Progressive Grocer (India) - - Contents - By Sushil Khai­tan

Many in­ter­na­tional and lo­cal play­ers to en­ter the nu­traceu­ti­cal seg­ment whose per­cent­age share of the over­all health and well­ness mar­ket is grow­ing at a rapid clip.

Thanks to the bur­geon­ing af­flu­ent mid­dle class that is in­creas­ingly be­com­ing health con­scious and aware of the pos­i­tive im­pact of us­ing di­etary sup­ple­ments, the nu­traceu­ti­cal mar­ket in In­dia is on the cusp of a break­out. This new health phe­nom­e­non among young In­di­ans is en­cour­ag­ing many in­ter­na­tional and lo­cal play­ers to en­ter the nu­traceu­ti­cal seg­ment whose per­cent­age share of the over­all health and well­ness mar­ket is grow­ing at a rapid clip.

Nu­traceu­ti­cals are a rel­a­tively new cat­e­gory in In­dia. Yet the mar­ket has wit­nessed ex­po­nen­tial and un­prece­dented growth in re­cent years. A pri­mary rea­son for this up­surge is due to the fact that the newer gen­er­a­tions are in­creas­ingly well-in­formed re­gard­ing health con­cerns. Peo­ple to­day are proac­tively tak­ing pre­emp­tive steps to re­main fit and healthy, which has helped put the spot­light on preven­tive health care. The health­con­scious young adults of to­day are also more open to the idea of “nutri­tion in a pill”. They un­der­stand the ben­e­fits of sup­ple­ment­ing their reg­u­lar diet to en­sure that the nu­tri­tional re­quire­ments are met.

The rise of In­dia’s nu­traceu­ti­cal mar­ket

The In­dian nu­traceu­ti­cal mar­ket was val­ued at 2.8 bil­lion USD in 2015 and is ex­pected to reach 8.5 bil­lion USD by 2022. How­ever, re­search now shows that the growth may far ex­ceed the pro­jected fig­ures. One of the main rea­sons for the spurt in nu­traceu­ti­cal sales is our eco­nomic up­swing. The In­dian econ­omy now ranks as one of the fastest grow­ing economies in the world with an av­er­age an­nual growth rate of 5 per cent. The in­crease in pur­chas­ing power has en­abled a larger num­ber of con­sumers to buy non-es­sen­tial prod­ucts in or­der to im­prove their qual­ity of life.

An­other im­por­tant rea­son for the grow­ing in­ter­est in nu­traceu­ti­cals is the in­crease in the in­flu­ence and reach of so­cial me­dia. So­cial me­dia plat­forms such as Face­book, Twit­ter, In­sta­gram, and Snapchat have in­flu­enced and in­creased the shar­ing of knowl­edge. So­cial me­dia is also an easy way to stay up-to-date on the lat­est news in health care. It has also helped cre­ate aware­ness on the im­pact of life­style choices on health. Our seden­tary life­style, cou­pled with an in­creased reliance on fast foods and pack­aged food, has led to a sharp in­crease in life­style dis­eases in­clud­ing di­a­betes, obe­sity, and heart dis­ease. The in­creased aware­ness of these health risks has re­sulted in con­sumers switch­ing to a health­ier life­style and sup­ple­ment­ing their di­ets with nu­traceu­ti­cals in­stead of phar­ma­ceu­ti­cal drugs in or­der to im­prove their over­all health.

De­mand for nu­traceu­ti­cal prod­ucts

While the younger gen­er­a­tions have played a sig­nif­i­cant role in the growth of the nu­traceu­ti­cal mar­ket, in re­cent years the se­nior cit­i­zens’ con­sumer bracket has also de­vel­oped. This growth can be traced to the in­crease in the av­er­age life­span, cou­pled with a grow­ing de­sire to en­joy one’s post-re­tire­ment years. In­di­ans are also well-in­formed about the

