NESSO MD Anirudh Ranga Talks About Floriculture India’s ‘Sun Rise Industry’

NESSO MD Anirudh Ranga Talks About Floriculture India’s ‘Sun Rise Industry’
Anirudh Ranga, Managing Director, Natural And Essential Oils Private Limited

The floriculture industry has witnessed exponential growth in the last few years and is crowned with the title of sunrise industry. Taking the world view, about 140 countries have contributed to commercial floriculture where India has the title of 100 percent export-oriented status. According to reports, the floriculture market is expected to reach the value of INR 661 billion by the end of 2026, with a CAGR of 19.2 percent for the period 2021-2026. There has been a spike in demand and supply of flowers used for floral perfumes across the globe. Flower scents are obtained from most flowering plant species including roses, orange blossoms, gardenias, jasmine, carnations, frangipani, lotus, and daisies.

To further elaborate on the aforementioned subject, StartupTalky spoke exclusively with Anirudh Ranga, Managing Director of Natural And Essential Oils Private Limited. During this interesting conversation, Mr. Ranga revealed the ups and lows of this trade.

How do you envisage the future of the Indian floral perfumery production sector?

Mr. Ranga: The application of pure flower extracts in perfumery is mainly in fine fragrance and aromatherapy markets. COVID has reiterated and increased awareness to maintain a healthy mood and reduce stress. People are finding various ways to reduce stress and Aromatherapy is a big help. Perfumes also exhibit a sense of hygiene and build confidence in oneself, and today’s youth is exceedingly aware of this thought.

The rising disposable income and increased consumer awareness in India are pushing the growth of natural fragrances. Apart from regular product research and marketing, Indian companies need to adopt an Artificial Intelligence (AI) based approach. The trend is moving towards individualistic olfactory preferences. The industry is developing algorithms to screen thousands of fragrance molecules and connect them to the olfactory preferences of customers. This futuristic and advanced approach will give a technological edge to the Indian perfume market.

What is the current market size of the Indian perfume industry and where does it stand in the international domain?

Mr. Ranga: The global flavors and fragrance market was valued at $24 billion in 2020 and India stood at $500 million (around ₹3,600 crores).

On the technological front, how equipped this sector is, and what are the latest technological developments happening in the production line?

Mr. Ranga: The traditional process of fine fragrance manufacturing was more based on subjective parameters, olfactory, consistency and color being the main elements. To understand the future of fine fragrances, NESSO has built up its technological capability with best-in-class equipment. The use of sophisticated analytical test equipment like GC and GC-MS along with a full-fledged application lab provided us with more insight into the isolation and consumer preference of fragrance molecules. Now we can develop several fragrance notes from the same flower through various molecule profiles by changing the process.

We have transformed the way we source floral raw materials. With the use of technology like DNA fingerprinting and the Internet of Things (IoT) in agriculture and blockchain, we can procure better quality flowers which is fully traceable at a fair price while ensuring sustainability. The raw material for all our strategic products is now obtained through contract farming and in-house cultivation. Due to this structure, we can maintain exceedingly stringent pesticide, phthalates, and heavy metal limits in our products.

Our vertically integrated supply chain is audited and certified by ECOCERT FOR LIFE standards. NESSO continues to apply its learnings to evolve the already established system of traceable, sustainable, transparent & responsible sourcing.

What are the major challenges of the industry and what steps are being taken by the associations and government to overcome these hurdles?

Mr. Ranga: COVID-19 has negatively impacted the fragrances and perfumes market across the world. There have been muted perfume sales with reduced social interactions and less flight travel. On the other side, from the availability of farm labor to puck flowers at the right time, transportation of flowers to production units, and logistics issues to reach product to customers, all have been a challenge the last two years due to COVID. We are happy to see the market opening and we are moving towards pre-COVID demands.

Most countries now expect fine fragrance suppliers to adhere to regulatory limits for contaminants like pesticides, allergens, etc. At NESSO, we realized this long back and continually invested in advanced R&D and QC facilities. We have worked on improving the product quality to meet international regulations. Perfume companies need to research and upgrade existing processes to stay relevant in the market.

Another hurdle is the unpredictable quality, yield, and price fluctuation. To overcome this problem, NESSO entered into contract farming and handhold its farmers to achieve high yield, and consistent quality flowers. Transforming the supply chain was paramount to ensure NESSO procures the highest quality flowers in an ethical, sustainable, and traceable way. We have ensured our farmers' growth through continuous training on improved organic cultivation practices along with fair wage principles.

How much dependency do you have on the country’s floriculture industry and is the raw material easily available to keep the production line running?

Mr. Ranga: Flowers play an important role in Indian culture. Flowers are extensively used in day-to-day life and weddings, prayer, celebrations decorations, etc. The industry faces a serious crunch during the festival season, which has forced the industry to look at innovation in the supply chain. This presents an inherent problem - No traceability, several layers in the supply chain, and poor quality of flowers.

Many companies are struggling to survive the challenges of desired quality raw materials, seamless supply, limitations of traditional methods, and ever-evolving regulatory demands in export markets.

NESSO, since its inception, imbibed an open learning and innovation approach. The agronomy team of NESSO successfully transformed the entire supply chain of Tuberose. To overcome the challenges of the traditional supply chain, the NESSO agronomy team worked on an experimental farm and optimized Tuberose farming to deliver higher flower yield, and lower cost to farmers with cleaner agricultural practices.

We continue to engage farmers in constructive dialogue around sustainable agriculture practices and support long-term training programs encouraging the implementation of more efficient soil and land management techniques. Our sourcing approach has helped farmers and farm workers to improve their economic stability making contract farming more attractive and sustainable.

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