The global organic food market expanded to $135 billion in 2020 from $89 billion around five years ago. The share of organic foods in the total food market grew from 2% to 2.3% during that period.
The organic food market is expected to grow at 9.4% through 2025, reaching a value of $210 billion and accounting for 2.6% of the total food market.
In India, the demand for organic food is increasing steadily, with the COVID-induced shift in consumption trends accelerating the growth. The market is expected to reach ₹5,600 crores by 2025 from ₹1,900 crores now.
Sresta Natural Bioproducts has filed a draft red herring prospectus with capital markets regulator SEBI to launch an initial public offering. The IPO will consist of the issuance of fresh equity shares worth ₹50 crores and an offer for sale of up to 70,30,962 shares by promoters and existing shareholders.
The company plans to utilize ₹31.4 crores from the net proceeds for funding working capital requirements and the remaining amount for general corporate purposes.
Company Profile
Incorporated in 2004, Sresta’s business involves procuring, processing, manufacturing and marketing of organic food products, supported by its research & development program. Its 24 Mantra brand is the largest in the packaged organic food segment, with a market share of approximately 29% in fiscal 2020.
The Hyderabad-based company is a leading organic food brand with a significant presence in the U.S. too. It has a presence across 39 U.S. states, and the products are sold both through Indian ethnic stores and mainstream stores. Overall, the company had a presence in 34 countries as of September 30, 2021.
While being a key player in the packaged food industry, Sresta also offers grocery staples, spices & condiments, edible oils, packaged food, beverages, meal accompaniments, etc. It also sells centre-of-plate products under the 24 Mantra brand.
Sresta’s main competitors in the domestic market are Organic India, Nature Land Organics, Pro Nature Organic Foods and Organic Tattva.
Key Figures
The company had a total income of ₹161 crores in the quarter ended September 2021, compared to ₹156 crores in the prior-year period. It reported a net profit of ₹1.1 crores during the quarter, versus ₹7.3 crores in the same period of the previous year.
Since the Indian organic farming and food processing industry is still at a nascent stage, a lack of awareness among consumers and farmers gives rise to misconceptions. Another challenge facing the sector is the fact that the majority of Indian farmers are accustomed to conventional farming and the use of fertilizers and pesticides.