Arvind ltd@ organic staple business mts 01 presentation

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Arvind Company LtdAkola, Maharashtra

MTS -1 Project title

Market Research for Organic Staple Business in Domestic and Global for Arvind ltd.

Presented by:Anjaney Kumar(10201006)

Sunil Kumar(10201055)

Organization Overviews

•Arvind Ltd.was established in 1931,company of Lalbhai Group

•It is India's largest Denim manufacturer apart from being world’s fourth-largest producer and exporter of

Denim .

•Today it not only retails its own brands like Flying Machine, Newport and Excalibur but also licensed

international brands like Arrow, Lee, Wrangler and Tommy Hilfiger, through its nationwide retail network.

•Arvind also runs a value retail chain, Mega mart, which stocks company brands.

•Recently it has launched BCI and Organic Staple food projects in Akola district. Arvind is working closely

with the farmers of the Vidarbha region in Akola to grow organic cotton and staple food like Moong,

Pigeon pea, Black gram, Soybean, sunflower, Sorghum, Ajwain etc

ORGANOGRAM : ARVIND ORGANIC LTD.

Organogram final.docx

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O

Objective of the Study:

•Estimation of production potential of organic staple food in Akola district of Maharashtra

under ARVIND LTD.

•Current scenario of organic staple business in domestic and global markets.

•Strategy formulation for this business

Significance of the study:

The significance of the study is to find the suitable market for organic food and to

make strategic formulation for the business of organic food so that marketing of the

organic food can run in a sustainable manner and producer can get better return

through the business

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Methodology

Methodology

Phase 1Objective 1

Phase 2Objective

2

Phase 3Objective

3Phase 4

Secondary data

•Internet

• Personal interviews (questionnaire, convenience sampling)•Focused group discussions

•Draft writing

• Report

writing

•Data interpretation •Strategy formulation 4

Crop Land (acre)

Green gram 7730.06(acre)

Pigeon pea 2867.9

Black Gram 1123.15

Soya bean 2429.6

Sunflower 205.5

Sesame 69.3

Safflower 11

Sorghum 1962.52

Ajwain 34.45

Green gram

47.04%

Pigeon pea; 17.45%

BlackGram; 6.83%

Soyabean; 14.78%

Sunflower; 1.25%

Seasame; 0.42%

Safflower; 0.07% Sorghum; 11.94%

Ajwain; 0.21%

Objective :01Total area of organic staple food production under ARVIND organic project.

Sources: field survey 5

Sr. no Crop Name Sowing period Harvesting period Production (QT)

1 Green gram July Aug –Sept 36201.39

2 Pigeon pea June –July Dec - Jan 11593.4

3 Black gram July –Aug October 5417.85

4 Soya bean June -July Sept – Oct 14951.03

5 Sunflower May -June Sept –Oct 962.05

6 Sesame July October 333.8

7 Safflower June – July Sept –Oct 47.64

8 Sorghum Feb- march April –may 11309.22

9 Ajwain June –July Sept – Oct 162.02

Moong Pigeon pea BlackGram Soyabean Sunflower Seasame Safflower Sorghum Ajwain0

1

2

3

4

5

6

7

4.684.04

4.83

6.16

4.7 4.824.33

5.77

4.7

Average Production Per Acre

staple food

quintal

Source: field survey

Seasonality of Organic Crop

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Sr. No.

Name of the Center

No. of SHG No. of farmers

1 Akhatwada 36 591

2 Mazod 36 619

3 Nimba 30 470

4 Chohotta 45 623

5 Paras 37 610

6 Ramgon 32 625

ARVIND ORGANIC PROJECTARVIND ORGANIC PROJECT

EXTENSION SERVICEEXTENSION SERVICE

INTERNAL MONITORING

INTERNAL MONITORING

FARMERSFARMERS FARMERSFARMERS FARMERSFARMERS

EXTERNAL

CERTIFICATE

(CUC)

EXTERNAL

CERTIFICATE

(CUC)

Center wise SHGs & farmers

Organic (ICS) Structure & Certification Source: field survey

All 3538 farmers have been in organic statusfield survey ,primary data collection.xlsx

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64%

22%

14%

Innovative Progressive Traditional

Classification of farmers

Objective 02 Domestic and Global Scenario Domesticsr. no 1 Area under certified (India )(2009) 2.5 Million Ha 2 Accredited and certifying agencies 11(CUC, international

resource for fair trade 3 No of product exported ( year 2009-

10)35

crop Quantity produced in MT(2009-10)

