‘Stifling innovation’: India’s plant-based industry cites new consumer data in battle to ditch ‘dairy’ ban
According to FSSAI, the reason for this ban is due to regulatory vocabulary – namely because current FSSAI regulations define ‘milk’ as the ‘normal mammary secretion derived from complete milking of healthy milch animals’ and plant-based products are not included in this definition.
“[Based on these regulations,] anything else can not be called milk as per this definition [so even] if any final product is intended to substitute milk, a milk product or composite milk product, a dairy term shall not be used,” FSSAI Head (Codex/Regulations) Sunil Bakshi told FoodNavigator-Asia.
“[Such] provisions specifically prohibiting [the] use of any dairy term (including milk) for a product which is not milk or milk product or composite milk product [actually] already exists in our regulations, [and the current proposed restriction] is only a reiteration of what [already exists].”
When queried as to what FSSAI proposes plant-based products in the market use to replace the dairy terms, Bakshi stressed that this nomenclature must be ‘indicative of the dairy analogue’s true nature’.
“[For example], it may be mentioned here that in the Codex Regional Standard for Non-Fermented Soya Bean Products (CXS 322R-2015), the term 'beverage' can be used in the nomenclature of the soya-based product analogous to milk,” he said.
This suggestion has not gone down well with the plant-based industry in India – plant-based advocacy body Good Food Institute (GFI) expressed concern that this was likely to not only confuse consumers, but also affect product sales across the board.
“[The] proposed ban is a surprising move given the reputation of the FSSAI as a progressive, evidence-based regulator, and risks stifling innovation which would benefit the consumer,” GFI India Managing Director Varun Deshpande told FoodNavigator-Asia.
“Plant-based milks and other products have a wide variety of uses, and our research has confirmed that Indian consumers use plant-based milks across several applications, including tea, coffee, and cooking, so the use of the term 'beverage' therefore may not accurately represent to the consumer what the product is and its full scope, which could result in confusion and a drop in sales.”
Desphande also highlighted the potential negative impacts of the ban on the entire industry, as well as the lack of consistency in its proposed implementation.
“We believe that [this] is against the interest of a young industry with major promise for sustainability, job creation, and consumer choice,” he said
“[It is] also inconsistent with common-sense regulations already in place for other foods such as peanut butter, cocoa butter, and coconut milk, and risks confusing consumers, who for the most part do not seem to have any ambiguity about the source of plant-based milk.”
This last part was also based on GFI and IPSOS research, where a majority (over 70%) of Indians were found to be able to successfully identify the source of cow’s milk vs plant-based milks, where they were from small cities or large towns, and whether or not they consumed plant-based dairy.
“What's more, a large majority (84%) of Indians (including consumers & non-consumers of plant-based dairy) believe that 'plant-based milk' is the appropriate terminology for these products,” he said.
“So even in a relatively immature market like India, consumers are not only educated enough about plant-based dairy to distinguish between these products and animal-derived dairy, they also believe that it is fair and correct to utilize dairy terms to describe them.”
Local dairy firm Epigamia, which also sells plant-based products, concurred with Deshpande’s views, stressing that Indian consumers who are already seeking dairy alternatives are ‘capable of making informed choices while purchasing these products’ and already ‘understand their inherent differences in ingredients and sources’ without a nomenclature change.
“[Traditionally used non-dairy products such as almond milk, peanut butter, and coconut milk [have] successfully established their identity in the mind of consumers,” Epigamia Co-Founder and CEO Rohan Mirchandani told us.
“Furthermore, it is important to note that many consumers are resorting to alternatives on the back of health reasons or the fact that they can’t digest dairy and we would need to cue the generic consumption category for these alternatives.
“Plant-based alternatives are critical in our move towards building safe, resilient, and sustainable food systems in the wake of COVID-19 [and] we hope that FSSAI will consider all these factors in its decision.”
Impacts and challenges for the industry
If the ban is formalised, the most major impact for plant-based product manufacturers, apart from dealing with consumer confusion would be both figuring out new nomenclature as well as dealing with additional costs – a situation that is neither fair nor sensible, according to Deshpande.
“The ban would certainly impact plant-based producers in terms of needing to incur expenses for label changes and marketing - Fair and sensible labelling would account for the fact that consumers have been educated about soy milk for decades and do not face any ambiguity in this choice,” he said.
“Fair labelling is critical to creating a level playing field for the growth of any new industry, and we believe that prohibiting the use of dairy terms may stifle this growth, to the detriment of producers and consumer welfare.”
What should be done instead?
As opposed to banning the use of dairy terms entirely, both GFI and Epigamia proposed that FSSAI focus on instead getting plant-based product companies to add appropriate qualifiers to their product labels.
“[At present], we believe consumers are not confused about the origin of different food products, [and] with appropriate qualifiers such as ‘plant-based’, consumers can differentiate the base ingredients used and its intended functionality,” said Mirchandani.
“If this regulation is passed, it might confuse the consumers who have become accustomed to this nomenclature instead. We have had a very good experience with the FSSAI and believe they will consider all options and make the best decision that is right for the people.”
Deshpande concurred that adding appropriate qualifiers would be the ‘ideal solution’ along with sensible norms, especially as it is likely that both the plant-based and dairy sectors are likely to see growth alongside, and not in spite of, one another in India.
“Our research indicates that the majority of plant-based dairy consumers (90%) also consume animal-derived dairy, and that people perceive each as having their own distinct benefits. So we believe that each category has room to grow independently of the other,” he said.
“In fact, animal-derived dairy businesses and associations would do well to consider plant-based dairy as an opportunity to diversify income streams, with India's diverse crops presenting the chance to provide unique products to supplement their animal-derived portfolio.
“Ultimately, we believe that using the appropriate qualifier such as 'plant-based' along with the dairy term will be the ideal solution (e.g. plant-based cheese), and consumers agree. We hope the FSSAI can come to a sensible conclusion on this matter which enables this very promising industry to advance.”
We’ll be shining the spotlight on Plant-based Innovation in our Growth Asia 2020 interactive broadcast series, where Varun will also be sharing more of his insights. Register for free here.