Exporting smart protein: how to tap into international markets
The evolving smart protein sector presents Indian businesses and startups with an opportunity to create a global presence. Armed with the right strategies, India stands to profit from the steadily rising global consumer demand for sustainable alternative protein products. Strong low-cost manufacturing capacity, the ability to create distinctive regional product formats, and growing consumer interest can position India to be a leader in smart protein exports.
Many Indian entrepreneurs that are looking outside domestic markets to take advantage of this opportunity are continually innovating and diversifying their product offerings to suit global audiences. However, navigating the complexity of international trade, particularly regulatory compliance, documentation, market entrance strategies, and distributor relationships, can be challenging, even for the more established players. To bridge this gap, GFI India hosted a webinar, Exporting Smart Protein: How to Tap into International Markets, in order to equip companies and entrepreneurs with the knowledge and insights to succeed internationally.
A diverse set of speakers from regulatory, trade, and industry backgrounds came together to share end-to-end, comprehensive insights on exporting smart protein products. From knowledge of regulatory frameworks to evaluation of market opportunities and the creation of efficient export operations, the experts Harsh Gursahani, Sanjay Kavalekar and Sudhakar Patnaik covered all the bases. The discussion also featured Akash Wadhwani, who shared the successful case study of his Indian plant-based milk company, OatMlk, that currently exports to five international markets.
Read on to know more about the key insights from the webinar that will enable you to navigate through challenges and seize opportunities in the global smart protein sector.
Understanding the regulatory landscape for export
One of the most crucial steps for exporting smart protein products from India is navigating the regulatory landscape. Countries have very different regulations; for companies looking to expand internationally, knowing and following these rules and regulations is essential to prevent disruptions, delays, and penalties. During the webinar, Harsh Hiroo Gursahani, a partner at PLR Chambers and a specialist in international trade laws, food law, product regulations, and compliance, offered thorough insights into these complexities.
Key regulatory requirements for exporting smart proteins
Harsh outlined the key steps that Indian exporters should take before entering foreign markets, including obtaining an FSSAI licence and an Import/Export code (IEC), as well as other certifications and permissions, along with adhering to domestic compliance rules and labelling and packaging requirements.
One of the most often made mistakes by exporters, according to Harsh, is misclassifying HS codes (harmonised system codes), which might cause customs delays, rejections, or inaccurate tariffs applied to the goods. He underlined the need for exporters to work closely with customs brokers to guarantee that all documentation, including invoices, certificates of origin, and free sale certificates, is correctly ready before the goods leave India.
Country-specific regulatory challenges
Every market offers unique regulatory challenges that exporters must address. Some examples below:
- European Union: Companies exporting smart protein products to the EU have to make sure their goods comply with the EFSA regulations, especially with regard to ingredients, labelling, and product registration.
- United Kingdom: The UK has its own set of food safety guidelines that vary between England, Scotland, and Wales; thus, exporters have to navigate the particular needs for every region of the UK.
- United States of America: While the United States Food and Drug Administration (FDA) has more liberal rules than the EU, exporters must still register their production facilities with the FDA and provide detailed product information upon arrival. If the product is classified as a standardised food item, entry is simplified; however, non-standardised products may necessitate additional scrutiny.
Under India’s Foreign Trade Policy (FTP), exporters can gain from incentives including the Market Access Initiative (MAI) scheme, which supports companies to enter new markets by means of trade expos and events and subsidising participation. Other programs allow companies to reclaim taxes paid during manufacturing by means of Duty Drawback schemes and Remission of Duties and Taxes on Exported Products (RoDTEP) scheme. It is important to leverage these government initiatives to lower the costs of exporting smart protein products and increase profitability in international markets.
Watch this space for GFI India’s regulatory guide on exporting smart protein. To access all other smart protein regulatory guides, visit our website.
Setting up export operations and determining market opportunities
Co-founders of Resources Nature Trading LLC, Sanjay Kavalekar and Sudhakar Patnaik, with considerable expertise advocating Indian plant-based and organic foods in the Middle East, shared pragmatic advice on how startups and established companies might successfully enter and flourish in international markets.
Why should one go global? For many brands, the domestic market may prove to be small or saturated, resulting in limited growth opportunities. Conversely, plant-based diets for health, sustainability, and ethical reasons are becoming more and more popular in other markets, especially Europe and the Middle East. Going global enables businesses to achieve economies of scale faster, lowering production costs and increasing overall profitability. New markets can offer the volume needed to optimise manufacturing and raise valuations.
“Choose a single market and consolidate before expanding. You need to champion one market before looking at others.”
