Plant-based food is a next-generation food innovation that perfectly replicates the taste, smell, and sizzle of animal meat but is made entirely from plant ingredients. In the last few years, the smart protein market has grown exponentially, led by companies from the US, UK, Canada, China, and Singapore, but India is rising fast.
The plant-based food market is growing in India, owing to its health benefits and environmental implications. So, is this going to be the next sunrise sector in India?
Outline
Plant-based food is a final product made from materials originating from plants, such as fruits, vegetables, whole grains, nuts, seeds, and legumes. The market for plant-based foods comprises foods that don’t contain any elements of animal origin, either during processing or as part of the finished product, and are used as substitutes for foods that would otherwise contain such substances.
India has among the world’s highest vegetarian populations. And, nine out of 10 Indians are protein-deficient, according to a survey by the Indian Market Research Bureau (IMRB) conducted as early as 2015. Things are changing, though, especially after the pandemic highlighted this deficiency. People are not only becoming more aware of protein requirements but are also seeking clean proteins.
Plant-based food companies in India are still at an early stage of adoption, but it won’t be long before these companies catch up with their global counterparts.
The plant-based meat market is expected to reach $13.8 billion by 2027. In 2020, about $3 billion will go into alternative protein companies globally, compared to the $824 million that was invested in this sector in 2019.
The numbers in India were valued at Rs 28,936 crore in 2019 and are expected to reach Rs 186,819 crore by 2025, expanding at a compound annual growth rate (CAGR) of up to 39 percent during the 2021–2025 periods.
It has been identified that India is a potential market for plant-based food. It found that 63 percent of Indian consumers are willing to buy plant-based food items regularly, and 60 percent would even agree to pay a premium for them.
Also, due to increased knowledge of lactose intolerance and a general shift towards greater well-being, we can observe a fantastic surge in plant-based dairy substitutes in India. Worldwide, the market for plant-based or non-dairy milk alternatives is one of the fastest-expanding segments in the functional and specialty beverage area of newer food product development. Plant-based milk is the front-runner of this change, and almond and oat milk have gotten fantastic responses from consumers. There is a growing emphasis on offering plant-based options and plant-based substitutes for animal-based foods like dairy and meat.
With growing health and sustainability consciousness among consumers and increased exposure to global food trends, there is a significant opportunity for brands like ours to innovate with plant proteins. The plant-based meat market was almost nonexistent two years ago, and in 2021, several brands ventured into this space. Consumer awareness increased during these two years, with younger generations of Millennials, Gen Z, and Alphas making an irreversible shift towards conscious consumerism.
Plant protein is an emerging food platform. In short, the industry has gone from having less than a handful of brands to now having more than a dozen new players, ranging from start-ups to the largest food conglomerates. This is beneficial for the segment in terms of attracting consumer attention. While plant-based meat products are relatively new, we are all still in the consumer food space. Growth and scale there are driven by having products that perform on taste, are priced for value, and are widely available.
Plant protein will make its mark across multi-billion-dollar categories like biryani, momos, or RTE and RTC. This space will see a Rs 100 crore domestic revenue brand as early as the next 2–3 years.
Entrance of FMCGs and startups into the plant-based sector
Targeting non-vegetarian consumers who are looking for an animal-protein replacement, besides a large section of vegetarians, big FMCG companies and many startups are entering the plant-based meat segment. In this plant-based meat alternative, several startups, such as Shaka Harry, Virat Kohli, and Anushka Sharma-funded Blue Tribe, etc., have entered. The segment, which opened up two years ago, is estimated to touch around USD 1 billion by 2030, and now products in the plant-sourced meat segment are available at e-commerce platforms and large retail chains in leading metros.
Tata Consumer Products Ltd. (TCPL) entered the plant-based meat products category under the new brand ”Tata Simply Better” and introduced four variants: nuggets, burger patties, awadhi seekh kebabs, and spicy fingers. Besides, players are also targeting institutional clients in the HoReCa (hotel, restaurant, and catering) segment, and several quick-service restaurant (QSR) chains, such as Domino’s and Starbucks in India, have included plant-based protein in their food menus. According to the Tata Group’s FMCG arm, plant-based meats are at the forefront of the broader plant protein landscape, aiming to replicate the sensory and cultural resonance of animal-derived meat without the associated implications for the environment and health.
ITC had entered the segment earlier this year, and over the long term, more FMCG companies would enter the segment. ITC has launched sustainable plant-based protein products for consumers under its ITC Master Chef IncrEdible brand across two varieties: the ‘Incredible’ Burger Patties and ‘Incredible’ Nuggets. The product has been rolled out across e-commerce channels and large retail chains in eight cities as of now, as well as to institutional customers.
Meat and seafood company Licious is targeting consumers on non-meat-eating days with its newly launched vegan meat brand, UnCrave. They plan to create relevance before aiming to take a share of it.
The California-headquartered, popular plant-based meat brand Beyond Meat has also entered the Indian market through a partnership with FMCG brand Allana Consumer. Through this partnership, Allana Consumer Products will distribute Beyond Meat’s line of Beyond Burger, Beyond Sausage, Beyond Meatballs, and Beyond Mince across the country. Founded in 2009, Beyond Meat sells across 1,83,000 retail and foodservice outlets in over 90 countries.
