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Contents
Foreword................................................................................................... 04
Introduction............................................................................................. 06
Executive summary................................................................................ 07
An insight into the nutraceuticals market of India
Section I: Nutritional status of the population of india....................................10
Section II: Nutraceuticals market: global and India......................................... 24
Section III: Way forward............................................................................... 48
Annexure.................................................................................................. 66
Acknowledgements................................................................................ 76
Glossary.................................................................................................... 77
About FICCI..............................................................................................80
Foreword
Ajit Singh
Chairman- FICCI Task Force on Nutraceuticals
Chairman- ACG Worldwide (formerly Associated Capsules Group)
President- Health Foods and Dietary Supplements Association (HADSA)
Dear reader,
Nutraceuticals as they are called in industry parlance cover a basket of products from dietary supplements to probiotic and energy drinks
to cholesterol and fat free foods among others. Increased discretionary spending, changing lifestyles and growing awareness among
Indians about healthy living are accelerating the growth of this Industry. Despite the huge potential, Indias share, with reference to the
global Nutraceuticals market is still minimal.
FICCI is one of the apex chambers of commerce of India, which has empowered Indian businesses in the ever changing and challenging
times, to step up their competitiveness and enhance their global reach.
FICCI acts an effective change agent and has been working diligently towards influencing the government to bring about necessary
policy changes to give impetus to this sector. FICCI has played a catalytic role in many sectors where India commands a leadership
position today.
HADSA is a non-profit trade association which not only represents the interests of manufacturers, suppliers and health-care products, but
also supports science-based environment for responsible marketing of nutritional supplements.
FICCI and HADSA have come together to provide a platform to the industry to share their concerns, flag issues, and discuss strategies to
compete globally in the field of Nutraceuticals, Functional Foods and Dietary Supplements.
Our vision is to accelerate Indias share of 0.9% of the worlds US$117 billion nutraceuticals, functional foods and dietary supplements
market to a sizeable number in the next few years. Considering the huge growth potential of the Indian nutraceuticals industry, I envision
India to be ranked among the top players such as USA, Europe and Japan which are the current market leaders.
This FICCI - Ernst & Young knowledge paper has synergized the available body of knowledge with the current business realities and
suggested strategies to increase Indias share of the global Nutraceuticals market.
Hitesh Sharma
Partner
Ernst & Young
M Muralidharan Nair
Partner
Ernst & Young
Dear reader,
Nutrition related risk factors contribute to more than 40% deaths in developing countries and India is no exception. Nutrition related
disorders force back its GDP by at least one percentage point. India is reeling under the burden of nutrition deficiencies with one-fifth of
the Indian population lacking the purchasing power to even consume a diet sufficient in calories, let alone nutrients; and an astounding
570 million consuming sufficient or excess calories, but lacking adequate intake of nutrients. In fact, 60% of this section consumes higher
than normal calories, with a disproportionately high fat intake and this could make India the future cardiovascular and diabetes capital of
the world.
The key factor responsible for these severe inadequacies in nutrient intake has been a significant change in lifestyle caused by rapid
urbanization and growing modernization in methods of food processing and cooking. As these changes are irreversible in nature, any
agenda to foster "quality healthcare for all" is incomplete without supplementing it through nutritional interventions. Unless such
interventions are introduced, the gap in nutrient intake will continue to widen. Thus, it should be a part of the nations critical agenda to
ensure that every citizen has access to Nutraceuticals - products which supplement the diet to provide nutrition over and above regular
food. It is a non-negotiable imperative that nutraceuticals cease being just a luxury and emerge as a necessity for the Indian populace.
However there are some impediments in the path to achieving this aspiration:
The prices of most nutraceutical products are high, severely limiting growth in demand, especially since India is a price
sensitive market
There is a lack of credibility of the benefits of nutraceutical products in the consumers minds, further aggravated by
unsubstantiated claims
The lack of regulations to govern nutraceuticals acts as a deterrent for committed nutraceuticals players, both Indian and
international, to enter the Indian market
"Nutraceuticals Critical supplement for building a healthy India", a FICCI Ernst & Young initiative is a comprehensive
study assessing the current and latent potential of the nutraceuticals market in India, the critical impediments to convert latent
opportunity into a market and the future imperatives for the government and private sectors. The report suggests concerted
and implementable strategies to the government and private sectors which, if implemented, would assist in achieving the
latent potential of nutraceuticals in India and at the same time addressing the diverse nutritional needs of the population.
We encourage you to explore, invest and partner in the Indian nutraceuticals market which truly stands at an inflexion point, poised
to grow.
Introduction
Quality healthcare is the foundation of any prosperous nation. Nutrition care, which forms an integral part of preventive healthcare, is
undergoing a transformation in India. Today, food alone is unable to fully service the nutrition needs of the body. Thus, supplementing
it with lifestyle interventions has become a non-negotiable imperative not only to enhance health but also to reduce dependency on
curative measures.
While lifestyle interventions can be manifold, this report is focused on those formulations or foods that can supplement normal
diet (called " Nutraceuticals ") and does not cover services that can be offered in this regard. Also this report covers the domestic
nutraceuticals market and not the export market potential of Indian nutraceuticals.
This document aims to present:
The nutritional status of Indians, their dietary patterns and underlying drivers
An assessment of the current and latent potential of the nutraceuticals market in India
Critical impediments in achieving latent potential, and
Way forward for the government and private sector
The viewpoints and conclusions presented in this report are an outcome of discussions with various stakeholders, regulators, key opinion
leaders, subject experts, data available in the public/propriety domain and our industry understanding. An attempt has been made to
provide a reference document for existing private Indian and global nutraceutical players, new entrants, potential investors and regulators
to explore and assess the nutraceuticals opportunity that India presents.
Executive summary
Nutrition is a fundamental need. Various risk factors related
to health result from an imbalance in nutrition. Together,
these factors contribute to more than 40% of deaths and
30% of the overall disease burden in developing countries.
In India, nearly 20% of the total population and 44% of young
children (below 5 years of age) are undernourished, numbers
which are significantly higher than even the poorer subSaharan African countries. Iron deficiency anemia during
pregnancy accounts for one-fifth of maternal deaths in India
and the prevalence of this deficiency in women has alarmingly
increased from 52% in 1998 to 56% in 2006. Iodine and
Vitamin A deficiencies in India are still above the WHO specified
desired levels. Annually as many as 0.3 million children
succumb to Vitamin A deficiency related diseases. The impact
of these deficiencies is a productivity loss of around one
percentage point of Indias GDP.
The nature of Indias nutrition concerns are three fold
On one hand is the undernourished population (380million)
with majority having inadequate purchasing power to
even consume a diet sufficient in calories, let alone take
sufficient nutrients. Their challenge is to meet foundation
needs to maintain normalcy of being. These needs
would have to be addressed by government programs
with the private sector playing a supportive role.
On the other hand is the huge population (570 million)
that is nourished in calorie intake but not in terms of
nutrient intake. This segment would typically include lower
middle to upper class population with sufficient purchasing
power but probably low awareness about their nutrient
requirements, leading to unmet condition specific needs in
addition to foundation needs. In fact, there are 340 million
in our population (30% in urban and 34% in rural areas) who
consume more than the recommended number of calories
with higher than recommended levels of dietary fats and
could be the largest contributor in making India the future
cardiovascular and diabetes capital of the world. While there
are several factors that have contributed to these severe
inadequacies, the key ones are increased urbanization,
larger working class population and growing affluence.
These factors have resulted in a shift of dietary habits from
consuming micronutrient rich foods such as fruits and
vegetables to consuming more of fat-rich calorie foods.
Section
10
Summary
Various risk factors related to health result from an imbalance in nutrition. Such
imbalances in India are widely prevalent leading to adverse outcomes. The impact
of these outcomes is a productivity loss of around 1% point of Indias GDP
A
nalysis of our dietary intake reveals nutritional imbalances across most segments
of population :
Majority of the undernourished population (380 million) faces a challenge to
meet foundation needs to maintain normalcy of being.
There is a huge population (570 million) that is nourished in calorie intake but not
in terms of nutrient intake. They face the challenge of meeting condition specific
needs in addition to foundation needs and could be the largest contributor in
making India the future cardiovascular and diabetes capital of
the world.
There is another population segment (80 million) which consumes nutrients and
calories more than norm due to their enhanced physical requirements.
