India: Alternative protein market overview
As demand and production of plant-based products continue to grow in India, new investments and initiatives emerge to foster cell-based meat alternatives
A handful of companies in India are tapping into the alternative protein space, a sector that is niche but growing. The positive outlook of this scene is validated by the increasing consumer interest towards a sustainable future and a healthy lifestyle. This shift is fuelled by a new wave of domestic and international brands, and backed by a steady influx of investments from government, philanthropists, and celebrities.
In India, domestic alternative protein companies have recorded double-digit growth over the past few years. However, many challenges remain, including supply chain security, high production costs, and the need for increased investments in various areas, particularly on the scale-up front. Educating consumers on the range of alternative proteins available in the market to increase acceptance of these products also remains a challenge.
Companies are currently concentrated in metropolitan cities like Mumbai, Pune, and Bangalore, and have a long way to go to realise the market potential.
An “egg-cellent” opportunity
Today, the Indian Council of Medical Research recommends individual consumption of 180 eggs a year, which is far from the current consumption per capita in India of around 70 eggs a year. Production output in the country is known to be at 84 billion eggs.
That’s why the market offers opportunities for companies that can deliver the nutritional benefits of eggs in alternative formats.
Liquid egg is a prime example and Evo Foods and Plantmade are front-runners in this space. These early-stage businesses are making the product without cholesterol, antibiotics, or animal cruelty.
India’s large flexitarian population, combined with the current consumption of eggs, is luring international brands into the market.
The San Francisco-based company Just, maker of the liquid egg alternative Just Egg, has sold an equivalent to 400 million eggs in the US and now it has set its sights on India.
Just says it wants to implement a commercial strategy to entering India similar to the commercialisation plan deployed in the US, partnering with food companies for manufacturing, sales, and distribution of its products. The company aims to begin production in India in 2021.
Investments in cell-based meat
Cell-based meat was once a mere distant pipe dream for entrepreneurs due to the inherent challenges of the production process.
However, the world’s first demonstration of a meat product created from stem cells was the result of a two-year project conducted in The Netherlands by researchers at the University of Maastricht in 2013. The lead scientists are now behind Dutch start-up Mosa Meat.
The project produced one pound (roughly 450 grams) of cell-cultured meat, which was priced at $1.2 million. The combined cost to produce a burger for testing was nearly $325,000.
Production costs of cell-based meat are still high, but technology is playing a part in bringing the numbers down. The sector is gaining traction among start-ups, and the most recent attempt by Just to enter the cell-based meat space is a testament to the trend.
Just’s cell-based prototype of a chicken nugget cost about $50 to make. The production costs, however, are expected to drop even further as the technology advances.
To achieve cost reduction through scalability, the Institute of Chemical Technology of Mumbai and the Good Food Institute (GFI) in India announced in February last year a plan for a centre of excellence in cellular agriculture. The project is designed as an open-access research facility, thus encourage private ventures to enter the sector.
The plan is supported by a government grant of 4.5 crores rupees ($640,000) delivered through the Department of Biotechnology to two facilities in India: the Centre for Cellular and Molecular Biology and the National Research Centre on Meat.
The grant is deemed to be one of the largest in the world to foster cell-based food.
This government backing supports an 18-month project on cell-based mutton. Scientists are developing technology to achieve a scale-up model for cell-based meat production.
The project also seeks to identify hubs in India at the forefront of cell-based meat and the expertise required for developing and scaling up cultured meat products, such as access to biopharmaceuticals and mechanical engineering expertise, for example.
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GFI India admitted that several foodtech partnerships are necessary to realise the full potential of the project.
Celebrities and influencers
Companies in the plant-based food space have received significant support and financial backing from international celebrities.
Hollywood star Leonardo DeCaprio and tech tycoon Bill Gates invested in Beyond Meat, and tennis and multiple Grand Slam winner Serena Williams and pop singer Katy Perry invested in Impossible Meat. They are among the many television personalities and social media influencers that advocate the consumption of alternative protein and invest in this space.
India’s own celebrity ecosystem is also tapping into the alternative protein arena, and among the newcomers is Imagine Meats. The venture was launched in June led by Bollywood actors Genelia and Riteish Deshmukh – recently converted vegetarians.
Imagine Meats partnered with GFI India and global ingredients manufacturer Archer Daniels Midland (ADM) to launch a range of kebabs, biryani, and curries through various channels in India.
The company is accelerating product development to hit the shelves in India by the end of this year.
Domestic companies in the alternative protein scene are cashing in on the increasing interest from consumers, and are reporting healthy sales numbers since their launch to market.
Udaipur-based vegan company Goodmylk, for example, has reported a 25% increase in revenue growth month-on-month. The start-up recently raised $400,000 in a second seed funding round.
Goodmylk hopes to catch headwinds in the domestic plant-based dairy space by expanding distribution within the local area and securing new partnerships with supermarkets.
Vezlay Food, a Delhi-based company that produces meat from soy, reported annual revenue of 2 crore rupees ($270,000) by selling products across India and the US.
Plant-based meat company GoodDot claims to have a 100% positive response from its customers and is now gearing up for launching products in Canada and Dubai.
GoodDot has set its sights on some of the world’s largest market and is in talks to expand into Africa, Australia and Europe.
A study conducted by researchers at Pennsylvania State University published in May concluded that the Indian consumer is willing to pay a premium for plant-based and cell-based meats. Companies in this space are expecting revenues that could allow them to address, or at least minimise, the current manufacturing challenges.
The increasing venture capital and government support for the development of alternative protein, combined with the ongoing Covid-19 crisis that has exposed the health, safety and supply chain vulnerabilities of the animal meat industry, are some of the driving forces paving the way for a positive outlook in the alternative protein arena for companies and consumers in India.