Key Takeaways
- ITC acquires 24 Mantra Organic for Rs 472 crore to dominate India’s fast-growing organic food market
- Packaged organic food segment valued at Rs 3,000 crore, growing at 15-20% annually
- Current organic penetration at just 0.35% presents massive growth opportunity
- Exports to drive next phase of expansion with global distribution plans
ITC is making a major push into India’s organic packaged food market through its recent acquisition of Hyderabad-based 24 Mantra Organic. The FMCG giant aims to capitalize on the segment’s rapid 15-20% annual growth, driven by increasing consumer awareness and export potential.
According to Anuj Kumar Rustagi, CEO of Staples, Food Division at ITC, the organic category holds significant interest for consumers, farmers, and the economy. India’s overall organic food market stands at approximately Rs 10,000 crore, with packaged organic products accounting for Rs 3,000 crore.
“Organic is a category of huge interest to consumers, the economy and farmers. There is also a lot of export potential,” said Anuj Kumar Rustagi, chief executive, Staples, Food Division, ITC, told TNIE.
The current organic penetration rate of 0.35% represents just one-tenth of the global average and a fraction of the US’s 5.8% – a gap ITC sees as its biggest opportunity.
Strategic Acquisition and Growth Plans
ITC’s acquisition of 24 Mantra provides immediate access to over 140 organic products and a certified network of 27,000 farmers across 1.4 lakh acres. This infrastructure would have taken ITC 8-10 years to build independently.
“Organic has to start at the farm. Just because you work with farmers doesn’t mean the produce is organic,” Rustagi said. The company valued 24 Mantra’s deep backend — a certified network of 27,000 farmers across 1.4 lakh acres.
The 24 Mantra brand will operate independently from Hyderabad with retained leadership. ITC plans to strengthen marketing investments to restore its market-leading position.
Export Expansion Strategy
Exports currently contribute nearly half of 24 Mantra’s revenue, primarily from the US and Middle East. ITC plans to deepen North American presence and expand to Europe and Canada.
“With our institutional resources, we can take this Indian brand global,” said Rustagi, noting the growing popularity of Indian cuisine worldwide.
The acquisition also creates new sourcing opportunities for ITC’s agriculture business to supply organic commodities internationally.
Market Position and Competition
ITC faces competition from Tata Consumer’s Organic India (Rs 280 crore turnover), Organic Tattva, BigBasket’s organic brand, and players like Patanjali. 24 Mantra recorded Rs 300 crore in sales last year.
Rustagi emphasized the distinction between certified organic products and natural/Ayurvedic offerings, noting organic requires complete certification from farm to storage without chemical fertilizers, pesticides, or fumigants.
“Our first ambition is to become the market leaders again in the organic segment,” Rustagi said.
With organic products commanding a 40% price premium, the segment represents a key lever in ITC’s premiumisation strategy and is positioned to be a significant growth driver as packaged foods recover post-inflation.
