Post on 03-Nov-2014
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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