Cotton 837293Rice 17762Wheat 113570Other cereals and millets 271042

Pulses 53227

Oil seeds and soybean 315067

Tea /coffee 40614

Spices 168507

Fruits and vegetable 889844Herbal and medicine 189193

other 24661

Demand of organic food in India year India market US

$ Mln

2004 4,768.592

2005 5,242.764

2006 5,765.965

2007 6,343.475

2008 6,981.161

2009 7,680.681

2010 8,423.843

2011 9,236.322

2012 10,129.539

2013 11,111.761

2014 12,192.130

Source: www.icongrouponline.comlimitation of organic agriculture.docxSource: APEDA

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Global Scenario Indicator Global total Leading country

Country with certified organic agriculture

160[2008,154;2000:86

Organic agriculture land 37.2 million .ha Australia(12 million .ha)Argentina (4.4),US(1.9)

Country with >5%Organic agri land

24(2008:22) Falkland35.7%, Liechtenstein (26.9),

Australia (18.5%)

Producer 2009 1.8 million2008:1.3 million

India(677257)Uganda(187893)Mexico(128826)

Organic market size 54.9bn USD(2008:50.9),(1999:15.2)

US(25.5USD),Germany(8.3 USD),France(4.3 USD)

Organic certifier 523(2008:489

Japan(59),US(57),South Korea(33)

Source: IFOAM 9

Conti…

Distribution of organic land world wide(2009)* Development of organic land from 1999-2009(M .Hac.) *

33%

25%23%

10%7% 3%

Oceania Europe Latin america Asia

North America Africa

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

5

10

15

20

25

30

35

40

1114.8

17.319.7

25.529.7 28.9 30.5 32.1

35.237.2

Year

Land

M.Ha

Source *: FiBL

54%43%

3% Market share*(2009-10)

Europe

North America

Others

2001 80,660.25

2002 89,145.73

2003 96,373.01

2004 100,645.99

2005 105,167.14

2006 113,026.80

2007 122,031.15

2008 131,781.15

2009 142,340.65

2010 153,779.13

2011 166,172.22

World Market for Organic Foods: 2001 – 2011 US $ mln

Source: USDA 10

EU countries Europe organic food market value: $ million, 2006–10

Year $ mln

2006 17,141.1

2007 19,349.7

2008 21,726.9

2009 22,774.3

2009 25,040.3

USA

Organic food market segmentation by valueCountry % share Germany 36.6%France 18.3%Italy 12.6%U k 11.9%Spain 2.5% Rest of Europe 18.2%

The European organic food market grew by 9.9% in 2010 to reach a value of $25,040.3 million. In 2015, the European organic food market is forecast to have a value of $36,382 million, an increase of 45.3% since 2010.

United States organic food market value: $ million, 2006–10

Year $ mln

2006 17,221.0

2007 20,410.0

2008 23,607.0

2009 24,803.0

2010 28,513.1

The United States organic food market grew by 15% in 2010 to reach a value of $28,513.1 million . In 2015, the United States organic food market is forecast to have a value of $ 42,531.8 million, an increase of 49.2% since 2010

United States organic food market value forecast: $ million, 2011–15

2011 31,316.7

2012 34,113.4

2013 36,923.6

2014 39,730.3

2015 42,531.8

Source: Data monitor 11

Objective :3 Marketing Strategy

Harvesting Selling at farm

Procuring /collecting

Packaging Storing in warehouse

Cleaning ,Grading and Storing

Storing

Selling Global

Domestic

Stretching /Labeling

Global :Exporter/Export

Domestic :Distributor /wholesaler Organic Retail outlet

/Mall

Value chain

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Marketing StrategyChannel

ProducerProducer

Procurement CenterProcurement Center

WarehouseWarehouse

Processing Processing

ExportExport ExporterExporter Distributor/SupplierDistributor/SupplierOrganic retail/mallOrganic retail/mall

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Domestic Global

4ps Model For Marketing Strategy

PRODUCT STRATEGY

• Offering Vast range of organic food products with

high qualities .

• Purely organic certified under internal inspection

with control union certification (NETHARLAND).