S
ince many of the drivers underlying nutrition related concerns are irreversible
and natural sources of nutrients are being consumed in insufficient quantities, the
requirement of an external intervention has become a non-negotiable imperative
that can supplement food diet to help prevent nutrition related disorders and
promote wellness rather than treat illness. Such products have collectively been
called as Nutraceuticals
11
More than forty percent deaths in developing countries are attributable to risk
factors linked to nutrition
8 of the top 15 risk factors are related to nutrition and contribute to nearly forty percent of total
deaths and thirty percent of total disease burden in developing countries like India
15 leading risk factors in developing countries with high mortality rates*
Risk factors
1 Underweight
13%
Unsafe sex
10%
10%
2 Blood pressure
2%
7%
6%
6%
3 Cholesterol
Tobacco
5%
2%
5%
2%
4%
4%
4%
1%
5 Zinc deciency
3%
3%
6 Vitamin A deciency
3%
3%
7 Iron deciency
3%
3%
Physical inactivity
2%
Alcohol
2%
8 Overweight
2%
1%
2%
1%
1%
1%
0%
5%
10%
15%
0%
4%
8%
12%
16%
Food is composed of a wide distribution of nutrients, which have very specific metabolic effects on the human body. Nutrients are
of two types - macro-nutrients and micro-nutrients
Denition of key nutrients
Macro-nutrients
Micro-nutrients
Nutrients
13
44% of Indian children are underweight1, which is much higher than most comparable countries. Further,
the proportion of underweight children has reduced only marginally in last 10 years, showing slow pace of
improvement. Other related adverse health outcomes are stunting2 and wasting3 and the proportion of
these is also alarming at 38% and 19% respectively. Being underweight may reduce a childs IQ by 5%,
while stunting may reduce it by as much as 11%.
Percentage of underweight children below 5 years of age
43.5
Underweight
1.4
3.7
6.8
Russia
Brazil
China
India
Maternal mortality rate in India is much higher than that of comparable countries. About 20-40% of maternal
dealth in India are due to anemia, the proportion of which has increased in the last decade.
Maternal mortality rate per 10,000 live births, 2005
45
Iron
deciency
74
2.8
4.5
Russia
China
79
52 56
11
Brazil
Percentage
anemic children*
India
1998-99
Percentage women
suffering
from anemia**
2005-06
Vitamin A
deciency
India
* Pre-school children
Source: NFHS, Report of the Working Group on Integrating Nutrition with Health, 11th Five Year Plan (2007-2012) , India Micronutrient National
Investment Plan 2007-2011
1
2
3
Underweight: Children under 5 years whose weight-for-age is less than -2 Standard Deviation (SD)
Stunted: Children under 3 years
height-for-age
is lessdeciency
than -2SD disorder)
Totalwhose
goiter
rate (Iodine
Wasted: Children under 3 years whose weight-for-height is less than -2SD
10%
14 Iodine
deciency
deciency
India
* Pre-school children
Source: NFHS, Report of the Working Group on Integrating Nutrition with Health, 11th Five Year Plan (2007-2012) , India Micronutrient National
Investment Plan 2007-2011
Iodine
deciency
5%
India
Source: Report of the Working Group on Integrating Nutrition with Health, 11th Five Year Plan (2007-2012), India Micronutrient National
Investment Plan (2007-2011 )
India has the largest burden of CVD and largest number of diabetes patients in the world
Blood
pressure,
overweight,
cholesterol
Cardiovascular diseases
DALYs (millions)
24.5
28.9
20.8
11.8
4.1
Brazil
Russia
China
India
4.6
4.6
Russia
Brazil
China
India
Adverse outcomes are estimated to cost nearly 1% point to Indias GDP and so improvement in
nutrition status is a critical part of the countrys agenda for progress
An estimate of the cost of productivity lost on account of mortality due to nutrition related
disorders was estimated to be 0.85% of the GDP in 2004 and is expected to increase upto 1.2% of
India's GDP by 2015
Source: WHO 2009, Popkins et. al (2001), Ernst & Young analysis
15
Analysis of India's dietary patterns provides a few key insights into the
nutrition levels and needs of the population
Nearly 20% of the Indian population is undernourished implying a low calorie as well as
nutrient intake
19
12
9
Russia
Brazil
Nigeria
China
Uganda
India
Source: Global Hunger Index, International Food Policy Research Institute 2008
Even in the population that shows sufficient calorie intake, the micronutrient consumption is
not at desired levels
While the intake of calorie rich foods may be high, micronutrient rich foods are being consumed
in low proportions. As a result, significant micronutrient deficiencies exist in urban as well as
rural areas
101%
83%
109%
102%
111%
RDA
93%
76%
76%
83%
70%
81%
71%
68%
56%
65%
Zinc
60%
58%
Vitamin A
33%
83%
90%
Iron
Cereals Edible oil Milk & milk Sugar
products
Calorie rich
Rural
Pulses
Vegetables Fruits
0%
Micronutrient rich
Urban
16
20%
40%
60%
80%
100%
120%
At the same time, there is a growing population (340 million) which is consuming excess
calories, with a disproportionately high level of fats
Nearly 340 million people - 30% of the population in urban areas and 34% of the population in rural
areas - consume calories more than the norm
Calories derived from fat as percentage of total calories
for the excess calories consuming population
19%
21%
70%
66%
Urban
<100%
100%-120%
Recommended range
11%
Rural
>120%
>150%
23%
120%
150%
17%
21%
Average
Rural
Source: NSSO 2004-05
*2700 kcal per consumer unit per day
32%
23%
16%
Urban
Also, there is a growing fitness need which has led to rapid rise in slimming centers and
gymnasiums. This is driving enhanced nutrition requirements for this segment of the
population
Growth in slimming centers and gyms market (INR billion)
4.6
4.5
CAGR
23%
CAGR
33%
2.5
1.9
Slimming centres
2005
Gyms
2008
17
18
Over-nourished 80 million
Under-nourished 3
380 million
Decient
Micronutrient intake
ICMR norm
for fruits and
vegetables2
Sufcient/
excess
These patterns can be mapped into distinct population segments based on their
food and nutrient intake
Decient
Adequate/excess
80% of norm
level as dened
by NSSO
Calorie consumption
Undernourished population
380 million
Nearly 70 percent (280 million) of this segment would include
those with inadequate purchasing power to consume a diet that
would be adequate in calories and therefore decient in
micronutrients
Immediate need for this section of the population would be
foundational to meet basic calorie nourishment and will have to
be addressed by government intervention. Some programs
under-taken by government include mid-day meal, micronutrient
national investment plan and food security programs under
Millennium Development Goals
Remaining 30 percent (100 million)of this segment would include
people with sufcient purchasing power but inadequate food
consumption due to various reasons like chronic illness, low
appetite, extreme diet consciousness
Source: NSSO 2004-05, India Micronutrient Initiative Plan 2007-2011, Ernst & Young analysis
Market size of this segment of the population is assumed to be insignicant as they are calorie decient but micronutrient sufcient implying that
they could be an extremely health conscious segment with dependence on very low calorie foods but still managing to derive sufcient micronutrients
1
As per most recent national initiative called the Micronutrient National Investment Plan 2007-2011, inadequate consumption of fruits and vegetables
is a key reason for deciency of essential micronutrients. For the purpose of estimating decient and sufcient nutrition intake population segments,
it has been assumed that persons who consume fruits and vegetables combined less than ICMR norm of 175 gms/ day would be decient in
micronutrients
The entire population below the food poverty line (as dened in the report of the National Commission on Macroeconomics and Health, 2005) has
been considered as undernourished, irrespective of level of calorie consumption
19
Enhancement
needs
Foundation needs
20
N
utrition needed by all segments of population to
maintain and promote a normal, healthy life
While food has been the major source for servicing these needs in the past,
with growing modernization some traditional ways are being given up, thereby
adversely impacting balanced nutrition
Nutrients concerned
Iron
Copper
Source: Srilakshmi B. 2003 Food Science, American Association of Cereals Chemists, Carribean Home Economics, Ernst & Young research
There is an ever widening gap in nutrient intake due to which "normal life is no longer normal"
21
While such interventions can be manifold, this report is focused only on products that can fulfill
this role. These products have been collectively referred to as "Nutraceuticals"
Traditional
medicine
Pharmaceuticals
Food
Nutraceuticals
Preventive
Usage
Curative
Nutraceuticals, an emerging concept, can be broadly categorized as products which are extracted
from natural sources (nature-like) or manufactured synthetically (man-made), which supplement the
diet to provide nutrition over and above regular food and help prevent nutrition related disorders.
Natural
Nature-like
Man made
Source
Ideally, intake of nutrients through food would have been sufficient to prevent curative
measures such as pharmaceuticals and traditional medicine to a large extent
However, in the absence of requisite nutrition through food, an external intervention in the
form of nutraceuticals has become imperative
22
Section
Nutraceuticals market:
global and India
24
II
Summary
As a concept, Nutraceuticals is in its stage of infancy with several developed
countries having defined it only in last 15 years
Of the global nutraceuticals market of USD117 billion (INR5148 billion), India has
less than one percent share and is estimated to be around INR44 billion in size. But
it has been growing much faster than global rates at a CAGR of 18% for the last 3
years driven by functional food and beverages categories
There are four key underlying drivers for this growth:
Affluence of working population with changing lifestyles
Reducing affordability of sick care, driving consumers towards wellness
Increasing physician awareness and media penetration
Increased accessibility due to emergence of newer distribution channels
However, the latent market in India is two to four times the existing market size
(between INR89 billion and INR172 billion) with nearly 148 million potential
customers.
