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