With markets for plant-based meat gaining momentum in emerging markets including Brazil and China, eyes are turning to India. But just what is the opportunity in a country where meat consumption is relatively low and the quality of many of the meat-free products on sale has been deemed to be mediocre? Dean Best reports.
Contrary to popular opinion in the West, not all of India’s citizens are vegetarian. Various surveys, including the last census, see around 70% of the population class themselves as non-vegetarian.
However, being non-vegetarian in India can mean a consumer eats eggs but still doesn’t eat meat, chomping into that 70% of the population that could become, at the very least, flexitarian.
Moreover, meat consumption per capita is still lower than in many countries, including in emerging-market peers like China. The meat that is eaten is consumed less frequently than in other markets, causing doubts over whether there might be the level of substitution seen in the West.
There are meat-free products on sale in India, largely chunks or nuggets made from soy, but the market for plant-based meat alternatives – at least as those in the West (and, increasingly, in other emerging markets) would recognise it, is so nascent you can count the number of brands doing business on fewer than the fingers of one hand.
That said, industry watchers, investors and entrepreneurs are, in the main, optimistic about the potential of the market for plant-based meat in India, even if there is some uncertainty about the real extent to which the sector can grow.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Three years ago, The Good Food Institute, the US non-profit that advocates for plant-based alternatives to meat, dairy and eggs, set up an office in India. Headed by managing director Varun Deshpande, GFI India is working to build a market for plant-based meat in India through research and consultancy. It is advising start-ups including Imagine Meats, the meat-alternatives business launched this summer by Bollywood actors Genelia and Ritesh Deshmukh.
“I started GFI India with the goal to establish the sector in the country – and I do mean that quite literally; pretty much nothing was going on in the country beforehand,” Deshpande says. “It’s the largest team outside of our US partners, GFI US, so we are totally optimistic that we can help establish the space on the ground in India.”
Deshpande acknowledges India is, when looking at meat consumption per capita “a different planet” when compared to Brazil and even China. “In terms of the value of what’s possible, right now, with a plant-based meat product, it’s not as clear to the biggest companies in India, because many of them aren’t even in meat. They don’t have that behaviour to tap into where people are saying ‘We are turning flexitarian now. We are going to reduce our consumption of meat [and] we’re going to replace it with something else.'”
However, Deshpande claims “an early-adopter, flexitarian cohort” is emerging for businesses to target, pointing to surveys from GFI India and from Ipsos suggesting interest in trying plant-based meat. This cohort, he explains, is younger, more affluent and “more international in its values”. They are “people in Mumbai, Delhi, Hyderabad eating like their counterparts in Sydney, New York, London, Singapore,” Deshpande explains. “There is this upper echelon of consumers that exists. I would size it at about 30 to 50 million people.
“We’re seeing a lot of purchase intent. We’re seeing 62.8% of people within that cohort say they are extremely likely to buy plant-based meat regularly. That number was actually replicated by Ipsos a few months after we did our own study. They got 63%. We’re fairly confident that that early adopter cohort is a very solid one. The problem is it’s spread out across all these cities.”
With the market in its infancy, there is, others argue, a paucity of evidence about the attitudes of India’s consumers towards plant-based meat. “Very little is known about Indian consumer preferences towards the recent meat alternatives launched in the market,” Dr. Satyanarayana Kandukuri, associate vice president at Hyderabad-based Sathguru Management Consultants, asserts. “There seems to be no consensus on the proportion of the Indian population that is vegetarian and non-vegetarian, with various reports projecting differently. The few survey results indicating a willingness to buy plant-based meat products were based on responses by well-educated participants from urban areas with high income. The current demand for plant-based meat products in retail and in foodservice is limited to major cities, with some players products available for distribution in select cities only.”
One business that has carved out a foothold is GoodDot Enterprises, based in Udaipur in north-west India. Set up in 2013, GoodDot launched its first product three years later and, according to founder and CEO Abhishek Sinha, the company sells its shelf-stable products, including alternatives to mutton and lamb, across the country. GoodDot also has around ten of its own foodservice outlets, located in Udaipur and in Mumbai.
Sinha, also GoodDot’s largest shareholder, agrees India is an “early-stage” market for plant-based meat but he believes the appetite for alternatives is there. “We are seeing a lot of green shoots coming up. It’s amazing the acceptance and willingness to try the products,” he tells just-food.
