Six reasons why India is poised to be a global leader in nutraceuticals
An overview of India Nutra Inc’s comparative advantages, growth drivers and development potential?
Growing awareness about health and fitness was already paving the way for a thriving competitive landscape for nutraceuticals in India. An ASSOCHAM report released in 2018 predicted that “the Indian nutraceuticals market is expected to grow from $4 billion in 2017 to $18 billion in 2025.”?
However, with ‘immunity’ becoming the new buzzword as the world battles the COVID-19 pandemic, the demand for nutraceuticals across the globe has increased manifold. A report from Technavio forecasts that the global nutraceuticals market is poised to grow by $180.38 billion during 2020-2024, progressing at a CAGR of almost nine per cent during the forecast period.?
And, experts opine that this could set the scene for India to emerge as one of the most formidable players in this segment.?
As Sanjaya Mariwala, Executive Chairman and Managing Director, OmniActive Health Technologies, points out, “There are two distinct market opportunities for the Indian nutraceutical industry i.e. exports-led and domestic demand-led. At $4-5 billion today, the nutraceutical market has immense potential to achieve at least two to three times growth in the next five years.”
So, what are India’s comparative advantages when it comes to nutraceuticals and how can this segment accelerate growth for India Inc??
1) Government focus on improving nutritional status: Malnutrition and undernutrition are major concerns in India. ‘Nutrition in India’, a World Bank report highlights that India loses nearly $12 billion in Gross Domestic Product (GDP) to malnourishment. The government and private stakeholders have been undertaking several measures in the recent years to improve the nutritional status in the country with concerted programmes to deal with the Integrated Child Development Services (ICDS), National Health Mission (NHM) and the mid-day meal scheme are all cases in point. Likewise, this month, September is observed as ‘Poshan Maah’ or “Nutrition Month” since 2017 to increase awareness about it among the masses. Another instance is the Poshan Abhiyan, a multi-ministerial programme which envisages a malnutrition free India by 2022. The Union Budget for 2020-21, declared before the lockdown also saw an increased allocation of Rs 35,600 crores for nutrition-related programmes.
But, the outbreak of the COVID-19 pandemic has further underlined the linkage between nutritional status and economic status of a country. This, in turn, is likely to lead towards a renewed focus and importance for nutrition in public health policies and schemes than ever before to prevent diseases and deal with unprecedented healthcare challenges, thereby giving the nutraceutical industry a definite boost.??
Mariwala clarifies, “Innovation, sufficient funding, regulatory support by introducing conducive measures, and tax subsidies will be the key drivers in bringing the growth and motivating entry of new players in the market.”
“Regulators are working on driving awareness of nutritional concepts (healthy fats, protein) at a large scale. This awareness potentially trickles down to drive understanding of supplementation as a category,” says Akshay Pai, Founder and CEO, Nutrova.?
2) Shifting consumer behaviour: A recent survey by Mintel, a market intelligence agency, revealed that the number of vitamin and mineral supplement (VMS) launches in India has increased. It also revealed that India was responsible for one in five launches across Asia. It notes that while the consumption level in India was at 37 per cent in the pre-COVID-19 days, this consumption rate is expected to rise in the coming months.?
Thus changing consumer behaviour in the country is also?transforming the nutraceutical space.?This is likely to be the harbinger of tremendous benefits for the industry in the domestic as well as global markets, since be it dietary supplements, functional foods and beverages or vitamins and minerals, the consumption of these products are set to skyrocket.?
“There is a shift from curative to preventive care in the Indian market. With immunity taking centre stage due to the onset of the pandemic, consumers are relying more on nutraceuticals. Increasing costs of hospitalisation and awareness of preventive care and access to information have helped in consumers looking at health supplements and nutraceuticals in a big way,” states Sudheer S, Business Head – Zindel, The Himalaya Drug Company.?
Reiterating these findings, Mariwala states, “Inclusion of exercise, diet, and the use of over-the-counter medications and dietary supplements is becoming a way of life. People have become more conscious of their wellness and preventive care. Additionally, consumer behaviour is moving from replenishment only to daily fulfilment. Even when the fear of pandemic settles down, these behavioural shifts are expected to continue. While this is good news, I would say we have just seen the tip of the iceberg.”
“The adage, ‘prevention is better than cure’ is now well etched into the minds of consumers. As a result, nutraceuticals are now looked upon as important supplements that are on the priority list of monthly expenses, which, like food, cannot be skipped,” informs Sandeep Gupta, Chief Founder & Director- Expert Nutraceutical Advocacy Council (ENAC) and CEO & Chief Founder- NUTRAWORKS.?
