Swati Pandey, CEO, Arboreal Bioinnovations

As Indian FMCG and nutrition companies add protein to everyday foods and seek alternatives to sugar, Lucknow-based Arboreal Bioinnovations is seeing demand run ahead of capacity, with HUL’s Horlicks Protein and products from newer nutrition brands such as SuperYou, Cosmix and Slurrp Farm’s Millé illustrating the widening market for its ingredients. The company is investing ₹125 crore over the next two years to expand manufacturing in Lucknow and Gujarat after FY26 revenue of ₹197 crore accelerated to a current annualised run rate of ₹455-500 crore.

The ingredient-technology company, founded in 2015 by Swati Pandey, CEO, and Manish Chauhan, COO, supplies ingredients and formulation technologies spanning sugar reduction, proteins, and other functional ingredients to food and nutrition companies. HUL’s Horlicks Protein is among products using an Arboreal ingredient.

“There is a huge opportunity to serve India as a market where people realise the importance of having protein,” Pandey told businessline, arguing that wider adoption will depend on putting nutrition into foods consumers already eat rather than requiring them to change their diets.

Demand Overtakes

“Right now we have more demand for our ingredients than what we can produce,” Chauhan said. Arboreal recently raised ₹230 crore in funding from EAAA Alternatives, formerly Edelweiss Alternatives, Omnivore, and Rainmatter, after raising about ₹42 crore previously. The company has separately outlined ₹50-60 crore of investment in R&D as it develops new ingredients and applications.

The expansion will add to its Lucknow manufacturing base and a protein-manufacturing joint venture in Gujarat, where Arboreal provides the technology and owns the underlying intellectual property.

The two most recent months generated sales of ₹38.5 crore and ₹45 crore, respectively, underpinning the current annualised revenue run rate, according to the company.

Beyond Stevia

Pandey and Chauhan returned to India in 2015 after spending about five years working abroad and initially built Arboreal around Stevia and natural sugar reduction. The company invested roughly ₹20 crore during its first five years, when it generated virtually no revenue while developing the agricultural, extraction and processing capabilities needed for Stevia. Its Lucknow extraction facility became operational in early 2020.

The Stevia-led business eventually accumulated about 200 customers and generated ₹1.5-2 crore in monthly revenue. But the founders concluded that remaining dependent on a single speciality ingredient would limit the company’s scale.

“We realised that if we were to remain a single-ingredient manufacturer, the end game for us as entrepreneurs a few years down the line was going to be a few hundred crores in revenue,” Chauhan said. “Good margins, good reputation, IP and all of that. But it was not going to scale significantly.”

The shift came partly from customers who had approached Arboreal for Stevia. After the company helped solve problems incorporating the sweetener into products, some began bringing it challenges involving other ingredients, including taste, texture, solubility, bioavailability and cost.

Nutrition Addition

Arboreal subsequently expanded into proteins, fibres and other functional ingredients, using technologies spanning extraction, encapsulation, formulation, fermentation and enzymatic hydrolysis. Pandey sees one of the larger opportunities in moving protein beyond supplements and shakes into regular Indian meals.

An unflavoured protein, she said, can be added to atta to make regular rotis with little difference in taste, or mixed into chaas or milk.

For Arboreal, the shift from selling individual ingredients to engineering how they behave inside food has widened the addressable market. With orders now running ahead of production, the immediate challenge is more basic: building capacity fast enough to supply them.

Published on September 20, 2026