Even though nutrition is a new segment and wasn’t growing like other pharma segments, in the last five years, a lot of awareness has been created that lifestyle and wellness through nutrition that plays an important role in treating human ailments. Hence there is immense scope for growth in this sector in the next few years, said VS Reddy, managing director, British Biologicals.
There are many areas where entrepreneurs can project their products as complementary medicines, or introduce products with science behind their evolution. When compared to developed countries such as the US, Europe and Japan, consumption of nutraceuticals in India is considerably low rising mainly from the higher socio-economic classes and a very small share from the lower classes. Health awareness and an increase in the penetration of organized retail stores play a major role in driving the nutraceutical consumption in India
In India, the nutraceutical market is seen to be the next wave as preventive health and wellness are seen to be the trends. Changing lifestyle, ageing population, changing eating habits, increase in the disposable income, higher spending power, awareness about preventive healthcare, shift towards self medication, growth in pharmacy outlets and retail chains providing easier product accessibility are some factors that drive the growth in the nutraceutical market. The future of healthcare is in preventive nutrition.
Overall, the Indian nutraceutical market is emerging with strong growth potential. With increasing health awareness, and the shift towards preventative health care and increased regulatory clarity, India’s future in nutraceuticals industry looks promising, for both manufacturers and consumers. However, there is a strong need of developing customized products, affordable pricing and distribution strategy.
The demand for nutraceuticals
Demand for nutraceuticals is likely to grow at a five-year Compound Annual Growth Rate (CAGR) of 17.1 per cent and is forecast to reach $4.46 billion by 2018. Fortified dairy products such as calcium and iron fortified milks, probiotic yoghurts, etc. are going to be growth levers for functional foods; functional beverages as an overall category is likely to grow at a CAGR of 21.7 percent. Considering preference for formats in which nutraceuticals are presented as both functional foods and beverages, these are likely to remain the largest selling categories unlike dietary supplements. Dietary supplements are generally associated with medication/treatment rather than a preventive healthcare solution; hence, it falls lower in customer preference.
The best growth prospects will exist in substances with clinically supported health benefits and broad applications in foods, beverages, dietary supplements and adult and paediatric nutritional preparations. Included in this group are soy proteins; oat bran, psyllium, and soy fibres; Bifidobacterium and Lactobacillus probiotics; omega fatty acids; cranberry and garlic extracts; calcium,magnesium and zinc minerals and vitamins A and C.
Factors driving nutraceuticals consumption in India include emergence of new categories and increased penetration across existing categories, preventive approach toward healthcare, and high growth in organized retail. With increasing awareness about lifestyle-related disorders and risk factors, increasing cost of healthcare, and growth in disposable income, Indian consumers have adopted a preventive approach toward healthcare, propelling demand for nutraceuticals.
Although, there seems to be huge potential for the growth of the sector in the country, yet its development has been nascent. In fact, the country has a long way to go in encashing much of its bio-agri wealth.
According to Dr B R Lokesh, chief scientist, nutraceuticals, Central Food Technological Research Institute (CFTRI), Mysore, India is a sleeping giant for food processing. “The current economic potential as producer and consumer of basic foods is around $45 billion and the retail food market size is estimated at $330 billion”, he explains.
According to him, nutraceuticals could complement drugs and reduce over-dependence on medicines for treatment. There was considerable scope for value addition of agri by-products. The biodiversity and traditional knowledge dating could make India world leader in the nutraceutical market.
Quoting an Ernst & Young report, Dr Lokesh said that while the global market was estimated at Rs 5,148 billion, the Indian share was a mere Rs 44 billion which accounted a minuscule 0.9 per cent. However, there was potential for growth spanning between Rs 89-172 billion driven by the sound biodiversity and traditional knowledge base.
According to Chitranjan Dar, chief executive officer, ITC Foods, packaged functional foods was valued around $25 billion in India. “The country is seen as an underserved nation. It was important for the food processing industry to address taste, convenience of consumption and develop products evolved around India’s cultural milieu. Only then companies in the space of nutraceuticals and functional foods would be able to succeed”, he said.
“The focus should be on fortification ensuring it addresses the deficiencies in cognition, common ailments and general health. There was also need for clinical trials on humans to validate the safety and efficacy of many of these products. The next five years would see some genuine launches of functional foods, may be over a decade the market for both nutraceuticals and functional foods could be reckoned with”, he explains.
According to Dr Vilas Ramrao Shirhatti, chief advisor, nutritional solutions business, Tata Chemicals Ltd, with breakthrough technologies, new process technologies and new ingredients, nutritional science seem to provide a platform for development of sports nutrition, prebiotics, symbiotics, dietary fibres, and fructo oligosaccharides that could be functional food ingredients. These could target ageing, women’s health, eye health, and reduce cholesterol.
“In an era of the emergence of gluten allergy, there was need to look at alternate foods. For instance, the pseudo cereals are known to be better sources of starch, high protein, fibre and minerals and sans gluten. With millets extensively cultivated in India, it needed to capitalise the business opportunity”,he added.
Functional foods
The market today brims with probiotic foods, fortified foods like Omega-3 acids, peptides enrichment, carriers for photochemical & sterols, mineral carriers and rich sources of conjugated linoleic acids (CLA).
“There are immense opportunities with functional dairy foods. In fact, dairy beverages will remain a preferred delivery vehicle for non-dairy bioactive ingredients due to convenience, flavour and nutritional value. Innovative dairy beverages targeting functional food trends like obesity, cardiovascular diseases, diabetes, and children and elderly nutrition. Functional foods are now seen to become indispensable. The key aim of such products is to provide enough nutrients to meet metabolic requirements to modulate various functions in the body and play detrimental roles for some diseases,” observed Prof. (Dr) Bikash C Ghosh, senior scientist, National Dairy Research Institute, Bengaluru.
