On 22 June, the Food Safety and Standard Authority of India (FSSAI) took the first step to set hard legal walls around the definition of organic food. It is inside these walls that the fastest-growing segment in food and groceries will find the freedom to flourish.
In the next three months when the draft regulation will be notified—it’s published on the regulator’s website and open for comments—it will free consumers and serious producers from the threat of fake organic food. It’d also be the first law to define authentic organic food, regulate the market and penalise any wrongdoer.
Apart from the freedom, what the industry and the regulator have been thrashing out in the run up to the draft is equally interesting. Up until now, the industry was driven by entrepreneurs, who are either passionate organic farmers or committed to the cause of chemical-free produce. The draft regulation will clear the way for the commercial growth of organic food on a larger scale.
“Whether what is sold in the name of organic, is actually organic or not, is not clear right now. The regulation will create an incentive for certified organic food producers to enjoy credibility. And kick in a generic penal provision of jail terms and fines for those who make misleading claims,” says Pawan Agarwal, CEO of the FSSAI.
Agarwal was pushed to create such a law when industry representatives convinced him that there was a real need, through multiple interactions over the last few months. “Everyone (all food brands) wants to jump on the bandwagon of organic food. We want to create a robust ecosystem for consumers to get credible trustworthy organic food,” he adds.
Established food majors like Tata Sampann, ITC and Reliance Fresh have begun the spadework to tap into this segment. Although the domestic market for organic food is estimated to be at a modest Rs 1,000 crore, it’s growing rapidly at 30% annually, and is projected to treble by 2020, forecasts India Brand Equity Foundation.
Online supermarket Bigbasket, which launched its own organic brand BB Royal in June 2016, has shown that packaged organic brands are a hit. Organic produce makes 10-15% of its online sales of agri-commodities amounting to Rs 20 crore per month. By the end of the year, it aims to sell 25% of its own brand BB Royal, exponentially expanding the entire organic food segment, says an executive of Bigbasket, on the condition of anonymity, as he is not allowed to speak to the media.