The market is latent because there some major impediments to effectively tap into
this market. These are:
Regulatory framework not yet implemented
Inadequate resources for implementation of regulations
High prices of nutraceuticals
Lack of credibility of nutraceuticals
25
26
Canada
Known as: Natural Health Products
Governed by: Food and Drugs Authority
Implemented in: 2004
Japan
Australia
USA
Known as: Dietary supplements
Governed by: Food and Drugs Authority
Implemented in: 1994
Russia
Vitamins
Minerals
Herb/botanicals
Amino acids
Concentrate, metabolite, constituent, extract
Herbal medicines
Vitamins and minerals
Nutritional supplements
Nutrition
Sensory satisfaction
Physiological improvements
India
Regulation: Food Safety and Standards Act (FSSA)
Effective from: Passed in 2006, yet to be implemented
Foods for special dietary use are specially processed or formulated to satisfy particular dietary requirements which exist because of a particular
physical or physiological condition or specic diseases and disorders and which are presented as such wherein the composition of these foodstuffs
must differ signicantly from the Indian Standard (IS) composition of ordinary- foods of comparable nature, if such ordinary foods exist and may
contain one or more of the following ingredients, namely : Plants or botanicals or their parts in the form of powder, concentrate or extract in water, ethyl alcohol or hydro alcoholic extract, single
or combination
Minerals or vitamins or proteins or metals or their compounds or amino acids ( in amounts not exceeding the Recommended Daily Allowance for
Indians) or enzymes (within permissible limits)
Substances from animal origin
Dietary substances for use by human beings to supplement the diet by increasing the total dietary intake
Source: US Food & Drug Administration website; Health Claim Evidence Requirements in Japan,(Yamada et al); Health Canada Natural Health Products Directorate website;
European Union Directive; European Parliament directive on food supplements; Department of Health & Ageing, Therapeutic Goods Administration, Australia website;
The Russian Federation Chamber of commerce and Industry website, Food Safety and Security Act of India, 2006
27
Formulations or foods with health benefits that are taken orally in addition to the normal diet
and can even be taken over prolonged periods in concentrations which are lower than the
Recommended Daily Allowance (i.e. below the therapeutic range) to:
Supplement the diet to help prevent nutrition related disorders
Provide structure/function support that may help prevent specific diseases like
diabetes, cancer, obesity through beneficial and proven effects that go beyond the known
nutritional effects
Fulfill special physiological needs of the body such as like pregnancy, lactation, sports,
infancy and sedentary lifestyle
3 Key
nutraceuticals
categories
tary
Die ents
plem
sup
Fun
ct
foo iona
ds l
Vitamin supplements
Mineral supplements
Macronutrients
Functional
beverages
Liquids that quench thirst along with replenishing minerals, provide energy, prevent ailments,
and promote healthy life styles
Antioxidants
Tonics
Herbal extracts like Chyawanprash,
non-herbal extracts like cod liver oil
28
US, Europe and Japan are key markets for nutraceutical consumption
Geographic split*
Switzerland 3%
UK 2%
Functional foods
54%
Rest of EU 6%
Italy 3%
Japan 22%
France 6%
Germany 5%
Functional beverages
14%
India 1%
Rest of Asia 7%
US 36%
Others 9%
Dietary supplements
32%
Source: Primary interviews, Industry sources, Ernst & Young analysis
Globally, this market is expected to reach USD177 billion in 2013 growing at a CAGR of 7% driven
by the fast growing dietary supplements category
Global nutraceuticals market
200
180
7%
GR
A
C
160
USD billion
140
71
120
100
38
49
80
60
39
40
40
20
0
2007
Functional foods
Functional beverages
57
2013
Dietary supplements
The dietary supplements category is expected to be the fastest growing product category
globally with a CAGR of 11%.
29
Nutrition
fortied foods
Functional beverages
22.7
43.9
6.0
Sports and
energy drinks
0.5
Vitamin
supplements
3.0
Fortied juices
5.2
Mineral
supplements
1.0
Macronutrients 2.2
Antioxidants
2.4
Tonics
1.4
Extracts
4.0
The functional foods market is the largest followed closely by the dietary supplements market
which has a 32% market share. The functional beverages market in India is relatively nascent.
Note:
While we have not validated the efficacy of the products constituting these segments nor the studies backing their claims, the attempt here has been to estimate the market
size of those segments where some research exists to substantiate health or nutrition claims.
Segments such as iodized salt have been excluded from the market sizing exercise as large scale fortification of these products has led to consumption not primarily for the
fortification benefits but for regular food value.
Please note that in the energy drinks market, caffeine rich products have not been included.
30
Nutraceutical products aim to fulfill different consumer needs based on which they can be classified
as Enhancement segments, Condition specific segments and Foundation segments
Enhancement segments
There are a few product segments such as
sports and energy drinks catering to health
enhancing needs of the consumers
High protein
supplements
Energy drinks
Sports drinks
Glucose drinks
Antioxidants
Vitamin
supplements
Mineral
supplements
Macronutrient supplements
Nutrition fortied foods, e.g., (fortied our)
Probiotic foods, e.g., (yogurt)
Extracts, e.g., (chyawanprash)
Child*
Young adult*
Adult*
Foundation segments
Foundation products segments cater to the
consumer trend towards wellness and healthier
lifestyles. These product segments promote
general well being are largely targeted at all
age groups.
Old age*
Lifecycle stages
*Note: Child: 0 4 years; Young Adult: 5 14 years; Adult: 15 59 years; Old Age: 60+ years
Source: Ernst & Young Analysis
Though a product category can be classified into a specific need-segment based on its predominant use, some product types may
transcend across need-segments
For example cod liver oil, along with meeting foundation needs of boosting the immune system, will also cater to prevention needs of
lowering cholesterol
31
While the global industry is growing at a CAGR of 7%, the Indian industry
has been growing at a CAGR of 18% in the last 3 years
Enhancement
needs
Condition specic
needs
Foundation needs
Glucose drinks
Sports and energy drinks
0.3
0.5
Mineral supplements
Antioxidants
3.1
Tonics
1.4 2.4
0.9
Extracts
Vitamin supplements
Probiotic foods
3.8
Macronutrients
2.2
Fortied juices
1.2
2.5
4.6 15.7
5.2
Fortied oil
Fortied our
11%-20%
21%-30%
Dietary supplements
Functional foods
Functional beverages
The functional food and beverages categories consisting of nutrition fortified foods, sports and
energy drinks, fortified juices and probiotic foods are growing faster, driven by wider distribution
across FMCG channels as well as aggressive mass marketing
32
e
enc
fu
A
1
Afuence of working
population with
changing lifestyles
ility
dab
r
o
f
Af
y
ibilt
ess
c
c
A
ss
ene
r
a
Aw
Reducing affordability
of sick care, driving
consumers towards
wellness
Increasing physician
awareness and media
penetration
18%
Increased accessibility
due to emergence of
newer channels
120%
100%
1.09 bn
8%
1.18 bn
1.25 bn
9%
10%
9%
22%
80%
60%
60%
62%
20%
32%
29%
27%
2005
2010
2015
<15 years
15-60 years
26%
11%
30%
63%
40%
0%
6%
>60 years
72%
65%
58%
2001-02
2005-06
2007-08
<0.09 mpa
0.09-0.2 mpa
>0.2 mpa
Growing disposable income and lifestyle changes such as shift in dietary habits towards higher
fat has resulted in increasing incidences of chronic disorders. This in turn is likely to fuel the
demand for nutraceutical products.
34
64
60
50
40
44
8000
34
30
24
10
6
Government
exp. on
healthcare
Global
6900
6000
Out-of pocket
exp. on
healthcare
2000
Other
Private and
social
insurance
4800
3900
4000
18
20
10800
10000
INR
Percentage of expenditure
70
Rural
2004-05
1995-96
India
Urban
These factors are driving consumer towards health and wellness related services in order to lead healthier lifestyle and
prevent spiralling sick care costs.
Share of consumers wallet on healthcare expenditure
is expected to go on increasing
100
42
34
5
5
9.5
12
14
56
60
5.5
5
40
14
20
0
12
12
10.5
25.5
22
19
12
3
4
1995
5
7
6
9
13
2005
2015
2025
Health care
Apparel
INR billion
Share of wallet
80
25
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
CAGR
33%
FY2005
4.5
CAGR
23%
4.6
CAGR
31%
2.5
2.5
1.9
1.1
Slimming
centers
Gyms
Spas
FY2008
35
Physician awareness
about health benefits
of nutraceuticals has
fuelled growth in nutrition
related prescriptions at
26 % CAGR in recent years
Numbers millions
400
350
300
250
26%
GR
CA
200
150
100
50
0
FY 2005
45%
410
260
FY 2007
450
40%
40%
35%
30%
36%
116
25%
25%
20%
64
15%
10%
6%
5%
0%
Internet
2006
2010E
36
156
2012E
1,400
29%
CAGR
1,163
Number of stores
1,200
30000
58%
CAGR
25000
36%
CAGR
1,000
1,000
800
737
700
600
400
400
400
200
0
86%
CAGR
45
Apollo
Med Plus
Pharmacy
Existing 2007
156
276%
CAGR
6
85
Medicine
Fortis
Reliance
Shoppe Healthworld Wellness
32%
CAGR
20 35
GNC
%
19
20000
15000
10000
%
75
(8
R)
AG
C
ar
ye
(4
R)
AG
C
ar
ye
24,300
12,755
5000
0
259
2001
2008
2012
Planned 2009
37
Grocer
Distribution channels
Direct selling
Pharmaceutical and FMCG players active in the nutraceuticals space have diversified by
introducing product extensions and developing variants under existing brand names.
