ITC and Tata want a meatless bite of meat

In today’s Finshots, we take a look at whether India’s biggest FMCG players will ride the next megatrend

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The story

There is one thing in particular that very long-term investors are watching: the next megatrend. And if you do a quick search on the phrase “megatrends in investing,” you’ll see that almost every asset management company has an introduction explaining this concept. Here’s how BlackRock explains it:

Megatrends — powerful, transformative forces that could change the global economy, business, and society… Think electricity, the automobile, the Internet.

The bottom line is that if you spot the next megatrend, you could put your money to work today and reap the rewards over the next decade. It’s the classic buy-and-hold approach that focuses on a theme rather than just a stock.

But it’s not just investors trying to get in on the ground floor. Companies are constantly trying to see if they can diversify their business and also catch megatrends. And one of the biggest megatrends that could shape the world today is the dietary shift to plant-based protein. You know, the kind that doesn’t involve animal products. So instead of cow’s milk, you have soy or almond milk. Instead of chicken nuggets, you get a plant-based version concocted from soy and pea protein. You get the drift. And some of these products taste eerily similar to the real deal.

But wait… how could this be a megatrend, you ask? After all, only about 3% of the world’s population identify as following a plant-based diet.

Well, the problem with megatrends is that you have to be early enough to get the most out of them. And this shift towards vegetable proteins is definitely only in its infancy. Let’s look at something called Veganuary. It is a non-profit initiative that starts every year in January. People from all over the world are signing up to live on a plant-based diet for a month. And over the past 3 years, this initiative has seen a 200% increase in registrations.

Of course, you could say that this is a temporary behavior change and does not indicate a long-term change.

But people are increasingly aware of the food they eat. They know that meat-based diets aren’t always the healthiest options. And they are also concerned about the environmental impact of cattle farming. Even if they don’t switch to a completely meatless diet, they may still want to find a substitute for at least two days a week. Without giving up the flavor profile.

Nor is it a trend that India ignores. According to a study by the Good Food Institute India, 63% of Indian non-vegetarians are likely to be regular customers of these herbal products. Okay, there are a few sub-paragraphs to that – the research specifically talks about those who live in big cities with a fairly high disposable income. But even then, the numbers are promising.

If you’re in a big city, open an app like BigBasket or Swiggy Instamart, and type in “vegan” or “plant-based.” Come on… what do you see?

At least in Bengaluru, I find a whole variety of results on multiple pages – chocolates, ice cream, sprinkles, sauces and even beauty products. And that was not the case a few years ago. You would have had to search every nook and cranny of the larger supermarkets to find these products. But now many D2C brands have already improved accessibility a lot – there’s One Good – an affordable plant-based food maker, started by a mother-son duo, Blue Tribe – backed by Virat Kohli and Anushka Sharma , Imagine Meats – founded by movie stars Riteish Deshmukh and Genelia D’Souza, Shaka Harry and many more. And these people are serious. Shaka Harry, for example, teamed up with one of India’s most popular chefs, Manu Chandra, to create their products.

And it seems that all this movement has not gone unnoticed. It eventually caught the attention of Indian companies FMCG – ITC and Tata Consumer Products.

Earlier this year, ITC launched a few plant-based protein products under its ITC Master Chef IncrEdible brand. And last week, Tata Consumer Products announced its own brand of plant-based protein called Simply Better.

So how has the response been so far, you ask?

First, let’s look at ITC’s IncrEdible brand. If you go to their online store, you’ll see that they sell plant-based burger patties and plant-based nuggets – two products meant to taste like “real meat”. And while it’s still too early to assess progress, opinions are mixed. On the product page, you’ll see people complaining about the taste, arguing that it doesn’t taste exactly like chicken. But perhaps most worrying is that they also complain about the price. While you could buy 520g chicken patty for ₹375 on ITC website, you would have to shell out ₹630 for 330g vegan burger patty. In other words, the plant-based alternative is nearly 2.7 times more expensive than the meat-based product.

Does that mean these products are doomed? Not necessarily. Look at Impossible Foods – a leader in the field. Between 2019 and 2020, their cost of production went from $4.50/book to $3.50/book. And today, some of their products sell for around the same price as their meat alternatives.

Or you can watch Dominos and their “Unthinkable Pizza” (although it still contains cheese, an animal product). The price of the product is quite competitive and its rating is quite decent for both vegetarians and meat eaters. Moreover, India is only picking up on this trend. In a few years (FY26), the vegetable meat industry in India is expected to be worth $45 million. And you can bet there will be more FMCG companies vying for a small slice of the pie.

The only question is: will the momentum continue? Or will it just be another fad? You told us.

Until there…

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About Thomas Hereford

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