Sanjay Kavalekar
Checklist for businesses looking to export like experts
- Market demand and product fit: Companies should do thorough research to explore if there is adequate demand for their products before entering a market. This includes understanding local consumption patterns, dietary preferences, and any existing competition. For health reasons, for instance, plant-based products are highly sought after in the Middle East; in Europe and North America, sustainability and ethical concerns are more likely to drive demand.
- Government incentives: Many countries, including those in the Middle East and Europe, provide government incentives to import sustainable and plant-based foods. For instance, the Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE includes tariff reductions and preferential treatment for certain plant-based products. Such agreements have the potential to significantly reduce export costs while also increasing the competitiveness of Indian products in international markets.
- Distribution and strategic alliances: Successfully entering new markets is contingent on finding suitable distribution channels, which also affect logistics. Businesses should seek partners ready to commit to long-term development who also reflect their vision and values. A good partnership is one with mutual trust, shared objectives, and a complete awareness of the local market in addition to sales and distribution. Allocating adequate marketing budgets to support promotional activities like sampling, trials, and discounts during the product launch phase can be shared by partners.
- Product adaptation: Products for export must meet the specific preferences and regulations of the target market. This will include taking into account the shelf life, changing the formulation, adapting the packaging to meet international standards, and appealing to local consumers. In the Middle East, for example, one may have to consider using PVC pallets, as the use of wooden pallets (which require fumigation) is not allowed due to food safety reasons.
- The right team: The importance of forming a strong internal team to supervise export activities cannot be stressed enough. Whether it’s a small, specialised team or a large export department, clearly defined roles and responsibilities guarantee that the business can properly coordinate with overseas partners, handle logistics, and comply with regulations.
- Appropriate labelling and certifications: Different countries have different labelling rules, and companies have to customise their packaging to meet the regulations of each region. Product labelling should satisfy international standards and feature important components, including barcodes, batch numbers, and other certifications like halal and gluten-free as required by the importing country.
A case study of success: OatMlk’s entry into global markets
Smart protein startups can find inspiration in the story of OatMlk, a plant-based milk company that ships to more than five countries. Akash Wadhwani, co-founder of OatMlk, shed some light on the evolution of his business—from achieving local success in India to building a strong presence in foreign markets including the UAE, Singapore, the UK, the Maldives, and Nepal.
To kickstart their expansion, OatMlk strategically chose to enter international markets like the UAE, Singapore, and the United Kingdom, where the demand for plant-based products is high. Driven by consumers’ concerns about health, sustainability, and animal welfare, these countries have seen a significant shift toward plant-based diets.
Three factors that helped OatMlk successfully enter international markets:
- Pricing: OatMlk wanted to make sure their product stayed profitable while being competitively priced. This meant considering all the extra expenses related to exporting, including last-mile delivery fees, health certificates, and cargo. Thanks to India’s lower manufacturing costs, OatMlk was able to price their product competitively in areas including the UAE and Singapore, thus providing an advantage over European and American brands.
- Partnerships: To help negotiate the complexity of selling in a foreign market, there is a need to build solid relationships with distributors and logistics partners. OatMlk was able to better control sampling, marketing, and distribution by collaborating with seasoned local partners, guaranteeing that their product would find the appropriate buyers.
- Channels: OatMlk’s strategic choice of sales channels has helped them be successful in foreign markets. Instead of concentrating on physical retail, the company worked hard to create a strong online presence using e-commerce sites. This allowed OatMlk to become popular rapidly in cutthroat markets where store listing fees can be quite costly. In countries like the UAE, OatMlk gave online platforms like Noon and Kibsons top priority, enabling the brand to quickly grow its customer base.
- Marketing: One of the toughest challenges of entering an international market is developing brand awareness, especially in cases when consumers are not familiar with your product. Utilising a grassroots approach, combined with strategic marketing via sampling and in-store promotions, assisted OatMlk in establishing loyalty and trust among its new customers. OatMlk engaged with local plant-based communities in markets such as the UAE, joining online groups and actively participating in discussions to help build an advocate network for them. By emphasising the product’s sustainability features, such as its glass packaging and commitment to reducing plastic waste, OatMlk was able to connect with environmentally conscious customers.
“You need to talk to people and build your community. They will spread the word for you.”
Aakash wadhwani
With the growing global demand for sustainable, plant-based alternatives, Indian companies are well positioned to capitalise on their low-cost production and innovative product offerings. From understanding complex legal frameworks to identifying ideal markets and forming key relationships, the webinar provided clear strategies for businesses looking to grow globally. As Indian companies look to grow internationally, harnessing this knowledge and insights will help them make a smooth transition into new markets and develop a strong international presence.