With growing consumer inclination towards health supplements and snacking, established FMCG players are looking at expanding their footprint into newer areas such as the protein and health category. For this, the companies are planning acquisitions of smaller brands in the segment which have already gained traction among consumers.
Nestle India and ITC have shown interest in picking up a stake in Yoga Bar, a healthy snacking and breakfast brand. Sprout Life Foods, the parent company of Yoga Bar, is said to be in the market to raise funds of around `150 crore, and given the growing importance of protein in the food and beverages (F&B) space, industry experts say it would make strategic sense for companies like Nestle and ITC to participate in the funding as they not only get a bite of the segment but also the direct-to-consumer (D2C) space.
Some D2C brands have been disruptors in the space, which has led larger FMCG players to take cognisance of these companies of late. Yoga Bar, for instance, has ambitions of entering the children and infant food category – a segment where Nestle enjoys a strong market share.
The move would also be in line with the trend of bigger FMCG brands investing in D2C brands in India, as companies do not want to miss out on the growing online shoppers market.
Marico has picked up a 54% stake in True Elements, another healthy snacking and breakfast brand, while Hindustan Unilever (HUL) has also launched some of its own beauty and personal care brands like Dove Baby, Love Beauty and Planet, Simple and Dermalogica.
The India protein market stood at $1.34 billion in 2021 and is projected to register a CAGR of 4.23% to reach $1.65 billion in 2026, according to Hyderabad-based market intelligence and advisory firm Mordor Intelligence.
F&B is becoming the largest end-user segment in this category. By application, food and beverage is the leading application segment for protein in the region, accounting for a major volume share of 64.6%, followed by animal feed with 33.5%, in 2020.
Growing awareness around demand for protein functionalities, protein-rich diets and their importance, dietary supplements, especially post-Covid, is what is driving growth for the segment in the F&B industry. In the F&B category, the meat, poultry, seafood and meat alternative products segment accounted for a major volume share of 32%, followed by the dairy and dairy alternative products segment with 23.8% in 2020.
Marico, for instance, has identified protein as a focus area and has plans to launch products in the category, and will also look at growing the category through inorganic growth opportunities. Sanjay Mishra, chief operating officer (India business) and CEO (new business), Marico, recently told FE that the company under its Saffola brand will be in breakfast & snacking and in some cases even forming the centre of the plate category. “Protein is an identified area which needs more focus and perhaps will see more launches. We already have Soya nuggets and peanut butter, and there would be more products coming up,” he said. Currently, it is offering Saffola Mealmaker Soya Chunks and Saffola Peanut Butter as part of the protein offering.
Similarly, Tata Consumer Products (TCPL) is betting big on protein as a growth area and has already launched a few niche products under the protein platform. Plant-based meat or alternate meat was its first launch under the brand ‘Simply Better’, and is offering nuggets, burger patty, Awadhi seekh kebab and spicy fingers as a part of it. Earlier this month, the company has also launched ‘Tata GoFit’, a plant protein powder catering to health supplement needs of women.
“The protein platform is beyond just alternate meat and we are looking at different ways to play the protein space. Though still niche in India, for us it is a category of the future and we want to get first mover advantage there. This is part of our larger platform play, we are not playing product, we are not playing category, we are playing platform,” said Sunil D’Souza, managing director and CEO, Tata Consumer Products. The company is looking at more launches in protein fortification, protein supplements and protein foods, among others.