India's plant-based protein market is heating up—But can it overcome these challenges?

Time of India

2 days ago

The alternative protein sector in India must bridge the price gap with the traditional meat and dairy industry, while also addressing infrastructure gaps. This approach is crucial to attract budget-conscious consumers and build a sustainable market, say industry stakeholders and experts.
This requires investing in efficient local raw material processing, robust supply chains, and scalable production to minimise disruptions and enhance competitiveness. With significant growth potential and low penetration, especially in urban areas, companies must adapt quickly to stay competitive and add stakeholders and experts.
Scaling production is key
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Experts and stakeholders say the alternative protein sector needs large-scale plant-based protein production facilities, requiring substantial investment, to grow and remain competitive in both Indian and global markets. They agree that scaling production in the alternative protein sector requires significant investment.
'The challenges in India's cold storage infrastructure, like storage capacity, uneven distribution, high initial capex and energy consumption, pose scalability challenges to the smart protein value chain,' says Rajeev Nayar, Partner at KPMG in India.
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India's alternative protein market needs government support through regulations, financial incentives, and public-private partnerships to scale up, according to experts. To optimise costs, the industry can adopt closed processing, simplify equipment like bioreactors, and reduce media costs through value engineering, they say.
There are over 100 start-ups innovating across plant-based, fermentation-derived, and cultivated proteins, spread across 23 Indian cities. India's smart protein market, currently valued at Rs 350 crore (nearly $42 million), is expected to reach $4.2 billion by 2030, according to a report by Deloitte &
GFI
India.
Sneha Singh, MD of non-profit think tank The Good Food Institute (GFI), says that young start-ups in the alternative protein sector struggle to raise capital, underscoring the need for large food processing companies to get involved and support the industry's growth.
Similarly, Nayar says that boosting productivity in both upstream processes (media optimisation, cell cultivation, and harvesting) and downstream processes (cutting, grinding, and packaging) can help lower costs.
Raw material procurement: A challenge
India's
plant-based meat
industry faces hurdles due to limited domestic cultivation of crops like peas, soy, and chickpeas, leading to heavy reliance on imported ingredients, according to experts.
Smitha Devigere, Founder and CEO of Devigere Biosolutions, notes that despite India being a top pulse producer, it lacks innovation and large-scale production of value-added products like protein extraction. Consequently, the country imports around 90% of its alternative protein, mainly from China, Europe, and Western nations. 'Plant proteins are costly due to high import duties, transportation costs, and inherent taste and texture issues, such as a beany flavour and texture. This is ironic, given that India exports pulses as commodities but imports high-value protein extracts,' says Devigere.
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India's plant-based meat industry faces hurdles due to limited domestic cultivation of crops like peas, soy, and chickpeas, leading to heavy reliance on imported ingredients, according to experts.
'Plant proteins require processing to match the texture and taste of animal-based proteins. To succeed, India needs innovation in two key areas: efficient protein extraction and developing animal-based alternatives using clean, sustainable, and cost-effective technologies. Industry partnerships with innovators are crucial to drive large-scale growth,' adds Devigere.
High costs
Smart protein products in India struggle with high costs compared to traditional meat and dairy, making it challenging in a price-sensitive market, says Singh.
'With reference to cultured meat, one of the biggest challenges is ramping up the production to an industrial scale at a cost comparable to the actual meat. One of the hurdles is to significantly bring down the cost of media. However, enough work is currently on the way to mitigate the price of media,' says Navneet Singh Deora, CTO, BlueTribe.
'Global companies are employing a range of approaches to minimise costs, including blending small amounts of cultivated meat or fat with plant-based ingredients, focusing on producing basic cell mass (undifferentiated or partially differentiated cells) rather than fully structured tissue, producing media components such as growth factors in-house, developing novel bioreactors, and exploring continuous or semi-continuous production processes. All these approaches need significant participation from government organisations and should be part of the strategic policy,' says Deora.
Flavor plays a crucial role
Flavour is also a key factor limiting the acceptability and marketability of plant-based meat alternatives. Plant proteins often have undesirable flavours, such as beany notes, bitterness, and astringency, which can hinder consumer appeal, experts say.
Deora suggests a unified regulatory framework and public tastings can promote cultivated meat adoption. Countries like Singapore and the Netherlands have successfully implemented pre-approval tastings by gathering consumer feedback and building familiarity, which can inform regulatory clarity, he says.
'Currently the industry does adapt to flavour maskers or taste modulators which are derived via bio-fermentation. Alternatively, working with high-purity protein and using appropriate processing steps could help mitigate the rigt flavor in the final product,' adds Deora.
Global ecosystem
According to Nayar, plant-based meat alternatives in Western markets initially faced taste and pricing challenges. Successful market entry strategies included partnerships with restaurants and retailers, such as collaborations with quick-service restaurants in the US that supply burger patties.
The US has been a leader in the technological development of alternative proteins such as plant-based meat (PBM) and cell-based meat (CBM) with growing market participation.
'The development of contemporary PBM products in the US has been driven by a combination of concerns about animal welfare, the environment, and human health. The evolution of PBM products based on soy, wheat, pea isolates, and lupin beans has been facilitated by more efficient raw materials, logistics, and retail, which has enabled scalability of processes and the development of more complex value chains,' says Deora.
In 2021, US retail sales of plant-based meat (PBM) reached $1.4 billion, with a 74% growth rate over three years, signalling mainstream adoption, says Deora. However, despite this growth, the PBM industry's market share remains relatively small compared to the global animal protein market, adds Deora.
'India can be a global hub'
Despite challenges like limited consumer awareness and acceptance, experts believe India's alternative protein start-ups have immense potential, and the country is well-positioned to become a global hub for smart protein innovation, driven by its growing economy, high-protein crop production, and cost advantages.
The country can establish protein isolate production units, reduce imports, and potentially export to other countries, driven by lower manufacturing costs, affordable labour, and government incentives, they say.
'High cost can be tackled by using conventional sources of proteins from the food by-product. For example, effective inputs in terms of using cheaper food grade raw materials like by-products from the oil industry (Defatted soy flour/ Defatted Peanut flour) with the protein as high as 50% can further optimise the cost along with the use of functional ingredients and adequate processing aids,' says Deora.
The experts say achieving price parity with traditional meat is crucial, and emerging alternative protein sources like fungi, potato by-products, seaweed, algae, and CO2-based protein production hold promise for future growth.
'To accelerate private financing towards smart proteins, particularly cultivated meat technologies, streamlining the process for international investors and introducing more flexibility in cross-border financing are crucial steps towards attracting substantial foreign investments. Infrastructure remains a significant bottleneck, with high costs associated with setting up specialised facilities, such as fermenters for cultivated meat,' says Singh.
The experts suggest targeted government grants and incentives for private investors in alternative protein infrastructure can significantly reduce capital costs. Utilising shared facilities and existing infrastructure can also help startups optimise resources and scale up efficiently. Strategies like leveraging grants, angel investors, and marketing partnerships can provide the necessary capital and market exposure for growth, they say.
'India's ingredient manufacturers working with indigenous crops have the opportunity to plug into the global value chain and offer diversified inputs for plant-based foods,' says Singh.