The market for milk alternatives is still small in India, estimated at $25 million, when compared to its bigger cousin, the dairy industry valued at $140 billion
Plant-based milk alternatives seem to have caught the fancy of urban India — a result of the vegan wave proliferating in certain sections of society. Recently, RS Sodhi, MD, Amul, even went so far as to slam makers of almond, soya, oat, coconut and rice beverages as sellers of plant-based ‘fake’ milk, threatening to take them to court. While food regulators and industry leaders discuss the semantics of labelling these products as types of ‘milk’, brands operating in the segment continue to peddle their products on the ‘health’ plank, nonetheless.
The market for milk alternatives is still small in India, estimated at $25 million, when compared to its bigger cousin, the dairy industry valued at $140 billion. Analysts, however, are optimistic of its growth prospects, adding that it is expected to grow at a CAGR of 30% over the next five years. Some of the brands in this segment include Sofit (Hershey’s), Raw Pressery, Epigamia, Urban Platter and Goodmylk.
Given that dairy is an integral part of Indian households, brands are aware that no overnight consumption shifts will occur. “Consumers will not move entirely to plant-based milk; however, they will incorporate it in their diet given its health proposition,” says Rohan Mirchandani, co-founder and CEO of Drums Food which owns Epigamia.
Companies are also strategising to convince consumers about the suitability of these products for Indian palates. Chirag Kenia, founder and managing partner, Urban Platter, mentions that its products have been customised for recipes, offering things like unsweetened almond milk which can be used to make tea/coffee. Brands are also forging partnerships for awareness: Goodmylk has tied up with coffee chain Blue Tokai, while Raw Pressery had partnered with Kellogg’s Muesli, when it launched almond milk in 2018.
“While our core target groups earlier were consumers who are lactose intolerant or vegan, over time, we have seen dairy and plant-based milk co-existing for daily consumption in homes,” says Smritika Sharma, head of marketing, Raw Pressery.
The companies are retailing these products mostly through e-commerce and modern trade stores, while some like Raw Pressery and Goodmylk have also adopted the subscription models.
Manufacturers are also mulling on ways to bring down the pricing of their products. Epigamia is looking at alternative raw products, while Goodmylk has already priced its oat and cashew milk the “lowest in the segment” at Rs 120/litre, with plans to further bring it down.
“We want to reach price parity with private dairy players,” says Abhay Rangan, founder, Goodmylk. The challenge, however, he adds, is the higher tax on milk alternatives. “The GST on plant-based dairy is 18-20% as compared to 5% GST levied on dairy,” says Rangan.
An expensive proposition
Pricing is the biggest hurdle for these players in their endeavour to go mainstream. “Given that these products are priced significantly higher than regular dairy, their uptake is going to be limited as compared to dairy,” says Rajat Wahi, partner, Deloitte India.
While a one litre tetra pack of Amul milk is priced at Rs 61, a similar pack size of Sofit soya milk stands out at Rs 111. Almond milk is even more expensive: Epigamia and Raw Pressery’s one litre tetra packs are available at Rs 300 each, while Urban Platter has priced its almond milk and oat milk at Rs 245 per litre.
Also, given the strong positive perception about the health benefits of milk, it is going to be difficult to find wider acceptability. “The goodness of milk is ingrained in the Indian consumer’s mindset and to convince them otherwise is not going to be easy,” says Anurag Mathur, head, retail and partner, PwC.
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