Indian nutraceuticals market growing at 17.1% - Frost & Sullivan

08 April 2014 | News | By Bureau Report

Growing at a compound annual growth rate (CAGR) of 17.1%, Indian nutraceuticals market is expected to reach $4 billion by 2018, a new analysis by Frost & Sullivan says.

According to the analysis, the penetration of nutraceuticals in India was around 15% in 2013. Globally the nutraceuticals market earned around $168 billion in revenues in 2013 in which India had a demand share of around 2%, earning around $2 billion. China, Southeast Asia, and India are the fast-growing markets, with each experiencing growth in double digits. In the last 1-2 years functional beverages have emerged as a fastest growing category for the Indian market, with companies expanding their portfolio in the segment. The category is expected to grow at a CAGR of 21.7% by 2018.

“The Indian nutraceuticals industry has evolved from an ingredient export-focused industry to one that is looking to cater to the domestic market. With specific focus on the market, the industry has evolved from foods that started out as ‘with natural ingredients’ to, currently, foods that are positioned as ‘preventive care’”, said Vishnu Shankar, Associate Director & Head, Chemicals, Materials & Food Practice, Frost & Sullivan.

When compared to developed counterparts such as the USA, Europe, and Japan, the percentage of total population consuming nutraceuticals in India is considerably low. It constitutes of primarily the higher socio-economic classes and a very small percentage of the lower classes. The middle to high income groups are the dominant consumers of functional foods and beverages along with dietary supplements, while the lower income groups consume mainly prescription-based dietary supplements. Health awareness and an increase in the penetration of organized retail stores are expected to play a major role in driving the nutraceutical consumption in India.

“The Indian market is currently evolving at a rapid pace, one that needs to be matched by increasing consumer awareness, regulations, supply chain infrastructure, and product affordability to allow the industry to develop holistically”, notes Shankar. Currently, the market is dominated by pharmaceutical and FMCG giants. While dietary supplements such as vitamin and mineral supplements have been captured by pharmaceutical companies, functional foods and beverages are now being brought to the market by FMCG companies. However, certain segments like dietetic supplements are now being catered to by pure-play nutraceutical companies, apart from their pharmaceutical and FMCG counterparts.

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