rain-fed area presents many opportunities to improve the socio-economic status of the farmers by adopting organic farming methods. The state of Sikkim has the highest percentage (54.66 per cent) followed by Madhya Pradesh (16.80 per cent).

The government has made constant efforts towards improving the institutional support to growers by introducing several policies and programmes.Looking at the demand side of organic beverage markets, there are several factors that affect the consumer choices like certification of the products, perceived health benefits and prices of organic food. However, as noticed earlier, demand for organic drink in India is very small as compared to the United States market. Due to such a large foreign market for organic produce, a significant proportion of organic goods are exported.

However, there is a rising growth in demand of organic produce in India due to the increasing income of the population and growing health concerns.A new approach is required to realize the immense potential of the organic beverage industry in India. There are several challenges at every stage of the market which needs to be addressed in order to develop the industry further. At the production level, farmers face problems regarding certification of their products, due to very high certification costs.

(The author is quality assurance executive at Candor Foods Private Limited, Navi Mumbai. She can be contacted at divyani@candorfoods.in )
 
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