Nutrition
fortied foods
Energy
drinks
Pharmaceutical dominated
segments with player such as
GSKCH, Emami, Ranbaxy, Elder
Fortied
juices
Probiotic
foods
Chemist
Glucose drinks
Macronutrients
15 players
Consolidated
Extracts, tonics
and stimulants
Mineral
supplements
Vitamin
supplements
Antioxidants
610 players
Extent of fragmentation
11+ players
Fragmented
Largely, the market is fragmented. However, the FMCG dominated segments are relatively
less fragmented as compared to the pharmaceuticals dominated segments.
38
Player
Expansion plan
Alkem Laboratories
Alkem Laboratories has invested over INR1 billion to create exclusive manufacturing facilities for their health
foods business.
Alkem Health Foods is expected to generate a turnover of over INR3-5 billion annually within a few years.
Plethico
The company recently acquired a USD100 million nutraceutical company named Natrol Inc in the US and is
planning to launch its 700 odd products in India and other global markets.
Plethico, is also setting up a INR1 billion plant in Dubai to make medicated lozenges, is targeting a turnover of
over INR30 billion within five years.
Divi's Laboratories
Divi's Laboratories has set up a INR350 million nutraceutical plant and a separate arm, Divi's Nutraceuticals.
The company has already developed potential vitamin products such as Astaxanthin, Betacarotene,
Canthaxanthin and Lycopene.
Mission Vivacare
Mission Vivacare is investing over INR800 million in modern manufacturing facilities to launch its products
globally under the brandname - Mission VivaPrime. Its prime targets are the US and Europe.
GNC
Plans are on to open 150 stores by 2009, has an exclusive master franchisee tie-up with Guardian pharmacy
which is investing approximately INR1 billion
Operates approximately 4900 stores worldwide
Vitabiotics
Plans of investing INR1.2 billion in a manufacturing unit to roll out its entire range of products in India
Robert Schwartz
Plans of increasing footprint through Manipal Cure and Care as well as 50 additional health and wellness
centers by 2011
Source: "Drugmakers cash in on health supplement segment", 22 August 2008 Business Standard, Primary interviews
39
Even though the current nutraceuticals market is pegged at INR44 billion, there
exists a large latent potential market
Nearly 70% of the undernourished population (280 million) has inadequate purchasing power
to consume a calorie sufficient diet and hence is not a latent potential market. However, out of
the remaining 750 million population, nearly 148 million people can be potential customers for
nutraceuticals based on their affordability.
It is observed that the top 3 MPCE1 groups in urban areas and the topmost MPCE1 class in rural areas
(collectively referred to as "segments with affordability" from hereon) spend a significant amount
(25 per cent more than average) on processed foods & beverages and would, therefore, have greater
affordability to buy nutraceuticals.
Per capita monthly average expenditure on processed
foods and beverages (INR)
Spend above urban average
MPCE classes
271
126
91
>2540
2%
1880 2540
2%
1380 1880
3%
930-1380
59
6%
580-930
335-580
Below food poverty line
0 335
Rural - >1155
93
24
7%
4%
0.4%
7%
Rest of rural
69%
Urban average
74
31
Rural average
Source: NSSO 2006-07, Report of the National Commission on Macroeconomics and Health 2005
Note:
1. MPCE (Monthly per capita expenditure) As per NSSO definition, for a household, this is the total consumer expenditure over all items divided by its size and expressed on a
per month basis. A persons MPCE is understood as that of the household to which he or she belongs.
2. People below food poverty line have been considered to be those with monthly per capita expenditure on food less than the minimum expenditure required to consume a diet
sufficient in calories and nutrients as defined in the report of the National Commission on Macroeconomics and Health, 2005
40
This latent potential market is estimated to be atleast two to four times the
current market size (between INR89 billion and INR172 billion)
Potential
market
range
Foundation needs
For maintaining normalcy of being
Total
Current
market
INR
1.2- 1.5
billion
INR
0.8
billion
INR
49.7
99.5
billion
INR
9.8
billion
INR
38.0 71.4
billion
INR
33.3
billion
INR
88.9 172.4
billion
INR
43.9
billion
Source: NSSO 2004-05, NSSO 2006-07. NNMB 2007, Ernst & Young-FICCI Wellness report, 2009, Primary interviews, Industry sources, Ernst & Young analysis
Key assumptions*
Segments with affordability (as defined earlier) form the consideration set for this analysis
The following three scenarios have been considered for analysis:
Scenario 1: Segments with affordability in urban areas spend 25% of their processed foods and edible oil expenditure on products
that cater to foundation needs. This is in line with their current spending levels on foundation product segments. In this scenario,
there is no spend assumed on foundation products by the segment with affordability in rural areas. In case of condition specific
needs, 50% of the current nutrient intake gap is met through nutraceutical products, while for enhancement needs 75% of the
enhanced nutrient requirement is met through nutraceuticals.
Scenario 2: Segments with affordability in urban areas spend 40% of processed foods and edible oil expenditure on products to
cater to foundation needs. In this scenario too, there is no spend assumed on foundation products by the segment with affordability
in rural areas. In case of condition specific needs, 75% of the current nutrient intake gap is met through nutraceutical products,
while for enhancement needs 90% of the enhanced nutrient requirement is met through nutraceuticals.
Scenario 3: In addition to segments with affordability in urban areas spending 40%, those in rural areas spend 10% of their
processed foods and edible oil expenditure on products that cater to foundation needs. In case of condition specific needs, 100% of
the current nutrient intake gap is met through nutraceutical products, while for enhancement needs 100% of the enhanced nutrient
requirement is met through nutraceuticals.
*Refer Annexure 1 for details
Nutraceuticals Critical supplement for building a healthy India
41
However, there are critical impediments to convert this latent opportunity into
a market
4
Critical impediments to growth
Lack of credibility
of nutraceuticals
High prices of
nutraceuticals
2
Inadequate resources
for implementation
of regulations
1
Regulatory framework
not yet implemented
42
Regulatory framework to govern the nutraceuticals market in India has not been implemented
as yet
The Food Safety and Standards Act of 2006, passed by the Indian Parliament, brought into existence
the Food Safety and Standards Authority of India (FSS or FSSA), which is the responsible body for
framing rules and regulations to govern the nutraceuticals market.
However, rules are yet to be framed and this scenario lends an environment that is not conducive for
the growth of nutraceuticals.
Genesis and current state of FSSA
2005-2006
Pre 2005
A
need felt for integrating all
existing laws under one
G
roup of Ministers (GOM) appointed
by Government of India to propose
the Integrated Food Law
F
ood Safety and Standards Bill
2005 introduced in parliament
and referred to the Standing
Committee on Agriculture
R
ecommendations made by
standing committee incorporated
F
SS Bill passed by parliament
and signed by President
on 23 August 2006
Post 2006
43
Even if regulations are established, resources available to enforce them are insufficient
There is a lack of resources in terms of Food safety officers and Central food laboratories to monitor
compliance to regulations.
Monitoring reach
Food processing
units
Retail outlets
Extent of inadequacy
Underlying assumptions
E
ach food safety officer can
handle 4 inspections per
month of required quality
E
ach food safety officer
can handle 25 retail outlet
inspections per month
E
ach lab can handle 25
Each sample from retail outlets
samples per day
and food processing units can only
be monitored once in 4 years.
44
Prices of nutraceutical products in the Indian market are prohibitively high when compared to the
conventional foods. In a highly price sensitive market such as India, this is a severe limitation on the
growth in demand for nutraceuticals.
Product
Quantity
Price of
conventional food/
pharmaceutical
1 kg
INR11
Atta
1 kg
INR18
330 ml
INR20
10 tablets
INR15
45
A survey of consumers in 13 Asia Pacific countries including India, showed that for most
nutraceuticals more than 30% of the respondents felt that they do not offer any additional
health benefits
Percentage of respondents who believe these products do not offer any additional health benets
Percentage of respondents
42%
32%
31%
24%
Cholesterol
reducing oils
Iodine enhanced
salt
This lack of belief in the benefits of nutraceuticals is further aggravated by the unsubstantiated
claims made by certain products.
This loss in credibility of nutraceuticals in the minds of consumers is the key limiting factor in
the growth of the market.
46
Some of the key ingredients with health claims used by Indian nutraceutical players
Over and above the micro and macro nutrient ingredients available in the market, there are host of
ingredients used by nutraceuticals companies with diverse set of heath claims providing structure
function benefits such as carotenoids, dietary fiber, fatty acids, flavonoids, isothiocyanates, phenolic
acids, plant stanols/sterols and polyols. Below mentioned are few examples of ingredients used by
Indian nutraceuticals players.
