In today’s Finshots, we explore whether India’s largest FMCG players are riding the next megatrend

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The Story

There’s one particular thing that really long-term investors keep an eye out for — the next megatrend. And if you do a quick search for the phrase “megatrends in investing”, you’ll see that almost every asset management company has a primer explaining this concept. Here’s how BlackRock explains it:

Megatrends — powerful, transformative forces that could change the global economy, business and society ... Think electricity, 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 instead of simply a stock.

But it’s not just investors who try to get in on the ground floor. Companies are constantly trying to see if they can diversify their business and capture megatrends too. And one of the biggest megatrends that could be shaping the world today is the dietary shift toward plant-based protein. You know, the kind that does not have actual animal products involved. So instead of cow’s milk, you have soy or almond milk. Instead of chicken nuggets, you get a plant-based version that’s concocted out of things like 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 possibly be a megatrend, you ask? After all, only around 3% of the world actually identified as following a plant-based diet.

Well, the thing about megatrends is that you do have to be sufficiently early to make the most of it. And this shift toward plant-based protein is definitely in its very early stages. Let’s look at something called Veganuary. It’s a non-profit initiative that kicks off every year in January. People from around the world sign up to live off a plant-based diet for a month. And in the past 3 years, this initiative has seen a 200% increase in sign-ups.

Sure, you could argue that it’s a temporary shift in behaviour and doesn’t indicate a long-term change.

But, people are becoming more conscious of the food they consume. They know that meat-based diets aren’t always the most healthy options. And they’re also concerned about the environmental impact of cattle rearing. Even if they don’t switch to a completely meat-free diet, they may still want to find a substitute for at least a couple of days in the week. Without giving up on the flavour profile.

And it’s not a trend that India is ignoring either. According to research by the Good Food Institute India, 63% of Indian non-vegetarians are likely to be repeat customers of such plant-based products. Okay, there are a couple of subclauses to that — the research is specifically talking about those living in the big cities with a fairly high disposable income. But even then, the numbers are promising.

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

At least in Bengaluru, I find a whole variety of results spanning multiple pages — chocolates, ice creams, nuggets, sauces, and even beauty care products. And this wasn’t the case just a couple of years ago. You would’ve had to search every nook and corner inside the biggest supermarkets to find these products. But now plenty of D2C brands have already improved accessibility a great deal — there’s One Good — an affordable plant-based food manufacturer, floated by a mother and 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 plenty of others. And these folks are serious. Shaka Harry for instance teamed up with one of India’s most popular chefs Manu Chandra to create their products.

And it seems all this movement hasn’t gone unnoticed. It’s finally attracted the attention of Indian FMCG companies — ITC and Tata Consumer Products.

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

So how’s the response been so far, you ask?

Let’s look at ITC’s IncrEdible brand first. If you go to their online store, you’ll see that they’re selling plant-based burger patties and plant-based nuggets — both products intended to taste like “actual meat.” And while it’s early days to gauge progress, reviews have been mixed. On the product page, you’ll see people complaining about the taste— arguing that it doesn’t exactly taste like chicken. But perhaps the more concerning bit is that they’re complaining about the price also. While you could buy 520 gms of actual chicken grill patty for ₹375 on ITC’s website you’d have to shell out ₹630 for 330 gms of the vegan burger patty. In other words, the plant-based alternative is nearly 2.7 times more expensive when compared to the meat-based product.

Does this mean that these products are bound to fail? Not necessarily. Look at Impossible Foods — a leader in the space. Between 2019 and 2020, their cost of production fell from $4.50/pound to $3.50/pound. And today, some of their products sell for roughly the same price as their meat-based alternatives

Or you could look at Dominos and their “Unthinkable Pizza” (though it still contains cheese, an animal product). The product is priced rather competitively and it is rated pretty decently, among vegetarians and meat-eaters alike. Also, India is just picking up on this trend. In a few years from now (FY26), the plant-based meat industry in India is expected to be worth $45 million. And you can bet that there will be more FMCG companies vying to take a small piece of the pie.

The only question is — Will the momentum sustain? Or will it just be another fad?  You tell us.

Until then…

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