How covid shaped India’s smart protein pie

The menu didn’t change; only the meat in its non-vegetarian dishes—chicken, lamb and pork—was switched out for soy-based alternatives: what we now know as mock meat. The change didn’t fare well.

Meat eaters weren’t happy; it was either mushy, rubbery or tasted like cardboard. Vegetarians didn’t care for it either, and Chung Wah ended up falling between two stools. The original menu was back in no time and regulars heaved a sigh of relief into their bowls of egg drop chicken manchow soup.

Two decades on, the scenario seems vastly different. Mock meat or plant-based meat is still some distance away from showing up regularly on restaurant menus, but there is a lot of buzz online. Social media platforms are flooded with both companies promoting plant-based meat products and people showing off dishes they’ve created with them. The pandemic also seems to have done its bit: bored with the same offerings, people were ready to explore and experiment.

The trend doesn’t feel like a flash in the pan and is rooted firmly in economics. Irish food company Kerry recently released a report pegging India’s alternative meat market at $171 million and projected it to grow at 8.5% compounded annual growth rate (CAGR) by 2025. Others are more bullish. “Our preliminary research indicates that we are looking at a multi-billion-dollar industry this decade and the real mega-market size growth will happen in the next decade," said Varun Deshpande, managing director, Good Food Institute India. The institute, set up in 2017, functions as a thought leader and convening body in the alternative protein sector making connections between business, science and policy.

Clearly, the numbers are making the big guns sit up and take notice. Over the last few years, the space has been the stomping ground of about two dozen startups; more than a fourth of them born during the pandemic. But when FMCG giant ITC Ltd announced it is entering the segment—in the first of week of January this year—with two offerings (burger patties and nuggets, two of the largest selling products), the buzz was off the charts.

There’s a reason why big brands want a piece of the pie. Or rather, several hundred million reasons. About 30% of India’s 1.38 billion population identifies itself as vegetarian. However, the remaining 70% has a predominantly vegetarian diet, often labeled flexitarian. Which probably explains why the country has one of the lowest per capita meat consumption–less than 5 kg. Compare this with over 100 kg in the US, 80-90 kg in western Europe and 60 kg in China. However, issues of climate change, sustainability, animal cruelty and religious reasons (shunning meat on certain days/months) are factors that seem to influence some flexitarians to further reduce the meat they eat. Cheekily, they are called ‘reducetarians’. But any which way you look at it, these are mouth-watering numbers driving the plant-based food business.

“With nearly 72% of Indians being non-vegetarians, the size of the meat market is being estimated today at $45 billion. Given the growing consumer franchise towards wellness and sustainability, India has the potential to emerge as a large market for plant-based meat alternatives," said Ashu Phakey, vice president and business head at ITC’s Frozen Foods Division. “ITC’s foray in this segment also underlines the company’s commitment to sustainable consumption and production practices by providing meaningful product options to consumers which not only ‘taste better’ but also ‘do better.’"

It’s a hot brew

ITC’s entry is clearly being seen as validation of the segment’s growing importance. “It’s an incredibly exciting time for the plant-based sector in India and it’s safe to say that 2021 was plant-based meats’ breakout year," said Deshpande.

“We’re seeing a lot of our work over the last few years with plant-based startups and bigger corporations alike coming to fruition as they begin to enter the market. With products launching in retail, restaurants, and hugely popular e-commerce platforms like Amazon Fresh and Swiggy’s Instamart, it’s now easier than ever for consumers to access foods that provide the sensory and cultural resonance that conventional meats offer, without breaking the planet," he said.

This is what Gooddot, a plant-based meat manufacturing startup, offers. Its co-founder and CEO Abhishek Sinha grew up eating meat but chucked it up, racked with guilt over his love for animals. He became interested in meat alternatives in college, followed it avidly and set up his company in 2017 with just one product, a meat-substitute that mimicked mutton.

“Initially it was very tough since the category itself was new. People refused to believe that it was possible to create something that felt and tasted like mutton that was 100% vegetarian. Now there are a lot of inward enquiries. The market is maturing and there is strong growth, which is reflected in sales," he said. Gooddot now has 11 products designed as replacements for mutton, chicken and eggs.

Gooddot has had a remarkable run and is indicative of how the market will behave. “We have grown 100% year-on-year since we began in 2017. This year looks even more promising and we expect 200-250% growth. In the next 18 months, we hope to have at least 100 small format QSR outlets (called GoodDO, named after a goat called Guddu that they rescued). Overall, there is going to be a significant uptick in the next two-three years and at a minimum, the market will reach 15-20 times of what it is right now in the next three years," Sinha estimated.

