The company develops specialist plant proteins which it supplies to food producers. Jesse Sam spoke to the pair in January.
Proeon is part of a growing tide of Indian start-ups in the plant-based sector. Two in five Indians describe themselves as vegetarians. That, combined with its massive population. explains why it is one of the most exciting pulses markets in the world. Ashish Korde and Kevin Parekh co-founded Proeon in 2018.
We’re always interested in the background and experiences of entrepreneurs. Could you tell us a bit about what you were doing before you co-founded Proeon?
AK: I am an engineer by education and I also did management studies. But most of my career has been in industry: first the pharmaceuticals sector, then food and beverages, and then the health ingredients sector, which is where I actually met Kevin.
KP: Yes, we have similar backgrounds. I have masters degrees in biotechnology and management. I moved straight into the natural products ingredients industry. I worked as a product manager, developing strategy for markets in Europe and North America; I also did a lot of product testing, which involved analyzing the technical specifications of different products.
It sounds like you have a really well-aligned set of skills and experience. Did that help as you were setting up Proeon?
AK: I would say so. We both developed a really detailed understanding of the value chain behind supplements products. On top of that, I learned how to establish and run complex supply chains — one of the products I managed had a network of 10,000 farmers across India supporting its production. And Ashish developed a lot of commercial experience.
KP: Yes absolutely, I was involved in everything from commercial potential analyses, to supporting M&A activity and developing marketing strategies. It was really valuable experience for us both.
So how did you go from working on natural health products to setting-up your own plant protein company back in 2018?
AK: Well, we both knew we wanted to do something different. But we needed the right opportunity. We were looking for something with a large potential market that could have a positive impact on people and the planet. We saw the growth of the plant-based food sector in India and it really piqued our interest.
Why was social and environmental impact so important to you?
KP: We are human beings before we are entrepreneurs or engineers. And our instinct was just to want to do something that is positive for everyone involved — something that leaves everyone better-off in some way, Whether that’s our suppliers, employees or customers. And it’s not just a moral question - we really believe that exploitative or harmful practices cannot sustain a business over the long-term.
That’s really compelling. So why was Proeon the right opportunity specifically?
AK: We've seen a huge wave of consumer interest in plant-based alternatives in India in recent years and there’s huge potential here. A 2019 survey by Ipsos found that 63% of Indians are willing to swap meat products with plant-based alternatives. So that confirmed to us that this is a really big opportunity. The potential social and environmental impact speaks for itself.
But, from our conversations with companies in the industry, it was clear that there are still significant challenges with the base proteins they are working with to develop their products. We saw this as a really exciting problem to solve: if we can make better ingredients, then food companies can make better products.
KP: Absolutely. And it was a challenge that really lined-up well with our experience and knowledge, so we felt like it was the perfect opportunity.
So Proeon specializes in four types of plant-based protein — mung bean, chickpeas, amaranth and hemp seed — how did you decide on these ingredients?
KP: One of the problems we saw in the market was that food companies were trying to use a single protein for multiple applications. But that doesn’t work: a protein that works as a meat substitute isn’t necessarily going to work well in dairy products, right? So we recognised the need to develop a range of options.
We studied more than 40 different proteins, using technical and commercial criteria to compare them: things like how they behave in different food systems, their sensory profile, functionality, and nutritional content.
- We chose mung bean protein for its potential in plant-based egg replacements; it has excellent functionality and sensory profile that is suited for making eggs and it can be used in baking.
- Chickpea protein is an effective meat substitute.
- Amaranth is very suitable for dairy applications.
- Our hemp seed protein is still under development but we see a lot of potential for nutraceutical and protein supplement applications.
That’s really clear. Can you tell us a bit more about the egg application? It’s less familiar than meat or dairy alternatives.
KP: Yes, that was apparent during our research with market experts, both here and in Europe, which has a much more established plant-based sector. Egg is a new category but it’s fast growing.
What does your supply chain look like? Are you mostly working with Indian farmers?
AK: Yes, all of our products are sourced locally. We think that India has the potential to be a protein producer for the world. There is a huge, diverse foundation of pulses, millets and other high protein crops that are consumed as part of people’s daily diets but are not yet being leveraged by any companies to expand our protein output.
And what are the conditions like in India for growing some of your key ingredients?
KP: Chickpea is a major winter crop here in India. It’s super versatile and can grow in diverse conditions. It also doesn't require much fertilizer, water or pesticides. So it’s a really sustainable crop for farmers.
We also wanted one of our proteins to be millet-based. Millets are superfoods with such great nutritional properties and are very sustainable to produce. The United Nations has declared 2023 as the international ‘year of millets’ so we chose amaranth because it is very well-accepted globally, particularly in fast-growing markets like South America.
What’s your relationship like with the farmers in your supply chain?
AK: I think this is where our experience before setting-up Proeon has helped us tremendously. Our plan, as we grow, is to manage these relationships through India’s Farmer Producer Organizations. These are cooperatives of anywhere between 1,000 and 20,000 individual farmers who work together; they are really well organized and provide high quality products on a consistent basis.
KP: I’d also add that working through these collectives gives us better visibility over pricing; allows us to standardize contracts; and enables us to work with farmers to improve quality and grow specific varieties of crops to create the best proteins. So, for the next two years, we are really focused on expanding these partnerships.
You recently raised $2.4 million in seed funding and, according to press reports, you’re planning to establish an R&D facility in Europe. Before we let you go, can you just tell us about Proeon’s plans and priorities for 2022?
AK: Yes, you’re right. We are in the final stages of establishing an R&D facility in the Netherlands. Research and development is really central to our approach as a company. We want to create highly differentiated and better technologies and ingredients that give us the edge in the market. We have a close relationship with Wageningen University in the Netherlands; it’s one of the world’s leading institutions for plant-based proteins, so we are excited to strengthen that partnership.
KP: And in terms of our product, this year we are focusing on the breakfast category. We see a lot of opportunities for plant-based eggs to be used in everything from omelets to baking. India has a large vegan and vegetarian population which we think is increasingly interested in these products.
Very interesting. Well, all the best for the rest of the year. Thanks again for talking to us.