New startups and established players have started introducing plant-based food options that replicate non-vegetarian food in their product offerings.
Ahimsa Foods is one of the early entrants in the list of plant-based food companies in India. It was founded in 2008 by Yasmin Ahmad Jadwani. The company offers its product under the brand name “Veggie Champ” and also offers shami kebab, meat, chicken, drumsticks, and fillet (mock fish), among others, all of them made with plant-based ingredients. While Good Dot, founded by Abhishek and Abhinav Sinha along with their friend Shruti Sonali, sells vegetarian biryani, keema, Indian curries, etc. with a shelf life of about a year, the Udaipur-based company is also one of the first from India to start exporting its products to international markets like Canada, Dubai, Singapore, etc.
Shaka Harry is a plant-based food company that offers plant-based snack alternatives like a chicken patty, mutton samosa, chicken momos, and chicken nuggets, as well as vegan meat options like mutton keema and keema paratha. The brand is owned by Bengaluru-based Liberate Foods, and its co-founders include Anand Nagarajan, Sandeep Devgan, Hemalatha Srinivasan, Ruth Renita, and Anoop Haridasan.
Goodmylk: Founded in 2016 by mother-son duo Veena S and Abhay Rangan, GoodMylk offers plant-based dairy alternatives. Goodmylk makes plant-based milk from cashew and oats, and their offering also includes curd, vegan mayo, butter, and Indian cottage cheese. Whereas Evo Foods, founded in 2019 by Kartik Dixit and Shraddha Bhansali, has formulated a unique plant-based liquid egg in India.
The Mumbai-based company uses food science to extract proteins from legumes and other plant sources to create an egg replica that is environment-friendly and healthy. Imagine Meats was founded by Indian film industry celebrities Riteish and Genelia Deshmukh and offers plant-based meat products like many Indian variants of Biryani, kebabs, nuggets, and sausages, among others. Vezlay Foods offers ready-to-eat food products made of soy, which have textures similar to their non-vegetarian counterparts. The Delhi-based company makes Soya Seekh Kabab, Shami Kabab, Soya Chop, Soya Leg Pieces, and Soya Noodles, among others.
Blue Tribe Foods, which was founded in 2020 by Sandeep Singh and his wife, Nikki Arora, makes meat-free products using pea protein. The company’s offering includes nuggets, keema, and sausage made with plant-based ingredients. Looking at the growing trend of plant-based meat, Virat Kohli and Anushka Sharma, who are also both plant-forward in their lifestyle, made the perfect ambassadors and investors for Blue Tribe.
Wakao Foods, founded in 2020 by Sairaj Dhond, is based in Goa and makes plant-based meat products from Jackfruit. Jackfruit is widely considered a superfood that can be consumed in a variety of ways, including as a fruit. For thousands of years, India, the world’s largest producer of jackfruit, has used it to make vegetarian dishes, tangy pickles, and as an ingredient in rice dishes. Lately, Jackfruit has caught the world’s attention as a vegan substitute for animal meat. And Plantmade is a food-tech startup from Delhi that offers a variety of plant-based food options. The company has created various plant-based products that resemble meat, eggs, and other animal-based food items—Peshawri seekh kebab, vegetarian egg, turmeric milk, and vegan masala chai, to name a few.
Tempe Wala, founded in 2019 by Vaibhav, offers soybean Tempe, chickpea Tempe, and flavor-infused Tempe Bites, along with many other soy products like butter, milk, curd, etc. Tempeh is one of the favourite vegetarian foods of Indonesia, which was discovered around 2,000 years ago. Tempeh is made using whole soybeans, and it’s fermented in a loaf-sized shape. The unique food has caught the attention of many people across the globe, with many tempeh food startups entering the space. Tempe Wala brings Tempe to the Indian market. Greenest started in 2017, and Delhi-based Greenest offers different kinds of plant-based shami kebabs and plant-based keema.
Acceptance and Demand
A plant-based diet is a global movement that has the best environmental impact and a cruelty-free footprint. There is a growing demand for and acceptance of plant-based food products in India. Even though the size is small — new launches in this category were only 0.7% of the total launches in November 2019, which, however, grew to 2.1% in October 2022— experts expect this number to further increase in the coming years.
Plant-based foods are globally known to address multiple issues such as the health crisis, climate change, and animal cruelty. They have become a global phenomenon in the past few years owing to a convergence of trends in consumer behaviours, product innovation, and investment. Indeed, this surge has forced manufacturers and retailers to respond quickly to meet consumers’ interest with a number of brands that encompass meat, cheese, milk, and protein alternatives.
Deliotte India’s research shows that the plant-based alternate protein industry in India is currently valued at Rs. 350 crore and is expected to grow at more than 45% CAGR till 2030. The sector is showing significant momentum, with over 50 start-ups already active in the space. An increasing consumer shift towards making health-conscious choices in their food habits and awareness about protein deficiency and environmental concerns among early adopters are some of the key factors expected to drive long-term growth in the sector.