GoodDot’s distribution has been helped by a relationship with Indian retailer RCM, the owner of which is an investor in the meat-alternative business. Sinha says RCM has 7,500 outlets in India, all of which carry GoodDot’s products. However, the retailer’s stores are concentrated in India’s “tier-two, tier-three cities”, Sinha explains, meaning GoodDot’s presence is – so far – heavier away from the country’s main conurbations.
But not for long, Sinha reveals. “We started with very high hanging fruit because RCM primarily takes care of the middle-income group and tier-two, tier-three cities, which are not so well aware [of plant-based meat]. If those people readily accept our products, now with the urban centres, people who have more disposable income, better travelled, they are the low hanging fruits. We feel we have done the hard part by validating our product at tier-two, tie-three cities. Urban India, the metros of India, are hungry for good plant-based meat solutions.”
Industry watchers believe the relative success so far of GoodDot has been based on two factors – its positioning and its products.
Umesh Madhavan, a consumer, foodservice and retail analyst for Rabobank, the Netherlands-based financial services group, points to what he sees as a point of difference in the way GoodDot has positioned its products. “What I really like about what GoodDot has tried to do is what I think a lot of the global brands have not done, which is GoodDot’s approach is very clearly catered to India, which is you target the mass consumer base,” Madhavan says. “If you look at what some of the global brands have done they’ve tried to skip [to] the more premium consumer segment and work their way down. GoodDot is looking at providing a product which is affordable to the mass consumer segment. That’s really a refreshing change in terms of how the industry’s been attempted.”
As ever, the key facet to any food product is taste and it is a critical factor in developing plant-based meat for the Indian market in more ways than one.
Like China, India has a history of its own type of meat-alternative products, with a number of domestic businesses offering soy chunks and soy nuggets for decades but without, it’s said, really building demand and a market.
Deshpande warns the existence of these products in India could present “baggage” for start-ups eyeing the market but says GoodDot has been able to surmount that obstacle. “The soy nuggets that have existed for a while are not that good,” Deshpande asserts. “They’re actually a by-product of the soybean oil industry and so it’s just something that, because it’s a side stream – they are cleaned up a little bit and packaged and sold – they’ve never been super successful. They don’t have that nice, fatty, mouthfeel that you get from meat. It doesn’t remind people of meat. GoodDot have sufficiently differentiated themselves from the stuff that already existed to call themselves a plant-based meat company.”
Entrepreneurs working on products, Deshpande advises, will have to work hard on their branding and advertising. “The marketing has to be clear in terms of ‘We’re not going to taste like your grandparents’ soy nuggets. This is the next generation. It’s juicy. It’s tasty,” he says. “You have to make sure that consumers understand that you are 2.0.”
There is a consensus that understanding the regional flavour variations and taste preferences of India is also vital.
“In India, the country is so large, so diverse you know and so complex. There are so many diverse dishes you get in the four zones of India – north, south, east, west – so the ethnicity of taste does matter here,” Sanjay Laud, a managing director in India for US agri-food giant ADM, says.
ADM has worked with the Deshmukhs on the development of Imagine Meats’ first products, which are set to make their debut at retail outlets in Mumbai at the end of this year or early next and are “typically local dishes including kebabs, biryani and curry”.
Laud adds: “It’s important to develop products that cater to local tastes. That means we focus on region-specific dishes; it’s just not possible to create a pan-Indian taste profile simply because so many complex blends of spices go into any single dish.”
Product developers will need to think about other characteristics. “Indian food is extremely flavourful,” Rabobank’s Madhavan explains. “We have to remember there is a need for these products to have the ability to absorb these spices and flavours, which I think is a slight problem with the old soy nuggets.”
While resolutely upbeat about the prospects for plant-based meat in India, GFI India’s Deshpande lists manufacturing as among the challenges facing entrepreneurs interested in launching plant-based meat in the country.
“The technology that’s used most broadly – the gold standard technology that gets you the next-generation, neat, basic ingredient – is extrusion and specifically high-moisture extrusion. We have limited capacity in India. We’re working with a number of businesses that want to be manufacturing partners to the entire industry. We’ll see multiple, specialised, contract manufacturers set up in the country over the next couple of years where they’ll be able to unlock a key bottleneck for local manufacturing,” Deshpande says.
