Nutraceuticals are the products that offer health as well as medicinal benefits, consisting of prevention and treatment of disease. The word nutraceuticals is a combination of two words - Nutrient & Pharmaceuticals. Increasing rate of chronic diseases has emphasised the need for prevention over intervention. The key reasons for this have been the increased incidence of lifestyle diseases the world over, increase in life expectancy and inadequate nutrition.
Increasing health consciousness, changes in dietary habits, increasing shift towards self-medication, changing demographics, improved awareness on preventive care v/s curative care, improved incomes and standards of living have boosted the growth of nutraceuticals markets in India, making it one of the fastest growing segments. Information symmetry created by mobile and TV has played its role in making this happen and makes India the most potential market for nutraceuticals and dietary supplement products in the world. The ageing population will increase, and demand for supplements and functional foods related to age-related conditions will certainly grow at double-digit rates.
The major growth drivers for nutraceuticals in India are:
· Aging population
· Increasing mortality rate due to cardiovascular, diabetes and obesity
· Annual disposable income
· Internet users
· Healthcare spending
· Spending habits of the urban population of the country
In India, nearly 450 million people belong to the middle class with disposable income making them capable to buy nutraceuticals and dietary supplements. There are 516 million people between the ages of 20-55 today; that number will grow to 800 million in the next 40 years. The growth alone is larger than the entire US population. There has been considerable increase in spending by Indians on healthcare backed by the growing purchasing power of individuals. It is an inevitable fact that affluence is one of the causes of lifestyle diseases, which nutraceuticals and dietary supplements often address. In addition, the growth of the nutraceuticals market has also been contributed by easy availability and accessibility of healthy foods in developing nations, inclination towards healthy lifestyle and introduction of foods targeted at specific diseases and deficiencies.
India’s future in nutraceuticals industry looks promising, for both manufacturers and consumers. And there is a strong need of developing customised products, affordable pricing and distribution strategy. Globally nutraceutical market is forecast to be worth $278 billion by 2021, according to Transparency Market Research, suggesting 7.3 per cent compound annual growth rate.
Primarily, the Indian nutraceuticals market divided into dietary supplements, functional foods and functional beverages. Among the three market segments, functional beverages is growing much faster at CAGR of around 21 per cent followed by functional foods at 20 per cent and dietary supplements growing at a CAGR of 15 per cent. As per market research agency IKON, Indian nutraceuticals market is highly concentrated in South India followed by East India with leading top three states Andhra Pradesh, Tamil Nadu and West Bengal.
While dietary supplements such as vitamin and mineral supplements have been captured by pharmaceutical companies, FMCG companies are now bringing functional foods and beverages to the market. With increasing sophistication among nutraceuticals, consumer demand for products with specific health benefits has been on the rise. Nutraceutical products have now been cordoned into various segments based on health benefits. These sectors such as heart health, eye health allow manufacturers to position themselves better.
The urban centric Indian nutraceutical market is gradually gaining ground in rural India with the recent penetration of lifestyle diseases in rural India. Rural India occupy nearly one third of the market. As per IKON’s estimates, the nutraceuticals market in India penetrated just above 10 per cent at all India level. The penetration rate is high in urban India at 22.51 per cent, where as in rural India it is merely 6.32 per cent, according to a study on 'Indian Nutraceuticals, Herbals, and Functional Foods Industry: Emerging on Global Map,' jointly conducted by ASSOCHAM and RNCOS.
Globally, US and Japan are the most developed markets for nutraceuticals, due to the consumer acceptability achieved in these regions. India, China and Brazil are developing nations which show huge potential for the nutraceuticals market. Germany and Israel have emerged as the key innovation hubs of the nutraceutical industry.
However, the industry in India is in a nascent stage and holds ample opportunity to grow in future. There is a strong need of developing customised products, affordable pricing and distribution strategy.
The mood of the industry is upbeat and many companies are pumping in money into the nutraceuticals market in India. Important thing is to recognise that companies need to begin investing in India to take advantage of these above mentioned trends in the future. Lifestyle diseases are on the rise thanks to workplace stress, poor eating patterns and long working hours. India has advantages like qualified human resources, world class R&D facilities and varied raw-material aspects that give our country a leading edge.
Today, the opportunities are plenty, there is vast empty space in the market, the consumer is hungry for products, the market forces are openly welcoming new entrants, the competition is not yet intense, and the growth drivers are in place. Hence, in all probability, there could not be a better timing to enter this market in India than now.