“The key drivers for functional foods are population demographics, rising medical costs, increased incidences of non-communicable, chronic diseases and consumer awareness of food-health relationships,” he added.
Functional foods can be produced by eliminating the component causing deleterious effects, e. g., allergenic proteins. These can be developed by increasing the concentration of naturally present components, e. g., fortification or processing interventions. Further, these can be created by adding components that are not normally present - for example, non-vitamins, antioxidants, prebiotics, and fibres. Besides, it can be manufactured by replacing the component, usually macro-nutrients whose intake (excessive) cause the deleterious effects like fat Increasing bioavailability or stability of a component known to produce functional effects to reduce the diseases-risk potential.
Now the impending issues are that milk inherently is a challenging environment for non-dairy bioactive components - mainly due to interactions with proteins and other components during processing.
Dairy products occupy a significant space in the functional foods market. During the last decade, consumers’ approach to healthy foods has changed dramatically. Today enhancing the healthy life span of consumers through consumption of healthy food is more important than non-healthy life span. This is where the functions of functional foods like early development and growth, regulation of the basic metabolic process, defence against oxidative stress, cognitive and mental performance, including mood and alertness besides physical performance and fitness are key, according to him.
In the current market, domestic companies are trying to maximise the opportunity. Those companies already operating in their existing brand strength are looking to expand into new categories. The new entrants in the wellness space are trying to unlock the opportunities. “Moreover, international players are looking at India for growth opportunities. There are several joint ventures, licensing and repackaging agreements. Besides marketing partnerships, sales & distribution agreements and technical collaborations indicate the interest in dairy functional foods,” stated Prof. Ghosh.
Nutrition and healthcare system
There is a great deal of disconnect of knowledge in matters of agriculture, food processing, nutrition and healthcare system, according to K C Raghu, managing director, Pristine Organics.
“India still is treasure trove of biodiversity, be it cereals, pulses, fruits and vegetables, or herbs. Knowledge of Ayurveda exists to bolster many of the benefits. We may have to position foods as such with all their bounty to explore the market. Partial information on foods may not carry us for long as we have to be true to ourselves. As for nutrition, refined, segregated, separated and purified contents are less efficacious and sometimes harmful”, he said.
“The only answer is to view and research on the functionality of organically grown traditional foods. The reality is that these traditional organic foods need to be positioned as functional foods and nutraceuticals,” he pointed out.
Another important factor to derive benefits of nature is to maintain as much biodiversity as possible. This is because biodiversity is the bedrock of good nutrition.
Even the Food and Agricultural Organisation (FAO) recommends to move from food to nutrition and not vice versa. In this context, the Pristine chief highlighted even the quality of milk from cows depended on the grass fed because of the residue of pesticides in the earth which was also a serious cause for concern in the case of grazing cattle.
Sports supplements and energy drinks
Energy is a broader market and in high demand. The biochemistry behind ribose, a non- stimulant energiser makes it very appealing. Carnitine is also finding a home in energy drinks and has wide-ranging benefits in helping muscles. Sports nutrition continues to offer excitement in terms of category growth and speed to market and also provide multiple health benefits. “Lot of research on both cardio and energy applications is on,” revealed Dr Shirhatti of Tata Chemicals.
Nutritional solutions
Similar in appearance to conventional foods, the nutritional solutions are consumed as part of a usual diet, and are demonstrated to have physiological benefits and/or reduce the risk of chronic disease beyond basic nutritional functions.
Functional foods can have one or more nutraceutical molecules, according to Dr Lokesh of CFTRI. “India is a biodiversity hot spot, covers legumes, fruits, vegetables, and medicinal plants. The country is known for its many years of traditional wisdom and holds sway in the area of Ayurveda and aromatherapy. The herbs and spices are used traditionally in food preparations. The country is known for its rich and diverse food habits and cooking styles with nutritional rationale,” he concluded.
Consumer perspective
There is great disparity in reach and penetration of nutraceuticals in urban and rural Indian markets, which is mainly attributed to consumer awareness and perception. While the presence of an educated middle class and high incidence of lifestyle-related diseases has resulted in medium awareness among consumers in the urban market, rural markets still lack the required awareness for effective product penetration. Lack of affordability and awareness with regard to premium-priced nutraceuticals products indicates the importance of the role of an influencer, particularly physicians, in these markets.
Rural India is mostly a perception-based market with usage being pushed majorly by various state governments through Public-private Partnerships (PPP) and Public Distribution Systems (PDS). Awareness and perceived importance of various nutraceuticals ingredients also varies with lifestyle, goals, socio-economic classification, age, and gender.
The growing markets
Countries such as Brazil, China, India, Mexico and Turkey will be among the fastest growing consumers and producers of nutraceutical ingredients worldwide. Increasing economic prosperity will enable these countries to expand and diversify their food and beverage, processing, and pharmaceutical industries. In 2017, China, alone, will absorb more than 16 per cent of the value of global nutraceutical ingredient demand and will account for over 18 per cent of the value of related world shipments. Because of maturing markets, the supply and demand of nutraceutical ingredients in the United States, Western Europe, and other developed economies will increase more slowly than the average worldwide pace. Nonetheless, food, beverage and pharmaceutical companies in these economies will continue to pursue opportunities in conventional and speciality nutritional products and natural medicines. As a result, they will remain key customers for nutraceutical ingredients.