One market that is strongly accelerating around the world in recent years is nutraceuticals and India is one country that is bagging on it in lumpsome. Considerable amount of raw materials that run into making nutraceuticals is contributed by India. A number of eminent research institutions in India are marching forward to add new ranges of nutraceutical products into this industry. This promising term reflects lucrative market opportunities for domestic as well as international pharmaceutical and nutraceutical companies.
Experts define nutraceuticals as a combination of nutrition and pharmaceuticals, refers to extracts of foods claimed to have a medicinal effect on human health. Traditionally the nutraceutical was contained in a medicinal format such as a capsule, tablet or powder in a prescribed dose, although more modern nutraceuticals such as probiotic drinks and yogurt are now found in ordinary supermarkets alongside normally everyday versions of the product. More rigorously, nutraceutical implies that the extract or food is demonstrated to have a physiological benefit or provide protection against a chronic disease. The role of nutraceuticals or dietary supplements plays a prominent role in the present day world as they provide health benefits and are alternatives to modern medicines. They are gaining acceptance for their ability to address several diseases including diabetes.
With the mushrooming of nutraceutical manufacturers in the country, the market is protruding an upward graph. According to the FICCI - Ernst & Young study titled ‘Nutraceuticals - Critical supplement for building a healthy India,’ the Indian nutraceuticals market is estimated to be USD one billion. While the global market is growing at a CAGR of seven per cent, the Indian market has been growing much faster at a CAGR of 18 per cent for the last three years, driven by functional food and beverages categories. However, the latent market in India is two to four times the current market size and is between USD 2-4 billion with almost 148 million potential customers.
Of the global nutraceuticals market of USD 117 billion, India has less than one per cent share. Globally, this market is expected to reach USD177 billion in 2013, growing at a CAGR of seven per cent driven by the fast growing dietary supplements category.
According to Cygnus estimates, nutraceuticals market in 2007 was Rs 18.75 billion, expected to grow at 20% CAGR to achieve a market size of Rs 27 billion in 2009. Global nutraceuticals market was estimated at USD120 billion in 2007.The US has been the major market for nutraceuticals with India and China becoming fastest growing markets. Nutraceuticals are gaining acceptance for their ability to address several diseases. Vitamins, Minerals and Nutrients constitute about 85% of the market while antioxidants and anti-agents account for 10% other segments such as herbal extracts occupy 5% of the market, globally. Cygnus has considered nutraceuticals along with functional foods to estimate the total market of nutraceuticals, both global and Indian market.
As a concept, ‘Nutraceuticals’ is still in its stage of infancy with several developed countries having defined it only in the last 15 years. With more than 40 per cent deaths in developing countries attributable to risk factors linked to nutrition, nutraceuticals are gaining momentum.
The United States, Europe and Japan dominate the global market, with the combined share estimated at about 86% for 2007. The three regional markets are expected to continue to hold on to
their leading position as global producers and consumers of nutraceuticals due to high-income levels of consumers, greater awareness and widespread preferences for speciality nutritional and herbal products, and trends promoting preventive medicine and self-treatment. An expanding proportion of elderly population, enhanced awareness about health and nutrition and availability of scientific evidence linking diet and health are major factors contributing to the strong growth being witnessed in the worldwide nutraceuticals market. Escalating costs associated with healthcare constitutes another factor that is pushing the demand for self-medication and healthy foods, states a report by the Global Industry Analysts.
Nutrients, herbals and dietary supplements are major constituents of nutraceuticals which make them instrumental in maintaining health, act against various disease conditions and thus promote the quality of life. They are convenient for today's lifestyle and are natural and bioactive chemical compounds that contain health promoting and disease preventing properties.
Competition in the industry is driven by several factors such as price, safety, efficacy, packaging and brand loyalty, among others. With growing similarity among products and formulations, maintaining consumer brand loyalty is emerging as a critical yet complex issue. Global nutraceuticals market is characterized by intense competitive conditions, as a result of which consolidation activity has gathered momentum. Consequently, large pharmaceuticals companies are taking over smaller and regional players to boost their position in the intensely competitive market.
Affordability, awareness and accessibilty are the major factors that depend on consumption of nutraceuticals in any country. With India's major chunk of population striving to win even their daily bread, it can be predicted that a number of years will have to pass before nutraceuticals become a common name in the country.
“It is vital to have interventions in the form of nutraceuticals and make it a part of our preventive health care systems; for this all stakeholders – government, industry, academia from food, as well as health fields, need to pool in their efforts to have a national food policy and a national health policy that complement each other,” states Rashmi Uppal, technical marketing manager – foods, DSM Nutritional Products India Pvt. Ltd.
The Indian nutraceutical market is dominated primarily by pharmaceuticals and FMCG companies with very few pure play nutraceutical companies. Pharmaceutical and FMCG players' active in the nutraceuticals space have diversified by introducing product extensions and developing variants under existing brand names. Many new players have announced aggressive investment plans.
Various risk factors related to health, result from an imbalance in nutrition. Such imbalances in India are widely prevalent, leading to adverse outcomes. These adverse outcomes are estimated to cost nearly one per cent point to India's GDP and so improvement in nutrition status is a critical part of the country's agenda for progress. An estimate of the cost of nutrition related disorders was 0.85 per cent of the GDP in 2004, and is expected to increase up to 1.2 per cent of India's GDP by 2015.
Analysis of India's dietary intake reveals nutritional imbalances across most segments of population The report states that majority of the undernourished population (380 million) faces a challenge to meet foundation needs to maintain normalcy of being. There is a huge population (570 million) that is nourished in calorie intake but not in terms of nutrient intake. They face the challenge of preventing condition specific needs in addition to foundation needs and could be the largest contributor in making India the future cardiovascular and diabetes capital of the world. There is another population segment (80 million) which consumes nutrients and calories more than the norm due to their enhanced physical requirements.
According to Naveen Kumar, faculty, Manipal College of Pharmaceutical Sciences, Manipal, Karnataka, “Nutraceuticals are presenting excellent opportunities for research scholars and industry people to exploit their usefulness. The use of nutraceuticals, as an attempt to accomplish desirable therapeutic outcomes with reduced side effects, as compared with other therapeutic agents has met with great monetary success. The preference for the discovery and production of nutraceuticals over pharmaceuticals is well seen in pharmaceutical and biotechnology companies.”
India capitalising opportunities
In order to tap a huge latent potential market and to pave the way for nutraceuticals to supplement India's quality healthcare agenda, the government should lay down rules to govern quality and claims of nutraceutical products. To ensure implementation of these rules, the government should ensure availability of resources. Encouraging R&D in the field of nutrition and deploying PPP models to serve needs of the undernourished segment of population will further boost sector growth
The private sector as well has a significant role to play. Companies should focus on developing customer focused products addressing specific needs of different consumer segments. It is important for players to create product differentiation by credibility building and/ or lowering prices of products. Product promotion to increase awareness of the benefits of nutraceuticals through advertising and the physician.
