Brief On Nutraceutical Products:India
OVERVIEW OF NUTRACEUTICAL PRODUCTS
Background
As Indians become conscious
about their health and how they look and feel, the market for dietary
supplements, sports nutrition products, and weight loss products that are
broadly clubbed under nutraceutical is beginning to pick up speed. At present,
the nutraceuticals industry in India is about USD 2.2 billion and is mainly
focused in the southern region, followed by the eastern region with three major
states of Andhra Pradesh, Tamil Nadu and West Bengal. Along with the growing
healthcare industry in India there is an emerging trend in Fast Moving
Healthcare Goods (FMHG) in India worldwide known as Nutraceutical, which are by
definition, ingredients with human health benefits beyond basic nutrition.
The Indian nutraceuticals
industry is expected to grow at 20 per cent to USD 6.1 billion by 2019-2020 due
to rising awareness about health and fitness and changing lifestyle. However,
dietary supplements, specifically herbal and dietetic supplements will form the
greatest opportunity areas for Nutraceutical manufacturers, driven by growing
demand from an evolving consumer base.
Large global food
companies, which are always on the lookout for ways to diversify their product
line and still turn a profit, have set up functional food or nutraceutical
divisions. Pharmaceutical companies are now adopting the nutraceutical and the
recent trend is convergence of food manufacturing companies with
pharmaceuticals to implement the research necessary for drug discovery; the
move into the less expensive and time consuming nutraceutical research process.
It is thus becoming a logical progression for many food companies to enter into
nutraceutical market.
Present Market Scenario
The trend towards
preventive healthcare has seen Pharma Companies such as Novartis,
GlaxoSmithKline, and Cadila Healthcare has diversified into the production of
nutraceutical. Then there are fast moving companies like Cadbury India and
Dabur that have had a presence in the market with a slew of supplements &
additives. On the other end of the spectrum companies that specialize in
ayurvedic/ herbal health care products like the Himalaya Drug Company. The
Indian Nutraceutical Market is dominated by pharmaceutical and fast-moving
consumer goods (FMCG) giants. While Dietary supplements such as Vitamin and
Mineral Supplements have been captured by Pharmaceutical companies, functional
food 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. The nutraceuticals industry in India is one of the rapid growing
markets in the Asia-Pacific region. Factors like rising awareness about health
and fitness, ageing population, changing lifestyle are fostering this growth.
The industry is anticipated to grow at around 20 per cent over the period to
reach USD 6.1 billion by 2019-2020. Nutraceuticals business is divided into
three segments - functional food, functional beverages and dietary supplements.
Entry of various international andlocal
players in this market, there is acceleration in growth. The Indian
nutraceuticals market is divided into functional food and beverages (68 per
cent) and dietary supplements (32 per cent).
International Market Dynamics
The
global nutraceutical market was valued at $160.6 billion in 2013 and increased
to $171.8 billion in 2014. The market is expected to reach $241.1 billion by
2019, a compound annual growth rate (CAGR) of 7% from 2014 to 2019. Global
population of individuals over 60 years of age expected to reach 1 billion by
2020, 70% of which will be living in developed nations driving “Anti-aging”
and
“age-defying” products to higher product visibility. Increases in global
healthcare costs led more individuals to focus on preventative care,
self-diagnosis, and self-medication.
1.
Europe -
Increased government regulation and arduous approval processes stifling
innovation. In lieu of introducing new ingredients, European companies are
focusing on rebranding and expanding product offerings for currently approved
ingredients
2.
Latin America -
Underserved markets could spur growth in the region as disposable income
increases
3.
Asia/Pacific -
Currently the Asia/Pacific region’s market share is only surpassed by the U.S.
dominated North America region. Regional market share as a whole is expected to
surpass North America’s market share by 2017
Ø
China -
Expected to be the largest consumer of Nutraceuticals ingredients by 2020.