“If you look across the spectrum of research and development, the talent pool, the fundamental infrastructure at lab pilot and manufacturing scale and then, you know, the catalytic capital that’s required from investors, all of these things do present things that we have to work on. They present challenges but we’re totally optimistic.”
Delhi-based Bveg Foods is a new company looking to be a co-manufacturer of plant-based meat. It is part of a group of businesses that also include an ice-cream cone supplier for customers such as Hindustan Unilever. Co-founder Prateek Ghai says Bveg wants to be a supplier to branded businesses inside and outside India. It is setting up a manufacturing facility scheduled to be up and running by next June.
“In terms of Bveg, it’s a new segment, with an aim to cater to the plant-based community and to raise more awareness,” Ghai says. “We are trying to make a difference in the society by not trying to just go directly B2C and taking our own product to the market but, in a sense, we are trying to create a centre of excellence for B2B segments, creating co-packaging, co-producing and collaborative working, taking a lot of DNA of what we have been doing in our other companies. My real aim is to ensure the shelf is full of different products by different vendors, so the visibility of this particular market will grow faster.”
Weighing up the potential for plant-based meat, Ghai suggests that, even though there are opportunities to be had in catering to India’s more affluent shoppers, there is an alternative strategy in developing products for the more mainstream consumer.
“Does [going premium] really justify the effort you’re going to put in? Will it be the kind of numbers you’re going to expect? It really depends on what you are trying to achieve,” Ghai says. “The masses are what you really need to focus upon. Yes, there is premium, you can sell it but where is that big chunk [of the population] that is left? It is difficult to work on but, if you do, the numbers are endless.”
However, for those start-ups aiming at the mainstream consumer, Ghai does offer further advice. “We are very much a price-sensitive country,” he reflects. “As soon as you would say a plant-based meat, people would start comparing it to conventional meat and expect the pricing should be below that. From an Indian perspective, they feel a meat product is for people who can really afford it and, if they’re going to go for something that’s not the actual thing, they would expect to pay a lesser amount.”
Among industry watchers and the early market participants, there is broad agreement that, as in other markets worldwide, health and environmental factors are fuelling interest in plant-based meat in India, especially in the wake of Covid-19.
At GFI India, Deshpande talks about the “health and sustainability halo” that plant-based meat has come to have among that “early-adopter cohort” the organisation has identified.
However, he concedes price is a key consideration, alongside taste and convenience. “The major question for any company entering the space is: Can you access a broader base of consumption that’s not just the upper echelon of consumers? Can we make this dream of 1 billion Indians, as a consumer base, actually true?” he says. “The focus has to be on taste, price, convenience. Products have to come through that taste the same or better, and cost the same or less, and are available everywhere and there’s awareness of these products. Otherwise, it’s not going to succeed. You cannot rely on a health or sustainability halo for someone who isn’t thinking in those terms.”
The onset of the pandemic has, Deshpande and ADM’s Laud say, delayed the launch of a number of plant-based meat products in India. At GoodDot, Sinha says the company dialled down its plans to open more foodservice outlets. But all three insist activity will pick up and all agree there is an opportunity to capture in the country.
“We were expecting multiple product launches in the market this year but, because of Covid, those have been pushed back a little bit,” Deshpande says. “There will be multiple product launches in 2021. We’re working with several entrepreneurs across the board, some of them are a little bit earlier stage than others but it’s a very exciting landscape. Even if we think that we can hit 10%, 15% of the total meat market in India, it’s still a very sizeable, multi-billion-dollar opportunity. We don’t think that this is a sprint. This is 100% going to be a marathon and it’s going to be worth it.”
There are notes of caution about the very extent of the prize, at least in international terms. Dr. Kandukuri at Sathguru Management Consultants believes the under-consumption of protein in India does present an opportunity for the fledgling market for plant-based meat. “The potential opportunity lies in the addressing the wide gap in protein consumption in the country and meeting the national protein demand based on recommended daily allowances,” he says, noting the recommendation is 55g a day for women and 60g for men – and actual consumption stands at 30g. “Meat substitutes can complement other protein sources in Indian diets in meeting this gap.”
However, he adds: “The plant-based meat trend will not be as strong as in the USA or Europe as non-vegetarian consumers in India, unlike western countries, are not completely dependent on meat.”