India- Global Nutraceutical Hub in making

By Amit srivastava – Responsible Nutrition Evangelist @ Nutrify India.  Nutrify India is an initiative in empowering responsible nutrition business in India.  amit@nutrifyindia.com

Scientific Nutrition has always been an arborvitae of India since 3300 BCE. Ayurveda is one of the most scientific ancient text on clinical nutrition and preventive health nutrition. This science took a backseat due to chronic exposure of India to foreign invasions that disrupted its progress. Meanwhile in the early 1900s the western world had begun to witness the newly found gold rush for vitamania. The discovery series were motivated by the principles of pharmaceuticals leading to molecular reductionist approach coupled with clinical validation methodologies. The discoveries of those times evolved into convergence of allied fields like biotechnology, agrotech, chemical engineering, pharmaceutical technologies and principles; thus fuelling the onset of nutraceuticals – the newly formed discipline with relatively lesser known long term health impact but commands a unified global support that interprets to USD 387 billion market.

Global nutraceutical market continues to grow at 8% per annum with US commanding 60% of the market share.

Nutraceuticals is only going to get bigger with time as the “want” for preventive health turns into the “need” in current years.

Nutraceuticals is bound to be an integral part of any country’s economic growth strategy.

For instance, India has defined its economy to touch USD 10 trillion by 2030. Quadrupling of growth is certainly worth a praise, but the question is who would deliver these numbers? The citizens of India? 840 million citizens are calorific sufficient but malnourished. Subjecting absolute majority of population to stress in order to achieve USD 10 trillion economy would open up the new unknown challenge of managing lifestyle diseases that would spiral up without much of controls.

The growing population size, information access, increasing spend power, the emerging “need” to stay healthy – the nutraceuticals in India is bound to have a robust growth for next few decades. Currently, Indian nutritionals/nutraceutical industry is USD 9 Billion growing at 12% per annum. 

The question is – how equipped is India to develop and deliver high quality, clinically validated nutraceuticals and what equity it has into the global market in the field of formulated products and ingredients?

Most of the Indian nutraceutical industry operates in “cookie cutter” model and has not evolved with times. India’s exports in nutraceuticals is slightly below USD 250 million (ingredients and formulation combined). That’s negligible equity into the global nutraceuticals market of USD 387 billion. On other hand, India imports active ingredients and formulated nutraceuticals to the tune of USD 2.3 billion. India has 108 large contract manufacturers in nutraceuticals, but none are able to tap into international projects.

For India to emerge as nutraceutical hub that delivers world class high science nutraceutical products to serve the needs in India and also command a respectable share in the international nutraceutical market, it will need some structural categorization in ministries, start up incubation hubs and regulatory.

A) On Government Front: Incubating Nutraceutical Industry:

  1. In order to enable and empower nutraceutical industry, it needs to be incubated first and this would essentially mean centralized ownership. The most suited ownership would be with Ministry of Food processing Industries (MoFPI).This would mean including the ecosystem (Active Nutraceuticals Ingredients, formulations, contract manufacturing, raw materials processing) of nutraceuticals under it. MoFPI could create a sub category as Medical/Health foods. Nutraceuticals is the other side of the coin named Food/Nutrition. Irrespective of its science, outcomes, it is still a food. Hence, it would naturally fit into MoFPI. By creating a sub category and incubating the industry under it would enable government to roll out industry specific focussed incentivization program.
  2. By including medical foods ecosystem into MoFPI, the component related to Biodiversity laws in MoEF (Ministry of Environment, forest and climate change) and NBA (National Biodiversity Authority) could be managed under MoFPI ministry. This will stop Indian innovators using USA as the platform to launch their plant ingredient discoveries and help small to medium sized players ramp up business (which is currently curtailed by complexity of Biodiversity laws)
  3. Include Medical foods/Nutraceutical parks under PMKSY scheme of MoFPI, that could lead to focussed parks in strategic locations of India to enable entrepreneurs as well as larger players in nutraceuticals to tap into research/ development lab complex, prototyping, testing, validation, common facilities (like blender farms, SCO2 facilities, Spray drying, freeze drying, fermenters, etc.) and market access. An initiative of MoFPI creating NIFTEM (National Institute of Food technology Entrepreneurship management) is an appreciable first step towards fully-evolved ecosystem park that seems to be a near future possibility now.

