With promising GDP growth targets and rising purchasing power, the so-called luxury food products market is heading for an upswing, say industry officials. Combining luxury, nutrition and wellness, the “nutraceutical market” — in which nutrition meets medicine — is fervently preparing for dizzy growth.
Moreover, food companies, which are already under intense competitive pressure in the traditional food segment, have now started looking at the nutraceutical segment for help.
Indian market is growing at more than twice the global growth rate of 7%. Last year, it notched up revenues of more than $1 billion. “The segment is promising, with consumption of such supplements directly proportional to the growth of the economy. It should grow over 20-30% yearly,” said Muralidharan Nair, Partner, Ernst & Young, a consultancy firm. Though India has less than 1% share of around R44 billion among the entire global market (R5, 148 billion), the segment is offering significant growth opportunities and wider profit margins to lure local investors.
“Moreover, the entry of local firms is easy,” said Akkshay Mehta, managing director, Mission Vivacare, Mumbai-based firm. “By the year-end, we will be adding over 20 products. Also, we are setting a new facility to produce over 72 lakh units per day to match the demand.”
Dabur Chyawanprash, a R250-crore nutraceutical brand, has occupied over 5% share in the total sales of the company in the last few months. “It reflects the surging demand for such products. We are expanding the range of such items and in future we may plan to invest more,” said Praveen Jaipuriar, head-health supplements, Dabur.
However, the sector falls outside the purview of government pricing control. “Absence of pricing control adds attractiveness but then retail prices are not affordable because of undue margins, overheads and higher custom duty,” said Sandeep Jha, managing director, GenLife, another new entrant, which has recently introduced a range of products and plans to add over 100 products in 5 years time.