“Alternative protein or Alt protein” is going to be a critical food category solution in immediate future and there are many thought leaders, entrepreneurs, academicians in India sharing their views time to time. However, it is ideal to understand the categorical insights for this segment from core food professionals who have not only spent a long time in the industry with retail, modern trade, e-com developing the fresh food categories (Meat / Seafood / Eggs / Frozen / Fruits & Vegetables) but also have been responsible for some ‘first in India’ category solution launches for international retailers. nuFFooDS Spectrum spoke exclusively to Rajesh Kumar Prasad, Category Leader, Amazon Retail India and Amod Ashok Salgaonkar, Co-founder & Chief Operating Officer, A2S2 Enterprises to get some real-time overview of the industry during a recently held event in New Delhi.
Edited excerpts-
Many brands/ startups in the “Alternative Proteins” space are endorsing “Celebrity Figures”. Do you think that this may be helpful? What about those brands & startups that have no high budgets?
Rajesh: Not only “Alternative Protein” brands, but generally brands endorse celebrities to encash their popularity across customer cohorts. This is effective to get trials but advantages continue only if there is a product solution and pricing strategy. The followers of such celebrities tend to try the product at least once and if the fan following is in millions, then automatically there is sales spike in the short term. However, Indian consumers are frugally smart, they will try the newly launched product because of his or her favourite celebrity but if the product is not ticking the right boxes including price perception, then new launches are off their grocery list. The “Celebrity Endorsement” is useful for brand awareness, to initiate customer trials and rest thereafter depends on the ‘quality-availability-pricing’ of the respective product. The brands having funding tends to go for such endorsements but when it comes to “Alt Protein” segment in India, majority of the startups are in early phase with limited ‘go to customer’ reach and we believe going for “Micro-Influencers” targeting smaller region/ city would be right, gradually building the pyramid approach. “Micro-Influencers” need not be a celebrity, he or she can be anyone having high social media connect, good communication skills, most important is to have high NETWORK of professionals across selling, marketing & media platforms with reasonable enough experience of the industry. Such micro-influencers come with low cost, and can be an excellent marketing starter for multiple micro market approach.
Amod: True, micro-influencers can give value time to startups & support in the right way in majority of the cases. If startups do not have that budget, then too works well where they can go for some limited paid meetings with such experienced professionals. The challenge is that majority of the startups want good guidance with marketing support but with no commitments. Such business and experienced people may not be available for free consultation in maximum cases. If any startup is getting those valuable consultations free of cost at initial levels & understanding the worth of that professional, then startups’ founder should retain such professionals by offering them lucrative deals.
How do you see the Alt Protein category progress & do you think it will work well in India?
Rajesh: Being at seed of the seed stage, it will take few years of consistent category messaging for it to be known to majority of the consumers. We are also going conservative at present in our approach and are “testing waters” with focus on customer feedbacks and insight to learn further. It is a very exciting phase for this category, and if I have to define it simply then it is “learn-unlearn-learn” category now. Unlike outside of India, I believe Alt protein will have a totally different journey, as brands will understand customers and with the unique India specific “Market Dynamics”, we will see the picture emerge. Some interesting insights are that we eat many vegetarian foods already with our proteins, we eat many food types together, protein tends to be a celebration meal, there is so much impact of religious practices on protein consumption etc. etc. We would like to be right at the forefront when the rubber hits the road.
One critical piece will be pricing, customers are very sensitive to price points and long-term successful brands in India are known to hold price points despite all the cost pressure and come with innovations to solve. Startups who will adopt faster to this tenet will be miles ahead of others and will always have the higher pie of the market, more so when it crosses the tipping point and explodes in India.
What is the most important take-away that founders of Alt Protein startups should keep in mind while launching their products in modern trade or on other channels?
