Curating healthcare to new heights

The Indian healthcare sector witnessed several trajectories in recent months, especially, within the wellness and 'immunity' booster segment gathering considerable steam. The 'Healthy Food' cluster co-existing with prescription products for the past 20 years saw a greater demand during the pandemic under nutraceuticals. The sector saw more players stepping up to incubate their resources into businesses to capture a slice of the mainframe healthcare market. The Indian nutraceutical market is the 4th largest in Asia and accounts for about 2% of the global nutraceutical market that is growing at 8% per annum. India's ancient heritage into herbal, Ayurvedic medicines and indigenous spices co-existing within an alternate health domain is now being converted into a nutraceutical industry vying for expansion and scientific validation. Corporate Citizen presents a sector profile, the opportunities, growth and challenges in an interaction with Amit Srivastava, Chief Catalyst, Nutrify India, and Director, Legacy Healthcare, Switzerland

Amit Srivastava began his career with Fresenius Kabi that Inculcated in him the importance of biochemistry-driven product development and clinical trial-based validation of products for the targeted outcome. "My passion for responsible nutrition started when I migrated back to India and was working with a major pharmaceutical company in Hyderabad. The passion grew for building an ecosystem for the country and that's when I moved on to join the government in setting up of India's first nutraceutical incubation hub - Biovalley Incubation Council in Vizag", he said.

In India, the Food Safety and Standards Authority of India (FSSAI) defines Nutraceuticals as "foods for special dietary uses". The advent of nutraceuticals is rooted within pharmaceutical discoveries based on the molecular reductionist methodology in tandem with clinical validation techniques. This has further led to the convergence of allied fields like chemical engineering, biotechnology, pharmaceutical technologies and agrotech that powered the beginning of nutraceuticals a lesser-known discipline which is gradually being recognised to offer long-term influence on health. Global key players include Nestle Health Science, Abbott Nutrition, Fresenius Kabi, Hexagon Nutrition, Unique Biotech, Tablets India, Esperer Onco Nutrition, form the breed of upcoming nutrition companies.

Corporate Citizen: Did nutraceuticals always exists within the Indian healthcare fabric?

Amit Srivastava : India played a pivotal role in establishing clinical nutrition and preventive health sustenance globally through Ayurveda and other alternative therapies. However, these took a backseat due the lack of readiness on India's part to focus on its development as a supreme science for health and vitality. While India lost focus due to a heavy invasion of foreign players in the 1900s, the western world gradually gained momentum in its quest for a golden health pill which started with the idea of ‘Vita-mania’.

CC: What has been your observations since the launch of Nutrify India?

The launch of Nutrify India in February 2020, was well recognised whereby the nutraceutical incubation park in Vizag saw eager and on-site participation from industry executives. Post the launch of the virtual platform, it has conducted multiple business workshops, deals and investments enabling market access. The past six months managed to mobilise some 3000 industry professionals from India and abroad to stay connected.

CC: How has Covid-19 outbreak impacted the industry?

The pandemic brought in more acceptance of 'nutra' care which is already deep-rooted amongst Indians as preventive care. The result is that in India many companies are lining up to foray into the market which is growing at a Compound Annual Growth Rate (CAGR) of 15.8%, which is likely to hit 22% annually, post the Covid-19. The India nutraceuticals market is projected to reach $20.6 billion (INR 1.54 lakh crore) by 2025.

CC: Did the pandemic prove a catalyst for the sector's growth?

The current pandemic moved from being a government responsibility to a lesson of self-education and did turn out to be the crucial catalyst for the industry's growth. Projections reflect that with chronic exposure to fear and the nudge for self-healthcare, the growth trend in the 'new' normal would remain 50% higher than the 'old' normal.

CC: Has the pandemic changed consumer behaviour viz nutraceuticals?

The growth of the nutraceutical industry is propelled by population growth, increasing ageing population, rising burden of chronic diseases, information access and voluntary self-healthcare initiatives by consumers. In their pursuit of adequate compliance, consumers are seeking formulations that fit into their regular habits thus increasing demand for functional foods. However, it is evident that western trends of functional foods have caught up with startups fuelling this growth. Indian companies like Esperer Onco Nutrition, Hexagon Nutrition, and Aavishkar Pharma have also witnessed faster growth.

CC: What about e-retailing and standardisation post-Covid?

The pandemic has altered the dynamics of procurement for nutra. Consumers moved their choice from 'want' to 'need' as their awareness increased to 80% resulting in an overall category growth as with 'Chyawanprash' brands. 'Digital' nutra brands are here to stay. Of the $4 billion market, $1 billion was online sale which is expected to double up by March 2021. eTailers will, therefore, have to arrange for responsible nutrition philosophies and strict compliance to FSSAI to ensure that the right products make their way into the stores with strong monitoring of reviews posted for products.

CC: Is it possible to sustain the post-pandemic market interest for nutraceuticals?

In the 'new' normal, the nutra sector is growing at 22% but to sustain it even after a year from now, the infrastructure of India will need to be more conducive and regulators will have to be more careful. This is important to overcome possible lack of trust generated due to hyped claims versus health outcomes, something similar to what happened to Ayurveda that could spell a potential downside and risk losing consumers. Combined efforts would not only lead to enabling a healthier population but also delivering higher economic objectives for the country, while building a strong global equity for the sector.

CC: Has there been any FDI investments in the sector? What about the import-export balance?

