The dietary supplements market In India grew at a CAGR of around 15 per cent to reach Rs 331 billion in FY21, according to a report by EY India released on Friday.
This segment, always considered to be high potential given the growing lifestyle diseases, has witnessed an accelerated adoption curve, post COVID-19, the report said.
Over the last year, the demand for herbal supplements and vitamins and minerals have witnessed a growth of over 25 per cent, the report titled— 'Sunrise Consumer Health and Nutrition Sector'— said.
"While some see this as a short-term phenomenon, we expect this phase to catalyse a larger acceleration in the propensity towards personal health, hygiene, fitness and holistic nutrition. European and Asian nations have adopted functional foods and supplements, the Indian consumer is still predominantly showing a preference for “better for you” foods and home remedies. Ayurveda and herbal are increasingly becoming “back to roots” answers to modern problems,” said Angshuman Bhattacharya, National Leader – Consumer Product & Retail Sector, EY India.
Approximately 94 per cent of Indians are worried about their family’s health against 82 per cent globally.
The report further said that Indian consumers have opened their wallets towards fitness classes and activities, consuming natural foods, health supplements, and following specialised diets.
Over 52 per cent of respondents think changes in their approach to mental wellbeing will persist beyond COVID-19, globally it is just 39 per cent, the report said.
Most large food players have adopted functionalisation in their product portfolio to differentiate and drive value for consumers. 40 per cent of Indian respondents stated that they will pay a premium for products promoting health and wellness, which is higher than their global counterparts (29 per cent ). This is also indicated through 14 per cent CAGR of the health food and beverages segment, during FY18-21, to reach Rs 700 billion in FY21.
The EY report stated that there is growing interest in natural and ayurvedic products has encouraged companies, already active in this segment, to assert their credentials more strongly, while it has also attracted the attention of players from pharmaceuticals.
Further, consumer companies are keen to build their medical credentials and capabilities, with the aspiration to eventually achieve higher margins characteristic of these products.
“In the next five years, we expect consumer product companies to invest in demand creation and increasing consumer education using virtual equivalents of multilevel marketing (MLM), medical representative models, social media-based influencing and direct-to-consumer (D2C) approaches. We expect this segment to grow at over 35 per cent for digitally integrated omni-channel players, and 20-25 per cent for offline brands,” Angshuman added.
Further, the wellness and vitality segment has seen increasing fund-raising in the past few quarters both in the venture and early growth stage. There has also been a strong strategic interest in the segment. As per the EY report, the market should see a spate of Mergers and acquisitions (M&A) transactions led by both global and local majors, as early-stage investments mature.
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