3) A rich heritage in herbal and Ayurvedic medicines: The herbal segment is likely to contribute 30 per cent of the dietary supplements market in India, expected to grow CAGR of ~20 per cent from 2015 to 2023, as per a report by ResearchAndMarkets.com. Another report from Statista reveals that the export value of ayurvedic and herbal products amounted to about $446 million from India in the fiscal year 2019.?
“Today, India’s government is committed to providing a critical thrust to Ayurveda, Yoga, Unani, Siddha, and Homeopathy. Largely driven by key players like Dabur, Himalaya and the Baidyanath group, the industry has also seen relatively new, increasingly dominant, entrants such as Patanjali, who are playing a crucial role in popularising Ayurveda and giving the sector a boost,” states a report from Arthur D Little, a management consulting firm.?
Speaking at the recent launch of International Ayurveda Alliance, Barnik Chitran Maitra, the Managing Partner and CEO of ADL India and South Asia, states, “Ancient Ayurvedic practices have been the cornerstone of wellness in India and the industry has a unique opportunity to propel the global acceptance of Ayurveda.”
Other industry stakeholders and observers also hold this view.?
“India has taught the world the importance of Ayurveda, curcumin-curculife, Ashwagandha-KSM66, etc. These success stories led to companies’ worldwide studying botanical ingredients with evidence. It is India that can show the world evidence-based nutraceuticals because we have a solid reference in Ayurveda that can be modernised through modern evidence gathering methodologies,” informs Amit Srivastava, Nutrition Evangelist, Nutrify India.??
Dr Apurve Mehra, Biogetica also updates, “India has the most abundant heritage in the healing space. The Vedic sciences speak of a five-body model of the?pancha koshas, one that bridges the current divide between biology, medicine and physics. Ayurveda, for example, can prescribe variants on Vitamin C based on whether we need to create or reduce heat in the body. All of this can be effectively brought to the world for its healing and our ancient sciences are just waiting to be once again validated by modern empiricism.”
Thus, India’s rich heritage of herbal and Ayurvedic medicines, as well as spices, can stand the country’s nutraceutical industry in good stead as it expands and progresses.? ?
4) Abundant availability of ingredients: As per a Marketsandmarkets report estimates, “The nutraceutical ingredients market is estimated to be valued at $162.1 billion in 2020 and is projected to reach $227.5 billion by 2025, at a CAGR of seven per cent from 2020 to 2025.” The same report highlights that “Asia Pacific is projected to be the fastest-growing market for the forecast period and India is also projected to be the fastest-growing country in the region. It accounted for nearly 31.5 per cent of the market share in 2019.”
Explaining why India has an advantage in this segment, Pai elucidates, “With high biodiversity, robust agricultural research infrastructure and a growing number of qualified individuals in the field, India is well poised to be a leader in the nutraceutical ingredient space. The ability to grow botanicals under very controlled conditions to meet organic and other claims, the know-how to produce superior ingredients from these botanicals and robust clinical research industry to quantify outcomes in human studies can help drive growth.”?
Gupta adds, “Nutraceutical supplements like KSM-Ashwagandha, highly bioavailable curcumin, Vitamin C, vegetarian Vitamin D3, Vitamin B12, zinc, selenium, reduced form of glutathione, N-acetyl cysteine, plant protein, vegan Omega-3, sea minerals like calcium, magnesium, fibres like fenugreek, nanosomal iron, milk calcium’s, probiotics, natural astaxanthin, tocotrienols, black garlic, amino acids have become essential to people’s lifestyle and accessibility of nutraceuticals has significantly improved in all geographies of India, resulting in a significant growth through B2C and D2C channels.”
Experts and stakeholders also believe that the export potential for India in this segment is huge and waiting to be tapped.?“The global opportunity for nutraceutical active ingredients is about $154 billion,” apprises Srivastava.
“Industry players must leverage India’s chemistry expertise, pharma knowledge & natural agriculture base to develop relevant products, invest in research & development to drive innovation, regularly collate feedback and inputs from consumers to bring product enhancements in sync with evolving lifestyle needs, develop multiple sales channels including internet-based sellers to increase product penetration, and finally tap global opportunities through exports. Nutraceutical industry presents opportunities for exponential growth, it is important to proactively leverage them,” recommends Mariwala.?
