Gaurav Manchana, Founder & Director, The Organic World
India’s retail market contributes 10 per cent to India’s GDP and employs 8 per cent of India’s population. As per industry reports, the food retail market in India was valued at around $380 billion in 2020 and is projected to reach $540 billion by 2024, showcasing a compound annual growth rate (CAGR) of over 7 per cent. In such a huge food retail market where natural and sustainable products are in high demand, Bengaluru-based ‘The Organic World’, an organic and natural retail store chain, is making its presence felt. Gaurav Manchana, Founder & Director, The Organic World shares the company’s challenges and future growth strategies with NuFFOODS Spectrum. Edited excerpts:
Where do you place yourself in the food retail market of India?
At The Organic World (TOW), our aim is not only to capture a share of the expanding food retail market but also to lead the organic and natural foods segment. Since our inception in 2017, we have been working towards fostering consumer trust through transparency, authenticity, and a genuine dedication to promoting a healthier and more sustainable lifestyle. Accessibility, Affordability, and Authenticity are our driving principles.
Currently, we are India’s largest retailer of organic and natural groceries, with an assortment of 2000+ products in the food, grocery, personal care, and home care range.
We create awareness about the compromises modern life has normalised, and strive to offer “better choices” to empower our consumers to lead a healthy lifestyle.
What are the typical challenges faced by a retail store chain operating in the food segment in India?
Most Indian consumers are still in the process of understanding the distinction between organic and conventional products. We need to educate consumers about the benefits of organic and natural products. Affordability is a critical factor, as organic and natural products tend to be priced higher due to production costs and limited supply. It’s crucial to demonstrate the long-term value of these products to the consumers’ health and well-being. Encouragingly, a Nielsen report states that 73 per cent of Indian consumers are willing to pay more for products from sustainable brands.
Ensuring a consistent supply of high-quality organic and natural foods can be challenging due to the fragmented nature of the supply chain, and the reliance on specific weather and growing conditions. Also, developing robust warehousing, cold chain facilities, and an efficient distribution network to maintain the quality and freshness of products can be capital-intensive and operationally demanding.
Adhering to rigorous certification standards and compliance requirements for organic products is essential. However, it can be complex and time-consuming, adding to operational challenges.
Navigating and complying with evolving regulatory frameworks and policies related to organic certifications, labelling, and import/export regulations pose constant challenges.
The market for organic and natural products is becoming competitive, making it essential to differentiate and position the retail store chain effectively, amidst an ever-growing number of players.
We adopt a strategic approach, powered by strong collaboration with suppliers and regulatory bodies, to address these challenges.
What are the key aspects of promoting sustainability and responsible food retailing in India?
Responsible food retailing essentially entails being transparent with customers, and weighing their best interests over short-term financial returns and growth. In terms of sustainability, we are committed to creating an ecosystem that benefits all participants – consumers, farmers, communities, and the environment.
We source products only from certified organic farms and suppliers who follow sustainable agricultural practices. We procure many foods from our own farms as well as our network of organic farms and farmers, under our umbrella brand Happy Harvest Farms. As a policy, we prioritise sourcing from local farmers and artisans, empowering them economically and promoting fair trade.
At TOW stores, we have a zero-waste section. We enthusiastically embrace recycling programs and encourage customers to bring reusable bags to reduce plastic waste. We firmly believe that sustainable and responsible food retailing is not just a business imperative, but also a collective responsibility towards a better and greener future.
How do you maintain your supply chain of organic and natural food products in the retail space?
Maintaining a robust supply chain for organic and natural food products is a critical aspect of our operations. From day one, we have made a conscious decision to establish direct relationships with organic farmers and certified suppliers, fostering trust and ensuring the authenticity of our products.
We are also making dedicated technology investments to enhance supply chain visibility, enabling us to trace products from farm to shelf, in the space of blockchain technology. We look to leverage data analytics and market trends to optimise inventory levels and accurately forecast demand, reducing stockouts and overstocking. Additionally, our robust cold chain network helps ensure the freshness of our perishable organic products.
As far as challenges are concerned, seasonal variability is an issue. The availability of certain organic produce can be affected by seasonal changes, impacting the consistency of supply. Similarly, organic food prices can fluctuate due to market dynamics, impacting procurement costs and retail pricing.
What are your suggestions to the Indian food retailers and the regulatory bodies in the space?
As a food brand, we strive for authenticity, accessibility and affordability. By ensuring that the products we keep on our shelves at TOW live up to a higher standard than industry-established ones, we hope to pave the way to a healthier and better world. The impact would be much stronger if more food brands as well as the regulatory authorities joined in this mission to empower Indian consumers to make “Better Choices”.
We do hope to see more initiatives to support organic farming and more awareness programs around them as well. There have been several encouraging steps in this direction. The Indian government has been taking proactive steps to encourage organic farms and farmers and it would be great to see this continue – as more farmers enter the ambit of organic farming, awareness will grow and we could see a transformative change in the Indian farming landscape. SOPs and benefits to reduce the cost of inputs would be another welcome step in this direction.
Could you elaborate on your industry-first stand, “Not In Our Aisle List”.
TOW’s “Not In Our Aisle List” forms the basis of our vetting process. If a brand does not conform to these standards, you will not find it on our store shelves. This is a definitive and hard stand we have taken to give our customers the confidence that every product on our shelves is a better, chemical-free choice for them. It is a stand that is above industry-established regulations, enforcing our commitment to being a truly responsible retailer.
Our industry-first “Not In Our Aisle List” is a list of 25+ (and growing) chemicals/ingredients that we have banned from our stores because studies have found that they could be harmful for consumers. This includes ingredients like high fructose corn syrup, a sweetener, found in soda, juice, candy, breakfast cereals and packaged snacks; artificial flavourings/colours found in most snacks and packaged foods; Tertiary Butylhydroquinone (TBHQ), an antioxidant found in biscuits, microwave popcorn, butter substitutes and chicken nuggets; carrageenan, an emulsifier and thickener, found in cottage cheese and ice-cream; parabens, sulphates and phthalates found in personal and beauty care products; acids and toxins found in home cleaning essentials.
What are your future plans in terms of expansion?
We currently have 16 stores in Bengaluru in key catchment areas. By 2025, we are looking at operating 100 stores (mostly through franchise models). We also intend on expanding to other key markets in South India such as Hyderabad and Chennai, to begin with, and then look at Tier 2 cities.