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-By Tanisha Saxena (cbedit@imaws.org)
As plant-based diets gain traction globally, their presence in India is becoming more prominent. Despite their growing popularity, one significant hurdle remains: the higher cost of plant-based foods compared to traditional animal-based products. This price disparity can be attributed to a complex interplay of factors, including production expenses, supply chain logistics, and market dynamics. Understanding these factors provides a clearer picture of why plant-based foods command a premium in India and what it means for the future of this burgeoning industry.
Taxation disparity
The disparity in taxation between vegan food and animal-based products under India’s Goods and Services Tax (GST) regime highlights a significant economic and policy issue. Sagar N Mehta, founder of Vegandukan in Bangalore, explain, “Vegan foods, including plant-based alternatives like tofu, soy milk, and vegan cheese, often face higher GST rates compared to many animal-based products. For instance, while essential animal-based products like milk and eggs are typically exempt from GST or taxed at lower rates, vegan counterparts may attract GST rates as high as 18%. This taxation policy inadvertently creates a financial disincentive for consumers choosing more sustainable and ethically-produced vegan options, potentially slowing the shift towards plant-based diets. Such a discrepancy not only affects consumer behavior but also undermines environmental and public health objectives, as plant-based diets are widely recognized for their lower carbon footprint and health benefits.”
Secondly, The plant-based food industry in India faces a stark contrast in support and subsidies compared to the animal husbandry sector. Mehta elaborate, “While the animal-based industry enjoys substantial government backing through initiatives like the National Livestock Mission (NLM) and Rashtriya Gokul Mission (RGM), the plant-based sector lacks similar financial incentives and subsidies. This disparity affects the availability of resources such as quality raw materials, research and development funding, and marketing support for plant-based products. As a result, the growth and modernization of the plant-based food industry are hindered, limiting its potential to contribute to sustainable agriculture and dietary diversity in India.”
Higher production cost
With the rising popularity of plant-based diets, understanding the cost implications of different protein sources becomes essential. While animal proteins like chicken, lamb, and beef are directly procured and processed, plant-based proteins undergo a more intricate journey. This journey from plant to plate involves extensive extraction and processing, making it inherently more expensive.
Shiv Müdaliar, Co-founder & CEO of Green Ecstasy Foods , accentuate, “When sourcing protein from natural animal sources like chicken, lamb, or beef, the process is relatively straightforward and cost-effective. These animals are brought to butcher shops, where the meat is processed and eventually reaches our kitchens for cooking. This direct procurement makes animal protein readily available and generally affordable. In contrast, obtaining protein from plant-based sources involves a more complex and costly process. Plant-based proteins cannot be consumed directly; they must be extracted and processed to create edible products. This extraction and production process typically involves sophisticated machinery and considerable labor, both of which drive up costs.”
The machinery required for processing plant-based proteins is often specialized and expensive, designed to isolate and concentrate the protein from the plant material. He further adds, “Additionally, the labor involved in this process is intensive, requiring skilled workers to operate the machinery and ensure quality control throughout production. These factors collectively contribute to the higher costs associated with plant-based proteins compared to their animal counterparts.”
Lack of Research and development
“One significant challenge faced by vegan food businesses lies in research and development (R&D), primarily due to several factors,” asserts Vaibhav Nagori, founding partner of GREENR cafe. “A major issue is the limited availability of specialized ingredients capable of replicating the taste and texture of traditional animal-based products. Developing plant-based alternatives that appeal broadly necessitates extensive experimentation and innovation, which can be both time-consuming and costly.”
Nagori further highlights, “Additionally, the vegan food industry is relatively young compared to its conventional counterparts, resulting in fewer established R&D frameworks and resources. Consequently, many vegan food businesses struggle to keep pace with evolving consumer preferences and nutritional standards, impeding their ability to introduce innovative products that deliver sensory experiences comparable to non-vegan equivalents.”
Furthermore, due to this deficiency in research and development, vegan food businesses often find themselves allocating substantial resources towards marketing and branding efforts. These expenses become necessary as they strive to differentiate their products in a competitive market, where achieving sensory experiences akin to non-vegan alternatives remains a significant challenge.
Need for Consumer awareness
According to a survey, 18% of the Indian population is vegan. Despite this significant number, the vegan market faces several challenges, with price being a primary concern. Daisy Pruthi, founder of ‘Loving Hut – A Vegan Paradise’ in Gurugram, emphasizes the crucial role of consumer awareness in overcoming these challenges. “It all starts with awareness and education,” she says.
Pruthi explain, “When discussing milk, it’s important to note that our vegan milk, made from nuts like almonds or cashews, is naturally more expensive. This cost is justified by the quality and sourcing of ingredients.” She adds, “I’ve been in this business for the past five and a half years, and back then, vegans were a rarity. I didn’t increase the prices of vegan menu items because I wanted to encourage people to turn vegan. In fact, I offered vegan food at prices comparable to, if not lower than, their non-vegan counterparts. Consumer awareness is crucial. As more people understand the benefits of plant-based diets, the demand for high-quality vegan products will grow, and naturally, the prices will balance out.”
Pruthi also believe that, Consumer awareness is crucial when it comes to vegan food in India due to the diverse dietary habits and cultural preferences prevalent in the country. With a significant portion of the population traditionally consuming animal products, educating consumers about the benefits and availability of vegan options can help in making informed dietary choices. “Lack of education about veganism often becomes a barrier as many people are unaware of the nutritional benefits, environmental impact, and ethical considerations associated with a plant-based diet. Without proper knowledge, misconceptions and resistance to veganism can persist, hindering its acceptance and growth in the Indian market. Therefore, increasing consumer awareness through educational campaigns and accessible information is essential to promote healthier, sustainable, and ethical food choices,” she concludes.
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