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"Nutra market growing at average 17% pa"
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April 01 , 2015
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The nutraceutical industry is a platform for preventative personalised medicine that has recorded consistent growth in the last few years. It has emerged from consumer demand for food supplements and is now seen to have moved from healthy diet additions to mandatory diet requirements specifically designed for consumer needs. In an email interaction with Nandita Vijay, Dr Baidyanath Mishra, MD & chief scientific officer, InnoVision Healthcare, delves into details. Excerpts:
How would you describe the current scene for nutraceuticals in India and global markets?
The Indian nutraceuticals market, which has grown from $1 billion in 2008 to $1.8 billion in 2013, and crossed $2 billion in 2014 and is expected to top $4 billion by 2018 - roughly 1.5 % of the global nutraceutical industry - is growing with a CAGR at average 17% per annum. Currently, it is a nascent market which is trying to incorporate traditional herbal ingredients, which are Ayurvedic, into the nutraceutical portfolio. Nutraceuticals could complement drugs and can reduce over-dependence on medicines for treatment. There is considerable scope for value-addition of agri byproducts. The biodiversity and traditional knowledge could make India a world leader in nutraceutical market. There has been an increasing awareness among the rising affluent middle class about health and wellness. Nearly 400 million people in India belong to the middle-class and have disposable income which have made them capable of buying nutraceuticals and dietary supplements. It is an inevitable fact that affluence is one of the causes of lifestyle diseases, which nutraceuticals and dietary supplements often address. These factors will support the double digit growth of the industry in the coming few years.
What are the products that are emerging and the most-sought-after for this sector?
Nutraceuticals product basket is majorly divided into three different categories - Functional Food, Functional Beverages, Dietary Supplement - accounting for 33%, 36%, 33% respectively. Past couple of years, because of various reasons and increasing lifestyle diseases, dietary supplements witnessed a double digit growth and is still going strong with vitamins and mineral supplements accounting for 49% and amino acids and omega 3 fatty acids and probiotics accounting for 6%, 8%, 2% respectively. The balance 35% account for various other supplements.
What are the visible trends in the nutraceutical industry in India and abroad?
The nutraceutical industry is a platform for preventative personalised medicine. It has emerged from consumer demand for food supplements. Nutraceuticals have moved from healthy diet additions to mandatory diet requirements specifically designed for consumer needs. As such it is an industry that constantly tracks and monitors consumer trends and its products are often direct responses to such demand. There are four key trends -
The first is natural products: With increasing concerns about chemical side-effects and introduction of synthetic additives into foods, consumer demand for natural alternatives increased dramatically. The industry responded to such demand by focussing on customisation of products - natural alternatives for established variants. For instance, growing concerns about the fears of Aspartame, a popular sweetener till its role as a possible carcinogen was made known, led to the introduction of Stevia, a natural sugar alternative and plant extract. This trend towards natural products has taken the West by storm with consumers equating natural to healthy. Natural variants are today one of the most sought after avenues in the nutraceutical segment. This is apparent by the increasing demand for natural antioxidants both in foods and supplements. Popular orange drinks such as Fanta and Sunny D are facing increasing competition from variants filled with natural beta-carotene antioxidants from algae and vegetables in spite of these products being more expensive.
The second is the cultural customisation: Here nutraceutical manufacturers understand that various cultures have specific requirements for products. The latest trend is towards ascertaining such cultural requirements and focussing on these. For instance, in India, omega-3 is traditionally non-vegetarian product has been developed with vegetarian variants obtained from algae and flaxseed oil. In contrast, in the West, particularly Europe, a highly aware market, the focus for omega-3 products is specific health functions particularly heart health, a primary cause of European deaths. India is a key market that has brought forward the importance of understanding a country’s cultural psyche before launching products. The probiotic industry in India has faced challenges of a completely varied kind than seen elsewhere in the world. This is primarily because, yoghurt, the primary mode of intake of probiotics, is an essential part of the indigenous diet and normally home-made. Convincing consumers to pay premium for something so easily available has been a major stumbling block for marketers. As nutraceutical markets move East, it is necessary for manufacturers to understand the importance of culture while marketing products. This is especially important in India and China where traditional medicine and home-made remedies still hold immense sway on the average population. China, for example, has been witness to new products that are possibly unknown in other parts of the world. These include mood enhancing drinks such as Scream and gender-specific drinks such as He and She both native to the Chinese market alone.
