Indian Nutrition Market

Nutra-ceutical is a fairly new terms especially for Indians.  As the name partly suggests these nutra-ceuticals are partly food partly vitamis and they offer nutrition to accompany eating. The product could be  is a purified form of food food material dried and packed in capsules or powder form. This form is not usually associated with food and even though it offers to have added value beyond food – consumers are more cautious about using these. The benefits could be physiological or provide protection against some deficiency.

Nutraceuticals are three kinds – functional foods – like dried pulp or fruits or beverages which can be made by adding water to powder or in capsule form containing minerals.

Nutraceuticals is a combination of the word – ‘nutrition’ and ‘pharmaceuticals.’
This term was totally uncommon in India untill a about ten years ago when many companies like Amway, Herbalife, Himalaya drug and others started offering things like – Karela capsules, Amla capsules or Glucosamin capsules.

Indians were not comfortable to eat such vitamins (except Becosules) as the belief has always been to eat simple food and draw maximum out of fresh foods.

However, with changing environment and lifestyles people have understood and many of them swear by the benefits they have from these nutraceuticals.

The name and components  for Nutraceuticals varies in different countries – In Canada, the US –  herbal formulations and are considered part of Nutraceuticals but not in Japan.

Regulation in India

the Food Safety & Standards Act is expected to be amended to include this growing category. The Dietary Supplement Health and Education Act of 1994 has led to expand ‘Nutraceuticals to include vitamins, minerals, herbs, amino acids and dietary substance for human use as a supplement diet’.

The regulatory framework of Nutraceuticals in India right now creates some distinctions between food category items and medicine category items. INdia will finally follow the US and in time – approval therapeutic products and  provide assurance of safety. Japan is taking the lead in this.

Market potential

Two areas of health are very important in India – ‘immunity build up in children and growing adults’ and ‘boosting physical and mental strength of children.’ Rising health care costs, a greying population, huge levels of disposable incomes all these are driving the market for Nutraceuticals.

As per Cygnus Business Consulting & Research, in 2008, the Nutraceuticals market in India was Rs18.75 billion and this is growing at the CAGR of 21.23%. The Indian nutrition market is estimated to be US$1 billion; while the global market is growing at a CAGR of 7%, the Indian market is growing much faster at a CAGR of 18%. The latent market in India is two to four times the current market size with 148 million potential customers.

The domestic market for Nutraceuticals is around Rs 4,400 crore. India’s nutritional supplement market is expected to more than double to Rs 9,500 crore by 2013. Growth in Nutraceuticals products business will be fuelled mainly because of the changing lifestyle and increasing awareness about nutritional supplements.

Indian consumers have a penchant for anything that is “natural” or carries the “herbal” tag. Gullible consumers even get cheated in the process. But the manufacturers of Nutraceuticals products are trying hard to produce products that suit the Indian palate. The rural population in India is 72% and until this market is penetrated, real success may elude the Nutraceuticals industry.

The market will reap benefits for those products that can clearly provide health benefits to the consumers. Growth in herbal extracts segments is likely with green tea, herbal bread, garlic capsules, soya milk gaining popularity in the market. Probiotics, protein supplements, Omega 3 fatty acids, and antioxidants are products that can play a major role in the future growth of Nutraceuticals industry.

As far as the Indian Nutrition market is concerned, Nutraceuticals need to be targeted at the bottom of the pyramid population to achieve volume growth. Direct marketing efforts may take longer to reach the consumer but are a viable means of reaching out to the consumer.

India – an ideal destination

India is an ideal location for manufacturing Nutraceuticals products because of availability of natural products, good quality fruits and vegetables. India has advantages like qualified human resources, world-class R&D facilities and varied raw material aspects that give our country a leading edge.

Growth drivers

The factors that contribute to the growth are consumer awareness, greater health consciousness, changing lifestyle diseases, ageing population, increase in disposable income, and booming retail growth.

Challenges

The total market size in India is still very small compared to the global market. Lack of awareness and absence of regulations are some of the ills plaguing the sector. The Indian market is largely a prescription-oriented market. Many pharmaceutical and Nutraceuticals companies that were trying to promote their products through the doctor are now adopting a different route, the direct route to the identified end-user.

Reduction in cost of manufacturing and packaging by marketing the products as dietary supplements in powder form to keep the intrinsic value alive.

A recent study reported that 70% of patients typically consulted a medical practitioner before going in for natural therapy. The problems faced by Nutraceutical companies are

1. Consistent quality

2. Increase in market competition

3. Increase in product cost

This has led companies to outsource products.

Unlike USA, the Indian Nutraceuticals market is regulated by multiple laws. In the absence of a regularised system for setting up of manufacturing units for Nutraceuticals products, companies are unable to avail of subsidies in the products. Due to absence of regulatory guidelines, the Nutraceuticals are either categorised as foods or drugs. Quality and price control then becomes a major issue.

As a concept, Nutraceuticals is still in its infancy in India due to low levels of awareness and market penetration. How many people are aware about protein biscuits and how many can