Organic India: Sustainability to a Tea
There aren’t many lovelier places in the world to enjoy a cup of tea than the garden lawn in the middle of Organic India’s test farm, just outside Lucknow, India. The tea’s ingredients — including the all-important tulsi (holy basil) plant — are being harvested just an arm’s reach away. Geese cackle pleasantly in the background. The air is redolent with the scent of jasmine, hibiscus and lemongrass.
Stopping briefly to sit in the shade and enjoy a soothing cup of green tulsi tea is the man who makes it all happen, Organic India Managing Director and CEO Krishan Guptaa. Guptaa took over Organic India in 2007, just as the global demand for both tea and organic foods was exploding. Organic food sales in the U.S. have been averaging close to 10 percent growth per year since 2007, powering right through the recession and vastly outpacing nonorganic sales, according to Nutrition Business Journal.
Guptaa cuts a commanding figure in his elegantly embroidered kurta and jodhpurs, and his resume is just as striking. He has a chemical engineering degree to go along with an MBA, and deep experience in new-product development from stints at Colgate and Gillette in the U.K.
Organic India’s two main product lines are tea and herbal supplements. On the tea side, the company trails market leaders such as Celestial Seasonings and Tazo Tea, but it’s quickly closing the gap. Its $6.1 million revenue in 2011 is part of a 40 percent year-over-year growth rate in the past several years.
You can spend an entire day with Guptaa and he will sidestep every opportunity to take credit for Organic India’s rise, deferring it all to the company’s founders, his team and the farmers who grow for him.
“It’s the team that matters,” he says, sipping his tea. “That is my strong belief.”
But in fact, the company was a dormant brand until he came on board. It had great roots — but it hadn’t yet fully flowered.
Step 1: Get the right mix
There are two ways to become a player in organic foods. The path of least resistance: Buy up materials on the open market, affix your own brand to them, and invest everything else in marketing muscle. So, that hypothetical package of Mother Nature’s Farm crackers in the organic foods aisle? Often no such farm exists.
Organic India took one look at that business model and said no thanks. “We’ve taken the tougher route,” Guptaa says. “Instead of buying products and ingredients overseas and putting our labels on them, we grow all of our products ourselves here in India. Quality is key. I can tell you, it hasn’t been easy.”
The first seven years of Guptaa’s tenure were spent building out an entirely new supply chain — from the soil up. The company had to find farmers and train them in organic best practices; position agricultural experts near the farms for troubleshooting; get international certification from organizations around the world, including the U.S. Department of Agriculture (USDA); and ensure product samples could be deployed to market rapidly.
“We had nothing. Not a single farmer,” Guptaa says. “Once we were assured of our supply chain — that we would be able to scale up as sales improved — we said: ‘It’s time to go to market. Go to the end consumer and give them what they’re really longing for.’”
Going to market is exactly where FedEx comes in. Organic India uses FedEx Express for all of its shipping with India, as well as to deliver time-critical samples to new consumers, distributors, regulatory organizations and retailers in more than 30 countries worldwide. That includes both the U.K. and a key Organic India distribution center employing 15 in Boulder, Colo.
“This is how we get new orders,” Guptaa says. “If our product samples are not delivered on time, and handled with care, we will not be successful. We are proud to associate ourselves with FedEx.”
Step 2: Steep in organic methods
The sun beats down relentlessly on the Lucknow test farm. Dark red hibiscus leaves are spread out to dry on a concrete slab, curling in the heat. You don’t need a green thumb to recognize such a fertile place. And a spiritual place: A shrine of Buddha gleams in the sun, magnolia blossoms left peacefully at its pedestal.
This test farm also serves as Organic India’s education facility, providing free training in organic agriculture to its network of local farmers — they stay in a guest house on the property. That training includes proper seed selection, natural fertilization and pest prevention, waste management, and other earth-friendly techniques.
Starting with just three farmers in Azamgarh, India, in 2006, the company now works with thousands of farmers throughout India who produce more than 2,000 metric tons of organic tea per year. These are small family farms — the kind worked and handed down through generations.
“I’ll tell you our business model: We only work with marginalized farmers,” Guptaa says. “Farms that might be as small as 400 square meters. By growing tulsi for us, they are earning much more money than they would from a traditional crop.”
Not only do the farmers receive free training and premium prices, they also get access to healthcare they would almost never receive otherwise. (See sidebar.) The impact on small and isolated communities throughout North-Central India is profound.
