The nutraceuticals industry amidst the pandemic has an arduous journey ahead. A key shift in the markets would be that India could be the next big source of raw materials as well as finished goods, as the Chinese trade experiences a slump.
While the world was battling with various geopolitical, economic and religious issues, a virus rapidly crept in and helped us realise what really matters. Health, indeed, is the only wealth we have. As over eight lakh people are infected with the novel corona virus or Covid-19 (with the number increasing at an alarming rate), the path to build immunity is crucial to fight the virus. And, it is no secret that the role of nutrients in supporting the immune system is extremely important. However, this is not easing commercial woes for the nutraceuticals industry.
Major organisations across the world are facing a financial crunch, and it is not surprising that the nutraceuticals industry has an arduous journey ahead. Not only are various expos and international meets getting postponed (with a bleak chance of resuming), the export and trade relations between countries are on a complete halt, and maybe even strained, posing a threat to the manufacturing process.
Indian nutra market
The Indian nutraceuticals industry has great prospects. Over the last decade a wide range of products have been available, giving an insight into the tremendous growth. On the one hand, a booming economy has resulted in overall increase in disposable income of population. Added to this unhealthy, eating habits coupled with sedentary lifestyle have led to increased incidence of diet and its related health issues.
On the other hand, there is a growing awareness on the importance of nutrition and diet for long- term good health. These have contributed to favourable market conditions for nutraceuticals industry in India. India has a lot of advantages like qualified human resources, world class R&D facilities and varied raw material - aspects that give our country a leading edge.
The Indian nutritional market is estimated to be US$1 billion. While the global market is growing at a CAGR of 7%, the Indian market has been growing much faster at a CAGR of 18% 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 US$2 to US$4 billion with almost 148 million potential customers. In the US$1 billion market size functional food having 54% market share followed by 32% market share of dietary supplement and 14% share of functional beverages. The Indian nutraceuticals market is dominated primarily by pharmaceuticals and FMCG companies with very few pure play nutraceuticals companies.
Some major companies marketing nutraceuticals in India are GlaxoSmithKline Consumer Healthcare, Dabur India, Cadila Healthcare, EID Parrys, Zandu Pharmaceuticals, Himalaya Herbal Healthcare, Amway, Sami Labs, Elder Pharmaceuticals and Ranbaxy.
Nutra market around the world
Representing the developed world, the United States will maintain a 6.1% growth momentum. Within Europe, which continues to remain an important element in the world economy, Germany will add over US$4.7 billion to the regions size and clout in the next 5 to 6 years.
Over US$4 billion worth of projected demand in the region will come from rest of Europe markets. In Japan, functional food & beverages will reach a market size of US$9.8 billion by the close of the analysis period. As the worlds second-largest economy and the new game changer in global markets, China exhibits the potential to grow at 10.7% over the next couple of years and add approximately US$37.7 billion in terms of addressable opportunity for the picking by aspiring businesses and their astute leaders.
Presented in visually rich graphics are these and many more need-to-know quantitative data important in ensuring quality of strategy decisions, be it entry into new markets or allocation of resources within a portfolio. Several macroeconomic factors and internal market forces will shape growth and development of demand patterns in emerging countries in the Asia-Pacific, Latin America and the Middle East.
Emerging scenario
Given the current market scenario, emerging nutraceuticals brands targeting the preventive healthcare segment must thoroughly understand and ascertain the degree of work that is required to establish consumer trust with regards to the efficacy promise of the brand. There is also a real threat of an unforeseeable crisis that could disrupt a very interdependent and convoluted supply chain.
On the other hand, it is important for dietary supplement brands to not overreact in this situation. In all likelihood (and we hope), that this change and a shift in the policies, consumption and manufacturing may be temporary. While it may impact our business and commercials significantly, it might also fuel the need for supplements for the end-consumer. A key shift in the markets would be that India could be the next big source of raw materials as well as finished goods, as the Chinese trade experiences a slump.
(The author is research scholar at Utkal University, Odisha. She can be contacted at drushtiraj@gmail.com)