Plant-based ingredients sector is set to revolutionize investment portfolios with high returns in India

Asit C. Mehta Investment Interrmediates (ACMIIL), Trusted Equity Research House with a legacy of 4 Decades, has published a comprehensive report titled “From Roots to Riches: Creating Wealth with Plant-Based Ingredients!” This comprehensive report uncovers the vast, untapped potential of the plant-based ingredients sector and highlights the investment opportunities within this rapidly growing industry.

Globally, the market for plant-based ingredients is expected to expand reaching an impressive $120 billion by 2029 from its estimated value of $60.71 billion in 2022 i.e. at a CAGR of 10.32%.

Investors, who previously overlooked this sector considering it as a mere commodity, must recognise its potential for tremendous value-added expansion and wealth generation. The government’s push and investor preference to move away from chemicals and unhealthy ingredients present a huge opportunity for plant-based ingredients with healthy compositions.

India: A Growing Powerhouse in Plant-Based Ingredients

The report emphasizes that plant-based ingredients extend far beyond the food industry, finding applications in pharmaceuticals, cosmetics, textiles, and many other sectors. This widespread usage presents a unique and lucrative investment opportunity for investors. The global shift towards sustainability, ethical consumption, and health consciousness is fuelling increased demand for plant-based ingredients. India is emerging as a significant player in the plant-based ingredients industry, thanks to its diversified and dynamic ecosystem and shift in consumer preference.

Shift in consumer preference

Green Gold: Capitalizing on India’s Expanding Plant-Based Market

Investors can capitalize on this structural shift, benefiting from the expanding market and premium pricing of plant-based products. Notably, the export market for India’s plant-based sector is projected to expand substantially by 2030. Manorama Industries stands as a solid example of the sector’s potential, delivering 16x returns since its listing in 2018. Such success stories shows how companies focusing on specialty plant-based products can generate substantial wealth while contributing to a more organic and vegan world. Some of the notable companies operating in the plant-based ingredients industry include Adani Wilmar Ltd, Sanstar Ltd (proposed IPO), Manorama Industries Ltd, Food & Inn, Gujarat Ambuja Exports Ltd, etc.

Diverse Applications of Plant-Based Ingredients: Touching Our Daily Lives

Plant-based specialty products and ingredients are derived from plants or agricultural produce, such as sal seed butter, maize starch, and menthol extract from mint leaves. As these ingredients are sourced from renewable and natural plants rather than synthetic or environmentally harmful materials, they are increasingly becoming the preferred choice for consumers. Top brands like Gucci, Louis Vuitton, Hermes, Stella McCartney, Prada Group, and Givenchy have developed vegan leather products made from plant-based sustainable materials. Additionally, butter extracted from seeds is replacing chemical-based cosmetics and foods.

New Policy Initiatives: Transforming Industry

The growth of this sector is supported by the Indian government’s progressive policies, such as the PM Formalisation of Micro-Food-Processing Enterprises Scheme, National Mission on Edible Oils-Oil Palm (NMEO-OP), and the Pradhan Mantri Kisan Sampada Yojana (PMKSY). These initiatives aim to create modern infrastructure, enhance supply chain efficiency, formalize the unorganized food-processing business, and reduce agricultural waste, thereby driving sector growth.

In today’s health-conscious world, consumers are increasingly shifting from white sugar to plant-based ingredients due to the adverse health effects of white sugar, such as obesity, diabetes, and cardiovascular diseases. The National Institute of Nutrition (NIN) and the Indian Council of Medical Research (ICMR) have proposed new guidelines emphasizing stringent limits on sugar content in foods and beverages. This newly proposed guidelines, emphasising stringent limits on sugar content in foods and beverages, are poised to positively impact the plant-based ingredient sector significantly, including plant-based ingredients like corn starch, agave syrup, coconut sugar and fruit pulp. With solid foods limited to approximately 5% of energy from added sugar and beverages restricted to about 10% of energy from added sugar, there will likely be a heightened demand for low-sugar and sugar-free alternatives in food formulation.

Mr Devang Shah, Head of Retail Research, ACMIIL, emphasized the potential of the plant-based ingredients market, stating, “The plant-based ingredients market represents a paradigm shift towards vegetarian, vegan, and organic natural products. Investors who recognize and seize this chance will not only benefit from substantial financial returns but also contribute to a more sustainable future. ACMIIL’s study outlines strategic recommendations for investors and businesses to leverage these opportunities, emphasizing the importance of innovation, efficient distribution, and government support in propelling market growth.”

Mr Prasanna Pathak, Director, ACMIIL, adds “As plant-based natural extracts sector expands exponentially backed by industry innovation and global demand, it promises to deliver substantial returns, making it a compelling addition to any forward-looking investment portfolio. Those who judged this sector as beyond-commodity specialty products generated wealth while contributing to the development of organic and vegan world.”