Indian Nutraceutical Industry

Nutraceuticals (also called health supplements) are specially processed or formulated foods designed to satisfy particular dietary requirements and/or provide medicinal or health benefits. They generally contain extracts from plant & animal sources, minerals, vitamins and dietary substances either discretely or in various combinations designed to meet a specific health requirement or augment nutritional intake.

The global nutraceutical industry was valued at USD 169.32 bn (₹ 1,100.58 thousand crore) in 2015 and was growing at a CAGR of 6.5%  in 2015. It is expected to grow at a CAGR of 7.3% from 2015 to 2021.

Currently, the United States, Europe and Japan account for 93% of the total global nutraceutical market and the market seems to have attained maturity in all the three regions. Therefore, the nutraceutical industries across the world are now turning their attention to emerging markets like India and China. The Indian nutraceutical market is expected to grow at a much higher CAGR of 16% over the next five years to reach ₹ 26,764 crore by 2020 according to the Drug Marketing and Manufacturing Association (DMMA) This would in effect be twice the current market size driven by strong demand for dietary supplements from the upper and middle class.

In 2014, the global nutraceuticals market was dominated by North America followed by APAC and Europe. However, the market in North America and Europe is saturated and the APAC region is poised to witness significant growth driven by an increasingly health conscious population and rising disposable incomes.

In India, FSSAI regulates the health supplements and nutraceuticals through Food and Safety Standards Act, 2006 and the regulations framed thereunder.

 

Segmentation of Health Supplements and Nutraceuticals

A. Fortified/Functional Food in India

• • With 11% current value growth in this segment from 2015, the market size of this segment is approximately ₹ 13,260 crore in 2016
• • Probiotic drinking yogurt sees strongest current value growth of 28% in 2016
• • Cargill is the leader in this segment based on market share
•  

Company Name	Key Products
Kellogg	Kellogg's Cornflakes, Oats
Abbot	PediaSure
Agro Tech Foods	Sundrop
Britannia Industries	Cheese, Nutrichoice biscuits, Tiger Glucose Biscuits
Cargill	Gemini, Sweekar
GlaxoSmithKline Consumer Healthcare	Horlicks
Nestlé	ActiPlus Dahi, CEREGROW, MILO, Baby & Me
Ruchi Soya Industries	Nutrela
ITC	Sunfeast
National Dairy Development Board	Dhara
Gujarat Co-operative Milk Marketing Federation	Amul
Mother Dairy Fruit & Vegetable	Nutrifit
Yakult	Probiotics
Pepsi Co	Quaker Oats
Patanjali	Choco Flakes, Corn Flakes, Oats, PowerVita
Heinz	Glucon C
Baggrys	Cornflakes, Oats
Mondelez	Bournvita Malt Drink
Mead Johnson	Enfagrow
General Mills	Natures Valley Granola Bars
Zydus Wellness	Glucon D, Complan, Actilife, Nutralite

 

1. B. Functional Beverages in India
2. • Functional drinks market grew by 15.6% in 2014.  By 2019, the functional drinks market is expected to have a value of ₹ 2,811.9 crore (an increase of 69% since 2014)

• • Energy drinks is the largest segment accounting for 63% of the total market value
• • Red Bull is the leading player with a 83% market share in energy drinks

• PepsiCo with Gatorade is the leading player in sports drinks category with 83% market share in 2016

 

Company Name	Key Products
Red Bull	Red Bull Energy Drink, Red Bull Sugar Free
Coco-Cola	Minute Maid Juices
PepsiCo	Gatorade, Fruit Juices including the Tropicana brand
Goldwin Healthcare	Cloud 9 Energy Drink
Hector Beverages	Paperboat
GlaxoSmithKline	Lucozade
Patanjali	Aloevera Fibre Juice
Dabur	Fruit Juices and Real and Real Activ Brand

 

1. C. Dietary Supplements in India
2. • Vitamins and dietary supplements registered a growth of 13% in 2016

• • Fish Oils/ Omega Fatty Acids recorded fastest growth of 16% in 2016
• • Amway is the leader in this segment based on market share
•  

Company Name	Key Products
Amway	Nutrilite range of products
Aventis Pharma	Seacod Capsules
Dabur	Dabur Glucose – D
Danone	Protinex
Novartis	Calcium Sandoz
Herbalife International	Herbal Life Protein Powder
Himalaya Drug Company	Himalaya Pure Herbs

Types of Nutraceuticals

Nutraceutical Products
Dietary Fibre	Dietary fibres lower risk of developing coronary heart disease, strokes, hypertension, diabetes, obesity and certain gastrointestinal disorders
Probiotics	Probiotics help improve intestinal microbial balance. There is also evidence of it decreasing the risk of developing allergy, asthma, cancer and several other infections of the ear & urinary tract
Prebiotics	The health benefits of the prebiotics include improved lactose tolerance, antitumor properties, neutralization of toxins, and stimulation of intestinal immune system, reduction of constipation, blood lipids and blood cholesterol levels
Polyunsaturated Fatty Acids (PUFAs)	Studies suggest that PUFAs have three major effects on the cardiovascular system as it is serves to be anti-arrhythmic (preventing or alleviating irregularities in the force or rhythm of the heart), hypolipidemic (promoting the reduction of lipid concentrations in the serum) and antithrombotic (decreased arteriosclerosis)
Antioxidant Vitamins	Antioxidant vitamins act both singly as well as synergistically for the prevention of oxidative reactions leading to several degenerative diseases including cancer, cardiovascular diseases, cataracts etc.
Polyphenols	Polyphenols possess antioxidant, anti-inflammatory, anti-microbial, cardioprotective activities and play a role in the prevention of neurodegenerative diseases and diabetes mellitus. There is also evidence that they have anti-carcinogenic and anti-atherogenic implications
Spices	Dietary spices in their minute quantities has an immense influence on the human health by their antioxidative, chemopreventive, antimutagenic, anti-inflammatory, immune modulatory effects on cells and a wide range of other beneficial effects on human health

Top Players 

Company Name

General Mills Inc

The Nature’s Bounty Co. (NBTY)

Amway Enterprises

Herbalife International, Inc

Royal DSM NV

Pepsi Co

Groupe Danone

Bayer AG

Abbott Laboratories

Chobani LLC

Demand Drivers

1. Malnutrition status in India and micro-nutrient deficiency

1. 2. Affordability: Increasing costs of hospitalization are driving consumers towards health supplements and nutraceuticals
2. 3. Affluence of working population with changing lifestyles and dietary patterns and increase in disposable income
3. 4. Awareness: Increasing concern about nutrition, awareness and access to information have led to an increase in use of health supplements and nutraceuticals
4. 
   Supply Drivers

With India transforming into a global manufacturing hub, there is strong impetus for nutraceutical product manufacturers to set up production facilities in India

• • Strong economic growth with encouraging macroeconomic indicators
• • Strategic location with access to all major shipping routes
• • Low cost of labour
• • Large pool of technical and skilled labour
• • Easy availability of ingredients
• • Strong distribution networks coupled with accessibility of products through e-commerce
•  
• Notes

Exchange Rate: 1 USD = ₹ 65  = 0.75 GBP = 0.85 Euro

Disclaimer: This information has been collected through secondary research and SMERGERS is not responsible for any errors in the same

Figures

[a] https://www.ey.com/Publication/vwLUAssets/ey-health-supplements-and-nutraceuticals/$File/ey-health-supplements-and-nutraceuticals.pdf

References