India is currently witnessing a remarkable surge in the number of vegan startups, marking a significant shift in consumer preferences and lifestyle choices. This emerging trend is driven by a combination of factors, including ethical concerns, environmental awareness, health consciousness, a growing vegan population, and government support.
The Alternatives Market is estimated to reach over $47.57 million in value terms by the end of FY2026, as per Research and Markets
Globally, investments in alternative protein companies have surged, with venture capital and private equity investment reaching $3 billion in the previous year. This ongoing growth trend has prompted both large and small brands to explore sustainable alternatives across various categories, extending beyond just food. In fact, the global market for cruelty-free cosmetics is expected to reach $14.23 billion by 2030.
What is driving it?
Major drivers of growth have been the pursuit of healthier lifestyle and clean ethical sustainable consumption.
- The growing desire for a healthier way of life has played a significant role in the rise of vegan startups. People are increasingly recognizing the health advantages of adopting a plant-based diet, which can lead to reduced risks of chronic diseases, improved digestion, and heightened energy levels. To cater to this demand, vegan startups offer a variety of nutritious and tasty plant-based alternatives, including meats, dairy substitutes, and snacks.
- Intensive animal agriculture, one of the primary contributors to global warming, is responsible for approximately 16.5 percent of global greenhouse gas emissions. Moreover, farming purposes consume around 92 percent of the world’s freshwater, with one-third of it being utilized for livestock rearing and animal product manufacturing. In addition to its substantial carbon footprint and contribution to global warming, livestock farming subjects animals to stressful, unsanitary, and cruel conditions.
Trends to look out for in the Industry
1. Clean-label products will be a priority
Plant-based food innovators prioritize creating alternatives that not only utilize new technology and ingredients but also match nutritional profiles, ensuring healthier, minimally processed options. As the novelty fades, consumers, particularly Gen Z, seek delicious and healthy products, reading ingredient labels to understand what they consume.
2. More HoreCa partnerships for plant-based foods
As plant-based meat and milk companies expand in India, many will opt to introduce their products exclusively through B2B channels, particularly for plant-based meats. This strategy has proven effective in creating curiosity among consumers and reaching a wider audience. Collaborating with food service providers allows companies to leverage their expertise and resources for promotion and marketing. Furthermore, the B2B format provides a reliable revenue stream and aids in building brand recognition for new products or categories.
3. Plant-based seafood will be making waves in the year ahead.
Plant-based seafood sales constituted only 1% of plant-based meat sales in 2021, but the demand is increasing, indicating a significant opportunity. The number of plant-based seafood products sold in US retail grew by 25% in 2021. By 2031, the market for plant-based seafood is projected to reach a value of $1.3 billion.
4. More legacy brands will introduce plant-based choices
Food companies are responding to consumer needs by introducing a variety of indulgent and satisfying plant-based products that offer a range of flavors and textures. With the prediction that a significant percentage of consumers believe plant-based foods will replace meat in the next decade, there is a growing demand for these products. Companies that can innovate and provide high-quality, tasty, and satisfying plant-based options will likely succeed in this expanding market. Launching both plant-based and non-plant options together has become a natural approach, as consumers now expect to have dairy and non-dairy choices readily available.
*Source- USFDA
5. Rise of the budget-conscious flexitarian
As consumer budget concerns rise, food shoppers prioritize value, prompting brands to be innovative with pricing strategies. The growing demand for plant-based products has intensified competition, resulting in more affordable options. Brands will explore cost-reduction methods to enhance accessibility and cater to a broader consumer base