Whey me up!
Protein consumption in our protein deficient nation is growing across all demographics as we climb up the GDP curve. There are people in the next billion segment who have moved up the food chain and can afford to include different sources of proteins such as eggs, lentils and the occasional meat in their diets. There are others who were in a comfortable tax bracket and woke up to the significance of protein only in the last few years — a change made possible by the health conscious moment of high protein and low carb diet regimes.
Maybe this will come as a surprise to many of you, but 70% of India’s population today consumes meat. While it is disproportionately in the form of chicken; fish, mutton, beef, pork, other meats also feature. The amount of protein in the Indian diet is increasing at an astonishing rate of ~ 20% per annum and this growth is secular across animals.
The impact of factory farming, meat consumption, and poor feed conversion ratio has influenced the rest of the world to eat differently as long as they get the taste. Startups have been burgeoning across the globe to tackle this problem in the form of alternative proteins — cell based, made by fermentation, plant derived and insect based. Technology has come a ways where advances in processing and biotech allow for very little compromises on taste. Ambitious global companies such as Impossible Foods and Beyond Meat have ventured into selling plant based meat to customers directly at upscale restaurants and even McDonald’s, Carl’s Jr and Subway. This is an encouraging development for a nascent industry if we care about changing our meat centric food system. The Institute of the Future notes that lab grown meat will be a common sight at the butchers in around ten years time.
In India, as consumers we are still a good decade away from contemplating sustainability. Unfortunately, a majority of our population still grapples with Abraham Maslow’s most basic need — food. The value propositions for alternate proteins in India are health considerations for those who are vegetarians and/or lactose intolerant, lifestyle benefits ascribed to a low carb/high protein diet, dietary restrictions driving dairy and egg and meat substitutions, and flexitarians consuming meat alternatives to adjust in home meat eating.
That said, we are seeing innovation in the space with a handful of startups branding plant based protein driven consumer foods. There are others that are experimenting on the production aspect to capture the same palate using fermentation and cell based proteins. There is notable activity on the B2B ingredient side as well where players are scaling insect and algae based feed, and extracting protein from traditional plant proteins.
An encouraging trend is the alacrity with which India adopted protein supplements in the form of bars and powder. Primarily inspired by flourishing gym memberships, a proliferation of fitness apps, six pack abs shaming us on screens and an overall palpable health consciousness. Still a newish segment for us compared to Europe and US, our total market size (for protein supplements) stands at almost half of the European market of around $2bn. Investor interest in Indian alternative proteins and dairy startups are attracting investors as consumer demand for health/lifestyle brands grow rapidly.
At Ankur, as is ingrained in our thesis and culture to foster innovation at (most) costs — we took a bet on a company that has developed a synthetic biotechnology platform to convert waste gas into alternate proteins. String Bio aims to use smart science for a clean world with its amino acid outputs for aqua feed, agri biostimulants, human protein and personal care; and create a circular economy.
We believe the alternative protein market will form a significant part of the market in the future and India has two clear opportunities to be leveraged. Given our inherent supply chain advantages in sitting upon a large biodiversity of alternative proteins (mainly plant and insect based), we have the ability to create a smart alternative protein industry supplying ingredients to the world and us. In addition as Indian incomes rise and we become a more wellness conscious nation, we expect to see more consumer brands break through the taste and price barriers for the mass market. We believe that advanced processing can produce better taste and textures for consumers and the talent to do this is developing.
From an investor lens, we’re taking a bet on a market size expected to touch billions in the next 5 years. This also meets our manifesto of improving the lives of the next billion in a unique, meaningful way. Alternative proteins is the stuff great muscles/stories are made of.