• .The quality control systems are such that the

products are checked and rechecked right from the

field, grading and packing and during shipment,

which makes it possible to meet the high quality

standards of Europe and other developed nations

• Producer: small holder associated with SHGs

• Country of origin : India

• Packaging: 50 kg wrapped in jute bag, labeled with

private organic logo.

PRICE STRATEGY

• provision for Cost plus price: total cost

from farm to the market plus 10%profit

margin for export market, and for

domestic business we work through

market penetration by offering minimum

price of the product for long term

business growth .and also for market

sustainability.

• Competitive price at highest quality .

• Price differentiation discount based on

volumes,rediness to inter long term

partnership.

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CONTI….

PLACE

• Direct shipping to the EUs and USA countries

to the wholesaler & distributor .

• Or via exporter

• At Domestic level business, Small as well as big

volume directly sold to the distributor ,organic

retail outlet and mall .

PROMOTION

• Personal selling :getting in contact with

potentially interested final distributor

/wholesaler

• Participation in organic and fair-trade fair

• Inviting potential client to the field visit

• Promotional material(pamphlet) for clients and

consumer

• After sales follow-up client satisfaction and

distributor satisfaction

• For domestic level promotion we will use

electronic media and print media.

• We also promote mouth to mouth promotion by

offering best quality of products at low price . 15

Export procedure

EXPORT.docx

Cost analysis of organic staple for Domestic and Global

costing final.xlsx

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•Wide varieties of commodities and vegetable can be grown

organically

•Very less consumption of chemicals in India as compared to

developed nations. These areas can be turned into organic .

•Organic pockets existing in different parts of the country

•Farmers as well as Government interests are rising in organic

•Various niches in fruits and vegetables can be created.

•Indian corporate investing in agribusiness especially in organic

farming

•Short shelf life varieties

•Lack of farmer awareness about agricultural practices, products

and technologies for organic farming.

•Quality not competitive in the domestic and international market.

• Price competitiveness

•Price is 75%-100 % more

• Lack of market information and intelligence

•Locations – only in affluent areas

•Favorable government vision.

•WTO offering global opportunities.

•Price- premiums in different markets.

•Export opportunities in new product/market (section).

•Rising demand for organic products in major markets like USA,

Europe and Japan.

•Natural food stores opening up

•Competition from domestic industry.

•Threat from imported products.

•New entrants.

•Non-tariff barriers may be imposed by developed nations.

Strength Weakness

opportunity Threat

SWOT ANALYSIS OF ORGANIC STAPLE BUSINESS

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CONCLUSION Organic project is as an important livelihood option for small, resource-poor farmers with

low-input costs and quality food production through • sustainable environment• Fair trade practices • Social justice Organic project is certified by CUC, Netherlands equivalent to standard of EUs countries

having 54% market share. Lack of awareness among people about organic food at domestic level. Favorable government vision Lack of universal certifying standard are the major problems for business at global level Organic demand in India in year 2010 8,423.843 US $ million forecasted to reach

12,192.130 US $ million in year 2014. The European organic food market grew by 9.9% in 2010 to reach a value of $25,040.3

million. In 2015, the European organic food market is forecast to have a value of $36,382 million, an increase of 45.3% since 2010.

The United States organic food market grew by 15% in 2010 to reach a value of $28,513.1 million . In 2015, the United States organic food market is forecast to have a value of $ 42,531.8 million, an increase of 49.2% since 2010

Business is viable in sense of profitability for the company

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RECOMENDATION

• Lowers operational costs, could offer discounts to customer for using Arvind organic food

brand products.

• SHGs should be registered

• Warehouse registration is necessary and location of warehouse should be near by market and

pure hygienic storage condition should be maintained.

• Advertisement through print as well as electronic media is important.

• Market linkage for domestic as well as global business through third parties (distributor and

exporter).

•

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LESSON LEARNT

• Focus of the project was to link the export as well as domestic market through Middlemen ( exporter and distributor).

• Government should act like facilitator and promoter of organic agriculture.• Capacity Building of farmers at farm level is major success factor for organic farming.• Farmers market linkage during IC1 and IC2• WIN – WIN situation should be there for every stakeholders.• Evaluation of any organic project should be based on:

Benefit goes to end user Consistency and Sustainability in agriculture

• Strict internal as well as external certification monitoring are necessary to ensure 100% organic.

• For storing organic staple food in warehouse optimal conditions are required depending upon the staple food.

• For organic staple Business quality and certification standard should be assured.• Corporate work culture .

Thank you