According to Frost & Sullivan, the market was worth US$1.48bn in 2011 and would grow to US$2.73bn in 2016, at an annual rate of 13%.
The report revealed that dietary supplements are the largest category accounting for 64% of the nutraceuticals market, driven primarily by vitamin and mineral supplements.
Functional foods will be the quickest growing category until 2015 followed by dietary supplements. However, dietary supplements, specifically herbal and dietetic supplements, have the most potential for nutraceutical manufacturers, driven by growing demand from an evolving consumer base.
Growing health concerns
Several factors support India’s market. For example, between 1998 and 2005, India's overweight rates increased by 20% so that 13% of women and 9% of men in the 15-49 age groups are overweight or obese.
India has become the diabetic capital of the world with 55 million diabetics in 2010. Of all deaths in the last decade, 40% have been cardiovascular related. The number is expected to cross the 50% mark by 2020, the report said.
Fortification is the way to go
According to the report Indian consumers have shown a preference for instant mixes and fortified foods, over tablets and tonics.
Gayathry Ramachandran, Senior Consulting Analyst, Chemicals, Materials & Foods Practice, Frost & Sullivan - South Asia, Middle East and North Africa, told FoodNavigator-Asia that the latter are closely linked in the consumer’ mind to sickness and disease.
“We found that Indian consumers preferred that they get their required nutrition in their day-to-day food. They also want to camouflage the taste of such supplements with their regular food,” she said.
Ramachandran added that the ease and speed of preparation of instant mixes make them more usable.
“We are now seeing breakfast cereals fortified with iron, malted fortified with Vitamin D and beverages fortified with minerals and vitamins,” she added.
Ramachandran said group discussions with consumers revealed Indian consumers tended to customise the available nutraceutical products to their needs.
“Consumers told us that they would not mix their powder supplements in water but rather with other flavour mixes to increase the taste profile of those supplements,” she relayed.
Flavour masking and flavour enhancing techniques were also on the rise. “One big example of this has been the development of omega-3, a traditionally non-vegetarian product, with vegetarian variants, thereby allowing it to gain traction with the large Indian vegetarian population.”
Lack of framework hurting manufacturers
Ramachandran said a lack of regulatory frameworks and standards for nutraceuticals has led most manufacturers to target export markets and use those standards in India.
The Food Safety and Standards Authority of India (FSSAI) has circulated a draft regulation on standards for nutraceuticals and supplements but it has been pending for more than a year.
Ramachandran added that this is one of the reasons why India’s nutraceutical market is in a state of oligopoly, with the market being dominated by big pharma and large FMCG firms.
“With no clear framework and standards to work towards, smaller companies are unable to spot a clear opportunity for themselves, favouring the export market instead,” she added.