The third is the Innovative Delivery Formats: Nutraceutical ingredients have typically been positioned as natural and healthy alternatives to traditional medicine. However one of the primary challenges being faced by these products is the difficulty informulating these products into traditional food and beverage products. Consumers are also seeking more variety and benefits from delivery methods beyond those possible through traditional tablet and capsule technologies. Such challenges have caused for innovative product presentation to ensure ingredient viability and stability.
Flavour masking has been one of the primary modes of supplying nutraceutical ingredients. With major flavour and fragrance companies such as Givaudan working on increasing technology to increase flavour masking the consumption of nutraceutical ingredients has also increased. The prime examples of such masking have been for those of omega-3 and soy products, both increasing dynamic markets that were being hindered by the unpleasant taste of the ingredients. Other such technologies include new formulations that increase stability of ingredients in the final product. For any food or supplement manufacturer looking to add functional ingredients to their products, the key issue of stability must be addressed as soon as possible during the product development process. Increasing technologies of microencapsulation, nano-separation and so on has allowed for extremely inventive new formats of delivery such as electrolyte delivering strips and vitamin enhanced chewing gum. Manufacturers have cashed in on popular snacks and fortified them thereby allowing for a new lease of life for both the nutraceutical as well as the convenience foods market.
The fourth is Condition Marketing: With increasing sophistication among nutraceuticals and the demand for personalised medicine growing, consumer demand for products with specific health benefits has been skyrocketing. The rise of this trend popularly known as condition marketing has given rise to a whole new avenue of product differentiation. This is particularly apparent in Europe where nutraceutical products have now been cordoned into various segments based on the health benefits. These sectors such as heart health, eye health, digestive health, joint health and so on are gaining immense popularity with manufacturers positioning themselves to focus on certain health avenues specifically. Ingredients such as lutein, beta-carotene, asthaxanthin and various other carotenoids have been earmarked for eye health while the omega-3 and phytosterol segment focuses on heart health. With increasing incidences of lifestyle related diseases customers are increasingly looking for preventive care along with their daily diets.
For instance, calcium supplements are one of the largest supplement sectors in Asia due to the high risk of Asian women to osteoporosis. Manufacturers have focussed on positioning their products to focus on the most common non-chronic diseases in a particular region. For instance, the major supplement categories in USA are for heart health as opposed to Australia where primary interest is in bone health. Also in the weight management category, while Europe and USA focus on tackling obesity at an overall level, the Asia-Pacific regions are focussing on tackling the alarming rise of childhood obesity. The rise of nutraceuticals that are health benefit-specific is a key area of customisation in the nutraceutical arena.
Do you feel the need for a dedicated nutraceuticals policy or can it be an addition to the current D&C Act ?
There is no doubt that it is of immediate necessity to have standard regulation governing nutraceuticals in India. In my preference, there should be dedicated nutraceutical policy and best if added as a separate chapter either with FSSA or Drugs & Cosmetic Act. The regulatory system should develop a policy that ensures quality of raw materials, safe manufacture of product, suitable health claims, labelling, and distribution & storage. This is because we should ensure that the nutritional products with notable health claims follow the suitable stages for approval that ensures the robust health benefits. Presently, the fragmentary nature of the regulations is making it difficult for players to comply fully or to make necessary investments.
What are the challenges that companies in India and abroad face to succeed in the sector?