Ingredient
Functional foods
(Nutrition Fortified foods):
e.g. omega fortified malted beverages
Beta glucan
Functional foods:
e.g. oat enriched foods
Phytoestrogens
Functional Beverages:
e.g. soya milk drinks
Tocopherols
Functional foods:
e.g. rice barn fortified oil
Ginseng
Dietary supplements:
e.g. Tonics and stimulants
Beta-carotene
Dietary supplements:
e.g. Beta-carotene in antioxidants
Source: Frost & Sullivan, Websites of Tata Tea, Pepsico, Godrej, Saffola
47
Section
Way forward
48
III
Summary
Agenda for government
Lay down rules to govern quality and claims of nutraceutical products
Take measures to ensure availability of adequate resources for implementation
of laid out rules
Encourage R&D in the field of nutrition and deploy PPP models to serve needs
of the undernourished segment of population
Agenda for private sector
Product development: Develop customer focused products addressing specific
needs of different consumer segments
Product differentiation: Differentiate products by focusing on credibility
building and/or lowering prices of products
Product promotion: Increase awareness of the benefits of nutraceuticals
through advertizing and physician education
49
Impediments
Way forward
Regulatory
framework not
yet implemented
Inadequate
resources for
implementation
of regulations
A. Revise RDA levels to make them applicable for the Indian population's current lifestyle
B. Develop rules which specify proven nutrients, permitted health claims, product approval process,
standards and Good Manufacturing Practice
Encourage R&D in the field of nutrition and deploy PPP models to serve needs of the
undernourished segment of population
A. Establish a dedicated fund focused on nutraceuticals research and support nutraceutical players by
providing them with research infrastructure
B. Deploy PPP models to cater to the needs of the undernourished section of the population
Lack of credibility
of nutraceuticals
High prices of
nutraceuticals
50
In India, while the Food Safety and Standards Authority, created as per the Food Safety and Standards Act 2006 (FSSA), has plans to lay
down rules by end of 2009 based on panel recommendations, it will be enforced state by state over an extended period of time. Here, it is
of critical importance that not only are the rules made exhaustive to govern quality and claims but their implementation is also expedited.
Revise RDA levels to make them applicable for Indian population's current lifestyle
Develop rules which specify proven nutrients, permitted health claims, product
approval process, and Good Manufacturing Practice
ii
Define the list of permitted health claims and specify quantity of ingredients required to make those claims
iii
Setup a process for introduction of new nutraceutical products and define the nature and range of evidence required
to substantiate product claims
15
400
9.8
300
6.2
200
100
0
2
1993
69
1995
80
5
50
1997
153 150
15
300
192
10
5
100 50
1998
1999
2000
51
1.A. Revise RDA levels to make them applicable for Indian population's current lifestyle
India is currently using the RDA (Recommended Dietary Allowance) system with norms last defined 20 years ago (year 1989) by
ICMR (Indian council of Medical Research). These norms are outdated and do not reflect the lifestyle changes as well as the considerable
nutritional research accumulated in this period. The need for urgently revising these norms has also been identified in the 10th Five Year
Plan acknowledging that the existing RDA norms are overstating nutrition needs and should undergo revision. At the same time, countries
such as the US, Canada, Australia and New Zealand have replaced the RDA system with more advanced systems (Dietary Reference Intakes
in the US and Canada, Nutrient Reference Values in Australia and New Zealand). These advanced systems have noteworthy merits for India
to learn from but the time taken to adopt them would also be significant, and is a longer term measure that is needed.
2
1
Need
13%
2425 2115
Sedentary
13%
2875 2492
Moderate
13%
3800
Case
12.5%
3000
1000
3293
Heavy
800
700
1989 RDA
1997 DRI
180
1989 RDA
400
1997 DRI
Activity category
Recommended as per 1989 RDA
52
Develop rules which specify proven nutrients, permitted health claims, product approval
1.B.
process, standards and Good Manufacturing Practice
Rules with regards to proven nutrients, permitted health claims, product approvals, standards and GMP need to be defined exhaustively.
ii
Define the list of permitted health claims and specify quantity of ingredients required to make those claims
iii
Setup a process for introduction of new nutraceutical products and define the nature and range of evidence required
to substantiate product claims
Scientific panels have been set-up within the FSSA for defining rules to govern nutraceuticals market &
label claims. Apart from Codex guidelines some of the practices that can be referred to while framing
these rules are illustrated in the table below:
Japan
Canada
India
Natural Health
Products Regulation
To be decided
Rules of the act not laid down
yet, hence no list currently
available
Dietary Supplement
Health and Education
Act (DSHEA)
(Pre-marketing
notification along with
evidence of safety has
to be submitted)
To be decided
Regulations which specify the
approval process have not been
framed yet
To be decided
Regulations which specify the
approval process have not been
framed yet
To be decided
Rules specifying GMP/standards
would be part of the rules of the
act when they are laid down
Is Good Manufacturing
Practices (GMP) in place
for manufacturing of
nutraceuticals?
Management of claims on label
Is a claim specifying
the beneficial effect on
structure or function of
the body permitted?
Is a risk reduction
claim pertaining to
any specific disease or
condition permitted?
(Permitted without
validation but with
a disclaimer)
To be decided
The act only specifies that
claims should not be false or
misleading. Rules to govern
claims are yet to be laid down.
To be decided
The act only specifies that
claims should not be false or
misleading. Rules to govern
claims are yet to be laid down.
(Exception based
monitoring through
sample testing)
(Mandatory. Alerts
issued to consumers
based on no. of adverse
events reported)
(Exception based
monitoring through
sample testing)
(Mandatory. Alerts
issued to consumers
based on no. of adverse
events reported)
To be decided
Rules yet to be laid down in the
act with regards to manufacturer
maintaining a record of all
adverse events
Source: US Food & Drug Administration website; "Health Claim Evidence Requirements in Japan,(Yamada et al); Health Canada Natural Health Products Directorate
website; Food Safety and Standards Act of India, 2006
54
Brazil
(Dietary fiber, lactulose, fructooligosaccharides, inulin)
(Lutein, lycopene)
Source: The World Bank - Agricultural and Rural Development Discussion Paper 30 "Health Enhancing Foods"
*Refer Annexure 3 for details
55
Define the list of permitted health claims and specify dosages of ingredients required to
make those claims
ii
T
he scientific panel on management of claims within the FSSA needs to frame a policy on the nature of claims that would
be acceptable
The level of regulatory control needs to be in line with the nature of claim while a low level of control is sufficient for
nutrition content claims, a high level of control is required for risk reduction claims ( types of claims and their definitions
are provided below)
For nutrition content claims and health claims, rules could specify the ingredient content limits. Further, for health claims a
list of acceptable claims needs to be identified based on scientific evidence
Claims made on the labels of nutraceutical products are generally classified into three types and the level of regulatory
control exercised on each type could vary as shown:
Nutrition claims
1
Types
Definition
Health claims
Minerals
Level of
regulatory
control
required
Case (US
FDA claim
regulations*)
S
tructure-function claims
describe
A
nutritional ingredients
effect on a structure or
physiological function in
the human body, or
Its support of
an anatomical,
physiological, or mental
function
Source of calcium
Low
N
o pre-approval of FDA
is required
N
o evidence is required to
be submitted
N
utrients and quantities are
required to be mentioned
on label
"Reduces risk of
heart disease"
"Lowers blood cholesterol"
Medium
High
N
o pre-approval is required
C
laim has to be for one of
the ingredients in the preapproved list of proven and
qualified health claims
P
re-launch notification
to FDA is required along
with evidence of claim
A
long with the claim a
disclaimer is required on
label mentioning that the
claim is not FDA approved
Source: Codex guidelines for use of nutritional and health claims; US FDA website
*Refer Annexure 4 for details
56
N
on-specific claims of overall
health are also included
Vitamins
Examples
Structure/function claims
T
he quantities of nutrients
required for the claim
to be made are also
required to be specified
iii
T
he process for introducing a new nutraceutical whether approval based or notification based should be clearly specified as
part of the rules and regulations of FSSA.
For an approval based system, the authorities responsible for processing the application and granting approval should be
identified and trained for standardization in implementation.
For a notification based system, a channel should be set-up to hear, record and process consumer grievances or adverse
event reports
In the Indian context, opting for an approval based process may lead to a regulatory bottleneck and delays. On the other
hand, a large proportion of the Indian consumers may not have adequate awareness or education levels because of which a
notification based process might lead to compromising consumer safety. Hence a hybrid of the two processes needs to be
conceived and implemented
The nature and range of evidence required to substantiate a particular health claim needs to be defined clearly.
