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Food Startups in India: Decoding Product Classification and Tackling Mislabeling Risks

From Startup Savories to Labeling Legitimacy: Exploring Food Product Classification in India's Culinary Entrepreneurship Scene and Navigating Mislabeling Risk

July 26, 2023

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The surge of food startups in India exemplifies the entrepreneurial drive, passion, and creativity propelling the transformation of the food industry. With their commitment to quality, convenience, and meeting the evolving demands of consumers, food startups are driving innovation, diversity, and excitement in the food industry. These ventures bring a fresh and innovative approach to the way we produce, consume, and experience food. They introduce new flavors, ingredients, and techniques, pushing boundaries and enticing consumers with unique culinary experiences. They have not only created new business opportunities but also enriched the dining experiences of consumers across the country.

The diverse range of food startups in India caters to different dietary preferences, health needs, and taste preferences. The rise of food startups in India has seen remarkable diversification across various food categories. Startups are meeting the shifting demands of consumers by providing a diverse array of options, including:

  • Plant-based Alternatives: Meeting the demand for sustainability, companies are offering plant-based protein sources, cell-cultivated meat, allergen-friendly spreads and various plant-based dairy alternatives beverages.

  • Beverages: Catering to different beverage preferences, from refreshing non-alcoholic drinks and flavored Indian beverages to fruit-based options and ready-to-drink choices like carbonated beverages, milkshakes, different tea varieties, cold coffees and probiotic drinks.

  • Health-based snacks and On-the-Go meals: Offering a wide array of fresh and nutritious food options, including health-based snacks, seed mixes, bars, yogurts, snack packs, smoothies, fresh fruits, vegetables, salads, dips, convenient ready-to-cook or ready-to-eat meal kits, gourmet foods, nutrition-focused products, gluten-free and vegan options, organic snacks and beverages, fair trade products, super foods, various chocolate varieties, bars, snacks, cereals, etc.

  • Dietary Supplements and other Health Foods: Specializing in providing nutritious alternatives tailored to specific dietary requirements, such as kid’s food products, protein supplements, nutraceutical supplements, nutrition drinks for all age groups with specific nutrition needs, vitamin & mineral premixes, diabetic snacks, and probiotic drinks with functional benefits. These startups aim to meet diverse nutritional needs and offer healthier options for consumers.

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The introduction of innovative food products and services by startups highlights the importance of ensuring the safety, quality, and integrity of the food offered. The Food Safety and Standards Authority of India (FSSAI) plays a crucial role in regulating and monitoring these emerging enterprises, ensuring consumer confidence in the quality and reliability of their products and services. This is achieved through the implementation of best practices, accurate labeling, adherence to strict hygiene standards, and compliance with stringent food safety protocols. However, despite guidelines provided by authorities like FSSAI, labeling mistakes are still prevalent among food companies, emphasizing the need for accurate and transparent food labeling to ensure consumer safety and informed decision-making.

One of the major errors made by food companies is the incorrect categorization of their products as per standard or proprietary food classification. This oversight is an extremely critical point that manufacturers should pay close attention to. The distinction between standard and proprietary categories is significant for food companies, as it determines the specific regulations they need to adhere to while manufacturing and labeling their food products. Failing to categorize foods correctly can lead to miscommunication, misinterpretation, and potential legal consequences.

Understanding Proprietary Food: Differentiating from Standard Food Categories

As per the Food Safety and Standards Authority of India (FSSAI), there are two categories of food products: Standard category and the Proprietary category. These categories help classify food products based on their composition and labeling requirements. Here's an explanation of the difference between the two:

1. Standard Category

Food products that fall under the standard category are those that have established standards and guidelines defined by the FSSAI. Manufacturers producing food items falling under the standard category must comply with the specific standards and labeling requirements set by the FSSAI.

2. Proprietary Category

Proprietary food refers to an article of food that has not been standardized under the regulations set by the Food Safety and Standards Authority of India (FSSAI). However, it excludes novel foods, foods for special dietary uses, foods for special medical purposes, functional foods, nutraceuticals, health supplements. Any deviation in quality parameters of a standardized food does not qualify it as proprietary food. Proprietary food can only contain ingredients that are either standardized or permitted for use in food products according to FSSAI regulations and those mentioned in the Indian Food Composition Tables (IFCT), 2017. It may also include vitamins and minerals within the recommended dietary allowance. The additives used in proprietary food should adhere to the specified levels for the respective category or sub-category. Health claims cannot be made unless supported by adequate scientific evidence. The food business operator is fully responsible for ensuring the safety of proprietary food for human consumption.

Steps to Identify the Appropriate Category for Proprietary Foods

Step 1: Understand Your Product: Familiarize yourself with the characteristics and composition of your product.

Step 2: Check FSSAI Food Standards: Refer to the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011, to determine if your product fits within any existing standard category. Review the description and standard parameters for guidance.

Step 3: Refer to IFC Categorization: If your product differs from the standard product description, review the IFC (Indian Food Code) product categorization and its description in Appendix A.

Step 4: Verify Ingredients and Additives: Ensure that any additives present in your product align with the respective categories listed in Appendix A.

Illustration: Within the standard food categorization of Chocolate, there are various types of chocolate such as milk chocolate, plain chocolate, blended chocolate and filled chocolate, among others. Filled chocolate refers to a product with a chocolate coating and a center that significantly differs in composition from the coating. However, it excludes flour confectionery, pastry, and biscuit products.

If your product contains a biscuit-like center filling, it deviates from the standard description of filled chocolate. As a result, it would be classified as a proprietary product under category 5.1.3 Cocoa and chocolate products. This 5.1.3 category is designated for chocolate as per the defined regulations and for confectionery utilizing chocolate that adheres to the specified standard and might include additional ingredients.

