food
Author: Karin Heinze

The domestic market for organic products in India has done some important steps in the last years. One of the enterprises which is a strong motor of this development, is called Sresta. From the level of agricultural cultivation up to retail, Sresta Natural Bio products Pvt.Ltd., headquartered in Hyderabad, develops its organic business.

Founder Raj Seelam has an ambitious vision: With his company he wants to become a leader in providing organic and natural products and services in India and across the world. With his retail concept and brand 24 Letter Mantra he successful sells organic good in own shops and also in other outlets.

First we would like to become an idea of the activities of Sresta in the domestic market. When is the �24 Letter Mantra� born and how did it develop since then?

Sresta and 24 Letter Mantra has been operational since 2003. But the dream to found such a company was born 10 to 15 years earlier, when I still worked as an agent for a conventional seeds, fertilizer and pesticide company. For me it gets clearer and clearer that we have to do something the other way around, in a sustainable direction. Also my father, who was a farmer, inspires me. I was connected with the traditional farming since I was a child. After founding Sresta, we first have to find organic farmers, have to organize the necessary certifications, product development and so on. Then, with starting the retail, with 24 Letter Mantra shops, we pursue the idea to offer consumers a full basket of products. This was the first issue we see. Second is the necessity to guarantee a continuous availability. The third thing is to offer reasonable prices for organic products. Our company�s mission is clear, we need to provide a sustainable livelihood to the farmers and also contribute to sustainable lifestyle for the consumers. We believe when we will do it like this we will also be commercially successful.

You have started a campaign in schools and you publish a newsletter for customers. Do you feel an education mission too? Which target group of consumers do you want to reach?

When we started the shops the awareness for organic and natural products in India was very low. So we have to do something to raise the consciousness. Now we publish 10.000 copies of our �Organic Circle�, with topics of healthy eating habits, information round food, recipes to create more awareness. We also create a campaign at primary schools 18 months ago. We have an audiovisual program to introduce good food habits and organic food and this causes a lot of interaction between the pupils. At the end of the session we give some samples to them for taking it home to the parents to prepare an organic meal. Afterwards we send coupons to their home. Consumers play an essential role in this play and we go a important step forward as mass media report about organic. To reach more �normal� consumers, we started to sell our products also in conventional shops, for example Spencers, since January 2008. (Spencers with outlets from 3000 -30.000 m2) This is like a partnership which we start in about 25 cities and about 80 shops, where the products were presented in several shelves in a block. Promoters are trained with organic and present the products to the customers. We try to reach the well-educated middle class. The market size is estimated by ICCOA (International Competence Center of Organic Agriculture) with about 150 million Euro. The challenge is that a lot of people don�t make a difference between natural, pure and organic. But now, with continuous media presence people learn that this is not the same. On our own 24 Letter Mantra shops we offer 90 % organic food (ca. 400 products, processed food) and we have our own organic bakeries in Bangalore, Pune and Hyderabad. Hyderabad is our flagship store with 350 m2, there we have a cafe where we serve salads, sandwiches, tea, coffee, juices and so on. I think customers will appreciate this in future. But we need to go on with education because food habits change in a very strange way in direction to fast food which causes a lot of health problems.

Sresta also wants to export organic products in future. What is your strategy for exports? Are there already contacts to western companies?

We are the only organic company in India which started with the domestic market. Sresta sees the challenge but also the potential of the home market. The engagement on the domestic business led us to the export. The Indian food market is worth about 200 billion US-Dollar and is growing by 6 %. When we are able to take about 5 % share in next 15 to 20 years with organic food this will be a huge market. But as we start working with contract farmers five years ago we now have the commitment to market the products from 8000 farmers, cultivating 12.000 ha in 10 states. We have three main products: Purees and juices and commodities which we export in bulk, third is the retail product range with ready made cooking sauces, convenience products. We have a very good response for this range. We already have customers in UK, for purees also in Netherlands and Germany. With the retail products we will start in the most important markets in Europe in 2009, UK, France, Germany and Italy. We will serve wholesalers and some big retail chains. The products for exports we adapt to a global taste, less spicy for example, but with authentic Indian roots.

What are the prospects for Sresta in the next 10 years?

2008 we will reach 3500 tons on output in exports, in the domestic market we will have 800 -1000 tons. In 10 years we should reach about 150 million Euro (200 mio US$). We keep growing in the domestic market but we have to face the obstacles of consumer awareness, of availability of goods and the price premium which has to come down from

about 40% know to about 15 % in future. It�s a fact, we have to improve the supply chain. I guess when we could manage these things better, the market would really explode.

Will you take part on BioFach in Nuremberg and on the first BioFach India in Mumbai, next April?

Yes of course, we will be present on booth trade fairs.

Thank you very much for this interview, Mr. Seelam.

29/01/2009

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