Level of
regulatory
control
Approval/license based
Notification based
High
Low
Key
features
C
onsumer safety can be ensured and misleading
claims can be barred centrally
Advantages
R
educed effort on monitoring, through sampling
and testing of products from the market
R
educed reliance on consumer reporting of
adverse events
R
educed scope for corruption which might be
prevalent in strictly controlled environment
where licenses are granted
Japan*:
USA:
A
ll new products have to get approval to be sold
as a FOSHU product
P
roducts with ingredients which have already
been marketed do not need approval. A
notification has to be given with evidence to
support health claims
T
he application for a product is required to
include documentation regarding:
Cases
F
or a new product with ingredients which are
already marketed, no approval is required.
Manufacturer notifies the FDA prior to launch.
F
or new ingredients, the pre-marketing
notification has to be 75 days prior to launch
in which period the FDA can analyze evidence
and raise concerns with the manufacturer
T
he manufacturer is required to maintain
a record of all adverse events reported by
consumers. Monitoring Monitoring is done
based on exceptions
58
2.
Evaluate gaps in number of food safety officers and recruit to fill those gaps
State Food and Drug Administrations need to assess gap in required
and available food safety officers and recruit to scale up and meet the
required number
Approvals by this agency would be in the form of a mark on the product which
would help build credibility for tested and proven products
Source: Primary interviews; Ministry of Food Processing industries website; Industry sources
59
3.
Encourage R&D in nutritional food sector and deploy PPP models to serve needs of the
undernourished segment of population
Current challenges
Imbalance of nutritional
ingredients in the food provided
to the undernourished through
government schemes
It is a part of the government agenda to meet nutritional deficiencies in the undernourished segment
of the Indian population
Major goals of "National Nutrition Plan" to be met by 2012
R
educe the prevalence of underweight condition in children under five years to 20%
Eradicate the prevalence of severe under-nutrition in children under five years
R
educe prevalence of anaemia in high risk groups (infants, pre-school children, adolescent girls, pregnant and lactating
women) to 25 %
Eliminate vitamin A deficiency in children under five years as a public health problem and reduce sub-clinical deficiency of
vitamin A in children by 50 %
Reduce prevalence of Iodine deficiency disorders to less than 5 %
Source: 11th Five Year Plan, Working group on integrating nutrition with health
60
These goals are to be achieved through multiple health and nutrition interventions planned by
the government
Some nutrition interventions undertaken by different sectors of the government
I ntegrated Child Development Scheme (ICDS)
N
utrition Program for Adolescent Girls (NPAG)
I ron and Folic Acid supplementation of pregnant women
V
itamin A supplementation of children of 9 to 36 months age group
N
ational Iodine Deficiency Disorders Control Programme
M
id day meal for primary school children
Source: 11th Five Year Plan, Working group on integrating nutrition with health
However there are gaps in the implementation of these existing nutrition interventions which can
be filled by ensuring participation of the private sector through Public Private Partnerships
Some Issues
Inadequate supplies
reaching the point where
food is dispensed
Partner with the government in supplementation and fortification of the food dispensed
through government initiatives
Provide surveillance and logistics management services to ensure the responsible supply of
unadulterated micronutrients
Source: India Micronutrient National Investment Plan 2007-2011 , Micronutrient India ; Network for Social Accountability website ; Ernst & Young analysis
Product
development
1
Develop consumer focused products
and product variants for different target segments
Product
differentiation
2
A. Build credibility
B. Lower prices
Improve processes/technology to
reduce cost of production
Product
promotion
3
Educate physicians
about published
research on nutrition
Physician awareness
Public awareness
Health
62
1.
Product development: develop consumer focused products for different target segments
What needs to be done?
C
onvert the nutritional properties of herbs and botanicals as per knowledge
derived from traditional Indian sources into products for consumer
Case study 1 Identifying customer needs and positioning products to meet these needs
C
alcium Sandoz switched to the OTC route from the ethical pharmaceutical route in 2000
S
ince then, Novartis has continuously identified needs of different target segments of consumers and positioned variants for
each segment.
Consistent growth in sales (INR million) of the Calcium Sandoz brand
after introduction of multiple variants to cater to specic user needs
320
15%
CAGR
120
2001
Launch of
Calcium Sandoz
Growth specically
for children
2002
2003
Launch of Calcium
Sandoz Woman
for older woman
2004
2005
Launch of Calcium
Sandoz Soft Chew
in various avors
targeted at children
in their semi-teens
2006
2007
2008
Case study 2 Collaboration with the government to innovate nutraceuticals from traditional
medicine knowledge
Avesthagen and Indian Council of Medical Research (ICMR)
A
memorandum of understanding was signed between Avesthagen Limited, a knowledge based Lifesciences Company and
the Indian Council of Medical Research (ICMR) for the formulation, coordination and promotion of biomedical research for
three years.
A
s per the agreement both the parties will be exploring possibilities to innovate nutraceutical development from traditional
and folk medicine by knowledge sharing. The agreement will open new avenues for research on traditional Indian medicinal
plants and their nutritional properties.
Source: Express Pharma, 115 September 2008
2.
In the absence of intellectual property protection, product differentiation in case of nutraceutical products can be achieved either through
building credibility of the brand/company or through prices lower than existing players in the market
Way forward
Adhere to all rules and regulations laid down to govern manufacture, distribution
and sale of nutraceutical products
F
ollow standards, GMP, claim regulations and approval process for nutraceutical
products
Lower prices of
nutraceutical products
Case study 1 Reputed external institution in USA granting approvals to nutraceutical products
The USP (US Pharmacopeia) Dietary Supplement Verification Program in USA is a voluntary testing and auditing program.
T
his program validates the quality, purity, and potency of dietary supplement finished products through:
Comprehensive laboratory testing against standards
A thorough manufacturing and quality control document review
An on-site manufacturing facility audit
Random off-the-shelf testing
U
SP's expertise in setting standards of quality for medications for 200 years helps in lending credibility to products which carry
its approval
Source: US Pharmacopeia Dietary Supplement Verification Program website
Case study 2 Efficacy studies for a product published and external institutional approval taken
A
chilled fruit juice product "Sirco" from Provexis launched in the UK contains the patented Fruitflow bioactive food ingredient that
reduces blood platelet aggregation, a significant contributing factor to thrombosis, which can cause heart attack or stroke.
I n May 2006, Provexis, announced a scientific endorsement for Sirco; two scientific papers, which detailed the clinical efficacy of Sirco,
were published by the American Journal of Clinical Nutrition (AJCN), an internationally recognized journal in the nutrition field.
T
his followed the 2005 announcement of a three year collaboration with registered heart health charity, Heart UK, which allowed
Provexis formal approval for its Sirco product, allowing Sirco to wear the Heart UK logo on its packaging.
S
uch endorsements on the packaging of the product from renowned institutions offer credibility to claims that the product is good for
the heart.
Source: "Functional Food and Drink Consumption Trends"-Datamonitor
3.
G
et the relevant research published in research and medical journals so that it
reaches the physicians as a part of their CME(Continuous Medical Education)
T
here is a need to educate the consumers about the relation between a healthy
life and a diet rich in nutrition
B
ased on the profile of customers identify various media channels of
communication such as TV, newspapers, magazines, direct selling etc.
C
reate the right content for communication which addresses customer needs or
creates awareness to activate latent needs
S
election of the right strategy need not be cost/investment heavy
Case "Revital" is Ranbaxys adult health supplement which transitioned from prescription to OTC
in 2002.
20%
83
40
R
anbaxy used a well thought out television creative
to target the consumer directly through advertizing.
"Revital" was positioned to fit into the users hectic
lifestyle empowering them with energy strength & mental
sharpness, enabling them to enjoy life to the fullest,
hence making them live the brand punch line of Jiyo Jee
Bhar Ke
T
he advertising was spread over three phases:
I n the first phase the commercials sought to
demonstrate the pre-use scenario and post-use
benefits.
2002
2007
Source: Revitalizing the brand, Express Pharma 31 march 2006; Industry sources
T
he second phase showed how a consumer of
"Revital" was able to make the most of his life which
his colleagues and friends are unable to do.
T
he third phase is in the form of testimonials by
regular users of "Revital"
Annexure
Annexure 1: Estimation of potential market
Market size estimation for foundation needs: Target market of people belonging to segments with
affordability and consuming at least sufficient calories but needing products to maintain and promote
a normal, healthy life
Parameter
Assumption
No. of consumers
belonging to segments
with affordability*
P
opulation belonging to top 3
MPCE classes in urban areas
and topmost MPCE class in
rural areas
T
he number of actual
consumers will vary with
each scenario with growing
awareness
Source
NSSO 2006-07
Percentage population
willing to buy
nutraceuticals for their
general well-being
T
he population consuming at
least sufficient food (>90% of
norm of 2700 kcal/day), would
have the propensity to further
buy nutraceuticals to maintain
their general well-being.
