Speaking at the Fi India exhibition in Mumbai last week, Parekh said that the company operates in a number of other segments, including savories, bakery, dairy and beverages, but nutraceuticals is its fastest-growing segment.
Sporting nation
“Nutraceuticals as a segment has been on the rise since the Commonwealth Games, and also a little before that,” he said, pointing to the 2010 games in Delhi, which exposed Indians to high-class athletes and sports.
“You can combine that with growing awareness about health and wellness in the country, which is connected to changes in lifestyle within India’s growing middle-class. This middle-class has also seen a rise in its purchasing power,” he said.
Not surprising then that Parekh has reported beverage premixes and ready-to-drink formulations as the fastest-growing area of the country’s nutraceuticals segment.
Parekh said that Indian consumers preferred to camouflage the taste of such supplements with their regular food and, therefore, localisation and fortification are central to cracking the Indian market.
This market, according to a recent Frost & Sullivan report, was worth US$1.48bn last year and is expected to grow at an annual rate of 13% to US$2.73bn in 2016. The report pointed to several factors behind the growth.
Not an urban phenomenon
Between 1998 and 2005, India's overweight rate increased by 20% to the point that 13% of women and 9% of men in the 15¬49 age group are either overweight or obese.
Health-wise, India has also become the diabetic capital of the world, with 55 million patients in 2010. Moreover, 40% of all deaths over the last decade have been cardiovascular-related, and that number is expected to cross the 50% mark by 2020, the report said.
Parekh dismissed the notion that growth is only coming from the urban segment, which has been heaviest affected from lifestyle-related diseases.
“You would be surprised to know how much the semi-urban and rural segment is driving the demand for nutraceuticals. A lot of our business comes from processors who make these products in urban areas, but their sales are in Tier-II and III towns as well,” he said.
He adds that the industry has grown organically to deal with the number of SMEs entering the fray. These, in turn, will compete with the larger players, both on a regional and national level.
Regulatory uncertainty is an obstacle
On the flip-side, Parekh said that regulatory uncertainty is hindering the segment in India, but with the Food Safety and Standards Authority of India (FSSAI) coming into force, things are expected to become easier in the future.
“India has typically had regulations which are antiquated, or there is a lack of governance for them to be effective. I think the FSSAI is trying to change things, and they look to be making progress.”
Parekh pointed out that many issues remain unsolved on the regulatory end—for example, labelling standards with regard to health claims. “Standardisation is needed across the industry. Right now, we have a situation that sees us teaching our buyers about what they can put or not put on their labels.”
Moreover, he added that the lack of a regulatory framework has also meant that a number of substandard nutraceuticals have been entering the market, with many smaller and regional players flouting quality norms.