Srivastava states that this space is increasingly becoming more attractive for investors. He updates, “There is a substantial shift in venture capitalists’ interests on nutraceuticals in India. Nutrify India has tied up with over eight focussed venture capitalists in nutraceuticals with priority on investments in India. Of these eight investors, six are international.” He also notifies, “Of 10,000 registered start-up companies, India has seen a whopping 4000 in nutraceuticals with 375 focussed on active nutraceutical ingredients (ANI).”?
Thus, this space is likely to see a lot of action in the days to come, catapulting India to a leadership position on the global stage.? ?
5) Manufacturing expertise and excellence:?India is a global pharma powerhouse due to its ability to produce high-quality and low-cost generic drugs.?
“Today, Indian manufacturing companies in several sectors are targeting global markets and are becoming formidable global competitors. Many are already amongst the most competitive in their sectors. The country is expected to rank amongst the world’s top three growth economies and amongst the top three manufacturing destinations by 2020. Several health supplements and nutraceuticals players have large scale manufacturing facilities in India. The largest number of US FDA approved plants located outside the US are in India, which is a testament to the high-quality global standards in manufacturing practices,” informs a MoFPI report 2017.
And, now as an increasing number of pharma companies enter and expand their offerings in the nutraceutical segment, their manufacturing expertise and skills will be extended to this segment as well, giving it a competitive advantage.??
Pai explains, “Nutraceutical manufacturing uses many of the same technologies as the pharma industry. Low cost-high quality manufacturing can help India emerge as a global leader in the finished product space as well. Catering to India-centric demands (such as a vegetarian dosage form) can help justify investments in technology that has a growing global demand (vegan certified products).”?
Gupta also points out that the players in this segment are increasingly looking at adopting innovation in dosage forms like chewables, effervescent tablets, beaded straws, gummies, mouth-melting strips etc., that are more enticing and consumer-oriented.
“Good practices from the pharma industry are already being emulated by the nutraceutical manufacturers. All quality standards are being adhered to. Companies are adapting themselves to changing needs and looking at nutraceutical manufacturing in a big way,” informs Sudheer S.?
6) Changing treatment protocols: Another growing trend is that healthcare practitioners are making nutraceuticals part of their treatment regime to improve outcomes.?
“Nutraceuticals can be incorporated into treatment protocols in various conditions and used in conjunction with pharma interventions. Specific segments of individuals under medical supervision require nutritional interventions (e.g. pregnant women, paediatric and geriatric populations). These interventions can be promoted to healthcare practitioners through the same channels that promote pharmaceuticals for these populations”, says Pai.?
This trend is also set to grow post the pandemic.
“Nutraceuticals are playing an increasingly important role in evidence-based medicine. Even the latest HCQ trials show that zinc changes everything. This applies to almost all categories now as every disease state may be bought to ease with certain nutraceuticals. Hence doctors across the globe are now prescribing nutraceuticals for all their patients,” informs Dr Mehra.?
However, he also points out that doctors haven’t awoken to the possibility of prescribing a full-spectrum solution that combines vitamins, amino acids, herbs and vibrational therapies.
But, Gupta indicates that the belief and trust in such products would be more influenced by scientific experts like medical doctors, nutritionists, health coaches and professionals in the times to come.?
This is validated by a report from Sathguru Consultants, in collaboration with ASSOCHAM, in 2019 which points out that medical foods are a niche fast-growing product category. It explains, “These are pill-based products and partial or complete nutrition products for specific targeted disease conditions. Pill based products are usually non-therapeutic nutritive pills, with proven benefits in specific disease management. Nutrition products include partial or complete meal replacement products that are targeted towards patients with specific metabolic diseases such as dyslipidemia, phenylketonuria, diabetes etc. who have difficulty in consuming regular food. While most specialised products are usually routed through physicians, some products such as Ensure for diabetes are more commonly found OTC in pharmacies and supermarkets.”?
“The market is still very nascent in India, with limited participation from indigenous manufacturers and lower awareness about foods for special dietary uses. While current leaders primarily constitute multinationals like Abbott Nutrition with strong global R&D and brands, the segment is gaining traction amongst Indian pharma companies and speciality nutrition companies,” informs the report.?
India – A Nutra hub in the making??
Thus, India Nutra Inc has several competitive advantages which can stand the test of time and help it forge ahead as a global leader. However, several challenges need to be overcome to leverage growth opportunities.?
So, while this article looked at the opportunities and growth areas, our next article will focus on the measures and strategies needed to truly leverage the growth potential in this sphere. Stay tuned.?