ITC, Tata Consumer Pull The Plug On Vegan Meat Offerings As Trend Fades

ITC Ltd. and Tata Consumer Products Ltd. have decided to exit the plant-based meat market as the hype surrounding the category begins to wane. The packaged consumer goods makers find it economically unviable to operate in this niche category because it has not yielded enough profits."We launched plant-based meat because we saw the trend coming across the globe, but the category has not taken off," Sunil D'Souza, managing director and chief executive officer, Tata Consumer Products, told NDTV Profit in an exclusive interview. Unsure of future demand, Tata Consumer has decided to pivot away from the fake meat segment and instead focus on other high-margin categories, such as its millet-based portfolio, he said.ITC Ltd., on the other hand, has also stopped selling its plant-based meat products. Consumers can no longer find their vegan meat items in retail stores, e-commerce platforms like BigBasket, or ITC's own online store. Though some variants are still being offered for institutional sales."The [plant-based meat] segment is still very nascent and evolving in India," Ashu Phakey, business head of frozen food at ITC Ltd., told NDTV Profit. "We continue to closely monitor and evaluate trends in this segment."Sales of plant-based meat products, which mimic the taste of chicken, spiked in the early months of the Covid-19 pandemic. Plenty of startups, including Blue Tribe, Shaka Harry, and Imagine Meats, carved out a foothold as plant-based diets gained popularity and acceptance in the world's largest vegetarian nation, especially among consumers who are young and living in the big cities with a fairly high disposable income.Celebrities have also begun investing in plant-based food companies, such as Blue Tribe, backed by Indian cricketer Virat Kohli and actor Anushka Sharma, and Shaka Harry, backed by MS Dhoni. Bollywood actors Riteish and Genelia Deshmukh are promoting Imagine Meats..McDonald's India Braces For Sales Slump In FY25 As Backlash Lingers.The megatrend soon caught the attention of the two fast-moving consumer goods giants—ITC and Tata Consumer—who entered the fray in 2022. While ITC launched meat-free burger patties and nuggets under its Master Chef Incredible brand, Tata Consumer began selling vegan variants of seekh kebabs and spicy fingers under a new brand, "Tata Simply Better".The entry of ITC and Tata into the market sparked optimism among analysts, who saw significant potential. A September 2021 report by Nirmal Bang projected the plant-based meat market to reach $500 million by 2024. Despite the initial buzz, however, the growth of the novel category has not lived up to expectations. Statista projects the current market size at $160 million to reach $260 million by 2027.While some consumers are turned off by the underwhelming taste of faux meat, the more concerning bit is the price. For example, a 520-gram pack of ITC's actual chicken grill patty costs Rs 375, while its 330-gram vegan burger patty was priced at Rs 630. Simply put, the plant-based option is nearly three times more expensive than its animal equivalent.A section of consumers is also skeptical about plant-based meat being a healthier alternative compared to traditional protein sources like dairy."There are so many delicious and nutritious protein options to choose from... why would I need processed substitutes?" rues 29-year-old Maya, who turned vegan five years ago. "Even for my parents, who follow a vegetarian diet, the concept of plant-based meat is not at all appealing."The lackluster response to plant-based meat category in India prompted FMCG players to move beyond the morass. "But if the trend comes back tomorrow, we are ready to roll, as we are one of the few companies in the country to have the right capabilities, be it manufacturing or distribution," said TCPL's D'souza.Poor sales in India also forced Beyond Meat, a US-based alternative meat brand, to exit the market only a year after forming a partnership with Allana Group in 2022 to distribute its sausages and burgers in the country.Meanwhile, the mock meat industry is going through pains worldwide, with companies like Impossible Foods and Beyond Meat losing revenue even as their smaller counterparts Hooray Foods and Nowadays have shut shops.Now Impossible Foods, known for its vegan burgers that are an alternative to beef hamburgers, plans to rebrand in a bid to “appeal to the carnivorous cravings of meat eaters,” according to a March 2024 press release..Britannia Ready To Sacrifice Margins For Double-Digit Volume Growth In FY25.Anand Nagarajan, co-founder and chief executive officer of Shaka Harry, admits that the widespread acceptance of plant-based meat in the country has not unfolded as quickly as initially anticipated. Dairy alternatives, in fact, is the only segment that has shown promising growth potential."That's perhaps because plant-based products are not marketed in the best possible way," he said.According to him, vegan meat and plant protein need an Indian context and narrative. "We cannot use what’s being used in the west and expect a high adoption. This category needs to fit in our culinary and cultural context."Elitism, often associated with plant-based analogues, is also driving away many consumers. To combat this, the Bengaluru-based start-up has introduced a 13-gram plant-based sandwich patty priced at Rs 99. It has also introduced cheaper variants of its plant-based products priced between Rs 99 and Rs 199, hoping to reach a broader swath of consumers.Nagarajan is optimistic about increasing its turnover by 2.5 times in fiscal 2025 over the last year as he believes "eating clean as a practice is here to stay"..Starbucks Records Slowest Growth Since Pandemic In India Last Fiscal

ITC, Tata Consumer Pull The Plug On Vegan Meat Offerings As Trend Fades

The underwhelming taste and high price of plant-based meat discouraged many consumers, resulting in poor sales in the country and prompting FMCG players to scale back operations.

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ITC, Tata Consumer Pull The Plug On Vegan Meat Offerings As Trend Fades

The underwhelming taste and high price of plant-based meat discouraged many consumers, resulting in poor sales in the country and prompting FMCG players to scale back operations.

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