Organic food demand soars amid Covid-19 pandemic

As a necessary step to break the chain and lower the coronavirus curve, the government imposed a nationwide lockdown in 2020. However, the lockdown significantly impacted the livelihoods of many people, from rich to poor. Businesses from all sectors were affected due to this, and the food industry being one of them. With a lack of workers and transportation restrictions, the production was adversely affected, leading to decreased sales.

In India, 91% of the total workforce belongs to the unorganized sector, which leads to a fragile system in a country like India. The workers, migrants, and agricultural families were hit the hardest during the pandemic. The sudden imposition of lockdown was a wise move to save people from coronavirus spread, disrupting the local food system. The lockdown was initiated during the country's peak harvesting time, due to which most crops, fruits, and vegetables had gone to waste due to the sudden halt in the country.

When the lockdown was declared, the cities' workers had to leave to go back to their native villages, as it was impossible to live in the town with their mere daily wages. The chaos was more severe in states like Delhi, Uttar Pradesh, Odisha, and Bihar. This led to a lack of workforce and the production of food products reduced. Thus, decreasing sales in the food sector. This article describes the impact of lockdown on the various segments of the food industry.

Agriculture

The adverse effect of lockdown led to a decrease in the movement of goods and labor, which was a setback for the farming industry. The harvest was not timely delivered to the mandis. The lack of transportation made it very challenging to make the food grains, fruits, and vegetables available, both in rural and urban areas.

Foodservice

The foodservice industry was the worst hit of them all, in India as well as globally. Dining was prohibited in lockdown. While the food delivery option was available but only in recognized areas. Food delivery was accounted for less than 5% of foodservice sales in India. The closure of the foodservice business led to a decline in B2B demand as well. People resorting to stockpiling and home-cooked foods led to the low demand for packed foods. Disruption in logistics and labor movement impacted the availability of raw materials, and the slow production of finished products led to low inventory stock-outs.

Beverage sector

The lockdown affected the carbonated beverage and packaged water market tremendously. The consumption rate of carbonated drinks and packaged water was less than 20% of the annual volume. Summer is the peak time for the beverage industry, which was drastically suffered as the retail spending shifted to food and healthcare products compared to recreational beverages. Packaged tea was the least affected even after the low consumption rate on tea stalls.

Seeds and grains

The consumption of oils and grains remained resilient as people preferred stocking up and cooking at home. The high demand for staples like pulses, oils, rice, wheat-based products (noodles, biscuits, bread, and others) were the most purchased goods. The only setback was caused by the restriction of the movement of transport, which caused limited availability of products.

Dairy industry

Milk is an essential commodity; considering this, the government ensured it to be on top priority to deliver it to households or keep it available in the nearest grocery store throughout India. Other dairy products like cheese, butter were affected due to restrictions on transportation. Many online groceries platform indeed ran out of stock due to limited supply.

Packaging and logistics

The feedstock was reduced due to the low price of crude oils, which was suitable for film manufacturers. The impact on food and packed foods also resulted in the low demand for packaging. Global trade disruption also impacted film exports.

Meat industry

With ongoing rumors on social media that coronavirus was affecting chicken's health, it was unsafe to consume it. These rumors led to the reduction in the consumption of chicken and eggs. Even after the government clarifying that these rumors are false, people were still hesitant to consume them. Due to this, the Indian poultry market witnessed decreased sales and suffered losses in their revenues for few months. Seafood was also impacted due to the global trade disruption.

Organic food

The industry experts believe that the organic food industry was the only one not to get affected by lockdown. The pandemic raised awareness about health and fitness. People started to consume healthy foods, which led to a great demand for organic products. With Ayush Ministry promoting awareness of the benefits of ayurvedic herbs and foods, the consumption of these saw an immense rise. Many organic food startups were established due to the growth of the organic industry.

With no toxic chemicals and pesticides, organic food has witnessed substantial growth during the pandemic. With people's rising trust in organic food and the government encouraging organic farming, the scope for organic food businesses is immense.

Rishabh Chokhani is the founder of Naturevibe Botanicals.