Industry structure and developments:
The nutraceuticals market consists of sales of dietary supplements, functional food,
medicinal food, and farmaceuticals.
The nutraceuticals are classified as food but are also used for medical purposes.
Nutraceuticals are specially designed consumable products from various food sources that
contain a high concentration of bioactive compounds that have several nutritional, health,
and medicinal benefits.
Nutraceutical products and supplements can be taken by an individual along with a
normal daily diet to get additional nutrients to promote good health and wellbeing.
Nutraceutical products are used to improve health, prevent chronic diseases, increase life
expectancy, and support the physical and mental health of an individual.
They are also proven to have a potentially positive effect on health conditions like
cardiovascular disease, hypertension, diabetes, inflammation, cancer, and others. The main
types of nutraceuticals are vitamins and minerals; probiotics; proteins and peptides;
omega fatty acids; and others. Vitamins and minerals are nutrients required for the bodys
daily functioning.
Vitamins and minerals are added into food products to increase the nutritional value of
food to improve the health of an individual and provide them with high immunity. These are
classified according to their source, which can be plant, animal, or microbial.
These nutraceutical products are used in various applications, such as functional food,
functional beverages, dietary supplements, personal care, animal nutrition, and others.
They have various product forms, which are capsules, tablets, softgels, powder, liquids,
and gummies.
The various distribution channels through which nutraceuticals are available are
specialty stores; supermarkets and hypermarkets; convenience stores; drug stores and
pharmacies; online retail stores; and other distribution channels.
Indias Nutraceutical Market Growth:
As per recent statistics, Indias preventive healthcare sector is expected to reach
$197 billion by 2025 at a CAGR of 22%.
Consumers of today want to be proactive in how they approach their health. If the
pandemic was a wake-up call for everyone, the last three years have further increased
peoples understanding of how they need to take charge of their lifestyles and what they
consume. What started as prevention and a way to improve immunity is today a holistic
approach to self-improvement and nutrition is a vital element of this change. They want to
ensure that what they eat is clean and supports their endeavor to improve their
well-being.
In 2017, the Indian market held only a 2% market share of the global nutraceutical
market and its estimated valuation stood at around $5 billion as of 2019. It is expected
to grow at a CAGR of 15% between 2023 and 2028.
The Indian nutraceuticals industry has been growing at 25% annually during the
pandemic. Foreign Direct Investment (FDI) has also increased.
The nutraceutical market in India is witnessing significant growth, driven by
increasing health consciousness, rising disposable income, and urbanization. Consumers are
seeking natural and safe alternatives to support their health and well-being.
Nutraceuticals in India fall under the purview of the Food Safety and Standards
Authority of India (FSSAI). The FSSAI regulates the manufacturing, labeling, and safety
standards of nutraceutical products to ensure consumer protection and product quality.
The Indian government is promoting the use of traditional and natural ingredients in
the nutraceutical sector.
It has also initiated various programs to promote the cultivation of medicinal plants
and herbs used in nutraceutical products.
Year 2022-23 for the company:
Today, nutraceuticals are becoming integral to both the management of specific health
issues as well as a persons overall health. With digital technology and the growth in D2C
and e-commerce channels, our brands are able to provide better access to high-quality and
effective nutrition and supplements that suit the needs of every individual. For instance,
despite ample sunlight, most Indians have been found to be deficient in Vitamin D. With
our diet, it is sometimes hard for us to get sufficient amount of some nutrients such as
omega 3 fatty acids and vitamin B12. This is where our products like O3D3, Oxyflax Global,
ZnC Nutratab are increasingly being used to support and develop immunity and address
specific lifestyle requirements like sleep, bone, heart, brain, and eye health, and
overall physical and mental wellness. The positive move in the market is that supplements
are no longer perceived as medicines but a daily nutritional intake.
Consumers today want clean alternatives that is tracked in terms of its source and
quality. They expect brands to be transparent about the ingredients used and whether these
are backed by adequate scientific research and evidence. We as the emerging pioneers in
nutraceutical industry are also responding to these evolving consumer preferences by
investing in R&D and innovation. There are products like Tulsi Satt, Notodengue,
Curcumin tablets among others, which are emerging as viable alternatives for those who
need supplementation. These supplements target either specific health issues or focus on
overall wellness.
The millennial and Gen Z consumer is always on-the-go but is also aware of the need to
take care of their health. They thus need nutraceuticals in a way that can be integrated
with their daily routine while also allowing them to follow their own regime. Our
Nutridecc products are formulated to meet the nutritional needs and challenges as they
arise. Today, with the increasing use of digital screens a wide variety of problems such
as Screen Eye Syndrome, Text Neck and Brain Fog have emerged. Our Nutridecc brand of
products is scientifically formulated to plug the nutritional challenges which may solve
these problems while also providing lifestyle tips and exercises to remain healthy.
We are also responding to the industry demand of customer experience and product
innovation by making the supplements available in the form of tablets, application oils,
and even mixes which can be consumed on the go. We address the second aspect to putting
the consumer first is that the brands are creating experiences and not just products by
helping the customers understand what they are ingesting or using. Organowild Lavender oil
can be applied to the temples, back of the neck, bottom of feet & pulse points to
experience its calming grounding effect. Breathing in the scent of lavender both lessens
anxiety and improves mood. It may also help promote sleep and fight insomnia.
Threats and key challenges faced by Nutraceutical segment in India:
Trust worthiness: There have been instances fake or counterfeit products which are
unregistered and unapproved, and it has led to skepticism from consumers as well as
industry trade community.
The Indian consumer is prescription oriented and so companies try to promote their
products through doctors. This approach lacks growth and companies need to look for a more
direct route to the consumer.
