FSSAI’s New Rules For Ecommerce Likely To Pinch D2C Dairy Alternative Brands

India’s food regulator Food Safety and Standards Authority of India (FSSAI) has instructed all ecommerce platforms to delist non-dairy and plant-based products which are being categorised under dairy products and being sold on their respective platforms. The new rule could impact new-age brands and direct-to-consumer (D2C) dairy alternatives such as Raw Pressery, Epigamia, Urban Platter and Goodmylk, as well as FMCG majors such as Sofit (Hershey’s) and Amul. 

In a notice issued on September 3, the food regulator directed ecommerce food business operators (FBOs) that no such dairy alternatives listed on the online platforms are allowed to be sold under the dairy category. 

The food regulator highlighted that there are certain exceptions for ‘dairy’ terminology and could be used for products such as coconut milk, peanut butter and others. FSSAI said that the term ‘curd’ could not be considered a dairy term exclusively as it also includes non-dairy products such as soybean curd. 

The food regulator said that if any ecommerce entity is found guilty during the investigation, it would be given 15 days to improve or modify product labels and comply with the relevant provisions of Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011. The ruling applies to ecommerce platforms such as Amazon India, Flipkart, BigBasket, Grofers among others.

The regulatory body has directed state food safety departments to investigate and identify specific instances of violation by ecommerce platforms.

However, FSSAI hasn’t specifically clarified which particular plant-based or non-dairy product it is targeting. At present products such as oat milk, rice milk, walnut milk, flax milk, soy milk and others claim to be an alternative to cow/buffalo milk. 

The notice issued further doesn’t mention what will be repercussions for ecommerce players if they fail to comply with the notice issued. A detailed questionnaire sent to FSSAI went unanswered at the time of publishing the story. 

While the said notice might not be a major cause of concern for ecommerce platforms which rely on consumer electronics and garments to drive their sales, it needs to be seen how plant-based or dairy alternative startups will react as they depend mostly on these ecommerce platforms to sell their products. If ecommerce platforms delist these startups’ products from the ‘dairy’ segment and put them under a newly created ‘non-dairy’ category then it might hamper products’ discovery, thus dropping in total number of sales.

In India, startups such as Raw Pressery, Epigamia, 137 Degrees, Milkin Oats, Goodmylk and others offer plant-based milk substitutes such as almond milk, oats milk, soy milk and others on ecommerce platforms. It is worth noting that several major FMCG brands have also forayed into producing dairy alternative products such as Hershey’s with Sofit.