My tryst with food, food companies, and food enthusiasts has given me many interesting insights into aspects like food innovation, consumption patterns, sustainability of ingredients, future food trends and its impact on the environment among others. With this piece, my prime intent is to explore the rise of the planet called ‘alternative protein.’
Indian Food Industry
India’s food industry, which includes food processing, manufacturing and retailing, is one of the largest in the world. The food sector has emerged as a high-growth and high-profit sector due to its immense potential for value addition, particularly within the food processing industry.
India is a country that is very attached to its food, be it festivals, special occasions or everyday meal. The interesting point to note about India’s food ecosystem is that while it has always been acknowledged as a country with massive diversity, it has also been perceived as largely vegetarian. However, as this piece suggests, it is a myth that India is a vegetarian country. As India marches ahead, trends clearly show that as the population of this country grows and so do aspects like accessibility, information exchange and product choice; it is evident that the consumption pattern will move to meat-based products.
Shifting Trend and Alternative Protein
Even though animal meat is high in protein level, it has certain adverse effects. Some of these include impact on the climate due to animal agriculture, excessive usage of resources like land and water to produce hygienic meat, animal cruelty, and skepticism around nutritional value of traditional meat products. Therefore, there is a need to shift to a protein type that is not only adequate for a human body but is also a sustainable solution for our environment as well as the economy. The natural answer here is opting for plant-based meat.
The idea is to create a similar meat-like experience with respect to taste, appearance and texture; by creating products that are derived from animal cell and are minimally processed. In the US, companies like 'Impossible Burgers' and 'Beyond Meat' have been able to achieve the replication of similar experience for a meat-eater while providing the nutrition in a sustainable manner.
Has India joined the movement?
We conducted a prime facie research which proved that there are three essential factors that will determine the adoption of alternative protein products in India and those include: Affordability or pricing; Awareness; and Distribution efficiency.
It is believed that Tier-1 cities like Mumbai, Delhi, Bangalore and Hyderabad among others will be the early adopters of alternative protein products in India. The presence of multiple awareness platforms aided by a well-equipped distribution chain makes these cities a right fit for launch of products in the plant-based and cell-based meat alternatives space.
From the mind of a next-gen investment banker
Listed below are few trends that are expected to dominate the F&B sector from an investor’s point of view:
1. Higher disposable incomes, better Internet penetration, improvement of the supply chain in emerging states and cities, creating an ecosystem to capture the growing Tier - 2, 3 and 4 markets with the right product-price, local and indigenous marketing/branding along with customisation of the product as per the local environment. These are the few factors that will help in building robust and scalable businesses thereby leveraging the growing demography.
2. Data analytics will play a massive role in creating a deep-tech enabled food ecosystem right from growing ingredients to putting the finished product on the customer’s plate. This has happened in other sectors like logistics, banking and real estate, the food services sector is getting disrupted as companies are collecting very interesting data around food patterns, taste preferences, price sensitivity, crop seasonality and so on.
3. Product innovation is a massive food trend that will play out in the country in the next 10 years. Alternative protein is leading the charge when it comes to product innovation and we believe that entry of new products, latent cuisines and modifications in existing products will pave the way for building large businesses that are scalable and profitable.
Food for thought for investors and food industry professionals
The growth of plant-based or meatless protein in the last few years has not only been notable but also in alignment with the global philosophy of creating a food ecosystem that is sustainable, environment-friendly, and most importantly, does not lead to a massive change in consumer taste preferences. Therefore, in my opinion, now is the right time to ideate, develop and implement in the plant-based meat products space!
As we build momentum in this space, there are few elements that one needs to be thoughtful about. First is building a great product which will excite customers and result in stable adoption and at the same time provide value for money. With this, comes the omni-channel approach which India has already adopted with the advent of tech-enabled companies such as Swiggy and FreshMenu. Taking into account the dynamicity of the food industry, it is important to built business model and operations that can adapt to changes.
My belief is that the Indian market is entering a golden period for creating products that are centred around plant-based protein alternatives and cultivated meat. This is because of the growing demand for protein-led products, increased global and local awareness coupled with the need to develop a healthy and sustainable food ecosystem, growing per-capita income levels, active participation of government bodies with capital and advisory and most importantly the drive to build a flavourful product palette by leveraging the beautiful legacy of our country's diversity. As we delve deep into this space, we are certain that it is bound to get exciting from the perspective of creating spectacular businesses.
