Sushil Khaitan CEO & Director, Purenutrition.me
When nutraceuticals first arrived in India, most manufacturers were skeptical about the scope for sales, but consumers were quick to adopt the trend. The Indian nutraceutical industry is still in its nascent stages, accounting for just 2% of the global market share, but current trends point towards great prospects in the near future. Back in 2015, the market was valued at $ 2.8 billion, but it estimated to have already reached around $ 4.2 billion this year. With our huge markets opening up further and other encouraging developments, the nutraceutical market value should hit the $ 10 billion mark in just three years.
DEMAND DRIVEN INNOVATION IN THE NUTRACEUTICAL MARKET
Social changes have always been a driving force for innovation and advances, and that certainly holds true for nutraceuticals. Increasing public awareness and rising costs of health care have pushed consumers to explore alternative therapies for treatment. Most importantly, there has been a shift in popular perceptions of health and wellness, underscored by preventive care. At the same time, consumers also want convenience. For this reason, we will be launching a line of new products in sachet form, aimed at increasing intake of specific vitamins, which most Indians tend to be deficient in because of our vegetarian diet – this includes vitamins B12 and D3. Another product in the functional food space will contain CLA to help fight belly fat, which is one of the most pervasive problems today, thanks to our sedentary lifestyle and diets. In addition, consumers can also expect new products like bio chlorophyll (concentrated wheat grass), which can help fight inflammatory conditions, and collagen sachets, which helps not just with skin health, but also the joints. One area that is of particular interest to us is cancer research and we are working on products to address both physiological and cosmetic concerns that are common to cancer patients. We are also closely following developments in the use of medical marijuana or cannabis extract in nutraceuticals, but this is not on the table for our Indian market right now.
GROWTH DRIVERS FOR THE NUTRACEUTICAL MARKET IN INDIA
As we have already established, India’s nutraceutical market share has already doubled since 2015 and I am fairly confident that it will double or more than double yet again, within three years. But, what is really propelling this growth?
In the past, nutraceutical products like supplements and functional foods were primarily purchased by higher socio-economic groups, but this trend is changing quickly thanks to rising disposable income and higher purchasing power. At the same time, there has also been an increase in levels of awareness among consumers about the impact of lifestyle and diet on health. Consumers have therefore begun to appreciate the role of nutrition in preventing and dealing with ailments. Additionally, awareness and appeal of natural health focused products has also grown multi-fold and most consumers see the cost benefits on spending now to prevent future ailments.
INCREASED CO-PRESCRIPTION WITH CONVENTIONAL DRUGS
Although the perception of nutraceuticals as an optional component by doctors limits the scope of nutraceuticals, this viewpoint has been undergoing a steady shift. As more research throws light on the role of diet and nutrition in disease prevention and treatment, the medical fraternity has embraced the use of nutraceuticals, including functional foods, such as for patients on liquid diets or with meal replacements. In addition to the increase in co-prescriptions by conventional doctors and specialists, nutritionists and dietitians have also been instrumental in recommending specific supplements and functional foods to patients.
As shocking as it may be to most consumers, a study also found that 70% of dietary supplements marketed in India are fake or unregulated (The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and RNCOS, April 2017). This has a huge impact on the market, hitting our revenues and also shaking consumer confidence. The root of this problem has been the lack of consistent regulation and standardization of nutraceutical products. Fortunately, the FSSAI’s introduction of new regulations in 2018 should be a game changer that will enable the manufacture, sale, and import of such products within a specific framework. These new regulations will include clear standards with well-defined product categories, including supplements and nutraceuticals. There is also greater clarity in the regulations with regard to permissible ingredients in nutraceutical products and labeling.
DEEPER MARKET PENETRATION IN INDIA
Over the last one year we have seen a shift in consumption, where a chunk of our sales earlier were from the metros and Tier I cities, we are seeing a steady growth in orders from Tier II and Tier III cities. We believe that this trend will only gain momentum as awareness about the importance of preventive medicine and health and wellness keeps increasing across the country. Consumers are beginning to recognize the health risks of prevalent nutritional deficiencies, which has created an appreciation for dietary supplements, functional foods, and nutraceuticals. The shift in focus towards preventive care has also spurred this growth in demand across the country.
INDIA GOES DIGITAL
As digital access improves and awareness about lifestyle diseases and nutritional deficiencies increases, it furthers the demand for wellness products and we can now reach such consumers directly. Consumers can be more confident about product quality when they purchase directly from manufacturers online or from reputed retailers. The online option also offers pricing advantages to both sellers and buyers. A report published earlier this year predicts that Indian e-commerce sales will touch $ 120 billion by 2020, up from $ 30 billion in FY2016 (India Brand Equity Foundation, May 2017). With health care products as one of the fastest growing e-commerce segments at a CAGR of 87.4 (Ken Research, April 2017), it is likely to make the most gains from India’s digital expansion. I should also point out that many other medical and health services have begun a shift to the digital domain, with online consultations and record keeping. Purchasing nutraceuticals online fits perfectly into this trend of integrating health care services online.