Growth in China expected to be fueled by the rapidly growing middle class and
its disposable income
Ø
Japan -
Currently the second largest individual consumer of Nutraceuticals (behind the
U.S.)As its middle class continues to expand, China should eclipse Japanese
consumption within the next few years
Ø
India and
Indian Subcontinent - Unlike its regional neighbors, India’s market share
growth is not expected to come from dietary supplements. However, functional
beverages are expected to drive growth throughout the subcontinent
The
Functional foods (24 percent) and Functional beverages (12 percent) are relatively
nascent markets in India, primarily due to the existence and reliance on
traditional wisdom and Ayurveda by a burgeoning middle class, which accounts
for a huge chunk of the purchasing power in India. Further the marketing of
products such as sports and energy drinks is primarily targeted at niche
segments of the urban population, resulting in low penetration for these
products, even amongst the urban population. Growth of the Dietary supplements
will be spurred forward by the growing demand for dietetic supplements, due to
an urban, fitness conscious, young population. With increasing sophistication
among Nutraceutical, consumer demand for products with specific health benefits
has been on the rise. Nutraceutical products have now been cordoned into
various segments based on the health benefits. These sectors such as heart
health, eye health, in India and allow manufacturers to position themselves
better.
MAJOR PLAYERS
GSK
Consumer Health Care: is an
Industry leader with an estimated seven percent of the world’s Pharmaceuticals
Market. GSK has two products: Nutritionals and OTC. Recently GSK has
successfully extended brand Horlicks into food categories such as biscuits,
noodles, cereal bars & oats.
Amway:
Amway is one of the world’s largest direct
selling companies. Amway operates in more than 80 countries and
territories on six continents. More than 450 unique, high-quality products
carry the Amway name in the areas of nutrition, wellness, beauty, and home. In
addition, Amway distributors in selected markets sell additional brand-name goods
through local merchandise catalogues, plus a variety of services and
educational products. The Indian arm of Amway Corporation, has achieved a
turnover of Rs 22.88 billion for calendar year 2012. The company also
registered a CAGR of over 20 per cent for the past five years and is aiming to
achieve the turnover of Rs 50 billion by year 2020.
Abbott
Nutrition: Abbott
Nutrition is a division of Abbott, the global, broad-based health care company.
Every day, our global team of scientists is working hard to discover and
develop nutritional and related health care products that advance the quality
of life for people of all ages. It offers a range of nutritional
products for children, infants, adults, people with diabetes etc. Worldwide
sales of nearly $5.4 billion increased 3.5 percent on an operational basis,
consistent with previous guidance, driven by 9.0 percent operational sales
growth in Nutrition and 6.4 percent operational sales growth in Diagnostics.
Baidyanath Group : One of India's
most respected Companies, Shree Baidyanath Ayurved Bhawan
Ltd.
(Kolkata), popularly known as Baidyanath, is the acknowledged leader of
Ayurvedic know-how. Ayurveda is a 5000 year old Science of health care and
herbal treatment. Ayurveda, is highly effective in common and complicated
ailments, assures long term relief and has no side effects. AYURVEDA is now
backed by modern scientific research and technologies and provides its gentle
healing touch to millions around the world
GROWTH OF NUTRACEUTICAL PRODUCTS
Market Growth
The
nutraceutical market broadly consists of two major segments- Food supplement
and vitamins and Mineral supplements, the former constituting over 60 per cent
of the market and the rest 40 per cent comes from the latter. Among vitamins
and mineral supplements have continued to be marketed and distributed like
prescription drugs in India, as the general awareness level are still low. Food
and supplements on the other hand, are marked and distributed more like FMCGs,
a reason why they are also clubbed as fast moving healthcare goods by the
various players. Nutraceuticals market penetration in urban India is at around
22.5 per cent, while it is comparatively low in rural India at 6.3 per cent.
The urban penetration is more as demand for protein supplements is increasing
among the urban youth due to rising desire towards maintaining fitness and
building a strong physique.
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