B) Regulatory:

  1. Lacking enforcement: While FSSAI/Ayush continues to evolve in right direction, resource constraints and the vast area of food regulations, unlike in pharmaceuticals has kept regulators distant from effective enforcements. This has resulted in some nutraceutical/Ayurveda companies indulging in deviated claims and practices bringing in loss of trust and disrespect to the industry.
  2. Technical staffing in licensing and product approval committee to appreciate the scientific rationale and be able to approve high science novel nutraceutical products.

C) Ministry of Finance:

  1. Moderating the import duties to allow space for local ingredient manufacturers to develop.
  2. Incentivisation to medical food/Nutraceutical exports
  3. Taxation structure of 18% tax (with few categories even taxed at 28%) to be revised to make nutraceuticals more accessible.

D) State ownership as Host:

For nutraceutical parks to evolve, it is important that state governments have vision and own up to host the ecosystem park. Telangana govt in India is taking huge steps in creating ecosystems for various components of healthcare including creating an incubation park for nutraceutical industry. The project is being driven by Mr. Shakthi Nagappa-Director (Life Sciences and Pharma), under the guidance- of present government in the state of Telangana.  

E) Industry:

  1. Indian nutraceutical industry needs self-regulate to ensure that there is a collective projection of industry in responsible nutrition and not a short cut revenue generation channel.
  2. Embracing Nutrify India Initiative as it enables responsible nutrition innovation through start-up. This initiative commercializes innovation through government market access programs as well as large companies with strong supply chains. 
  3. Work closely with Responsible Nutrition Association in creating standards that can be used internationally too.
  4. Work closely with incubation hubs for tapping in high end innovation. There are 4000 nutraceutical start-ups in India working with various incubation hubs supported by government’s innovation promotion bodies like BIRAC and AIC.
  5. Accept clinical trials and validation as new norms. With onset of Pandemic, there is a major push from the government for clinical validation of ingredient or formulation. Its best show cased with large scale study on 80,000 subjects being rolled out by the government on Ayush ingredients to establish the efficacy.

F)eTailers:

Pandemic has changed the purchase dynamics of nutraceuticals. Consumers have shifted their choice of want to need due to impact of pandemic. The awareness of nutraceuticals have gone as high as 80% and that has resulted in overall category growth with chyawanprash of the world leading the race to 80% growth. Digital nutraceutical brands are here to stay and build on and drive nutraceutical industry. From USD 4 billion market, USD 1 billion was online, but this USD 1 billion is expected to double up by March 2021. This is a phenomenal growth. eTailers will have deploy responsible nutrition principles and strict compliance to FSSAI to ensure right products make way into their stores and any kind of reviews in their platform should be monitored to avoid any mis-guidance and mis-interpretation.

G)Pharmaceutical Industry:

Till 2019, pharma was dabbling with nutraceuticals, but the pandemic has created a surge in demand from pharma industry seeking strong entry into nutraceuticals. Right from Dr Reddy’s to Cipla health to Alkem, to Glenmark, Indian pharma giants have rolled out nutraceutical business units to give a focussed attention to its growth. Esperer Onco Nutrition- a nutrition company was born out of a pharma company as a division and today it has evolved as a fast growing stand-alone company that even raised funding during lockdown period. This is an early stage success stories of pharma companies succeeding in nutraceuticals. Pharma industry will bring in deep science and nurture responsible nutrition in near future. Pharma industry however would be facing its own challenges of mindset for choosing right format for consumer compliance.

With the new normal of nutraceutical growing at 22% after one year from now, the infrastructure of India needs to be more careful and compliance to regulator, else this industry also runs into risk of losing out as consumers will start losing trust due to hyped claims vs outcome deficit, that’s what happened to Ayurveda .

Combined efforts would not only lead to better health outcomes enabling healthier population to deliver higher economic objectives of country, but also build strong equity into Global nutraceuticals space.