Indian nutraceuticals market to touch $6bn by 2020

Changing lifestyles mean that India’s nutraceuticals market will more than double from its current US$2.8bn over the next five years, according to a report by Assocham.

With the global market expected grow at around 8% each year to reach almost US$263bn by 2020—from its current base of US$182.6bn—the trade body believes that India will drive growth across Asia-Pacific considerably in the face of bigger markets.

America continues to occupy the biggest nutraceuticals market, followed by Asia-Pacific and the European Union. 

With 14% of the market, Japan is the biggest nutraceuticals consumer in this region, followed by China at 10%. 

Indian, meanwhile, is at a nascent stage but it is still fast emerging, now accounting for around 1.5% of the global market. This is expected to increase owing to country’s large population base, increasing urban belt and awareness, said DS Rawat, secretary-general of Assocham.

However, he said, India does not currently have any regulatory guidelines for the approval or monitoring of the products in this segment. 

As a result, the country’s food regulator, FSSAI, should come up with “properly framed guidelines related to manufacturing, storage, packaging and labelling, distribution, sales, claims and imports, the report said. 

“This will bring clarity to the industry stakeholders and they can invest into the industry with no fear of counterfeiting​,” said Rawat.

He added that this absence of regulations was causing products to take longer to reach the market, thereby hindering growth.

“It is of the utmost necessity to give faster approvals for eligible nutraceuticals​,” said Rawat. 

Market penetration is around 22% in urban India, whereas this figure is as low as 6% in rural areas, largely due to a lack of awareness in these areas, the report noted.

India’s food safety system 'a barrier to consumer justice'​

Existing legal provisions show how consumers are “at the mercy of retailers and state agencies​” to get justice if they suspect a product is unsafe, a report in The Times of India​ has said.

This is despite efforts by government agencies to protect consumer rights, particularly in case of food products, according to the newspaper.

“According to the Food Safety and Standards Authority of India (FSSAI) Act, the consumer has to inform the retailer that he is buying the product for testing and he must take a receipt, to which consumer activists and even officials remarked that retailers would refuse to sell products in such cases,” it said. 

Illustrating how such provisions can be impractical, Suresh Misra, professor of consumer affairs at Indian Institute of Public Administration, told ToI​: "The minute a consumer says why he is buying the product, no retailer will sell the item. This is despite the fact that the retailer won't be held responsible for any defect in the product​." 

Most food sold in India is sold without having been tested​

Speaking to The Indian Express​, Vishwas Jain, director of one of the three recognised Indian laboratories that will carry out fresh tests on Maggi noodles​, said that over 90% of the food consumed in India is sold untested.  

“The biggest challenge is the paucity of testing facilities, said Jain. “The government labs need flexibility in terms of expenses on equipment​. 

“Some equipment have cost me around Rs20m [US$306,000]. In case of a breakdown, I have to replace it or get it fixed​.” 

Labs are currently not getting samples because of a lack of enforcement, Jain added: 

“Most of the products in the retail market pass off without quality check​.”

Confident of its Indian future, Kellogg announces third plant​

The world’s biggest cereal maker is undaunted by the Maggi affair and has announced it will open both a research centre and its third manufacturing facility in the country.

Kellogg’s is now the second major announcement by multinational food companies after Mars International said in March it would set up its first chocolate factory in the country. The Pune plant will entail an investment of Rs10bn (US$153m).

For its part, Kellogg did not say this week how much it was planning to invest, though Business Standard​ estimates this could be around Rs5bn. 

Kellogg's second manufacturing plant in Andhra Pradesh was set up at an investment of Rs3.6bn. On top of this, an R&D lab could add another Rs1.5bn, it said, citing sources.