Investments in the form of Foreign Direct Investments (FDI) have grown by 25.4% from $131.4 million (FY12) to $584.7 million (FY19). This rise has been in lieu of modifications in FDI regulations by the Government of India allowing 100% FDI under automatic route for the nutraceuticals sector. Currently, the Indian market imports more than it exports-at $1.5 billion in exports while it imports $2.7 billion worth of nutraceuticals. This indicates a trade deficit.

"India needs to shift from formulation to the creation of active nutraceutical ingredients with clinical validations"

CC: What causes this trade deficit?

India has some 52 agro-climatic zones that could become a potential global hub for all medicinal and nutraceutical plants. However, hurdles involving biodiversity law in India and the lack of single ministerial ownership leads the industry to run between various departments for getting clearances. The lack of industry incubation ecosystem adds to the risks and hurdles, compelling the industry to opt for the easier option of importing nutraceutical ingredients and formulate it in India. Since not much of Indian research work is getting commercialised in India, companies are not willing to invest heavily in nutraceutical research.

CC: Are companies trying to bridge the trade gap?

The Indian nutraceuticals formulations market is slowly expanding into the western markets with disruptive nutraceutical delivery technologies like Aavishkar Pharma with its 'Nano' nutraceuticals delivered through sub-lingual strips, Pulse Pharma with its 'Nano' Vitamin D, Zeon Life Sciences with their 'Nano' curcumin shots. Other Indian players are Sami-Sabinsa Group, OmniActive Health Technologies, Synthite and Vidya Herbs. However, one contributor that is plugging the gap is Frizzle Foods Pvt. Ltd. due to their emerging standardised supply chain systems. Such operations can enable India to be a quality supplier of finger-printed (recorded data of activities and certificate analysis) nutra ingredients and plug in the existing gap between $1.2 billion exports of ingredients to the current market size of $157 billion.

CC: Can demographics impact the uptake of nutra products?

Yes. Segmentation of the nutraceuticals' market is dependent on the nutritional map of India as below:

Category A - Complete malnourishment category. This segment includes those who are in the low-income group category or in medical condition that impacts their nutrition absorption profile.

Category B - 650 million people are calorific sufficient but malnourished. This population is typically affected by lifestyle diseases like diabetes, cardiovascular problems, cancer, etc.

Category C - 150 million people are those that migrated from category B in pursuit of being healthy and are experimenting with food choices, and supplements.

Category D - 10 million people are the most health conscious and they know what nutritional supplements or functional foods to consume.

CC: How can we relate the above demographic categories to the nutraceuticals market?

The current growth of nutraceuticals is mostly being fuelled by Category B and C. Popular nutraceuticals are products identified as vitamin and mineral health supplements. Functional nutrition are products designed to address specific health outcome and medical nutrition both enteral and parenteral that requires trained medical intervention. Functional nutrition is fast-evolving from being preventive to either adjuvants or therapy completers. Category B is mostly ignorant and depends on non-standardised traditional ingredients in times of health emergencies.

CC: How does the existing government rules (India) impact the sector?

Currently, rules are ambiguous and not directly focussed to the nutraceutical sector. Recent Indian pharmacopoeia commission announcement of creating nutraceutical expert committee (Document ref: F.NO. T.13011/01/2017- AR&D dated 16th October 2020), had professionals picked from the pharmaceutical industry. Although, this shows the interest of the government in nutraceuticals, it does not yet have an understanding of key companies in nutraceuticals. Therefore, there is a strong need for a nutraceutical industry expert to be a part of an expert nutraceutical committee.

CC: What are the challenges?

The prime challenges are the current lack of governmental ownership and an industry incubation ecosystem. Most of the active ingredients are imported at high costs coupled with import duties and GST. India needs to shift from formulation to the creation of active nutraceutical ingredients with clinical validations. The shortage of venture funds for active nutraceutical ingredients and a lack in export promotion adds to the woes. The lack of promotion schemes from the government makes it an industry working in silos and is totally self-dependent. This in turn discourages large research work in India.

CC: What measures could help boost the industry in India?

In order to allow and authorise the nutraceutical industry, it needs to be first protected, which would mean a need for centralised ownership. Some steps are like the governing body should include the entire nutraceuticals ecosystem. Create single ministerial ownership for incubating the industry. Enable the government to dole out industry-focussed incentive packages. Nutraceutical parks under the 'Atmanirbhar Bharat' scheme could lead to concentrating on strategic locations of India.

CC: How does Nutrify India select startups to support?

We do not entertain innovators who work on the formulation to make a 'me too' product, rather those that have clarity in defining a problem or a big innovation/disruption. Quantifying how this innovation would plug the loophole and address the problem that would impact health outcome, wealth creation for the innovator, the industry, and the country. The innovator should have proof of concept in place. For the international market, we also have to match the Indian startup with a potential global partner, make a business case and pitch through our networks globally for a favourable deal.

CC: Do you have a fixed incubation period for startups?

We work like an 'Incu-celerator' a bit of incubation but more of an accelerator. We support a company for one year as we are usually able to get the startup company running on its own within a year but are open to exceptions where the newbie needs additional and genuine support.

CC: How do you plan to upgrade on consumer knowledge?

We plan to make nutraceuticals education free via Nutrify India TV, to be launched in 2021, also launch nutraceutical business-career upgradation certificate programmes targeted at mid-management professionals and MSME business owners.