“Since the day we started [this system], not a single farmer has chosen to leave us for another company,” Guptaa says. “Though they are completely free to do so. There is no contract.”
In the words of Kailash Nath, one of the first farmers to work with Organic India, “Organic farming has come as a real blessing for our family. Our succeeding generations will reap the benefits and realize the fertility of the land is our true wealth.”
In addition to boosting incomes and healthcare, Organic India provides farmers like Nath access to a much wider global market. Organic India now exports 60 percent of its products, with sales forecasted to rise in every product category.
Step 3: Bring to a boil and serve
Organic India’s main production facility is just a 40-minute drive from the test farm in bustling Lucknow, a city of nearly 5 million in Northern India. Step inside, and the chaotic sounds of horns and traffic fade. The energizing scent of tea hits you right away. Packaging machinery pulses rhythmically — the reassuring drumbeat of commerce — as workers quickly fill capsules, tea bags, consumer packaging and, eventually, large shipping boxes. The company will produce more than 270 million tea bags and 300 million health-supplement capsules this year alone.
Guptaa’s office is just steps away from the factory floor. On his desk sit several leadership books, along with the best-selling The Omnivore’s Dilemma, by famed organic-food writer Michael Pollan. When asked whether Organic India is capitalizing on the organic revolution in the West, Guptaa responds diplomatically but firmly.
“India was always organic,” Guptaa says. “By going organic, we are simply returning to what we already were. It’s a business opportunity, but it’s also an ethical opportunity.”
When asked what kind of impact the company has made on its 350 employees in India, Guptaa immediately gestures to the front gates and smiles. “Look outside,” he says. “See those expensive motorbikes? Most of my employees used to arrive by bicycle. Many of my managers have graduated to cars. I remember wanting a motorbike so badly when I first started my career. When I see [my employees] buying these expensive motorbikes, I feel good.”
If you wonder what’s next for Organic India, just peek over Guptaa’s left shoulder at a whiteboard on the wall. It lists an ambitious number of initiatives, including branded retail stores, cosmetics, and baby and toddler products.
Will any of them succeed like tulsi tea? Don’t bet against Guptaa. And be assured that whatever success follows, Organic India will pay it back to the communities that support the company’s efforts. It’s the one unifying ingredient of every Organic India product.
“This is a unique model,” says Guptaa, “where everyone in the chain wins. Hopefully in the future, we will leave a better place for our children and generations to come.”
“Selling products is great. We want to make sure we continue doing that. But we want to make sure we support society in a much larger way.” — Organic India Managing Director and CEO Krishan Guptaa
The Organic India Foundation
You can measure Organic India’s commitment to its farmer families in diseases cured and lives saved.
Through its two regional healthcare centers and many mobile healthcare camps, the Organic India Foundation provides free care to thousands of farmers, family members and villagers every year. Services go beyond treatment to include preventive care such as AIDS awareness, blood-pressure check-ups and women’s health.
Organic India funds the foundation through a contribution of 5 percent of its annual profits.
“People say we are helping these marginalized farmers,” Guptaa says. “But the fact is, these farmers are helping us, and this planet, so that coming generations can have a better place to live.”
Inside the Test Farm
In addition to training village farmers in organic agriculture best practices, the Organic India test farm in Lucknow, India, acts as the company’s living lab. Farm managers there work to increase productivity without sacrificing organic principles while testing and marketing new crops previously not grown in the region.
Here are some of the farm’s recent findings:
Rose petals. A pilot program here proved that this key ingredient for tea could be grown using organic methods in India.
Chia (also known as salvia). Originally accessing this plant
from Latin America, Organic India now grows it domestically, thanks to an herb trial.
Quinoa. After successful testing, Organic India now grows 20 to 30 metric tons of this grain per year.
Chicory. Thanks to the testing farm, Organic India is now one of the largest exporters of chicory around the world.
One Village, One Month
To get a sense of the scale of the Organic India Foundation’s outreach, here’s a snapshot of the healthcare services it provided to Azamgarh — a village located in far Northern India, near Tibet — in just one month last year.
- Introducing the 2014 Access 25
- India faces challenges and opportunities
- New Markets. New Opportunities.
- Corporate Responsibility
- Emerging Markets
- Fred Smith
- Free Trade
- Health Care
- Job Growth
- Online Retail
- Renewable Energy
- Small Business
- Social Media
- South Korea
- Supply Chain
- Trade Policy
- United Kingdom
- United States