The US nutraceutical market stood at US$50.4 billion and was by far the largest nutraceutical market in the world, followed by European nutraceutical industry, approximately valued at US$35 billion, and the Indian nutraceutical industry was estimated at US$2 billion, roughly 1.5 per cent of the global nutraceutical industry. The major challenge in India we face is the lack of clarity in regulatory system, followed by high price because of which a huge strata of population is not able to afford it.
As an expert in this field, do you think the R&D efforts are adequate in India?
Proper Research and Development not only holds the key to future of this segment, but sustains and develops the technology to establish its strengths to transform scientific talents into the healthcare segment which is the need of the hour for the nutraceuticals. It is very tough to say that R&D efforts in nutraceuticals are adequate at present and consumer also looks at R&D intensive products for their use which ensures best affordable, safe and effective formulations. But certainly we must agree that R&D is the next mantra for the establishment of evidence-based and safe-effective nutraceutical products for the days to come and accordingly we all must strive. For example, based on a recent report, Europe’s focus within the nutraceutical industry is on innovation and new product development, resulting in increasing R&D spends in the sector, up from 0.24 per cent of the industry revenue in 2004 to between 0.8 to 1 per cent in 2010.
Do you think ‘Made in India’ and ‘Innovate in India’ programmes of the Union government can spur the growth prospects of the sector?
Yes, certainly. It will spur the growth prospects of the nutraceutical sector.
How does one get right talent for the sector?
India is a diversified country and rich in talents across all sectors. We don’t face any change in getting talents that meet our corporate requirement. But it is also not always so easy to have the right manpower for the right position across all the divisions especially in seniority level.
Give us an overview of the expected disease conditions that InnoVision Healthcare would focus on in its product development efforts.
Combination of pharmaceutical drugs and herbal ingredients can work better in terms of reducing side-effects and increasing bio-efficacy. InnoVision HealthCare’s objective is to develop products that are purely natural and well researched with cutting edge technology to deliver the solution that it is meant for in a cost-effective way. We are committed to develop highly scientific and purely natural products in the coming years, and based on high prevalence of the various lifestyle & metabolic related diseases, we look to focus on products delivering on bone and joint health, cancer risk reduction, cardiovascular health, maternal and infant health, immune system energy and eye health, skin health, respiratory health, weight management, cognitive and mental function.
The company is expected to drive all its products through Ayurveda route, which are the key ingredients that would require to be sourced and would the company invest in a new plant or manufacture under contract?
InnoVision HealthCare is committed to deliver its products which are with high scientific validation based on international standards. We adopt strict quality control mechanism in selecting vendors for various ingredients and packing materials supply with clear mechanism of traceability and following GACP guidelines wherever possible. We believe in 100% vegetarian and hence also adopted to incorporate the vegetarian capsules for our various singlet capsules which are based on single herbs, stepping ahead from other manufacturers. Presently we are adopting manufacturing hiring other best manufacturing locations. We are under progress to have WHO certified manufacturing units in next couple of years.
Would the company focus on nutraceuticals?
InnoVision healthcare is under progress of fast expansion. Under this expansion, we have taken suitable steps to reach the mass addressing their various health issues and keeping each consumer healthy. But our belief and continued work will be to have sustainable, affordable and safe formulations across all our segments including nutraceuticals. Through cutting edge technology and evidence-based scientific validation including clinical research and publications. We are looking to enter the pan-India market from April 2015.
Are these new products to be researched and developed in India ?
InnoVision HealthCare will continue its research across all sectors on time-committed manner. We look forward to industry-academia researches and are open for continuing researches.
What are the targets set to achieve growth for your company?
The objective is to reach the mass audience with our innovative products which are herbal and well researched. In order to do that we will be aggressive and our initial objective will be to reach pan-India in the span of first year of business. There is a major focus on research. By the end of first year our plan is to acquire 4% market share. We will be introducing set of new products in the third quarter of the year in order to bring the momentum into the business and take the product basket size up to 50 products. By the end of three years we are looking at a product basket of 200 products which will include and expand our brands reach to all the major metros, Tier 1 and Tier 2 cities capturing 15% of the herbal healthcare market.
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