Engaged in producing organic products for the international market.
The company provides end-to-end solutions for organic agriculture and is involved in each stage of the supply chain, from production of compost to the export of processed herbs, spices and other food commodities. Phalada was founded in 1999 to develop inputs for organic farmers to help improve soil fertility and prevent pests and diseases. “This soon led to a more committed involvement to facilitate organic certification of farmer’s groups and provide them with a premium market. Today we produce a wide range of products in our GMP certified processing facility in Bangalore,” avers Mr.C.M.N Shastry, chairman and managing director.
Market for Products
In the international market, most of Phalada’s buyers are processors who cater to retail market with their own brands. “Some products reach the end user in the whole form and in some cases reach the end user as one of the ingredients in the multi-ingredient product. In the domestic market, we have been supplying to most of the retail brands,” maintains Mr. Shastry.
Further speaking about parameters that the buyers evaluate the products in the international market he says, “Most of the players in the international organic market donot look at only the price factor.
Consistency in supply, quality of the product, transparency in the entire supply chain, processing facility, commitment to organic integrity and social objectives of the organisation play a major role in the decision making of the buyers,” adding, “Phalada has been trying to excel in all the above areas to have better acceptance in the market by involving in all areas of cultivation and processing and by providing end to end solutions.”
Promotion of Products
The company promotes its products through international fairs and exhibitions. “We attend most of the international organic and natural products exhibitions and also participate in a few of them.We try to reach new customers and provide after sales service to the existing customers,” says Mr. Shastry. He adds, “Phalda believes that organic agriculture could be successful only when provided with proper market to the organic products grown by the farmers. Hence focus is given to those areas, farmers and crops where Phalada is comfortable in marketing the produces.”
The company currently works with more than 360 farmers with a majority of them located in Karnataka. They also have farm groups in Uttar Pradesh and Himalayas. “It allows us to grow a wide range of crops according to their required climate and soil type. Most of our farmers are smallholders and own only a few acres of land. To increase the income of these farmers we encourage many of them to grow medicinal, aromatic and dye plants as intercrops, or to sustainably collect wild herbs that are already growing on their land,” maintains Mr. Shastry.
“All our farms are certified organic (or in conversion) through Control Union or Lacon. Some farms are also following biodynamic methods and are certified by Demeter. More recently we have also started working with the Forest Garden Programme (FGP), and are in the process of applying for Fair Trade and Bio-equitable certification for selected products and farmer’s groups,” he maintains.
Phalada provides training to farmers. “We provide them training through a couple of orientation classes and field visits at regular intervals, and also fair and transparent dealings, the farmers are trained to adhere to organic integrity. Even international customers are taken to the fields to explain the importance of hygeine and good quality,” he adds.
He however admits, “As the farmers don’t have exposure to the international market and quality requirements, it is a herculean task for us to change their mindset and follow our harvesting and processing guidelines. Even though GACP (Good agricultural and cultivation practice) training session are regularly conducted, it takes time for them to change.”
Processing & Quality Assurance
The post-harvest processing starts at the farm itself based on the requirements of the crop. “The farmers sort, wash and dry the raw material at the farm. Phalada invests in setting up basic on-farm processing facilities such as washing tanks and solar dryers. Herb growers are trained in Good Agricultural and Collection Practices (GACP) for medicinal plants. From the farm the dried material is transported to our central processing facility in Bangalore where it is further processed according to the buyers requirements. All post-harvest processing is carried out following written Standard Operating Procedures(SOPs),” says Mr. Shastry.
Regarding quality assurance he adds, “Before exporting any product it is inspected, processed, tested and packed in our GMP certified processing facility in Bangalore. Our in-house facilities include equipment for drying, steam-sterilisation, powdering, sieving and metal detection. Other forms of processing, such as freeze-drying and CO2 extraction, are outsourced to other organic certified facilities in the area. We also have an in-house a laboratory where we test all of our products for microbiological contamination, (oil content and moisture levels). We back up our tests and provide you with test results using accredited external laboratories.”
Currently Phalada is mostly into spices, medicinal herbs, coffee and essential extracts. In future the company has plans to expand to grocery items as well. “The ground level work for ensuring proper supply base has already started by making our existing farmer group in Uttar Pradesh to start growing these products. We have plans to enter into domestic retail market within the next one year with a complete range of products,” informs Mr. Shastry.
Since 6 years FKCCI has been recognising the best export performance by manufacturers and exporters in Karnataka by giving “Export Excellence Award.” The exporters are classified into various categories like micro, small, medium and macro, besides others based on the investment on plant and machinery by the company and the export turnover. Phalada has won the “Export Excellence Award” for the third consequetive year for the micro category.
Future of Organic Products
Speaking about the increasing demand for organic produce worldwide Mr. Shastry says, “In spite of the so-called economic crisis worldwide, there has been consistent increase in the demand for organic food ingredients all over the world,” adding, “Within India also the demand for organic produce is increasing manifold. The stringent quality expected in the international market in terms of microbiology and aflatoxins has forced the players in this segment to adopt to better technology in the post harvest processing.”
He further says, “As per the latest survey conducted by Assochem, the Indian domestic organic business is expected to go up from the present level of Rs, 2500 crores and touch Rs.10000 crores by 2015.
And prospects for organic products are enormous,” adding, “Awareness on organic food is building up not only in the urban segment, but also in the rural areas. The way the organic business is growing , there is enough room for more players to get into the organic business.” He suggests, “In India most of the farmers are having small holdings.They have little access to the market and are squeezed by middlemen and brokers. As long as you are fair with them in the pricing and deal with them transparently, you are sure of your success.”
Source : Agriculture & Industry Survey [/hidepost]