T
he proportion of such
population would vary with
MPCE class
Amount willing to
spend on products that
meet foundation needs
A
mount willing to spend on such
products would be in proportion
to spend on food categories like
processed food and beverages
T
his spend would increase with
increasing MPCE and would
vary with each scenario
NSSO 2004-05
66
Scenario 1
Scenario 2
Scenario 3
38.0
60.8
71.4
Market size estimation for condition-specific needs (1/4): Target market of adults (>20 years)
likely to face vitamin and mineral deficiency disorders due to significantly lower than recommended
fruit & vegetable consumption
No. of consumers
belonging to
segments with
affordability
Parameter
Assumption
P
opulation
belonging to top
3 MPCE classes
in urban areas
and topmost
MPCE class in
rural areas
Percentage
adults
consuming
vitamins less
than RDA
Percentage
adults >20
years
T
he overall agewise break-up
of population
for urban and
rural areas was
equated to the
respective MPCE
classes
A
ssuming that
the households
in which fruit
and vegetable
consumption is
less than average
(which is still
lower than ICMR
norms), will be
facing deficiencies
in vitamins
The proportion of
such households
would vary with
each MPCE class
Source
NSSO 2006-07
NSSO 2004-05
Vitamin
intake gap
per adult
per day
Price
per unit
vitamin
gap
T
he gap is arrived
at for the most
extensively
tracked vitamins
T
he extent of this
gap varies with
MPCE classes
R
epresentative
price of the most
commonly used
multivitamin
supplement is
considered
F
urther, the
tendency
to address
this gap with
nutraceuticals
will vary with
each scenario
NSSO 2004-05
NNMB 2007
Scenario 2
Scenario 3
4.1
6.2
8.2
67
Market size estimation for condition-specific needs (2/4): Target market of pregnant and lactating
women with an increased requirement for nutrient intake like proteins, iron
Parameter
Assumption
No. of women
consumers belonging
to segments with
affordability
W
omen belonging to
top 3 MPCE classes
in urban areas and
topmost MPCE class
in rural areas
Percentage
pregnant and
lactating women
in the age group
of 15-49 years
T
he overall
proportion of
women in the age
15-49 years for
urban and rural
areas was assumed
to be applicable
for the respective
MPCE classes
B
ased on the birth
rate figures, number
of pregnant and
lactating women
were arrived at
Source
NSSO 2006-07
NSSO 2004-05
Nutrient
intake gap
per pregnant
woman per day
Price
per unit
nutrient
R
epresentative
price of the most
commonly used
protein and iron
supplements is
considered
F
urther, the tendency
to address this gap with
nutraceuticals will vary
with each scenario
NNMB 2007
Potential market for nutrients for pregnant and lactating women (INR billion)
68
Scenario 1
Scenario 2
Scenario 3
20.1
30.2
40.3
Market size estimation for condition-specific needs (3/4): Target market of other women in the age
group of 15-49 years suffering from any form of anemiao
Parameter
Assumption
Source
No. of women
consumers
belonging to
segments with
affordability
Women belonging to
top 3 MPCE classes
in urban areas and
topmost MPCE
class in rural areas
NSSO 2006-07
Percentage
non-pregnant,
non-lactating
women in the
age group of
15-49 years
Percentage
women
consuming
iron less
than RDA
The overall
proportion of
women in the
age 15-49 years
for urban and
rural areas was
assumed to be
applicable for
the respective
MPCE classes
Women suffering
from any form
of anemia and
belonging to this
age group would
have maximum
impact due to loss
of iron through
blood during
menstruation
The number of
pregnant and
lactating women
is subtracted from
the total figure
Proportion of
such women
belonging to
the high income
groups was
considered
NSSO 2004-05
NFHS 3, 2005-06
Iron
intake gap
(mg) per
woman
per day
Price
per mg
of iron
NNMB 2007
Representative
price of
the most
commonly
used iron
supplements
is considered
Scenario 2
Scenario 3
18.9
28.3
37.8
69
Market size estimation for condition-specific needs (4/4): Target market of children aged between
4 to 17 years and consuming less than RDA proteins needed for growth
No. of persons
belonging to
segments with
affordability
Parameter
Assumption
Source
Population
belonging to
top 3 MPCE
classes in
urban areas
and topmost
MPCE class in
rural areas
NSSO 2006-07
Percentage
children
consuming
protein less
than RDA
Percentage
children
in the age
group of
4-17 years
The overall
proportion
of children in
this age group
in urban and
rural areas was
assumed to be
applicable for
the respective
MPCE classes
Households in which
overall protein
consumption is less
than RDA limits,
were considered
NSSO 2004-05
T
he proportion of
such households
would vary with
each MPCE class
Protein
intake
gap (gms)
per child
per day
Price per
gm of
protein
Representative
price of the
most commonly
used protein
supplements
is considered
NNMB 2007
analysis
Note: Prices based
on various brands
available in market
Scenario 2
Scenario 3
6.6
9.9
13.2
70
Scenario 1
Scenario 2
Scenario 3
49.7
74.6
99.5
Market size estimation for enhancement needs: Target market of people going to the gym and
engaged in moderate to heavy work-out routines, who have an enhanced need for nutrient intake
Parameter
B
ased on annual
size of gym market
and average
subscription per user
Assumption
Percentage
needing enhanced
protein nutritions
Typically a
proportion of these
gym goers who
are engaged in
moderate to heavy
work-out would be
needing enhanced
protein nutrition
Source
Additional
protein intake
needed
(gm/day)
Protein requirement
of such people
is usually 20%
higher than RDA
for an average
sedentary male
Price per
gm of
protein
Representative
price of the most
commonly used whey
protein supplement
H
owever, the
tendency to address
this additional
requirement with
nutraceuticals
will vary with
each scenario
Primary interviews,
NNMB 2007, Ernst &
Young research
Scenario 2
Scenario 3
1.2
1.4
1.5
71
Annexure-2
An understanding of Dietary Reference Intakes (DRI)
Reference values known in the United States as Recommended Dietary Allowances (RDAs) and
in Canada as Recommended Nutrient Intakes (RNIs) were used through the 1990s. They were
established primarily to set nutrition and health policy.
Need
In 1994, in response to significant changes in the nutrition field as well as the recognition that for many nutrients
the single RDA values did not meet the expanding needs for nutrient reference values, the IOM began an initiative to
develop a new, broader set of values known as the DRIs. The U.S. and Canadian governments supported this initiative
In 1997, the first DRI report was released. In the subsequent years, RDA/AI levels for other nutrients
were described
DRIs
Recommended Dietary Allowance (RDA): Derived from the EAR and covers the requirements for 97% of
the population.
Tolerable Upper Intake Level (UL): Highest average intake that is likely to pose no risk.
Adequate Intake (AI): Used when an EAR/RDA cannot be developed; average intake level based on observed
or experimental intakes.
DRI has significant advantages over older RDAs. The new DRIs
Advantages
Include upper levels of intake, where appropriate. Upper levels were not defined in the older RDAs prior
to 1997. This provided a safe upper limit for nutrient intake.
Specifically highlight concepts of probability and risk for defining reference values. The EARs use the
median values to calculate the RDA levels taking into account the distribution of dietary requirements
for each nutrient (where possible). This accurate calculation of the DRIs was useful in their application to
determine adequacy of diet at an individual level. The older RDAs used the average values determined
from a group of the population and extrapolated to determine RDA levels...
Incorporate chronic disease endpoints within the array of endpoints that may serve to establish
adequate intake or upper intake levels where possible. The older RDAs used appearance of signs or
symptoms of deficiency disorders as endpoints
Source: Dietary reference intakes for calcium, phosphorus, magnesium, vitamin D, and fluoride/Standing Committee on the Scientific, Evaluation of Dietary Reference Intakes,
Food and Nutrition Board, Institute of Medicine.USA; The Development of DRIs 1994-2004: Lessons Learned and New Challenges: Workshop Summary- Food and Nutrition
Board, Institute of Medicine, National Academy of Sciences, USA
72
Annexure-3
Case studies: Approved functions and functional ingredients
Japan:
In the mid 1980s Japan was faced with a crisis having an ageing population with its increasing health problems and the expected
increases in health care costs as a result. This pushed government-initiated research to investigate, in-depth, the role foods can play in
reversing and preventing the prevalent chronic health conditions. "Foods for Special Health Use" (FOSHU) regulations were framed and
implemented by the Ministry of Health, Labor and Welfare (MHLW) in 1991, which recognized various health conditions for which a list of
preventive foods was made.
FOSHU functions and functional food components
FOSHU function
254
117
71
64
G A B A, peptides
34
26
Soy isoflavone
Heme iron
Source: The World Bank - Agricultural and Rural Development Discussion Paper 30 "Health Enhancing Foods"; "Health Claim Evidence Requirements in Japan", Yamada et al
In April 2001, a new category was introduced by MHLW "Foods with Nutrition Function Claims" (FNFC)
under which 12 vitamins including vitamin A; thiamin; riboflavin; vitamins B-6, B-12, C, E, D; biotin,
pantothenic acid, folic acid, niacin as well as minerals calcium, iron, zinc, magnesium and copper have
been standardized
Brazil:
Functional food regulations were introduced in Brazil in 1999, and since then over 200 products have been approved with 14 different
functional property claims.
