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How to Start Organic Food Store Business in India

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How to Start Organic Food Store Business

Introduction

Organic food is the food that is grown organically without the use of pesticides and fertilizers that are chemical-based. Hence, Organic food is natural food. Organic food is incredibly good for human health. Since Organic food is not produced or processed with the use of pesticides or chemical fertilizers, it does not affect humans. Natural techniques such as green manure are used to fertilize lands and crop rotation in pest and disease control that really helps in producing safer, and healthier food products. Also, since organic food does not contain preservatives, it is often fresher. Organic farming is also good for the environment since it reduces pollution, reduces soil erosion, conserves water, increases the fertility of the soil, and uses far much less energy. Since organic farming does not involve the usage of pesticides, it is good for birds, animals, and for human beings living closer to the farms.

1. Organic Food Store Business

You are taking a very wise step if you are choosing to start your Organic food store. The demand for organic food is increasing. Everyone wants to live a healthy life. People are ready to spend more on healthy and natural food and green vegetables. An increasing number of organic farming and grocery chains selling organic store food products are coming up almost everywhere. Indian organic food market has a good future and is expected to grow around 25% in 3 years. Hence there is a good scope for organic farming business.

Opening an Organic Food Store

If you are deciding to start an organic food store business, it certainly requires detailed planning and many things must be taken care of. Organic food store business is not just about products, but it is also the about right location. Right location is a predominant factor in determining the success of your store. You will always want a location where there is a lot of local support accessible and whethe there is a high foot fall to drive the sales. Sales promotion techniques you adopt are also important in determining the success of the store. Below are a few steps to be completed which you can follow to start your organic food store business.

  • Finding a Location for your Store: This is a very crucial and also lengthy step in the process for starting the organic food store business and may take months. As discussed above, location is a paramount factor in the success of the store. You should try to open the store in a prime location where people are well-aware of organic food and ready to spend money on it. You should also ensure that there are not many competitors in the area.
  • Securing a location for your store (Documentation, etc.): You may negotiate concessions with the landlord if you are taking the space on rent. You are also required to sign a lease agreement. The concessions may be regarding interior design costs, which may include painting, infrastructure, and maintenance. You also have to apply for the necessary building permit and would want to take the hell of an interior designer.
  • Apply for necessary registration and Permits:
    • There are certain formalities and legalities that must be fulfilled before you start the operation. These are as follows:
    • Any entity which proposes to start a food business and handles the preparation and sale of food requires a permit from the Health Department
    • You must get your organic store certified officially by Organic Trade Association
    • You must file for EIN or Employer Identification Number
    • Select the type of entity that may be amongst limited liability company, Sole Proprietorship, or Partnership
    • Apply for GST registration (If your turnover is expected to be above Rs. 20 lakhs in the financial year) and the PAN number
    • Open an account in the Bank under the name of your Business
  • Deciding about Organic Foods you would be Selling

This step is also important for the business. You have to carefully decide about the organic foods you would be selling in your store depending upon their demand and profitability. You may also have to establish a network of organic food distributors. Hence, you would have to conduct a lot of research before hiring the distributors. You will have to do a lot of enquiries of pricing, credit, and delivery terms of different distributors.

  • Setting the prices for your products

Setting appropriate prices for your products requires a lot of calculations. If you set the prices too low, the sales volume may be high, but you may not be able to cover your fixed and variable costs. On the other hand, if you set the prices too high, price-sensitive customers may go off. Hence, you must do a lot of mathematics and set optimal prices for your products.

  • Hiring Manpower for your Store

Any business requires optimal and sufficient manpower, hence, you need good staff and managers for important functions such as finance, operations, sales, marketing, stores, and purchases. The number of staff you require will depend on the size of your operations.

  • Management of Your Organic Food Store

You must maintain the optimal quality of your food products and you must be adaptive to customer preferences. If your store is big enough, you may have to install a CCTV camera to control theft and must also have good control over the supply chain.

  • Marketing of your Organic Food Store

There are many types of marketing techniques such as Word of mouth, advertising on social media. You can also have your own website. There are offline methods as well such as banners and posters.

  • Investment required for Organic Food Store Business

On average, you may need to invest around Rs. 10 lakhs to start an organic food store business. The investment amount includes a deposit for the rented location (if taken on rent), running costs for paying salaries, and other operating costs and inventory of organic food products. You will also need to spend money on furnishing and interior decoration.

  • Financing Options for Organic Store Business

We, at Lendingkart, have attractive business loan options. If you have an established business that is operative for more than six months, you are eligible for a loan through Lendingkart. If you have all the prescribed documents, you can get the loan at the click of a button. A Business loan Lendingkart offers is unsecured and hence you need not provide any collateral or security. The EMI’s can be paid monthly or even bi-weekly.

Conclusion

Starting an organic food store business is a good idea and can be very profitable provided careful and detailed planning is done, location is selected appropriately, and it is managed and marketed well.

Read More:
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Organic Food Store Business FAQs:

1. What are the basic requirements to establish an organic food store?

Some of the requirements are : • Licenses and different permits to certify your food store. • Perfect location of your store is essential. • Employee hired should be courteous and knowledgeable to assist customers. • Upfront investment is required to establish the business. • Product prices should be kept affordable, keeping customer response in mind. • Advertise your store through different means.

2. What are the most in-demand organic food in India?

Today the organic food market is growing exponentially. As people are becoming health conscious, they prefer to purchase different kinds of organic food material such as fruits, vegetables, pulses, grains, honey and dairy products.

3. What are the significant challenges for an organic food store?

Although the organic food is becoming popular yet it is at its nascent stage, lack of awareness is a significant stumbling block. Moreover, organic food is a premium to conventional food products, so consuming organic food is costly. Finally, e-commerce sites selling organic food online are emerging as a significant challenge to stores.

4. Which food comes under the terminology ‘Organic’?

Labeled as Organic Food – there are two categories: • NPOP System – In case of multi ingredient product in which 95% of ingredients are of certified origin, are ‘Certified Organic’ • PGS System – In case of multi ingredient product in which 95% of ingredients are of Organic Nature are ‘Certified Organic’.

5. Is it mandatory to get the Organic Food certified?

Certificate is mandatory for Organic Food to ensure that the production and handling of the products are according to the specified organic standards as stated by the law. Certification of products creates trust in organic labeling and promotes fair marketing and competition in the market place.

6. Which food is allowed under Organic Animal Husbandry?

Animal health should be taken care of by giving them high quality organic feed, livestock density, and proper rearing conditions for specific species. No medicinal substances should be given to them unless specified by a medical professional.

7. Why is organic Food more expensive than conventional food?

Organic food is more expensive because of the following reasons: • Organic food production and supply is limited and the demand is sky-rocketing • Labor cost is high • Post-Harvest management cost of organic food is much higher • Marketing is difficult since the volume of production is limited, thus increasing the overall rates of the food.


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