Thoughts on healthy foods businesses.

Should Indian companies building in nutrition think of the industry from the perspective of hierarchy of needs?

note: these are my personal thoughts, and majorly a high level thesis on how one could think about the consumers and building a healthy food business in India. For numbers there are enough reports out there :)

Healthy foods or food supplements that also taste great are a massive opportunity.

But “taste” is the keyword here.

The first time an individual starts earning, they find comfort in the usual suspects - sugar, fried food, simple carbs.

Alcohol too, but I believe alcohol transcends the hierarchy.

I have personally been there and have seen friends and family (new adults with abundance of cash) repeating the trend with rare exceptions.

Expecting one to switch directly from vada pav, chhole bhature, litti chokha to fortified beverages, protein muselis, chicken breast, no-curry paneer that also taste avg at best is an attempt failed on day 1.

Unless one is rightfully building only for a smaller subset of the top 1-3% population, which probably includes you (who is reading this post) and I (the author of the post), who will gladly sacrifice taste for function; ignoring taste for functionality may not be the right approach.

Why smaller subset of 1-3%? - Look around in your family/extended family.

How many uncles/aunts/mothers/fathers/friends/bothers/sisters can you move away from a standard Indian diet to protein, fat, complex carbs? If you can, your are probably somehow related to the families of folks like Mr Sandeep Mall ,Mr Prashant Desai or Ms. Sonali Swami (all of them are huge inspiration for many) or your family is exceptionally aware and inspiring.

I am of course over exaggerating, but the number is still small.

Sure, there are some extra nuts, some good quality fats, dairy and eggs in the diet of the top brass, but that doesn't cut it, does it?

Getting people to move from that daily poha/paratha/dosa/chai to nutritionally balanced meals that can be repeated daily, is an uphill task.

Office meals in leading companies are the prime example of this.

Taste buds that have been trained for decades on flavour heavy food groups cannot move to salads, chicken breast, non-greasy paneer, non-greasy daal, artificial tasting protein shakes, bars and so on cold turkey.

And this is where the healthy food companies haven’t been able to crack the code so far.

Now you must be thinking, what is this guy even talking about.

“Salads taste great when prepared well”.

“Protein bars are nothing but a dessert”.

I don’t disagree. But this is the classic bondi beach bias that you, I, all the online coaches and health food companies have.

If you visit bondi beach, everyone has abs, so you think that the entire world must have abs. But that is not true because the bondi beach crowd is a small self selected crowd where everyone is trying their best to look fit.

People who eat healthy food regularly have the same bias. They find their food tasty and easy to repeat, and wonder why aren't others consuming it too.

I have one recipe for my chicken, and I haven't changed it in last 60 days. I cook it once every 4-5 days and store in the refrigerator. My wife and I, who like being fit find it amazing and repeatable. But if you ask my other family members and friends, they'd disagree. In fact, wife gets overwhelmed by it too by 3rd day, but picks it up again when we cook a fresh batch.

When you are trying to build a business around health food, that other group of non health food eaters, makes the majority of the market.

You can validate it by speaking to the gym/running regulars (3-6 days per week, small number) vs gym/running casuals (once every few weeks, large number) + the vanity folks (who take memberships, but never visit, largest number), and check their food patterns. The difference is wider than one thinks.

The regulars don't care about the taste, the casuals care a lot and dabble around with health foods but hardly commit to a category, and the vanity folks only care about taste. Note that regulars + casuals + vanity is still a small number which at least think about running or gym. We aren't even considering the complete health agnostics yet.

The group of regulars which will sacrifice taste for function are the smallest in number.

The real game is not in building a product which existing protein drinkers and chicken breast eaters would consume. They will always be the early adopters.

The real game is in making a product which easily integrates into the lifestyle of casuals and vanity without compromising on taste and without being inconvenient on price and accessibility.

Whats amazing though is that many families now have at least one budding CHO (Chief Health Officer) with an exceptional record of success with self discipline, awareness, and an equally abysmal record of trying to convert their family members towards health.

This 1 person in every family is ready to take charge of changing the food pattern, but she/he for the life of them cannot alter the taste buds of the family.

In fact, many families are going to lengths to procure purer cooking oils, better flour, better fruits and veggies, and even paying 30-40% premium. But they are not completely uprooting their food pattern and replacing it new food groups for health. They are finding ways to make their existing foods healthier.

This is a very interesting trend to note for the new age brands, which are spending dollars in attempts to replace the existing food groups in Indian families with new unheard items instead of trying to improve the existing groups. An example I can think of is Kombucha and Kokum Juice. Instead of positioning the product as Kokum flavoured Kombucha, could it perform better if positioned as Digestive Kokum Drink! This is me thinking out loud.

Unless the vegetables, chicken breast/soya (or whatever the choice of protein is), good fats and carbs can be made tasty (or adapted for existing taste buds), made accessible and can easily integrate into life without disrupting the routine, mass adoption even for the top audience will continue to be a challenge.

For example, fortified flours could become a great category. It can be easily integrated into daily routine and food pattern without any major disruption. The only change is raw material, while rest of the process remains same.

However their mass success would depend on the price point. When a trusted and widely distributed brand like Aashirvaad is available at Rs 60 per kg, a good price point for fortified flours could be in the range of Rs 90-150 per kg. The market for this price point would be smaller than Rs 60 per kg, but would still be very large. Beyond this, at every Rs 25 jump, the market will shrink further.

Fresh Juices could be another great category purely from business pov at right price points. Fruits are indeed better than juices, yet you see people hoarding the street stalls for a glass of freshly squeezed juice at Rs 20-60 bucks depending on the location, city, area. A brand in this category cannot afford to go beyond this price range.

Health foods are here to stay and grow. Big FMCGs like Amul and Britannia are already working toward democratising protein in big way with nearly 40% lesser price per gram. But will they be able to crack the taste is yet to be seen.

I am more excited for the startups innovating in this area, and looking forward to seeing some of them competing eye to eye with the big ones.

Credits to my man Chirag Barjatya for seeding the thought when he spoke about office breakfast meals yesterday.