Plant-based beverage companies seek time to remove ‘milk’ from labels

“It is easier to comply in e-commerce as we have to change the picture of the product and also replace the work ‘milk’ with ‘drink’ in the listings. But it’s a huge logistical challenge to change the product labels,” said Chirag Kenia, founder of Urban Platter.

There are allegations that the crackdown on plant-based beverage companies was at the bidding of dairy cooperatives, which see these new-age products as a threat to their market.

The soya, almond and cashew-based beverage business has been growing in India recently with the emergence of veganism and fitness awareness among consumers. According to industry estimates, the market for plant-based beverages is valued at $20-25 million (Rs 147 crore-184 crore) in India.

Heavy cost of ‘milk’

The food regulator also asked e-commerce companies to delist plant-based beverages labelled as ‘milk’ products from their platforms. It ordered the food safety departments in the states to investigate the usage of dairy-related terms for non-dairy products. Several companies have reported confiscation of products by the authorities from retail shops since the order was issued.

According to the FSSAI regulations, the use of the word milk and any other dairy term is prohibited for products that are not milk, milk products or value added dairy products such as curd. It gave the companies 15 days to reprint their product labels.

If FSSAI does not extend the deadline, the companies indicated that they would have to dispose of products, resulting in losses to the tune of Rs 1-5 crore.
Industry stakeholders said companies with a major presence in the offline segment will have a tough time reprinting the labels of products that are in stores or with distributors.

“The packaging solutions employed today are high-volume ones so we have to reprint them. This means that lakhs and lakhs of units need to be repackaged, which is quite a significant expense,” said Abhay Rangan, founder of Goodmylk.

Dairy versus plants

However, the regulator has relaxed the norms for products such as peanut butter and coconut milk, saying these terms are used worldwide.
“The logic behind the order is confounding – allowing the usage of dairy terms for some products and not for others. Even terms such as soya milk and almond milk are used globally,” said the top executive of a company operating in the segment on condition of anonymity.

Plant-beverage companies allege the FSSAI’s crackdown on them is at Amul’s behest. An executive of another company went as far as to call it “bullying” by dairy cooperatives such as Amul.

“The order is not in consumer interest and will confuse them,” the executive said.

Gujarat Co-operative Milk Marketing Federation, which sells Amul-branded dairy products, has been campaigning since last year to remove the word ‘milk’ from labels of almond, soya, oat, coconut and rice beverages.

“We have requested the FSSAI to instruct these product manufacturers and importers to remove the word milk from the labelling and also refrain from using this dairy term in any communication as it violates the existing regulations,” RS Sodhi, managing director of GCMMF, said in November last year.

GCMMF earlier this year launched an advertising campaign to “dispel the spread of misinformation” about these the plant-based beverages.

The cooperative rolled out advertisements in newspapers and on social media in March talking about the difference between milk and plant-based beverages.
The advertisements claimed to bust “myths” that plant-based beverages are “rich in nutrients,” “milk” and “a sustainable food system.” They also highlighted that milk was “a complete food, natural as well as vegetarian.”

The campaign piqued People for the Ethical Treatment of Animals, which led to a tussle between the milk cooperative society and the animal rights organisation.

What lies ahead?

Experts said plant-based beverages will continue their growth trajectory and the crackdown will just be a blip in their journey.

“The overall underlying demand for plant-based beverages remains strong and will not be impacted by a change in their names,” said Angshuman Bhattacharya, national leader, consumer and retail, at EY. “The growth of the category is being led by veganism, vegetarianism and growing fitness consciousness amongst consumers.”

Instances of lactose intolerance have also fuelled the growth of this new category.

However, experts said the dairy industry has nothing to worry about because these products are positioned differently and not trying to compete with milk. Brands such as Sofit target consumers with the ‘fitness’ proposition.

Also, plant-based beverages are quite steeply priced. A one-litre tetra pack of Amul milk is priced at Rs 61, while Sofit’s soya drink costs Rs 111. The almond beverage is even more expensive, and depending on the brand, a one-litre pack can cost upwards of Rs 250.

The high prices also make these products a niche play compared with dairy, which caters to the masses.

Though the plant-based beverages market has grown 35 percent in the past few years, industry experts said this was on a low base, given the nascency of the segment in India. Sample this: While the dairy industry is valued at $140 billion, the milk alternatives market is pegged at $25 million in India.

However, the speedy adoption of plant-based beverages globally and the decline in dairy consumption has the cooperatives in India worried. It remains to be seen if there is any need for concern.