1. NUTRACEUTICALS
&
FUNCTIONAL FOODS MARKET
Dr. DEBASHISH KAR, PhD

2. Executive Summary
The Indian Nutraceuticals market valued at $1480 Million in 2011 to grow to
$2731 Million in 2016 – Frost & Sullivan
The Global Nutraceutical market in 2011 was $149.5 Billion
Comprises of three segments, dietary supplements, functional foods and
functional beverages
Market
Drivers &
Challenges
Drivers:
• Increasing shift towards preventive therapies
• Increasing disposable income
• Increase in Healthcare Spending
• Increasing shift towards self-medication
• Growth in pharmacy and wellness & retail chains
• Favorable pricing environment
Challenges:
• Lack of standardization
• High pricing
• Lack of awareness
• Marketing and distribution
challenges
Government
Regulations
Amway
17% Dabur
12%
Heinz
6%
Ranbaxy
6 %Pfizer
5%
Others
56%
Major
Players
Major Players by Market Share-
Domestic companies currently enjoy a stronger
foothold , but multinationals are also
increasing their presence. Players include large
FMCG companies, pharma companies.
Regulatory framework to govern the nutraceuticals market in India has yet to be
implemented rigorously
Food Safety & Standards Act 2006 was effective from 5th August 2011

3. Contents
1. Introduction
Nutraceutical-Classification
Nutraceutical- Necessity
Nutraceutical-Therapeutic Benefit
2. Market Overview
3. Competition - FMCG Vs Pharmaceuticals
4. Drivers & Challenges
5. Government Regulations
Past & current state of FSSAI
FSSAI - Functionaries
6. Strategic Recommendations
7. Way Forward

4. Nutraceuticals -Classification
Nutraceutical the term coined from "Nutrition" and
"Pharmaceutical”
The term "nutraceuticals" is often interchanged with
"functional foods" even though there are subtle differences
between the two.
Nutraceuticals are "naturally derived bioactive compounds -dietary
supplements and herbal products, and have health promoting, disease
preventing, or medicinal products”
Functional foods are foods which contain an ingredient that gives that
food health-promoting properties over and above its usual nutritional
value, for example, Probiotic yoghurts

5. Necessity of Nutraceuticals
In Indian 380 million population are Undernourished.
Nearly 70% (280 million) low purchasing power lead to deficient in micronutrients.
Remaining 30% (100 million) due to inadequate food consumption for various reason
like illness, low appetite ,diet consciousness.
Calorie sufficient-nutrient deficient population-570 million
People who are consuming adequate or excess calories than norm but not sufficient nutrient,
generally higher and middle income group.
May have need due to specific conditions like pregnancy, obesity, stress due to changing life style.
Over-nourished population-80 million
This segment sufficient purchasing power and with enhanced nutrient and
calorie intake due special requirements sports, heavy exercising, etc

6. Nutraceutical-Therapeutic Benefit

7. Nutraceuticals Market
The Indian Nutraceutical market valued at $1.5 Billion compare to global
Nutraceutical market of $149.5 Billion in 2011
United States, Europe and Japan are the largest markets that together
account for a combined market share of over 90% of the global
Nutraceutical.
The Indian Nutraceutical market currently accounts for only 1% of the global
market.
The global market is growing at 7% where as Indian market has been
growing at a 21% CAGR for last 3 years.
Functional Foods is the largest segment, followed by Dietary Supplements.
Functional
Foods
54%
Dietary
Suppleme
nts
32%
Functional
Beverages
14%
Source: E&Y, Net scribes

8. Competition - FMCG Vs Pharmaceuticals
The Indian Nutraceutical market is dominated primarily by Pharmaceuticals and
FMCG companies with very few pure play Nutraceutical companies
Largely, the market is fragmented. However, the FMCG
dominated segments are relatively less fragmented as compared
to the pharmaceuticals.

9. Drivers & Challenges – Summary
Growing disposable income and lifestyle change in dietary
habits are likely to fuel the demand for nutraceutical
products.
Based upon qualitative analysis on dynamics of developed markets

10. Government Regulations
Food Safety and Standards Authority of India (FSSAI), which is
responsible for framing rules and regulations to govern the
nutraceuticals markets.
FSSAI (Food Safety and Standards Authority of India )–
The Food Safety and Standards Act, 2006 was notified in the gazette
of India on 24th August, 2006
Authority Established-2008 to operationalize the FSS Act,2006
Gazette Notified Licensing/Registration-FSS Regulations 5th Aug ,
2011
All Food Business Operators in India to get Licensed/Registered
with Food Safety Authority

11. Genesis and current state of FSSAI
Source: Primary Interviews and Ernst & Young analysis

12. Major Functionaries in FSSAI

13. Challenges & Success Strategy
Marketing
Challenges Strategy
 High development cost
 Clinical complexity
 Partnership for cost effective
development
 Well designed trials & protocols
Development
 High promotional spend
 Uptake by stakeholders
 Market competition
 Regulatory Barriers
 Patent Barriers
 Enter marketing agreements
 Right product for right indication
 Low cost manufacturing
 Gain experience from US/EU
regulatory guidelines
Gain legal expertise
Profitability
Marketing
 Technical Barriers
 Lack of Manufacturing
facilities
 Early planning & analysis
Team up with companies having
expertise
Access to GMP facilities
Manufacturing
Big US/EU Pharma
Indian Pharma
Strengths meter
Based upon qualitative analysis on dynamics of developed markets

14. Way Forward
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

15. * Information presented here is available in public domain.