Every crisis throws up covert and overt opportunities. The COVID-19 pandemic is no exception. Although it has disrupted lives and economies severely across the globe, the outbreak has opened up myriad opportunities in the hygiene and healthcare sectors. One such segment is nutraceuticals.

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Immunity and immunity-building nutraceuticals have been talked about extensively in the past several months. The rapidly increasing awareness about the need to stay healthy has led to a sudden unprecedented surge in sales of nutraceuticals.

In simple words, a nutraceutical is a common term used to describe products or active substances derived from food sources with specific health benefits that can further supplement the basic nutrition in foods. These provide some physiological benefits and may range from packaged food and beverages to tablets (including the effervescent variety). Market analysts in India believe that the nutraceutical business opportunities are two-fold – the domestic-demand driven ones and those that are export-oriented. Reports estimate India’s total nutraceutical market to reach $ 18 billion by 2025 from $ 4 billion now.

Present Scenario and Challenges

The Covid-19 crisis has turned things on their head. Many start-ups are evincing keen interest in venturing into this potentially lucrative and rapidly growing nutraceutical segment. These include food delivery start-ups seeking to launch unique and/or independent products or entering the industry via acquisitions.

Broad and comprehensive actions that include the introduction of conducive policy measures, regulatory support, financial subsidies and tax incentives will be necessary not only to facilitate the entry of new players in the industry but also to encourage and enable existing players to up their game that helps fuel further rapid growth in this segment.

Though the FSSAI (Food Safety and Standards Authority of India) has consolidated a set of previous laws regarding the safety and standards of food and nutraceuticals, the laws could be furthered streamlined to facilitate faster growth of the industry. Additionally, health supplements, including nutraceuticals, now come under the 18 percent GST slab (some even at 28 percent), up from earlier 12 percent making these products more expensive than before and therefore less pocket-friendly for a significant portion of the population.

Moreover, since this is an emerging industry, there is still a significant scope in creating a stronger, more organized and more efficient manufacturing and supply chain system that can create a more transparent and level playing field. Lack of proper protocol in the areas of safety and quality is currently compromising the established industry players in their efforts to thwart and keep a strict check on unwanted practices by some unorganized and fringe players.

Market Potential

On the positive side, this pandemic period has presented a unique opportunity to galvanize the nutraceutical industry and make a meaningful impact. The galloping trend of heightened awareness of health, nutrition and immunity is likely to stay for the medium term, thus presenting encouragement for companies (both existing and new) to develop health-proactive fortification solutions and create viable sustainable businesses while staying rooted to the value of improving the populations’ nutritional health.

According to a ResearchAndMarkets.com report, the herbal segment is expected to account for 30 percent of India’s dietary supplements market, which is likely to grow at a CAGR of around 20% between 2015 and 2023.

India’s prospects continue to be bright due to the existence of high biodiversity, availability of strong agricultural and botanical research facilities and a prevalence of the ancient tradition of consuming supplements for better immunity. Popular supplements used for many millennia include Ashwagandha, Brahmi and turmeric, among others.

Thanks to all of above, venture capitalists in the form of both domestic and foreign investors, are keen on investing in India’s nutraceuticals sector. One of the prominent attraction for start-ups and new investors is India’s reputation and undisputed standing as a global powerhouse in pharmaceutical industry, where high-quality, low-cost generic drugs are produced on a mass scale, catering to both domestic and overseas markets. As many of the manufacturing technologies and supply chain processes of nutraceutical & pharmaceutical industries are similar, the existing capability can well be leveraged by the former.

Separately, given the widespread pandemic impact, some healthcare practitioners have started recommending that their patients take nutraceuticals along with medication to improve the treatment outcome.

Considering all these factors, manufacturers, both existing and aspiring entrants, healthcare practitioners and other stakeholders will benefit from this unprecedented opportunity. This overall industry boost, besides ensuring bottom lines for companies, will also ensure better healthcare outcomes and improved nutrition for the people at large.

The author, Amit Bose, is Business Head, Project at MANDI (Making a Nutritional Difference in India) – DSM India. The views expressed are personal

First Published:Apr 6, 2021 2:20 PM IST