Plant-based food products have also become a necessity to achieve the ‘Zero Hunger’ target while reducing greenhouse gas (GHG) emissions from agriculture by 6% and in order to reduce meat consumption. The Organization for Economic Co-operation and Development (OECD) and the Food and Agricultural Organization (FAO) of the UN project the global meat supply will expand, reaching 374 million tons by 2030. The OECD-FAO Agricultural Outlook suggests that, following a business-as-usual path, SDG 2 on Zero Hunger would not be achieved by 2030 and GHG emissions from agriculture would continue to increase.
As the movement catches up in IndiaThis growing awareness has resulted in an increase in demand for plant-based food options in India. Adopting such a diet could be a potential solution to the rising health crisis of chronic diseases, improving their well-being, and solving the planet’s and our climate’s problems by changing the way they eat.
Besides consumer demand, taste and pricing also matter. For India, the biggest USP is taste, and as long as the products taste good and are rounded well with Indianness, there is a high likelihood of the products being accepted. Price comes next.
For mainstream acceptance, there is a need to offer products at price points that deliver value to the customer. This does not necessarily mean cheaper products, but smart pricing that justifies the novelty and experience for the consumers. The next factor, which is becoming more prominent lately, is how less processed, or how close to clean labels, the products can be.
Plant-based milk items like soy and coconut milk have been used for a very long time here. Both dairy and plant-based alternatives can co-exist as they cater to a wide array of consumers whose preferences are different. In fact, multinationals like Danone and Nestle have recently pivoting towards plant-based alternatives to address the growing demand from consumers.
While chicken and meat are proteins, soy meats and tofu have variants like soy chicken, soy fish, and soy duck, which are being marketed as mock meats. One can make tandoori, Chinese, or continental dishes without any fuss. The variants have mock chicken wings and chicken lollipops that can be enjoyed in the winter without compromising one’s health. Mushrooms are amazing substitutes, whether they are Gucchi or Shiitake; the textures are meaty and nutritious.
The price needs to be taken care of
In relation to price uniformity, the non-profit think tank Good Food Institute conducted a study with Mindlab to examine price as a driver of purchase intent and the willingness of consumers to pay more for plant-based products. When clearly asked, consumers rated price as the second-most important factor after taste to encourage or discourage them from purchasing a plant-based product. It also states that plant-based alternatives could reach price parity with meat as soon as 2023 and that cultured meat (produced in a lab) could be competitive with conventional meat by 2030.
Mintel’s Global Consumer Research also reveals that 53% of Indians agree that plant-based food and drink should cost less than animal-based products. As a result, brands must educate consumers on the various health benefits of switching to a plant-based diet, ranging from protein intake to gut microbiome, and boldly call them out or communicate them on the pack. Brands can leverage food service to introduce trials and samplings to drive the category forward. The awareness has enhanced its acceptance by a large section of society that is conscious of consuming such products, and the industry has spiraled up in just the last two to three years with Gen Z, millennials, and Gen Alfa making a transition towards a well-balanced and ethical lifestyle, making ethical food choices, and keeping their choices guilt-free. India has an extremely large number of individuals who eat meat. However, unlike the West, meat eaters in India eat meat only once or twice a week. Most consume vegetarian food. Also, there are many days on which meat is not eaten because of religious reasons.
Thus, for plant-based meat, there is a cultural tailwind in India. In the next few years, India will emerge as one of the world’s biggest plant-based meat markets.
Rising costs put pressure on the gross margins of brands, and plant-based companies cannot increase prices if they want to stay competitive with animal meat. However, rising costs also affect animal meat, the costs of which have been rising consistently over the past two years, so we are forecasting higher volumes of people trying out plant-based meat as the price differential becomes smaller.
While product pricing is still a deterrent for many who may want to try plant-based food, many brands are making conscious efforts to reduce the price for consumers. One route that some of them have chosen is to use traditional, indigenous ingredients such as jackfruit. It helps them with pricing as well as positioning as a more familiar alternative.
Editors’ view
India is still in its early stages, with only 1.5% of food and drink launches in the last few years between November 2019 and October 2022 having plant-based claims on the pack, as per Mintel’s Global New Products Database. Although Indian consumers want to adopt plant-based diets, they lack the understanding to do so, according to industry observers.
Up to 32% of Indians agree that a plant-based diet is the same as a vegetarian diet, and 42% of Indians agree that it is hard to understand the difference between vegetarian, vegan, and plant-based products. So, to go mainstream in India, plant-based brands will have to drive education and awareness over the health benefits of their products.
Also, Plant-based foods are not frequently found on retail shelves, but some retailers, like Foodhall, Nature’s Basket, and D Mart, have an inventory of plant-based dairy and meat products. Consumer access is anticipated to grow significantly with the increase in the number of cold-chain infrastructures and as shelf-stable plant-based food products on the market expand.
So, in the Indian market, if plant-based eating continues to gain popularity, the plant-based food sector will be the next big thing.