Presently the main market segment for nutraceuticals in India is based on vitamins and minerals followed by probiotics and omega -3 fatty acids. However, the potential for market penetration is seen, primarily, in preventive health products. Obesity rates in India have increased by 20% and so have cardiovascular death rates. Much of the population is plagued by diabetes. Nutraceutical manufacturers, therefore, need to focus on formulating their products for the Indian market, based on statistics for the prevention of various diseases.
How to tap the unlimited potential
There is a huge potential in the nutraceutical food industry in India as the products fall under a broad category. Vitamins, fortified milk drinks, pre – prepared diabetic meals, probiotics, beverages, herbal supplements, slimming products, and more, all come under the umbrella of nutraceuticals. The opportunities of growth are
- In exports as the Indian nutraceutical market has traditionally been export oriented
- Now with the increase in per capita income and increase in consumer health awareness, the industry is wide open to the domestic market
The biggest challenge facing the nutraceutical industry, however, lies in its ability to change the perception of it being a grey area. A more legal classification would prevent the different players applying different criteria for the various products. On one end the products maintain health while at the other end they are said to be of a medicinal nature. The problem lies in defining nutraceuticals as curative or preventive.
The domestic players and raw material disparity
Nutraceutical products in India are majorly manufactured by pharmaceutical companies, who also manufacture allopathic medicines in the same facility. The Indian pharma market has many big players who control all aspects of the pharma industry and the trends set by them are followed by the middle and small companies. To bring all these players into one regulated and standardized industry is a big challenge especially as the market is estimated to be growing at the rate of 18 to 20 percent a year.
India and China dominate the nutraceutical industry in Asia – Pacific region because of the availability of raw materials.
- However, the quality of raw materials varies drastically because there are no regulatory definitions.
- Studies carried out by private players show that many nutraceuticals did not show high quality, rather the quality of many formulations were consistently low.
- Whole food sources also show similar discrepancy as their constituents show variable levels.
This shows there is a clear need for well spelt out regulations for raw materials as well as for manufacturers of nutraceuticals.
Pharmaceuticals versus Nutraceuticals
In pharma companies there is an institutional focus on drugs and internal regulation of marketing but not in nutraceuticals. The pharma regulators tend to view drug and food supplement marketing as different with different marketing approaches. The drug market tends to be conservative keeping all medical and legal regulations in mind.
The same cannot be said for the nutraceutical marketing, where claims about the effectiveness of nutraceuticals can be exaggerated. This leads to a lot of inconsistency in marketing and sale of material as there are varied interpretations about claims. Another problem is that the Indian consumer is prescription oriented and so companies try to promote their products through doctors. This approach lacks growth and companies need to look for a more direct route to the consumer.
Difficulties faced by new players
Pharma companies dominate the nutraceutical industry and they are likely to continue as there seems to be not much information available to new players who would like to invest in this sector. Further since there is no regularized system for setting up manufacturing plants for nutraceutical products it becomes difficult for new players to enter the unknown territory. Lack of regulations also makes it difficult for them to avail of subsidies. Moreover nutraceuticals are categorized as either foods or drugs and so pricing and quality also become issues.
New entrepreneurs would like to enter the nutraceutical field since India is well positioned to supply ingredients for the global nutraceutical industry, especially in the case of plant extracts and phytochemicals. This could lead to foreign investment provided the regulations are implemented as early as possible and there is clarity for new players. In the current scenario, the nutraceutical importer are finding it difficult to import nutraceutical foods or ingredients without a clear regulatory framework plus a right distribution network is also a challenge for them.
Lack of data or information
Nutraceuticals can be fortified, enriched or enhanced foods that provide health benefits in addition to vitamins and minerals. The link between health claims and nutraceutical consumption should be based on sound scientific evidence.
- However, there is not enough data about recommended intakes and effectiveness, even though today nutraceuticals have become the hot topic in nutrition.
- Nutraceuticals cannot claim to be substitutes for actual food but only a dietary supplement.
- There is also evidence about the poor quality of some nutraceuticals
- As the consumption of nutraceuticals increases there is no science based literature to educate the consumer about them
Perception based rather than research based
India has a tradition of herbal medicines which is thousands of years old. As nutraceuticals are beginning to dominate the preventive health market, there is a growing need to address their usefulness and safety based on adequate research. Since this is an evolving market there are concerns about how private corporate research will match the ancient Ayurveda herbal medicine formulations. Some of the suggestions are that nutraceuticals must be manufactured on the lines of Indian Pharmacopoeia. There is a feeling that manufacturers of nutraceuticals will then comply with their safety and quality standards, thereby establishing India as a reputable supplier of nutraceuticals.
FSSAI and Need for Regulations
FSSAI has a greater role to play in defining standards that will streamline the entire operations required for nutraceuticals. They need to address concerns about
- quality of raw materials
- safe manufacture of product
- health claims
- distribution & storage
The manufacture, storage, distribution, sale and import of nutraceuticals in India are regulated under the Food Safety and Standards Act (FSSA), 2006. The FSSA has consolidated a collection of earlier laws relating to food and nutraceutical safety and standards. However, no concrete regulations are in force and the government is still seeking draft suggestions.
Nutraceutical companies themselves feel that regulations related to quality and safety will benefit the industry and will keep a check on unregulated practices. Presently, the fragmentary nature of the regulations is making it difficult for players to comply fully or to make necessary investments.