Over the years, and especially now that Veganism has gotten popular, Veganism has been called names such as “The Rich Person’s Diet” and “The Pay more and get less Diet”. As is obvious, these claims aim to paint the Vegan Diet as an expensive diet, one that’s out of reach for most regular people. So is there any truth to this? Is Veganism really out of reach of the general masses? Let’s dive deep into this claim to figure out whether this claim holds any water!
2 Sides of the Same Coin!
Before we try to understand whether Veganism is expensive, we must understand it’s important that we understand that just like any other food product, Vegan products can also be divided into 2 broad categories - Raw and Processed. While natural foods include all of our vegetables, which are pretty cheap for the most part, processed vegan foods are generally the ones that are trying to imitate the taste, textures, and look of non-vegan products such as meats. When people claim that the Vegan Diet is expensive, these processed foods are the ones that they are talking about. Now that we’ve gotten this clarification out of the way, let’s get into the nitty-gritty of why most of these products are generally more expensive than their non-vegan counterparts, especially so in India!
Reasons behind the high cost of vegan products
- Production Setups
The Animal Agriculture industry, which has now existed for almost as long as humanity itself, has benefitted from millennia of research and development. This has allowed for the creation of processes and machines which push the industry further and further towards higher efficiency! (Coincidentally this is also the reason why the cruelty that animals have faced, for us to be able to fulfill our needs, has increased exponentially over the centuries. This has happened as the focus of humans has shifted away from animals to extracting as much from animals for our gain!) This higher efficiency has allowed the animal agriculture industry to benefit greatly from economies of scale.
On the other hand, the Vegan Industry has only really gotten going over the past few years. This means that it is literally millennia behind the animal agriculture industry in terms of research and development done for the products and their production. Production of vegan products is labour, technology, and energy-intensive, unlike that in the animal agriculture industry. Additionally, the animal agriculture industry uses the cheapest labour of all, the animals themselves! Animals are never compensated (Anyways they’d prefer freedom over money :P) even though they produce the most valuable products i.e. milk and meats.
- Government Aid
Not diving deep into why this is so, the Government provides generous subsidies to the entire animal agriculture industry at all the various stages of business, right from animal procurement to distribution. While these subsidies are generally to the tune of 25% for every stage of business, they can even go as high as 33% in some situations (economically backward class as classified by the government). These subsidies allow organizations in this industry to produce at cheaper prices, sell more units to a wider segment of society, and ultimately save a lot of actual costs borne by the taxpayers.
Needless to say, India’s Plant-Based food processing industry does not yet have access to any such special subsidies. While it is generally understood that industries, which are in their nascent stages of development, need access to more funds, subsidies, and general aid from governments than their much larger, and long-established counterparts, in India, such subsidies are not yet established.
- Taxes, taxes, Taxes!
In 2017, the Indian Government brought GST into effect. This taxing system introduced various tax slabs at which different products would be taxed.
Under GST, animal-derived products are charged under the lowest tax slabs, usually at 0%. However, their plant-based counterparts are charged at 12% to 18%.
Because of the tax difference between animal-derived products and plant-based products, companies making and selling vegan products have to sell the products at higher prices to stay viable in the market.
See if you agree with this statement. When you go to the market to buy groceries, (or when you used to be able to go out before COVID :P) you’d be able to get most dairy and even animal products such as meat, without packaging or temporary packaging. However, in the vast majority of cases, the same can not be done with any vegan products, be it vegan milk or vegan meats. As a result, when you buy vegan products, you almost always have to pay for quality packaging as well as the product! This leads to additional costs. However such packaging also increases shelf stability or consumable life of the products.!
Closely related to the first point, scale is something that industries generally achieve when they’ve been around for some time. As makes sense from this point, the animal agriculture industry, especially in India, has grown to an enormous scale. This means that most products of this industry are produced locally is not just in all states, but even in all cities. On the contrary, the vegan industry is in its nascent stage. As such, its products are only produced in select locations across the country. This means that most products have to be packaged and delivered to people across the country, which means that on top of the cost of the product itself, customers also have to pay delivery charges, again raising the cost of all products.
Customer is King! This line rings completely true when it comes to the market. Since vegan foods have only recently begun to gain popularity in India, their demand in our country is diminutive when compared to that of non-vegan products. This low demand means that vegan companies are not able to produce in large quantities and therefore, are not able to take the benefits of economies of scale, hence not being able to reduce costs.
‘These were most of the significant reasons behind why some vegan foods, especially meat and dairy mimicking products ones, are more expensive than non-vegan foods.
Having said all this, the way this industry is growing with demand and R&D, plant-based and cell-based companies are marching towards benchmark pricing. However, the long shadow of continuous consumption of animal products eventually comes with assured medical bills. Large amounts of data have shown the same, which you can read about in some of our blogs, listed below.
So when you indulge in plant-based foods instead of their meat-based alternatives, you are doing yourself a favor.