Bengaluru-based Vegolution launched Hello Tempayy early last year, a soybean-based ready-to-cook food that is vastly different from either tofu or soya chunks. Spelt Tempeh or Tempe, it is made by fermenting soybeans.

The company began with a production of six tons a month and is on track to double it by March. “Surprisingly, the products have faced much less skepticism in tier II and III cities than in the metros. Among the top 10 stores selling our product, two are in Mysuru," said Vegolution founder and chief executive officer Siddharth Ramasubramanian.

But of all the players, ITC Limited, which will have both its products on the shelves soon, is being watched with interest. With its heft up and down the chain, it will be the first company to have its products across the country and on e-commerce platforms, and is expected to roll out more Indianized products in the next few months. Its products in the category are currently chickpea-based and it is looking to increase this range to include soya and legumes even as it explores the export market.

The rival is paneer

Though the products are plant-based, the industry is heavily focused on meat eaters who want to reduce or eliminate meat from their diets, which follows the global trend.

KFC’s recent announcement that its plant-based offerings will be fried in the same oil underwhelmed vegetarians but the company bluntly stated it was targeting customers “who want to eat a little less animal-based protein, but haven’t become vegan or vegetarian".

Similarly, ITC’s plant protein products are mostly targeted at non-vegetarians who are looking at animal protein replacement, said Phakey.

“Plant-based protein is key to the future, and animal protein is clearly unsustainable. Since Indians are primarily naturally vegetarian, plant-based protein has to first compete with paneer and lentils. So, the path to plant-based protein consumption has to be via meat eaters," said Krish Ashok, author of Masala Lab: The Science of Indian Cooking.

But plant-based meat is one, albeit significant, chunk of the overall plant-based protein market. Bengaluru-based Vegolution is attempting to focus on vegetarians and vegans rather than meat eaters.

“Our surveys showed that of the 70% who are categorized as non-vegetarian, only 30% are avid non-vegetarians. Of the rest, 15% are special occasion non-vegetarian and 25% are casual non vegetarians. If you take households that earn over ₹1 lakh a month, there are over 100 million vegetarians who are seeking more protein choices in their day-to-day meal. Our target is these people," said Vegolution’s Ramasubramanian.

“In the West, where people consume 75-100 kg meat per capita, lack of protein is not an issue. But in India, a majority of the protein is already coming from plant sources, but the problem is it is just not enough. Our product fills that gap."

For him, the opportunity is not about replacing meat but as a tasty and healthy replacement to existing protein sources for vegetarians, apart from lentils. “Paneer is an $8-9 billion industry in India, followed by soya chunks at $200-300 million and tofu a distant third. We want vegetarians to discover this source and add it to their plate. Of course, we are also looking at people who want to consume less meat," he said.

Ramasubramanian is also emphatic about how the product is perceived. “It is a plant-based protein, not a meat replacement and we don’t want it to be referential to something they are not eating at all, he said.

That’s a fact Abhishek Sinha of Gooddot also agrees with. “The feedback we got from vegetarians for our first product, a mutton replacement, was that it was very meaty. So, we developed a softer product and called it Proteiz, without the meat reference and it was accepted very well," he said.

But having said that, Sinha added that vegetarians who have tried his products have come to like it. “There is a lot of mental blockages to try something that resembles meat. But once they overcome the hesitation and try it, they do repeat it," he said, adding that it took his co-founder Deepak Parihar, a die-hard vegetarian, three months to even taste the product the company had launched.

The climate imperative

The last decade has seen an accelerated growth in the plant-based protein segment across the globe with increased evidence suggesting meat-heavy diets are unsustainable for the planet.

Over the last five years there has been a steadily growing consciousness about climate change. There is no country that has not seen firsthand the effects of the climate change. This reality seems to have sunk in especially among the Indian middle class and the elite, who have the purchasing power. “Even if a tiny fraction of 1.38 billion (India’s population) wants to buy and eat such products, you are left with a huge potential market," said Krish Ashok.

“The pandemic nudged people to discover new things on social media platforms and it increased the number of people willing to experiment. Some may not like it but more and more people will try to integrate it into their diet. Even if it is a couple of times a week, that’s a big change," he added.

There is also a sense of urgency, of searching for solutions to transcend the urban trend and expand it into a mass market, likely triggering growth. “If we want to feed 10 billion people by 2050, one-sixth of whom will be in India, we need to build a protein supply that is sustainable, secure, and just—for everyone," said Deshpande of the Good Food Institute.

“To transcend the early adopter market and supply nutritious, affordable protein to these hundreds of millions, we need to come together with the support of industry, academia, and government."