pos­si­ble side ef­fects of phar­ma­ceu­ti­cal drugs and so more and more of them are in­creas­ingly turn­ing to­wards nat­u­ral so­lu­tions – not just to in­crease their life­span but also to in­crease the qual­ity of their life too. Sev­eral of these nu­traceu­ti­cals of­fer ther­a­peu­tic ben­e­fits and can be used to pre­vent com­mon ail­ments as­so­ci­ated with old age. There is also a prac­ti­cal and fi­nan­cial driver be­hind the grow­ing in­ter­est in preven­tive health­care. Spi­ral­ing med­i­cal costs and in­creased in­ci­dence of life­style dis­eases has forced our cost-sen­si­tive mar­ket to con­front the re­al­ity that spend­ing on nu­traceu­ti­cals now is an in­vest­ment in fu­ture health. By in­vest­ing in preven­tive care, you can save a lot more on fu­ture med­i­cal ex­penses, and so nu­traceu­ti­cals have be­come a sen­si­ble and prac­ti­cal choice.

Most nu­traceu­ti­cals are bio-avail­able herbal for­mu­la­tions con­tain­ing nat­u­ral in­gre­di­ents and ex­tracts that work to­gether for a com­mon pur­pose. For in­stance, a di­ges­tive sup­ple­ment would con­tain a va­ri­ety of in­gre­di­ents such as ap­ple cider vine­gar, gin­ger root, pro­bi­otics, etc, that sup­port di­ges­tive health. Sim­i­larly, sup­ple­ments that help to lower blood pres­sure might con­tain the bark of the Ar­juna tree along with grape­seed ex­tract, and they also con­tain ther­a­peu­tic com­pounds that ex­ert lipid low­er­ing and anti-in­flam­ma­tory ef­fects. Com­bin­ing sev­eral nat­u­ral com­pounds and ex­tracts can greatly in­crease the ther­a­peu­tic ben­e­fits of the sup­ple­ment. For in­stance, stud­ies have shown that adding piper­ine – a com­po­nent found in black pep­per – to cur­cumin ex­tract ob­tained from turmeric could in­crease the bioavail­abil­ity of cur­cumin by more than 100 per cent! Nu­traceu­ti­cals are es­pe­cially ef­fec­tive in pre­vent­ing and man­ag­ing di­a­betes, heart dis­ease, ane­mia, arthri­tis, liver dis­ease along with res­pi­ra­tory and di­ges­tive dis­or­ders. These sup­ple­ments can also be used to detox­ify and cleanse your body, boost your im­mune sys­tem and sup­port healthy or­gan func­tion. Nu­traceu­ti­cals can also be used to im­prove hair or skin health and these sup­ple­ments are of­ten

and are pro­jected to touch INR 6 crore by the end of the cur­rent fi­nan­cial year. Fur­ther­more, we have seen great up­take over the last six months and are clock­ing dou­ble digit growth in month-on­month sales. We are also look­ing to start fran­chise stores pan In­dia. What sets us apart from the com­pe­ti­tion is the fact that we are closely at­tuned to the unique cul­tural and nu­tri­tional re­quire­ments of In­di­ans, al­low­ing us to cater to their needs. We have iden­ti­fied a grow­ing need for healthy, nat­u­ral prod­ucts in the FMCG cat­e­gory, which is why we will soon be in­tro­duc­ing pro­tein bars, gra­nola mixes, nut but­ters, etc. What is your re­tail­ing strat­egy? We have part­nered with top re­puted re­tail­ers across In­dia. Our prod­ucts are cur­rently avail­able at lead­ing hos­pi­tals, med­i­cal stores and chemists across the coun­try in­clud­ing No­ble Plus, Med­source health­care, Guardian Phar­macy, and Food­hall to name a few. We are also in talks with other re­tail­ers to in­crease our reach. Our ex­ist­ing part­ners have re­ported good trac­tion and we have con­sid­er­ably in­creased SKUS in stores over the last six months. Pure Nutri­tion prod­ucts are also sold across var­i­ous e-com­merce plat­forms like Ama­zon, Ebay, and Healthkart. We

mar­keted as cos­me­ceu­ti­cals, of­fer­ing the op­por­tu­nity to achieve healthy skin and hair from within. The scope for nu­traceu­ti­cals in­creases as newer stud­ies con­firm the health ben­e­fits of var­i­ous herbs and nat­u­ral com­pounds.