Amod: Every founder does feel all of their products are important however they may have some assured gut-feeling about few out of all products they have that this may work better, hence instead of the complete catalogue they should pitch on priority limited selection when getting a chance to launch the products in modern trade or E-commerce. The space inside the stores or mapping the pin codes through online channel has immense importance. Category managers will make SKU’s inactive after certain trial phase (say 3-6 months or even a year depending upon the negotiations) if it did not perform as per the proposed sales velocity. This scenario is obvious & founders of startups should keep in mind that any category manager will give preference to them if their selection is selling well. Though this segment is new, the activation time they may give is to check whether the product can sell or not and this duration is always limited. So those (brands) who perform well in that time frame would get retail space for longer time. Hence the most important take-away for founders is to launch the fast-moving products as well as leverage all the tools available with retailers to get eye balls for adoption and then repeat.
Do you think sampling can help Alt Protein category to lift its sales?
Amod: “Sampling” is one of the most important tools to build sales. Making the high sales is still away as this category has not even been introduced across all selling platforms in India. Most crucial problem which all founders in this segment are facing is to give perfect similar taste when compared with traditional products. One more natural thing is that unless huge ratio of people tastes the product, founders will not get the actual feedback about the product. So making maximum sampling at all possible platforms play a crucial role and if people like the product, then they may probably start buying the product which ultimately helps in consistent sales. Presently, majority of the available Alt Protein products are quite highly priced in comparison with traditional products. So, to sell the “Alt Protein Products”, the strategy of Right Taste + Economical Price should be applied if the target client is majority chunk of all population. Another important factor is also the availability of brand promoters if the sales platform is “Modern Trade”. Many a times, with no presence of brand promoter or merchandiser, mere shelf visibility doesn’t pass the smell test.
Rajesh: Absolutely there is no alternate to sampling, we have to get potential customer to taste and give feedbacks and more the merrier. Brands can use the reach of programmes like ‘Amazon Fresh’ where there are not only most of the early adopters but also the advantage of e-commerce platform’s ability to provide verifiable and credible data with insight across various metrics. This could help startups with crystal ball grazing and find the right customer backward answers for building next horizon capabilities to scale-up. India as a market requires heavy lifting for ‘go to market’ strategy and there is no plain and simple blueprint to follow I guess.
You rightly mentioned about “Importance of Sampling” but could you please shed more light on it?
Amod: Many brands do the sampling just as it is without any thorough planning. What more can be done is to do focused sampling, more meaningfully. That means generally the famous brands do the samplings on weekends in stores as the consumer traffic within the store is higher on those days. My point is that “Alt Protein” is a different category having no much sales history, so they should pick the days for sampling when footfalls are there & “Alt Protein” brand should get a chance to serve the product to customer via sampling. Normally, during weekends, as all lead brands from other categories do samplings – chances are less that “sampling” of Alt Protein brands will actually reach to consumers. If Alt protein brands are getting focus, enough space during weekends then that’s superb but if it is not then they should plan the alternate ways of how sampling must reach to maximum consumers. It may also be possible that some of the “Alt Protein” brands can take exclusive prime points of the store by discussing with category managers in advance, however giving exclusivity may attract additional cost to the brand and that may not be affordable to startups. Exclusive food promotion is also something they can explore to get the most bang for the buck.
The Alt Protein Brands are preferring more to be on an online segment than in modern trade. What is your opinion on it?
Amod: Having the presence on an online sale platform is always good, however majority of the “Alt Protein” brands are facing issues in entering the modern trade segment because their non-affordability of paying the necessary commercials for listing the products. Every segment has its own advantages & disadvantages. The situation has changed drastically since COVID-19 as many modern trade organisations made themselves equipped for online format in those days. For “Alt Protein” segment, be it online or modern trade or both, everything may work well from whoever they get support. What’s most important for the “Alt Protein” segment is to associate with right people having industry experience and who can guide startups by sharing the right things through real-time ground experiences rather than just giving opinions without having actual industry experience. After all, the investors investing in the brands would like to see the sales growth which may come after playing multiple techniques on ground basis actual experiences. Founders should be honest to understand the realities and make appropriate changes accordingly or else a long journey is difficult. Ironically, almost all are saying they are doing well but that’s not reflecting through sales numbers. I am not trying to figure out any lacunas, but I would like to indicate that if the founders are humble to understand the shortfalls timely, genuinely & if they adopt the necessary changes then there lies a scope to adapt themselves in a better situation to survive neatly in a competition.