Food Components and related approved functions
Approved functions
Functional ingredients
Omega 3
Lutein, Lycopene
Fructo-oligosaccharides, inulin,
Soy protein
Source: The World Bank - Agricultural and Rural Development Discussion Paper 30 "Health Enhancing Foods"
73
Annexure-4
Case study: Regulations governing nutrition and health claims
USA:
Claims on nutraceutical product labels are governed by DSHEA and NLEA in the USA
Nutrition
content
claims
Structure/
function
claims
N
o pre-approval required
G
uidelines provided for content level and evidence required
N
o pre-approval required
P
re-marketing notification to the FDA 30 days prior to marketing the product
M
anufacturer responsible for having sufficient evidence to back-up the claims made
D
isclaimer on the label stating that the claim is "not approved by FDA" and "the
product does not prevent, cure, treat any specific disease or condition"
Risk
reduction
claims
P
re-approved list of permitted risk reduction claims for certain ingredients is available
I f the product contains one of these ingredients in specified quantities, the related claim can be made
Pre-approved list of permitted risk reduction claims:
C
alcium and Osteoporosis
D
ietary Lipids (Fat) and Cancer
D
ietary Saturated Fat and Cholesterol and Risk of Coronary Heart Disease
D
ietary Non-cariogenic Carbohydrate Sweeteners and Dental Caries
F
iber-containing Grain Products, Fruits and Vegetables and Cancer
F
olic Acid and Neural Tube Defects
F
ruits and Vegetables and Cancer
F
ruits, Vegetables and Grain Products that contain Fiber, particularly Soluble
F
iber, and Risk of Coronary Heart Disease
S
odium and Hypertension
S
oluble Fiber from Certain Foods and Risk of Coronary Heart Disease
S
oy Protein and Risk of Coronary Heart Disease
S
tanols and/or Sterols and Risk of Coronary Heart Disease
Source: US Food & Drug Administration website
74
Annexure-5
Case studies: Regulatory process for launch of a new nutraceutical product
Japan:
As per FOSHU, all manufacturers that seek approval for their products need to go through the approval process before they can market
their product.
M
anufacturer submits application to the Office of Health Policy on
Newly Developed Foods (The Office) under the MHLW
The application for a product should include documentation
regarding:
I ts effectiveness based on scientific evidence including
clinical studies
I ts safety based on historical consumption pattern
A
nalytical method for determination of the functional component
5. Grant of
approval
1. Submit
application
Manufacturer
4. Submit
analysis
Ministry of Health,
Labor & Welfare
3. Submit
samples &
get analysis
National Inst.for
health & nutrition
2. Consultation &
recommendation
E
xpert committees evaluate the application for efficacy
O
pinions of the Food Safety Commission is taken to
evaluate safety
Food safety
commission
75
Acknowledgements
Ajit Singh
Priya Parab
President
Health Foods and Dietary Supplements Association
Proprietor
Vihaan Naturals
Dr. R.B.Smarta
Manager-Marketing
Ayuherb Healthcare
Managing Director
Interlink Marketing Consultancy Pvt. Ltd.
Arun Kelkar
R. D.Joshi
Managing Director
Hexagon Nutrition Pvt. Ltd.
Ranjit Puranik
Managing Director
GCI Nutrients (India) Pvt. Ltd
Chanchal K. Chadha
Head - Technology
Marico Industries
Deepali Shukla
Dr.S.K.Sharma
Head - Marketing
Amway India
Manager - Marketing
Zandu Pharmaceuticals
S.W.Deshpande
Advocate
Former Joint Commissioner FDA- Maharashtra
Himanshoo Nayak
Sanjay Singh
Technical manager
Plethico Pharmaceuticals Ltd.
Shrihari Shidaye
Technical Director
NOW foods
Dr. U.Y.Rege
Chairman
Food Safety and Standards Authority of India
Proprietor
Mukta Technical Consultancy Services
Pradeep Patil
Vikram Trivedi
G.M - Marketing
Zandu Pharmaceuticals.
76
Glossary of terms
Glossary of terms (1/3)
Term
Explanation
AI
Adequate Intake
AJCN
Antioxidants
A compound that helps to protect cells against damage by free radicals eg: flavonoids
BCC
B Pharm
Bachelor of Pharmacy
B Sc
Bachelor of Science
Chronic Illness/disorder
CAGR
Compounded Annual Growth Rate. The standard formula is: (last number/first number)^(1/periods)-1
CCP-ACP
CME
CVD
DALY
DRI
DSHEA
EAR
FDA
FICCI
FMCG
Fortified foods
Foods with nutrients added in addition to the levels that were originally
found eg: edible oils fortified with vitamins A and D
FNFC
FOSHU
FSO
FSS
77
Glossary of terms
Glossary of terms (2/3)
Term
Explanation
FSSA
GABA
Gamma-Aminobutyric acid
GDP
Gross Domestic ProductGDP is a basic measure of a country's economic performance and is the
market value of all final goods and services made within the borders of a nation in a year .It calculated
as: GDP = private consumption + gross investment + government spending + (exports imports)
GMP
GOM
Group of Ministers
GSK CH
ICDS
ICMR
ICRIER
INR
Indian rupee
IQ
Intelligence Quotient
KCal
LDL
Number of maternal deaths related to childbearing divided by the number of live births
MPA
MPCE
NABL
NCAER
NFHS
Niacin
NLEA
NNMB
NSSO
OTC
Probiotic food
PPP
RDA
78
Glossary of terms
Glossary of terms (3/3)
Term
Explanation
RNI
SD
Standard Deviation
Thiamin
Vitamin B1 which helps to maintain appetite and growth, deficiency of which causes beri beri
UL
USD
US dollar
USP
WHO
79
About FICCI
Set up in 1927, FICCI is the largest and oldest apex business organization of Indian business. Its history is very closely interwoven with
the freedom movement. FICCI inspired economic nationalism as a political tool to fight against discriminatory economic policies. FICCIs
commitment is now directed at changing the economic landscape of India, through reforms that expand the space for private sector and
public private partnerships.
FICCI is the rallying point for free enterprises in India. It has empowered Indian businesses, in the changing times, to shore up their
competitiveness and enhance their global reach.
FICCI maintains the lead as the proactive business solution provider through research, interactions at the highest political level and
global networking.
In the knowledge-driven globalized economy, FICCI stands for quality, competitiveness, transparency, accountability and businessgovernment-civil society partnership to spread ethics-based business practices and to enhance the quality of life of the common people.
FICCI- Western Regional Council is the western regional arm of the Federation of Indian Chambers of Commerce & Industry, which has
14 domestic and 7 overseas offices. In addition to supporting FICCI, New Delhi, FICCI-WRC organizes its own conferences, seminars,
workshops and networks with visiting delegations from several developing countries.
FICCI WRC actively provides sectoral services in brand protection, boating, business matching, design, gems & jewellery, nutraceuticals,
progressive Maharashtra, textiles, technical textiles and wellness.
Head Office
Federation of Indian Chambers of Commerce & Industry
Federation House
Tansen Marg
New Delhi 110 001
Website: www.ficci.com
80
Notes
81
Gurgaon
Golf View Corporate Tower B
Near DLF Golf Course
Sector 42
Gurgaon - 122002
Tel: + 91 124 464 4000
Fax: + 91 124 464 4050
Bengaluru
UB City, Canberra Block
12th & 13th floor
No.24 Vittal Mallya Road
Bengaluru - 560 001
Tel: + 91 80 4027 5000
+ 91 80 6727 5000
Fax: + 91 80 2210 6000 (12th floor)
Fax: + 91 80 2224 0695 (13th floor)
Hyderabad
205, 2nd floor
Ashoka Bhoopal Chambers
Sardar Patel Road
Secunderabad - 500 003
Tel: + 91 40 6627 4000
Fax: + 91 40 2789 8851
Chennai
TPL House, 2nd floor
No. 3 Cenotaph Road
Teynampet
Chennai - 600 018
Tel: + 91 44 4219 4400
Fax: + 91 44 2431 1450
Kolkata
22 Camac Street
Block C, 3rd floor
Kolkata - 700 016
Tel: + 91 33 6615 3400
Fax: + 91 33 2281 7750
Mumbai
6th floor & 18th floor, Express Towers
Nariman Point
Mumbai - 400 021
Tel: + 91 22 6657 9200 (6th floor)
Fax: + 91 22 2287 6401
Tel: + 91 22 6665 5000 (18th floor)
Fax: + 91 22 2282 6000
Jolly Makers Chambers II
15th floor, Nariman Point
Mumbai - 400 021
Tel: + 91 22 6749 8000
Fax: + 91 22 6749 8200
Jalan Mill Compound
95 Ganpatrao Kadam Marg
Lower Parel
Mumbai - 400 013
Tel: + 91 22 4035 6300
Fax: + 91 22 4035 6400
New Delhi
6thfloor, HT House
18-20 Kasturba Gandhi Marg
New Delhi - 110 001
Tel: + 91 11 4363 3000
Fax: + 91 11 4363 3200
Pune
C-401, 4th floor
Panchshil Tech Park
Yerwada (Near Don Bosco School)
Pune - 411 006
Tel: + 91 20 6601 6000
Fax: + 91 20 6601 5900