Nutraceuticals have been increasingly popular in India, particularly for preventive and proactive health care. They are rapidly gaining traction for reasons including skin and hair management, furthering beauty trends, and promoting holistic health and wellness. The nutraceuticals sector is a fast-paced, ever-changing industry that has great potential by combining scientific advancements with rising consumer interest in health-promoting foods.
Historically, India has been one of the countries with the fastest-growing markets for nutraceuticals and dietary supplements. Fast Moving Healthcare Goods (FMHG) is the designation given to nutraceuticals and nutritional supplements sales in India. Given a share of only 1% to 2% with regards to the global market, India has a lot of room to expand. A trend toward health maintenance, early intervention, and disease risk reduction are major pillars furthering the nutraceuticals industry in the country.
Functional foods and drinks account for 60% of the overall market, and dietary supplements account for the balance 40%. India has an advantage over other countries due to abundantly available raw materials and state-of-the-art research and development facilities. Additionally, economic growth and the rise in disposable income are some other factors that have contributed to India's nutraceuticals business expansion.
Tackling health and nutrition concerns in India
The rising prevalence of diabetes, obesity, thyroid issues, cardiovascular disease (CVD), and other lifestyle conditions has led to a surge in nutraceutical and dietary supplement consumption across India. According to the World Health Organization (WHO), approximately 2.26 million adults died in India due to CVD in 2020, where nearly 4.77 million people were diagnosed with the disease.
To avoid such a situation, India has diverted its focus on supplements and nutraceuticals consumption. Dietary variables play a significant impact in the onset, development, morbidity, and death from chronic diseases. Dietary variables are responsible for 40-50% of cardiovascular problems, 35-50% of malignancies, and 20% of osteoporosis cases.
Drawing on the Ayurvedic legacy
Nutrition designed with substantial proof health outcomes is a primary focus in the nutraceutical sector and in India, tried and tested Ayurvedic formulations are a boon to building the nutraceutical industry. There are thousands of plants in India that contribute to medications and nutraceuticals. Ayurvedic products manufactured in India have a strong foothold in the global market. New Ayurvedic product innovations are in higher demand due to their usage for various health benefits within affordable price ranges.
For instance, herbal honey, or Chyawanprash, has become a huge success, extensively used in products from jams and chocolate to cheesecake and in capsules as a general health supplement.
India is home to 52 different agro-climatic zones. As a result, the country has access to a tremendous range of medicinal plants, providing a diverse suite of native ingredients for use in nutraceuticals. Other traditional remedies available in India also symbolize a culture of natural goods and self-care that aligns with nutraceutical developments across the globe.
Can government policy benefit nutraceuticals?
Government initiatives aimed at reducing the burden of increasing lifestyle problems have raised awareness of dietary supplements and nutraceuticals in the country. As a result, a favorable business climate has emerged. Nutraceuticals are somewhere between food and medications, with a significant focus on pharmaceuticals so the market is propelled by research, health results, clinical studies, and other factors. Traditional medicines, Active Nutraceutical Ingredients (ANI) formulations, a start-up ecosystem, and academia are the cornerstones of the nutraceuticals market expansion in India.
In 2006, India established the Food Safety and Standards Act, a contemporary integrated food legislation that serves as a single point of reference for food product laws, including nutraceuticals, dietary supplements, and functional foods. In addition, the Health Foods and Dietary Supplements Association, a nationwide non-profit organization which was established in April 2002, aims to promote the interests of health foods, dietary supplements, nutraceuticals, and the healthcare business.
Also, the government has authorized a PLI (Production Linked Incentive) plan for the pharmaceutical industry. Extending the PLI scheme's support to the nutraceuticals industry would undoubtedly promote research, innovation, and clinical trials, enabling for the development of additional domestic patents and products.
The Union Budget 2021 emphasized a few efforts, including programs and opening doors for new healthcare collaborations, to boost healthcare and infrastructure India. As per its provision, a 137% increase in healthcare funding to US$30 billion was proposed by the government for investing in nutraceutical supplements.
Besides, key international expansion initiatives such as the UNPA-India Campaign are further fueling the market for nutraceutical supplements in India. Other initiatives include empowering Shefexil, and reshaping Indian ayurvedic medicine monograph.
Where does the Indian nutraceuticals market stand today?
The Indian nutraceuticals industry is now dominated by functional foods, followed by dietary supplements. The market for fortified foods and probiotics will be driven by this trend. Supplement of vitamins and minerals would see high demand in the forthcoming years. Herbal supplements and protein/amino acid supplements are expected to have similar market revenues in the future and collectively hold half of the market revenue.
As per Future Market Insights analysis, the market for nutraceutical gummies, a preferred product format, is predicted to grow at a 15% CAGR between 2021 and 2031.
Demand for nutraceutical excipients is predicted to increase at a CAGR of 7.10% between 2021 and 2031. In the future, the industry will benefit from rising sales of nutritional supplements and multi-functional excipients. Dry nutraceutical excipients account for more than 3/5 of all nutraceutical excipients consumed.
The nutraceuticals market in India accounts for almost 2% of overall nutraceuticals sales across the globe. It is anticipated that the market growth will increase rapidly, accounting for 3% of overall global market by the end of 2022. The industry is now dominated by urban consumers; semi-urban and rural markets present huge growth opportunities and will be the key driver for almost quadrupled growth in next 5 years.
Following the COVID-19 pandemic, consumer attention has switched to illness prevention, resulting in an increase in demand for nutraceuticals in the country. Also, public perception of healthcare has evolved, which has benefitted the nutraceutical industry. With changing consumer behavior and government incentives, the Indian nutraceutical industry is likely to grow at a rapid pace.
Challenges and opportunities
Despite the fact that the nutraceuticals market in India is developing, there are various challenges to market expansion:
- Lack of specific industry organisations, established supervisory authorities, academic facilities, incentives, financing, and strategic initiatives, and aid for the globalization of the nutraceutical sector.
- Concerns over counterfeit or virtually unregulated products associated with a lack of clarity and standardisation surrounding issues such as product definitions, approvals, health claims, and manufacturing standards.
- A need for focus on scientific proof and expert support in order to back up health claims. A separate approach with specific advertising, composition, positioning, price, and distribution is required for a holistic approach to the Indian market.
- Offering affordable customized nutraceutical products for the larger rural population of India.
To make it happen, the Indian government recently stated its intention to invest locally in nutrition science and innovation, with the goal of making India a worldwide center for "health" foods in the long run.
At the same time, manufacturers and marketers of nutraceuticals are taking on the task of educating customers by releasing thorough information about product advantages and functions, as well as establishing transparency and confidence among consumers. The growth of e-commerce will open doors for the sale of nutraceutical products. Manufacturers are drawn to e-commerce due to the emphasis on establishing individuality on a global platform. As the COVID-19 pandemic continues, consumers have shifted rapidly from brick and mortar to online purchasing. Aside from that, e-commerce provides an easier platform for consumers to compare items and pricing. Market players will be able to navigate through unforeseen supply chain interruptions in the future if they focus on developing an online presence.
The nutraceutical trend gives a huge potential for expansion and growth. The immediate concern, on the other hand, will be to develop the vision and foresight necessary to compete in this rapidly growing field!
Nandini Roy Choudhury is an experienced research professional and client research partner at ESOMAR-certified market research and consulting firm Future Market Insights (FMI).
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