Britannia has just extended its health biscuit brand, NutriChoice, to the Diabetic Friendly Essentials range, after establishing it with the Hi Fibre and Multi Grain ranges. As health reports declare India the world's diabetes capital, the launch is well-timed.
For the Rs 3,400-crore Britannia Industries, the move is part of a much bigger strategy, which started with its shift in identity and business strategy a few years ago with a change in logo design and brand positioning of 'Eat Healthy. Think Better.' Beyond NutriChoice, it is conducting trials of packaged products such as buttermilk oats and sweet multi-grain porridge under its Healthy Start brand in the breakfast space.
"In the last three years, health and wellness (H&W) has become a key driver for Britannia. The demand for H&W products is on the rise and at least 55 per cent of our turnover now comes from this category," said Anuradha Narasimhan, category director - H&W, Britannia Industries.
The company has seen high growth - at least 30% - in adult-related H&W food products. "This foray into specialised functional foods is fuelled by a rising demand for such products. One in eight Indian adults either has diabetes or is at high risk of it. There is a clear market need for such products," said Narasimhan.
According to a report released by the Tata Strategic Management Group (TSMG), the market for H&W foods in India, currently at Rs 10,050 crore, is set to achieve a compounded annual growth rate of 30-35% for the next five years, to touch Rs 55,000 crore by 2015. While the packaged foods and beverages category is growing at 15-20% annually, according to market estimates, H&W foods are expected to grow at 30-35%.
Investments from large players as well as start-ups will fuel the H&W foods growth, TSMG believes. Its practice head for consumer and retail, Pankaj Gupta, said: "H&W will be one of the mega trends driving the transformation of the packaged foods market in India. While start-ups will enter the industry in niche areas, the thrust will be from large players, as they have the distribution channels and brand development capabilities."
He added that for categories perceived as less healthy, 'better-for-you' variants will succeed, while for the perceived neutral or healthy categories, functional variants will succeed.
He has a point. Nestle, which is seeing a lot of competition for Maggi with large and small brands getting into the packaged instant noodles space, is responding with the introduction of healthier extensions. After introducing Maggi Atta noodles, it has extended the brand to Maggi Multigrainz noodles in August, calling it the "multi-gunn" noodle in TV ads that equate the product strongly with the 'mother'.
Overall too, Nestle has been riding the health platform with Maggi - "Taste bhi, health bhi" - for quite some time now. "The demand for H&W products is growing. We have rolled out many products under this line. We are not losing market share as the market itself is growing," said an official who requested anonymity.
According to a recent Euromonitor report, H&W in India is being driven by increasing consumer awareness, more importantly the trend of "avoidance and beneficial health". As Indian consumers express a growing awareness and willingness to consume healthier foods, food brand majors and minors are boosting their products and portfolios. While globally the penetration of packaged H&W food products is 20%, in India - where it is a relatively new category - it is about 10%.
No wonder direct selling company Amway is, for the first time, advertising its nutrition and wellness category brand, Nutrilite, which is now a Rs 700-crore brand in India. So far, the advertising was only for the company brand.
"The trend of prevention being better than cure is gathering steam. Globally, Amway is known as a health and beauty company. In India, over 50% of our sales turnover comes from one single category - nutrition and wellness - in which we have 29 products. We plan to launch more," said William S. Pinckney, MD & CEO, Amway India.
Seeing the huge opportunity in H&W foods, Yash Birla's H&W arm, Birla Wellness, has forayed into a sugar-free line of products with its Nutrinext brand. It plans to roll out sugar-free products and protein supplements, health bars/confectioneries for children, natural health drinks and tonics and dehydrated organic fruits.
"There is a huge opportunity and we envisage that the Nutrinext brand will be worth Rs 200-250 crore in two to three years. We are looking at penetrating the market and having significant presence in Tier 1 cities," said N Venkat, MD & CEO, Birla Wellness.
Glaxo SmithKline, seeing the opportunity in the H&W snacks segment, has extended its health beverage brand, Horlicks, to cereal bars. ITC's Sunfeast brand has been promoting healthy snacks for the past few years.
Kellogg's too launched health biscuits, though its focus remains on breakfast cereals. Here too, it has created H&W options in Special K, Heart to Heart oats and Just Right muesli.
Breakfast seems to be the meal where brands are sensing the H&W opportunity in India. Marico Industries' Saffola has extended its H&W proposition from edible oil to oats. Saffola Oats adds to the oats attraction that Pepsi Foods' globally established Quaker Oats has been extending to India.
As Indian consumers respond to the H&W idea, new products are finding their way into their consciousness. Yakult Danone India, the 50:50 joint venture of Yakult Honsha, Japan, and Groupe Danone, France, has launched the Yakult probiotic drink. The brand has a range of H&W products globally which, no doubt, will also be introduced in India. Mother Dairy already has probiotic curd on the shelves. Nestle and Cocoberry are offering fruit yoghurt.
TSMG estimates that curd/yoghurt, flour, savoury snacks and edible oils will be the fastest growing food categories, reaching eight times their aggregated current size by 2015. Emerging categories such as savoury snacks, yoghurt and yoghurt drinks are expected to grow the fastest, by around 35-37% per annum.