The fu­ture of nu­traceu­ti­cals

While nu­traceu­ti­cals have come a long way, there is still tremen­dous scope for mar­ket ex­pan­sion in In­dia. Although we have 17 per cent of the world’s pop­u­la­tion, only 2 per cent of the global nu­traceu­ti­cal mar­ket rev­enue comes from In­dia. This is pri­mar­ily be­cause most nu­traceu­ti­cal sales so far have been in the metropoli­tan ar­eas of the coun­try, but there is an in­ter­est in ex­pand­ing into tier II and tier III cities as well. The dras­tic im­prove­ment in in­ter­net ac­cess and in­creased con­sumer con­fi­dence in e-com­merce sites have also helped the nu­traceu­ti­cal mar­ket sig­nif­i­cantly. It is ex­pected that sales through new chan­nels and in new mar­kets will con­tinue to in­crease in the fu­ture.

The busi­ness cli­mate is also im­prov­ing be­cause of the FSSAI’S pro­posed in­tro­duc­tion of new reg­u­la­tions next year. This will help tackle the lack of con­sis­tent reg­u­la­tion and stan­dard­iza­tion of nu­traceu­ti­cal prod­ucts, en­sur­ing bet­ter qual­ity prod­ucts and boost­ing con­sumer con­fi­dence. The new frame­work will pre­scribe clear stan­dards and wellde­fined prod­uct cat­e­gories elim­i­nat­ing the cur­rent are look­ing at the fran­chise route in or­der to grow and ex­pand and aim to open 100 stores across the coun­try in the com­ing year. Which are the ma­jor op­er­a­tional chal­lenges that you face in terms of lo­gis­tics cost, re­tail and dis­tri­bu­tion mar­gins and other chal­lenges that you would like to men­tion? The main op­er­a­tional chal­lenge we face is the dis­tri­bu­tion mar­gin. To­day, dis­trib­u­tors and re­tail­ers of­ten ask for higher mar­gins. In re­tail, the norm is 30% of the MRP but now dis­tributers de­mand as much as 50%. This re­duces prof­its sig­nif­i­cantly. An­other se­ri­ous prob­lem is the rise of se­vere and un­healthy com­pe­ti­tion in the mar­ket. New brands are fre­quently be­ing launched; these brands fo­cus on keep­ing their man­u­fac­tur­ing costs as well as sell prices low. To do this, they com­pro­mise on the qual­ity of their prod­ucts and mar­ket low qual­ity for­mu­la­tions that have re­duced bioavail­abil­ity. What’s worse is that they in­dulge in ques­tion­able prac­tices, in­clud­ing mar­ket­ing syn­thetic prod­ucts as nat­u­ral prod­ucts. Their un­scrupu­lous prac­tices al­low these new play­ers to of­fer dis­tributers much higher mar­gins than the norms in the mar­ket which leads to un­healthy com­pe­ti­tion. am­bi­gu­ity. Once these reg­u­la­tions are in­tro­duced, it will also help us to man­u­fac­ture, dis­trib­ute, sell and im­port prod­ucts within a clear frame­work.

In light of the cur­rent trends, the fu­ture for nu­traceu­ti­cal man­u­fac­tur­ers is cer­tainly bright. The growth of func­tional foods and beverages has helped widen the ap­peal of nu­traceu­ti­cals and this seg­ment of the mar­ket alone is an­tic­i­pated to hit a value of USD 3.2 bil­lion within five years. At the same time, in­dus­try in­sid­ers be­lieve that the share of the cos­me­ceu­ti­cal sec­tor alone shall be worth an es­ti­mated USD 7.5 bil­lion by 2024.

We are a Mum­bai-based nu­traceu­ti­cal com­pany that takes inspiration from an­cient In­dian medicine, but uses rig­or­ous mod­ern sci­en­tific meth­ods of test­ing and trial to cre­ate a va­ri­ety of nat­u­ral foods, sup­ple­ments and herbal in­fu­sions of the high­est qual­ity. — Sushil Khai­tan CEO & Di­rec­tor Pure Nutri­tion

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