Was 2022 challenging for food innovation?

Lokendra Tomar, Diet Educator & Founder, Diabexy

The year 2022 has been excellent for the food industry in developing and innovating nutritious products such as low-carb, high-protein, high-fibre, etc. There was a lot of sales growth that was witnessed by players who cater to the segment. This sales growth can be attributed to two factors.

Firstly, as we know, owing to the pandemic, people have become extremely cautious, as many people spent most of the lockdown period focusing on their health and food. Several studies show that the pandemic increased people’s interest in nutritious meals that promote immunity. According to experts, the trend will continue in 2023. As a result, several businesses have followed suit and are investing in immunity.

Secondly, many small companies are into the manufacturing of innovative, nutritious products, but limited market access had previously always acted as a hindrance. They only served a limited geographical area and target market. With the exponential growth of e-commerce and the pandemic forcing businesses to become more agile and embrace the digital sales channel, the market for these businesses has opened up. They are now able to cater to a wider target market, not just in India but even globally. So in terms of sales, 2022 has indeed been a good year.

However, there have been challenges for the players in the innovative nutritional product category. 

Rising freight charges

If a company is to make high-protein, high-fibre, vegan protein, and vegan meat products, then all the raw materials need to be imported. As the pandemic spread, the freight charges for export and import containers increased three to fourfold. Also, with the currency fluctuating, it adversely impacted the imports in terms of costs. With import prices rising, there was an increase in the cost of production. This led to an increase in the retail price which directly impacted the end consumer. So despite the market being more aware and accepting of these nutritious products, the pricing of the product made them apprehensive and restricted them from buying it.

Besides, the majority of the population of India is lower middle class, and for them, these products have become out of reach. Only the upper middle and upper classes can afford and consume nutritious food because it is part of their lifestyle and diet pattern.

Supply chain disruption

Many people will continue to have nightmares about supply chain transportation logistics in 2022. The rippling impact of the Suez Canal closure is still being felt.

Other transportation difficulties include growing fuel prices, a shortage of truck drivers, and changing laws.

Because many raw materials and finished goods are perishable, transportation has proven especially difficult for the food and beverage industry. They must be dispatched and delivered as soon as possible.

Government support 

In the current scenario, where the market is extremely accepting of switching to and embracing healthy habits and eating, the government needs to step in and incentivise the industry as a whole.

While the market for whey protein concentrate is exploding in fitness-conscious and protein-deprived India, the world’s largest dairy producer still imports most of its whey. It is indeed ironic that despite India having big players like Amul and Parag, we are importing whey protein concentrate from Europe or America because our country does not have a single plant manufacturing whey protein.

So the government needs to incentivise and encourage companies to make investments in such plants. To help draw attention to this, the government can give an exemption from GST, reduce import taxes, and give land subsidies to set up such plants. Nutritional standards for food sold and served in public settings are established by healthy public food procurement and service policies. These regulations either expand the selection of foods that support healthy eating or restrict or outright ban the distribution of foods that support unhealthy eating.

The government has a crucial role in addressing population health, lifestyle choices, health inequities and chronic diseases. The following areas need government involvement: surveillance, research, programming, access to healthcare, quality control, and dietary & physical activity recommendations (PA).

Other stakeholders

Other stakeholders should encourage, support, and supplement government policy initiatives. Academia should prioritise research on optimal dietary targets and cost-effective policies, as well as monitor and assess health indicators and policy outcomes, connect with communities, advocacy organisations, the media, businesses, and policymakers. It must also inform/evaluate government and industry activities. Health systems, doctors, and insurers should implement patient behaviour modification methods, push for broad system changes to support these efforts, and connect with local communities. Organisational initiatives for healthier eating should be implemented by employers, communities, schools, hospitals, and religious institutions. Advocacy groups and scientists should collaborate to spread best practices and hold government and industry accountable for significant change.

Because numerous players must be involved in effective nutrition policies and programmes, clear ground rules for public-private interactions are required. The food business must use its experience, scale, creativity, and marketing to develop, distribute, and sell healthier foods, as well as to form transparent, serious collaborations with academics, advocacy groups, and the government. To accomplish this, the ultimate success of the food sector should be related to the provision of healthy, properly packaged foods in a sustainable, equitable, and profitable manner.

Final thoughts

In this day and age, everyone wants to eat healthy and nutritious food, however, the cost of these food items is a major barrier to their consumption. It’s time that the government looks deeper into the industry and lays out plans to incentivise the sector and attract the investor community. Governments should actively design and execute policies to promote strategic and long-term change, since multi-sectoral approaches are required to achieve healthy food systems. Governments should also review if the techniques deployed are having the desired impact, identify and address inequities, and detect unexpected outcomes. This data should be made available to the general public, academia, and other organisations.

So we can say that the future is optimistic, provided that timely actions are taken to boost this sector.