Nutraceuticals are specially processed to satisfy particular dietary requirements and/or provide medical or health benefits. Lack of medical aid, a general scepticism about allopathic medicines and food fads make nutraceuticals extremely popular.
Being versatile in nature, they are used in numerous industries such as pharmaceutical food & beverages, animal feed additives and personal healthcare. Recent innovations and findings of function-specific antioxidants are expected to create new opportunities in this booming sector.
Industry Overview: Global v/s Indian Nutraceutical Market
Currently, the USA, Japan and Europe account for more than 90% of the total global nutraceutical market. The global market should reach $336 billion by 2023 from $247 billion in 2019 at a compound annual growth rate (CAGR) of 8%.
But with these global markets attaining maturity, the focus of nutraceutical players is now shifting towards developing economies, especially those across Asia Pacific, including India. In 2017, the Indian market held only 2% market share of the global nutraceutical market and its estimated valuation stands at around $5 billion as of 2019.
It is expected to reach $11 billion by 2023, increasing at a CAGR of 21%. By 2023, India is also expected to hold at least 3.5% market share of the global market.
Key Challenges faced by Nutraceutical segment in India
The FSSAI has consolidated a collection of earlier laws relating to food and nutraceutical safety and standards. However, no concrete regulations are in force and the government is still seeking draft suggestions.
Nutraceuticals and other health supplements are subject to 18% tax (with few categories even taxed at 28%), making these products considerably more expensive than before (when they were taxed at 12%).
Further since there is no regularized system for setting up manufacturing plants for nutraceutical products it becomes difficult for new players to enter the unknown territory. Lack of regulations also makes it difficult for them to avail subsidies.
Nutraceutical companies themselves feel that regulations related to quality and safety will benefit the industry and will keep a check on unregulated practices.
Demand Shift and Trends
With 67% share occupied by the nutraceutical market, it has bested the pharma dominated supplement market. Increased public understanding and health responsiveness have contributed to this shift in consumerism towards nutraceuticals.
As per recent estimates, the nutraceutical market in India is signiﬁcantly condensed in the South, followed by the East and is gaining serious traction in rural areas as well with the population there getting familiar with the concept of lifestyle diseases.
The market is poised to witness significant growth owing to the increase in demand for preventive healthcare and rise in medical treatment, which stimulates the demand for nutraceuticals containing products.
Nutraceutical manufacturers and marketers are taking up the responsibility of educating the consumers by sharing detailed information about the product and its benefits and roles, while also bringing about a transparency and credibility among the consumers.
This will go a long way to build a stronger category for Nutraceuticals as a health and wellness segment. Industry players are also undertaking a number of initiatives on their own, including a renewed focus on improved quality standards of the product, enhanced transparency, and competitive pricing for innovations.
Towards a brighter future
It was the breakthrough in comprehending the correlation between health and nutrition that gave an impetus to the notion of nutraceuticals as a viable and reliable approach to attain ameliorate health as well as decrease the risks associated with certain diseases.
The Food Safety and Standards Authority of India (FSSAI) will soon ensure that regulations for nutraceuticals in India are at par with international standards thereby allowing new entrepreneurs to enter the nutraceutical field.
This could lead to foreign investment provided the regulations are implemented as early as possible and there is clarity for new players, making the industry valuation double in a very short span of time. Thus, apart from the forecast growth of the industry, nutraceuticals are set to become widely accepted and a common part of Indian households in the near future!
Transformation in food habits, less physical work, more desk jobs have made people more vulnerable to lifestyle ailments. The average urban & semi-urban Indian is becoming more conscious about health & fitness. This is providing a massive growth opportunity for Nutraceuticals Industry in India.
Lack of timely and nutritious food has led to increased rate of malnutrition, even among the urban and affluent section of society, leading to a deficiency of micro-nutrients. These deficiencies have led to the rise in nutritional supplements. Increase in consumer awareness on health problems and their urge to take preventive steps, has been driving the nutraceuticals industry.
Increasing costs of hospitalization and complex procedures arising out of avoidable conditions, are driving consumers towards health supplements and nutraceuticals. 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.
By Abhimanyu Rishi
The author is the Director of BhookhaHaathi Hospitality Pvt. Ltd.
DISCLAIMER: The views expressed are solely of the author and ThehealthMaster.com does not necessarily subscribe to it. ThehealthMaster.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.