Pricing: increase in raw-material pricing impact the product pricing. Price variation
can be found in the quality of raw materials and ingredients, efficacy, and innovation
behind each formula. The ingredients in your supplements make all the difference.
The FSSA has consolidated a collection of earlier laws relating to food and
nutraceutical safety and standards. However, no concrete regulations are in force and the
government is still seeking draft suggestions. Nutraceutical companies themselves feel
that regulations related to quality and safety will benefit the industry and will keep a
check on unregulated practices. Presently, the fragmentary nature of the regulations is
making it difficult for players to comply fully or to make necessary investments.
Outlook and future trends:
After a certain age, especially after 65 years or above, an individual requires
additional nutrients to build immunity to fight against a number of diseases like
diabetes, cholesterol, blood pressure, and other age-related issues. Nutraceuticals are
used as daily supplements to meet the daily requirements of nutrients.
For instance, in 2020, according to the United Nations, there were approximately 727
million people aged 65 and above worldwide, and that number is expected to reach
approximately 1.5 billion by 2050. Therefore, the rise in the geriatric population is
driving the growth of the nutraceutical market.
The nutraceuticals market is estimated to grow at a CAGR of 15% between 2023 and 2028.
Buoyed by the prospects in the Indian market, many global nutraceutical companies are
shifting their focus to the country. Add to this is the fact that consumers in the country
are also looking for quality and effectiveness of the products more than the pricing. Here
are some trends that will pave the way for further growth of the market in the year ahead.
Augmenting the need for cleaner alternatives for nutrition
New product development is the key trend being followed by the companies operating in
the nutraceutical market. on the other hand, is rooted in its values of knowledge,
transparency, sustainability, community, and excellence, which applies to every process,
including formulation and ingredients. Additionally, they conduct third-party testing for
all their products and have certificates of analyses (COAs) as well to provide to
customers.
The global nutraceuticals market size was USD 291.33 billion in 2022 and is expected to
grow at a compound annual growth rate (CAGR) of 9.4% from 2023 to 2030. The primary
factors driving the market growth are preventive healthcare, increasing instances of
lifestyle-related disorders, and rising consumer focus on health-promoting diets.
Additionally, increasing consumer spending power in high-growth economies is projected to
contribute to the growing demand for nutraceutical products. The growing demand for
dietary supplements and nutraceuticals is also attributed to consumer preferences shifting
towards self-directed care in the treatment of lifestyle disorders such as cardiovascular
disorders and malnutrition.
Risks and Concerns:
The analysis shown above clearly depicts the major risks and concerns involved in
nutraceutical segment. The strategy of your Company to de-risk against these factors is
also outlined in the said Sections.
Internal Control Systems and their adequacy:
The Company has established a well-defined process of risk management, wherein the
identification, analysis and assessment of the various risks, measuring the probable
impact of such risks, formulation of risk mitigation strategy and implementation of the
same takes place in a structured manner. Though the various risks associated with the
business cannot be eliminated completely, all efforts are made to minimize the impact of
such risks on the operations of the Company. Necessary internal control systems are also
put in place by the Company on various activities across the board to ensure that business
operations are directed towards attaining the stated organizational objectives with
optimum utilization of resources. Apart from these internal control procedures, a
well-defined and established system of internal audit is in operation. The results of
operations and financial conditions are affected by numerous factors including the
following:
• Supply and availability of raw material/traded goods;
• Competition from existing and new entrants; Performance of our distribution
channel;
• Brand image;
• Rate of interest policies;
• Economic and Demographic conditions; and Changes in laws and regulations that
apply to Nutraceutical Industry in domestic and overseas market.
Discussion on Financial Performance with respect to the Operational Performance:
On a standalone basis, your Company recorded net sales of Rs. 4,503.80 Lakhs during the
financial year 2022-23 as compared to Rs. 3339.19 Lakhs in the previous financial year
2021-22, whereas the Net Profit during the financial year 2022-23 stood at Rs. 45.56 Lakhs
as compared to a net profit of Rs. 32.42 Lakhs in financial year 2021-22 leading to the
Basic Earnings Per Share of Rs. 0.27/- for the financial year 2022-23 as compared to
Rs.0.21/- in financial year 2021-22.
On a Consolidated basis, your Company recorded Net sales of 4504.10 Lakhs during the
financial year 2022-23 as compared to 3339.19 Lakhs in the previous financial year
2021-22, whereas the Net Profit during the financial year 2022-23 stood at Rs. 36.40 Lakhs
as compared to a net profit of Rs 32.26 Lakhs in financial year 2021-22 leading to the
Basic Earnings Per Share of Rs.0.22/- for the financial year 2022-23 as compared to Rs.
0.21/- in financial year 2021-22.
Significant changes (i.e. change of 25% or more as compared to the immediately previous
financial years) in Key Financial Ratios, along with explanation are as under:
| Ratios |
FY 2022-23 |
FY 2021-22 |
| Debtor turnover ratio |
3.62 |
2.62 |
| Inventory turnover ratio |
0.54 |
0.31 |
| Interest coverage ratio |
6.58 |
4.58 |
| Current ratio |
6.11 |
6.47 |
| Debt- Equity Ratio |
0.01 |
0.08 |
| Operating Profit margin |
1.56 |
1.43 |
| Net Profit Margin |
1.01 |
0.98 |
| Return on Net worth |
0.57 |
0.42 |
References:
• www.fssai.gov.in
• www.biovoicenews.com
• https://timesofindia.indiatimes.com/
• https://foodsafetyhelpline.com/nutraceuticals-challenges-fast-growing-sector-india/
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