Dr R B Smarta MD, Interlink Management Consultancy, Board Member, Health Foods and Dietary Supplements Association (HADSA)
The nutraceutical industry is all set to reach heights in the coming years. The global nutraceutical market is expected to reach $278 billion by 2021, according to Transparency Market Research, suggesting 7.3% compound annual growth rate from $182.6 billion in 2015. Whereas Indian Nutraceutical Industry was valued at $ 2.2 billion in the year 2015 and it is predicted to reach $ 6.1 billion by the year 2020 at a growth rate of 20 per cent.
This prediction can very well hold true looking at the current scenario of the industry and market. We also see an increasing growing awareness among consumers about healthy living and wellness, which seems to be one of the major drivers of the Indian nutraceutical industry, though it is also a fact that still many people are not as yet aware of nutraceutical products and its health benefits, so we can imagine that if increase in awareness is created among the common masses, it could lead to an addition to the estimated growth of the Indian nutraceutical industry. Besides the increasing awareness, increase in lifestyle diseases have led to the development of a promising nutraceutical market involving products to prevent diseases or providing health benefits related to lifestyle issues. Moreover also individuals today are involved in keeping themselves fit, visiting the gym, proving potential consumers to various functional foods & beverages products.
The Nutraceutical Industry has three specialized markets:
1. Functional Foods
2. Functional Beverages
3. Dietary Supplements Functional Foods & Functional Beverages account for 68% of the Indian industry. We find that this functional foods and beverages are manufactured by the FMCG companies such as Mother Dairy, Amul, Nestle, Danone, GSK etc.
Dietary vitamin supplements, mineral supplements or vitamin and mineral supplements are mostly manufactured by Pharmaceutical companies. Amway, Vitamin World etc. are a few companies that manufacture vitamin mineral supplements, this market accounts for 32% of the Indian industry.
EIGHT LEVERAGING FACTORS
1. Demographics of Nutraceutical Market The major domestic nutraceutical market is mainly concentrated in southern region of the country, followed by the eastern region. Andhra Pradesh, Tamil Nadu and West Bengal spend more capita on Nutraceuticals than average Indians. Between the urban and rural, the urban market is greater than the rural market, with the rural market capturing almost 1/3rd of the total nutraceutical market in India. However, in terms of penetration, urban India still scores high at 22.51 per cent while it stands at 6.32 per cent in rural India. Mumbai and Delhi are the prime markets.
2. Drivers of the Industry The Indian Nutraceutical market has distinct growth drivers or trends which is one of the major reasons for the industry to reach $ 6.1 billion by the year 2020. As a developing country we see progress in every aspect of the system. Along with increase in health consciousness among people, the approach to healthy living today is built upon the opinion of preventing disease rather that treating it. So a shift is seen from a curative approach to a preventive approach. For preventing from being in an unhealthy state, one can be healthy through consumption of right foods in the required amounts. But lifestyle changes, have led to consumption of fast foods, lack of physical activity, involving oneself in more of a sedentary work style and so on, which does not favour healthy living, in addition to this most of the time it is difficult to meet the required amounts of nutrients through diet which in turn has favoured the growth of the nutraceutical industry.
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