How would the recession impact the Alt Protein segment in India?
Amod: Recession has already hit and it has started impacting many industries, so “Alt Protein” segment may experience a heat, it is not different. The funding in various industries has already been reduced drastically overall in all segments including Alt Protein. Over the next few months, the situation may prevail in the same way. “Alt Protein” segment in India in general since starts looking for funding as based on funding, research activities can be carried out to launch the products. Reduced funding in present scenario tests the capabilities of the startups as with no funds, there shall be limitations on continuing the research & product innovation, so processes may slow down. The behaviour of investors in this phase may be more towards either not investing in present times or to invest only in those brands who are highly promising. Having said that, investors may look more ROI if they are investing in present situations and things would not be much ideal for startups as in non-recession time frame. Recession creates low purchase power & tendency of consumer in this phase would be to buy most essential food commodities. The pricing structure of “Alt Protein” is towards the high end and sales may go down for this category products in the recession time. The startups who are highly passionate about this segment would adjust themselves in every possible way to survive the phase and such startups would go LONG after the end of recession but the startups who can’t acclimatise themselves would not go LONGER.
The Alt Protein forecasted sales in India by some organisations show quite high & promising figures. Being an industry expert, how do you look at it?
Amod: Being the business professional, I am always happy to see if any new industry is touching greater heights, however, I do not want to comment on forecasted sales of “Alt Protein” category in the present time frame. This industry will grow well for sure but how much, it is difficult to tell aptly right now because it depends on various factors and concluding figures would change immediately if any of those factors changed or did not work out. Sale forecasts are required and it’s important but how you are reaching to those figures shall explain everything. To give the most closely accurate forecasts, you require ground data & the said data about any industry comes after actual sales which then co-relate with other various factors assuming scenarios in the next few years. Industry scenario’s coming through this way may make sense. In real time today’s scenario, if the products are yet not visible even in certain states or sale platforms, ground actual data is not available, then in general giving the closely accurate sale forecasts is difficult as for analysis, you require a data. Many professionals in my opinion have just given guesstimates based on their own understanding & research they did.
What “Something New” can be tried in case of Alt Proteins for pushing the category?
Amod: There is no thumb rule set, however with my prior experience of the industry, I have observed some success in normal non-veg & frozen category during festivities / promotions, and that is doing “CROSS MERCHANDISING”. This works well if timing is accurate & product combination is right. This has not been seen in “Alt Protein” category and can be tried as one of the experiments in addition to regular sales. Other thing which can be checked is giving event-based sale support schemes e.g. during Navratri, sales of non-veg is generally on a lower side compared to regular days, so if there are plant-based meat / seafood / egg offerings in place on sale platforms then consumer may try that and this may give real time feedback to startups in this space. Founders of startups can identify such festivities & plan the offers with category heads in advance. The results of such occurrence-based sales will give an idea whether that strategy is working or not.
Details-
Rajesh Kumar Prasad is the ‘Category Leader’ at Amazon Retail India, and has worked on various other senior level portfolios in Retail, Food service & HoReCa in the past. Notable ones are heading buying & merchandising for international expansion at METRO AG, Country lead roles for procurement, supply chain, buying & merchandising. He is one of the leading veterans for building organised fresh food business in India.
Amod Ashok Salgaonkar is the Ex-Category Head of various food categories in his past assignments at HyperCITY Retail, METRO Cash & Carry India, Reliance Retail etc. He represented various board positions in the past at various international organisations. Presently he is the Co-founder & Chief Operating Officer of A2S2 Enterprises India. He is representing board positions at some organisations, mentoring various food startups & known very well in international food-seafood media for his multi-sectoral knowledge.