Background:
The introduction of plant-based vegan products in India was initially met with enthusiasm, with projections for the market to reach $500M by 2024. However, as per a recent article, the market today stands at $160M, and ITC Ltd. and Tata Consumer Products Ltd. have announced plans to exit the Indian PBV market.
Reasons for the Situation Today:
- Price: In a price-sensitive market, PBV products cost ~5x of soya and 2-3x of frozen chicken nuggets, appealing only to a niche audience.
- Positioning as a Meat Alternative: Existing PBV products have 50% higher calorie content and 25% lower protein content compared to meat, damaging their perception as a meat alternative. The lack of effective marketing further hindered their acceptance.
- Undesirable Taste: Customers often reported an undesirable aftertaste and bitterness in PBV products.
Future of PBV:
The PBV industry in India is still in its nascent stage. Unlike the Western world, where development is focused mainly on creating meat alternatives, the Indian market offers the opportunity to reintroduce PBV with a differentiated price-to-value proposition.
With a dominant vegetarian population, favorable demographics, and increasing consumer awareness of nutritional content, India continues to offer a significant opportunity for PBV products tailored to the Indian audience. Additionally, the broader bandwidth of diverse ingredients opens up avenues to evolve products around taste, positioning, and marketing to better align with the market demands. Some manufacturers remain optimistic and have already made progress on offering concrete value propositions.
We believe this segment is too attractive to ignore based on initial perceptions of the product and on its positioning. The inherent nutritional benefits offered by PBV products will allow manufacturers to remain engaged in this segment and serve the Indian vegetarian population with a unique yet affordable experience.
