Nutraceuticals
India, the fastest growing economy in the world, houses over 1.25 billion people and, as per the UN is forecasted to become the most populated country by 2024. With the growing population, India, a developing country, faces challenges to ensure that there is not only an adequate food supply but also meets the required nutritional levels.
A) Scope of the Nutraceutical market: Global scenario
The nutraceutical market is segmented into functional food, functional beverage, and dietary supplement. The functional food segment is further categorized as cereal, bakery and confectionery, dairy, snacks, and other functional foods. The other functional foods category includes functional fats and oils, meat, and baby food. Functional beverages are sub-segmented as energy drinks, sports drinks, fortified juice, dairy and dairy alternative beverages, and other functional beverages. The other functional beverages include Ready to drink tea or RTD tea, coffee, and enhanced water. Dietary supplements are categorized as vitamins, minerals, botanicals, enzymes, fatty acids, proteins, and other dietary supplements. The other dietary supplements include probiotics, prebiotics, flavonoids, flavones, carotenoids, beta carotene, etc. Nutritionally fortified or engineered foods, beverages or supplements that are marketed for their health-giving properties. In recent years, Indian economists and market research agencies have championed the Indian nutraceuticals market as a potential engine of growth. With current growth rates exceeding 18% and market forecasts of a fivefold increase by 2020, nutraceuticals are celebrated as the most successful sector of the food and pharmaceuticals market.
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Nutraceuticals |
B) Nutraceuticals Market: An overview
The nutraceuticals market is predicted to generate a business of USD 671.30 B by the end of 2024, registering a compound annual growth rate of 7.5% during the forecast period of five years (2019 - 2024). Ecumenically, nutraceuticals are gaining consequentiality and are becoming a component of the consumer’s daily diet. The major reasons for this change have been the incrementing prevalence of lifestyle diseases and people consciously taking preventive healthcare measures. In a competitive market like the USA, Europe's major manufacturers are working on the unexploited segment of customized products that will support health claims. Functional food covers the largest family pattern of the studied market, followed by functional beverage and dietary supplements.
C) Current Key Market Trends
Increased Demand In Developing Regions
Developing countries have a higher prevalence of non-communicable diseases (NCDs), like cancer, diabetes, cardiovascular ailments, and lung disorders. Therefore, the demand for nutraceuticals is expected to rise among these nations. The gradually increasing healthcare expenditure will also augment the demand for nutraceuticals across emerging nations. Nutraceuticals can be an opportunity for economic growth for many developing countries endowed with rich biodiversity and traditional knowledge of the health effects of certain indigenous plant species. The market records plenty of opportunities from within the emerging markets, not just in China and Brazil, but in other Asia-Pacific and South American countries as well. In order to succeed, key players need to emphasize more product research activities focusing on local consumers, thereby differentiating themselves from their competitors.
D) What are the Nutraceutical products?
The US physician, Dr Stephen De Felice, claims to have coined the term ‘nutraceuticals’ in 1989 as stated hereafter, A food or part of a food that provides medical or health benefits, including the prevention and/or treatment of disease. Nutraceuticals are not tested and regulated to the extent of pharmaceutical drugs. We cumulate the word nutraceutical from the word alimentation and pharmaceutical. A nutraceutical product is a food or fortified victuals product that not only supplements the diet but avails in treating or obviating disease (apart from anaemia), so it provides medical benefits.
E) What are Neutraceutical dietary supplements?
Dietary supplements look like drugs and are made from food, isolated nutrients or food-like substances to augment health. Nutraceuticals are a sector of dietary supplements made only from whole foods to augment health. Examples of nutraceuticals are natural foods, including antioxidants, dietary supplements, fortified dairy products, citrus fruits, vitamins, minerals, herbals, milk, and cereals. Dietary supplements look like drugs and are made from food, isolated nutrients or food-like substances to augment health. Nutraceuticals are a sector of dietary supplements made only from whole foods to augment health.
F) What are growth patterns and emerging opportunities In Nutraceutical dietary supplements?
The dietary supplement, functional food, and beverage marketplace is a $150 billion category growing at 10% per year.
Eight key market trends appear to be driving activity and growth in this sector.
Those 8 trends include:
- marketplace convergence of categories, channels, and technology
- accelerated growth of functional foods and beverages
- co-branding partnerships between ingredient suppliers and manufacturers
- increased focus on science and claims validation
- growing demand for sustainable and eco-friendly products
- The explosion in active nutrition products as consumers become more health-conscious
- emergence and popularity of innovative dosage and delivery forms
- rise of the millennials and a new paradigm on health and wellness.
F) Demand drivers for health supplements and nutraceuticals in India
There are four key demand drivers in India which have resulted in the need for health supplements and nutraceuticals.
1. Nutritional status of the population of India
The Government of India along with industry players has taken several steps to improve the country’s nutritional status and also create awareness amongst the masses about the importance of nutritional food intake for e.g., around 17% of the population was undernourished in 2009 which has reduced to 15% in 2016. This scenario results in enormous opportunities for the health supplement and nutraceutical companies who are playing a critical role in gradually, improving the nutritional status of India.
2. Affordability
While increasing nutritional deficiency is leading to an increase in health issues and diseases in India, the hospitalization costs of the family also increase. Out-of-pocket health expenditure constitutes around 62% of the healthcare expenditure in India as compared to 11% in the US, 10% in the UK, 25% in Brazil and 32% in China. Further, the average cost of in-patient treatment both in rural and urban India has increased at a double-digit pace of growth in the last decade.
Out-of-pocket expenditure is any direct outlay by households, including gratuities and in-kind payments, to health practitioners and suppliers of pharmaceuticals, therapeutic appliances, and other goods and services whose primary intent is to contribute to the restoration or enhancement of the health status of individuals or population groups.
With the shift in mindset towards preventive healthcare due to the high cost of hospitalization, the consumer base in India consuming health supplements and nutraceuticals is increasing.
3. Awareness
While there is a clear need for health supplements and nutraceuticals in India, the demand for these products is getting a significant boost due to increasing awareness about the products and their benefits which if consumed with a regular diet may be an important step to preventive healthcare. The Indian consumer’s awareness is increasing due to strong and effective initiatives by the Government of India and industry players. Interestingly, the increase in awareness of health supplements and nutraceuticals products along with their uses is also growing by accessing the information through the internet. Awareness of health supplements and nutraceuticals products are also increasing due to an increase in the number of nutritional care professionals/ service providers i.e. dietician and nutritionist.
4. Affluence
Certain important factors such as an increase in the working population, increase in the middle class and their income, growing disposable income, wellness, and sports make INDIA an affluent one. To take advantage of the demand drivers, the Indian health supplements and nutraceuticals players are continuously innovating by launching new products to meet the specific nutrient requirements and taste preferences of consumers of all age levels and thereby increasing their market share.
Ideally, the intake of nutrients through food would have been sufficient to prevent curative measures such as pharmaceuticals and traditional medicines to a large extent. However, in the absence of requisite nutrition through food, external intervention in the form of health supplements and nutraceuticals has become imperative.
G) Supply drivers for health supplements and nutraceuticals in India
Along with the demand drivers, the supply-side drivers have also ensured that India becomes a critical market for the global players in this sector.
The supply drivers are:
- Strong macro-economic indicators
- Strategic location
- India transforming into a global manufacturing hub
- Low labour cost
- Strong technical and skilled capabilities
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