Indian nutraceuticals, herbals, and functional foods industry emerging on global map
Nutraceuticals & functional foods market
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Transcript of Nutraceuticals & functional foods market
Executive Summary
The Indian Nutraceuticals market valued at $1480 Million in 2011 to grow to $2731 Million in 2016 – Frost & Sullivan
The Global Nutraceutical market in 2011 was $149.5 Billion Comprises of three segments, dietary supplements, functional foods and
functional beverages
Market
Drivers &Challenges
Drivers:• Increasing shift towards preventive therapies• Increasing disposable income• Increase in Healthcare Spending• Increasing shift towards self-medication• Growth in pharmacy and wellness & retail
chains• Favorable pricing environment
Challenges:• Lack of standardization• High pricing• Lack of awareness• Marketing and distribution challenges
Government Regulations
Amway17%
Dabur12%
Heinz6%
Ranbaxy6 %Pfizer
5%
Oth-ers
56%
Major Players
Major Players by Market Share-
Domestic companies currently enjoy a stronger foothold , but multinationals are also increasing their presence. Players include large FMCG companies, pharma companies.
Regulatory framework to govern the nutraceuticals market in India has yet to be implemented rigorously Food Safety & Standards Act 2006 was effective from 5th August 2011
Contents
1. IntroductionNutraceutical-ClassificationNutraceutical- Necessity Nutraceutical-Therapeutic Benefit
2. Market Overview
3. Competition - FMCG Vs Pharmaceuticals
4. Drivers & Challenges
5. Government RegulationsPast & current state of FSSAIFSSAI - Functionaries
6. Strategic Recommendations
7. Way Forward
Nutraceuticals -Classification
Nutraceutical the term coined from "Nutrition" and "Pharmaceutical”
The term "nutraceuticals" is often interchanged with "functional foods" even though there are subtle differences between the two.
Nutraceuticals are "naturally derived bioactive compounds -dietary supplements and herbal products, and have health promoting, disease preventing, or medicinal products”
Functional foods are foods which contain an ingredient that gives that food health-promoting properties over and above its usual nutritional value, for example, Probiotic yoghurts
Necessity of Nutraceuticals
In Indian 380 million population are Undernourished.Nearly 70% (280 million) low purchasing power lead to deficient in micronutrients.Remaining 30% (100 million) due to inadequate food consumption for various reason like illness, low appetite ,diet consciousness.
Calorie sufficient-nutrient deficient population-570 millionPeople who are consuming adequate or excess calories than norm but not sufficient nutrient, generally higher and middle income group.May have need due to specific conditions like pregnancy, obesity, stress due to changing life style.
Over-nourished population-80 millionThis segment sufficient purchasing power and with enhanced nutrient and calorie intake due special requirements sports, heavy exercising, etc
Nutraceuticals Market
The Indian Nutraceutical market valued at $1.5 Billion compare to global Nutraceutical market of $149.5 Billion in 2011
United States, Europe and Japan are the largest markets that together account for a combined market share of over 90% of the global Nutraceutical.
The Indian Nutraceutical market currently accounts for only 1% of the global market.
The global market is growing at 7% where as Indian market has been growing at a 21% CAGR for last 3 years.
Functional Foods is the largest segment, followed by Dietary Supplements.
Functional Foods54%
Dietary Sup-plements
32%
Functional Bev-erages14%
Market Share
Source: E&Y, Net scribes
Competition - FMCG Vs Pharmaceuticals
The Indian Nutraceutical market is dominated primarily by Pharmaceuticals and FMCG companies with very few pure play Nutraceutical companies
Largely, the market is fragmented. However, the FMCG dominated segments are relatively less fragmented as compared to the pharmaceuticals.
Drivers & Challenges – Summary
Affluence -Working population with changing lifestyles
Affordability –Driving towards wellness
Awareness and media penetrationRegulatory framework not yet implemented
High prices of nutraceuticals
ChallengesDrivers
Accessibility due to extensive marketing
Approaching towards preventive therapies
Inadequate resources for implementation of regulation
Lack of credibility of nutraceuticals
Impediments
Benefits
Growing disposable income and lifestyle change in dietary habits are likely to fuel the demand for nutraceutical products.
Based upon qualitative analysis on dynamics of developed markets
Government Regulations
Food Safety and Standards Authority of India (FSSAI), which is responsible for framing rules and regulations to govern the nutraceuticals markets.
FSSAI (Food Safety and Standards Authority of India )–
The Food Safety and Standards Act, 2006 was notified in the gazette of India on 24th August, 2006
Authority Established-2008 to operationalize the FSS Act,2006
Gazette Notified Licensing/Registration-FSS Regulations 5th Aug , 2011
All Food Business Operators in India to get Licensed/Registered with Food Safety Authority
Challenges & Success Strategy
Marketing
Challenges Strategy
High development
cost
Clinical complexity
Partnership for cost effective development
Well designed trials & protocols
Development
High promotional spend
Uptake by stakeholders
Market competition
Regulatory Barriers
Patent Barriers
Enter marketing agreements
Right product for right indication
Low cost manufacturing
Gain experience from US/EU regulatory guidelines
Gain legal expertise
Profitability
Marketing
Technical Barriers
Lack of
Manufacturing
facilities
Early planning & analysis
Team up with companies having expertise
Access to GMP facilities
Manufacturing
Big US/EU Pharma
Indian Pharma
Strengths meter
Based upon qualitative analysis on dynamics of developed markets
Way Forward
Agenda for government
Lay down rules to govern quality and claims of nutraceutical products
Take measures to ensure availability of adequate resources for
implementation of laid out rules
Encourage R&D in the field of nutrition and deploy PPP models to serve
needs of the undernourished segment of population
Agenda for private sector
Product development : Develop customer focused products addressing
specific needs of different consumer segments
Product differentiation : Differentiate products by focusing on
credibility building and/or lowering prices of products
Product promotion : Increase awareness of the benefits of
nutraceuticals through advertizing and physician education