The following are the essential aspects concerning the labeling of proprietary foods in accordance with FSSAI regulations:

  • The Word ‘ Proprietary Food’

  • Name of the Food: The label should clearly indicate the name of the proprietary food product.

  • Category or Sub-Category: The category or sub-category of the proprietary food should be mentioned on the label.

  • Ingredients and additives:  Only ingredients and additives that are either standardized or permitted for use in food products under FSSAI regulations.

  • Health Claims: No health claims should be made on the label or otherwise unless they are substantiated by adequate scientific evidence.

Regulatory Applications of Proprietary Food products under FSSAI

1. Obtaining Central License for Proprietary Foods

Proprietary foods that adhere to regulatory provisions do not need pre-approval from FSSAI. Food Business Operators (FBOs) must ensure compliance with these provisions and bear full responsibility for the safety of the proprietary food. In any case, a FSSAI license must be obtained from the Central authority. The manufacturer is required to update their license, and FSSAI will conduct checks and provide approval. Once approved and listed on the license, the corresponding Proprietary category number must be included on the final product label.

2. Intellectual Property Protection

Alongside regulatory applications, companies may consider obtaining patents or trademarks for their unique food products, processes, or formulations. This helps safeguard their innovation and provides legal recourse in case of infringement or unauthorized use by competitors.

Other critical labeling errors commonly made by most startup manufacturers include:

1. Inaccurate or Incomplete Ingredient Lists

Failure to provide accurate and complete ingredient lists is a common labeling mistake, with some companies intentionally omitting certain ingredients or overlooking them. This omission can be risky for consumers, particularly those with food allergies or dietary restrictions, who rely on ingredient information for informed decision-making

2. Misleading or False Claims

Food companies occasionally resort to misleading or false claims on their product labels to attract consumers. These claims may include unsubstantiated health benefits, misleading nutritional claims, or inaccurate statements about the product's origin or quality. Such practices can misguide consumers and compromise their trust in the brand. FSSAI has demonstrated its commitment to addressing mislabeling and misleading false claims by taking strong actions. Through rigorous enforcement and penalties, FSSAI aims to protect consumers and uphold the integrity of food labeling regulations in India.

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3. Inconsistent Nutritional Information

Accurate nutritional information is crucial for consumers to make informed dietary choices, but inconsistencies in labeling, such as incorrect calorie counts and misleading nutrient claims, can lead to confusion. Another common error is the omission of updated mandatory nutrients in FSSAI regulations like total sugar, added sugar, trans fat, and saturated fats, or incorrectly mentioning recommended dietary allowances (RDAs) above 100%, which can further impact consumers' ability to assess the nutritional value of a product.

4. Missing Allergen Warnings

Food allergies can be life-threatening for susceptible individuals. Neglecting to include allergen warnings or failing to highlight allergenic ingredients in bold or distinctive formats is a serious labeling mistake. It puts consumers with allergies at risk and may lead to severe health consequences.

5. Misleading Logo Usage

Food companies often display logos such as Organic logo, Jaivik Bharat, Fortification, and Vegan logo without adhering to the required procedures and updating their FSSAI license, leading to misleading practices that can confuse and misinform consumers.

6. Labelling of Health Supplement, Nutraceuticals and Health products

Manufacturers and food companies often fail to comply with the specific labeling and ingredient specifications outlined by FSSAI for health supplements, nutraceuticals, food for special dietary use, food for special medical purpose, functional food, and novel food categories. This non-compliance results in mislabeling, non-compliant claims, and formulations that do not meet regulatory standards.

7. Non-compliance with FSSAI Labelling Regulations, Legal Metrology regulations:

Food companies often make significant labelling mistake by failing to comply with the mandatory parameters of FSSAI Labelling and Display regulations, and also violations of legal metrology standards which include requirements such as the declaration of USP (Unique Selling Proposition), MRP (Maximum Retail Price), net weight, and adherence to prescribed font size and style.

The Food Safety and Standards Authority of India (FSSAI) imposes penalties for various violations to ensure compliance with food safety regulations. For misbranded food, a penalty of up to 3 lakhs can be imposed. Similarly, for misleading advertisements that make false claims about food products, the penalty can be up to 10 lakhs. These penalties serve as deterrents and encourage food businesses to maintain transparency, accuracy, and integrity in their labeling and advertising practices.

Food startups, food companies and all other manufacturers must be particularly cautious about food labeling mistakes as they can greatly impact their reputation and consumer trust. Non-compliance with FSSAI regulations can lead to severe consequences for consumers, compromising their health and ability to make informed choices. By prioritizing accurate and transparent food labeling practices, food startups can build consumer trust, promote food safety, and contribute to a healthier food industry. Increased awareness, strict monitoring, penalties for non-compliance, consumer education, and advocacy all play pivotal roles in minimizing labeling errors and empowering individuals to make informed and safer food decisions.

About LabelBlind®

Established in 2018 and based in Mumbai, LabelBlind® specialises in the area of Digitising Food Labelling and Regulatory Compliance. FoLSol® by LabelBlind® presents India’s 1st Digital Food Labelling Solution. The SaaS platform supports Food Businesses to be Labelling Compliant and Build Consumer Trust. FoLSol® by LabelBlind® is designed to strengthen the food labelling ecosystem across a wide spectrum of services including, Packed Food Labelling, Menu Labelling, Exports Labelling, Nutraceuticals and Food Supplements Labelling and Labelling for Ecommerce players. FoLSol® Digital Food Labelling Solution is fast, accurate, and cost effective. The company is ISO9001 certified in its processes.

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Monalisa Ganguly (MSc Food Technology and Processing)

Monalisa is happy go lucky gal, and fond of dogs and nature. She is a hardworking regulatory affairs enthusiast.

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