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Nutraceuticals

Critical supplement for


building a healthy India

Contents
Foreword................................................................................................... 04
Introduction............................................................................................. 06
Executive summary................................................................................ 07
An insight into the nutraceuticals market of India
Section I: Nutritional status of the population of india....................................10
Section II: Nutraceuticals market: global and India......................................... 24
Section III: Way forward............................................................................... 48

Annexure.................................................................................................. 66
Acknowledgements................................................................................ 76
Glossary.................................................................................................... 77
About FICCI..............................................................................................80

Foreword

Ajit Singh
Chairman- FICCI Task Force on Nutraceuticals
Chairman- ACG Worldwide (formerly Associated Capsules Group)
President- Health Foods and Dietary Supplements Association (HADSA)
Dear reader,
Nutraceuticals as they are called in industry parlance cover a basket of products from dietary supplements to probiotic and energy drinks
to cholesterol and fat free foods among others. Increased discretionary spending, changing lifestyles and growing awareness among
Indians about healthy living are accelerating the growth of this Industry. Despite the huge potential, Indias share, with reference to the
global Nutraceuticals market is still minimal.
FICCI is one of the apex chambers of commerce of India, which has empowered Indian businesses in the ever changing and challenging
times, to step up their competitiveness and enhance their global reach.
FICCI acts an effective change agent and has been working diligently towards influencing the government to bring about necessary
policy changes to give impetus to this sector. FICCI has played a catalytic role in many sectors where India commands a leadership
position today.
HADSA is a non-profit trade association which not only represents the interests of manufacturers, suppliers and health-care products, but
also supports science-based environment for responsible marketing of nutritional supplements.
FICCI and HADSA have come together to provide a platform to the industry to share their concerns, flag issues, and discuss strategies to
compete globally in the field of Nutraceuticals, Functional Foods and Dietary Supplements.
Our vision is to accelerate Indias share of 0.9% of the worlds US$117 billion nutraceuticals, functional foods and dietary supplements
market to a sizeable number in the next few years. Considering the huge growth potential of the Indian nutraceuticals industry, I envision
India to be ranked among the top players such as USA, Europe and Japan which are the current market leaders.
This FICCI - Ernst & Young knowledge paper has synergized the available body of knowledge with the current business realities and
suggested strategies to increase Indias share of the global Nutraceuticals market.

Nutraceuticals Critical supplement for building a healthy India

Hitesh Sharma
Partner
Ernst & Young

M Muralidharan Nair
Partner
Ernst & Young

Dear reader,
Nutrition related risk factors contribute to more than 40% deaths in developing countries and India is no exception. Nutrition related
disorders force back its GDP by at least one percentage point. India is reeling under the burden of nutrition deficiencies with one-fifth of
the Indian population lacking the purchasing power to even consume a diet sufficient in calories, let alone nutrients; and an astounding
570 million consuming sufficient or excess calories, but lacking adequate intake of nutrients. In fact, 60% of this section consumes higher
than normal calories, with a disproportionately high fat intake and this could make India the future cardiovascular and diabetes capital of
the world.
The key factor responsible for these severe inadequacies in nutrient intake has been a significant change in lifestyle caused by rapid
urbanization and growing modernization in methods of food processing and cooking. As these changes are irreversible in nature, any
agenda to foster "quality healthcare for all" is incomplete without supplementing it through nutritional interventions. Unless such
interventions are introduced, the gap in nutrient intake will continue to widen. Thus, it should be a part of the nations critical agenda to
ensure that every citizen has access to Nutraceuticals - products which supplement the diet to provide nutrition over and above regular
food. It is a non-negotiable imperative that nutraceuticals cease being just a luxury and emerge as a necessity for the Indian populace.
However there are some impediments in the path to achieving this aspiration:
The prices of most nutraceutical products are high, severely limiting growth in demand, especially since India is a price
sensitive market
There is a lack of credibility of the benefits of nutraceutical products in the consumers minds, further aggravated by
unsubstantiated claims
The lack of regulations to govern nutraceuticals acts as a deterrent for committed nutraceuticals players, both Indian and
international, to enter the Indian market
"Nutraceuticals Critical supplement for building a healthy India", a FICCI Ernst & Young initiative is a comprehensive
study assessing the current and latent potential of the nutraceuticals market in India, the critical impediments to convert latent
opportunity into a market and the future imperatives for the government and private sectors. The report suggests concerted
and implementable strategies to the government and private sectors which, if implemented, would assist in achieving the
latent potential of nutraceuticals in India and at the same time addressing the diverse nutritional needs of the population.
We encourage you to explore, invest and partner in the Indian nutraceuticals market which truly stands at an inflexion point, poised
to grow.

Nutraceuticals Critical supplement for building a healthy India

Introduction
Quality healthcare is the foundation of any prosperous nation. Nutrition care, which forms an integral part of preventive healthcare, is
undergoing a transformation in India. Today, food alone is unable to fully service the nutrition needs of the body. Thus, supplementing
it with lifestyle interventions has become a non-negotiable imperative not only to enhance health but also to reduce dependency on
curative measures.
While lifestyle interventions can be manifold, this report is focused on those formulations or foods that can supplement normal
diet (called " Nutraceuticals ") and does not cover services that can be offered in this regard. Also this report covers the domestic
nutraceuticals market and not the export market potential of Indian nutraceuticals.
This document aims to present:
The nutritional status of Indians, their dietary patterns and underlying drivers
An assessment of the current and latent potential of the nutraceuticals market in India
Critical impediments in achieving latent potential, and
Way forward for the government and private sector
The viewpoints and conclusions presented in this report are an outcome of discussions with various stakeholders, regulators, key opinion
leaders, subject experts, data available in the public/propriety domain and our industry understanding. An attempt has been made to
provide a reference document for existing private Indian and global nutraceutical players, new entrants, potential investors and regulators
to explore and assess the nutraceuticals opportunity that India presents.

Nutraceuticals Critical supplement for building a healthy India

Executive summary
Nutrition is a fundamental need. Various risk factors related
to health result from an imbalance in nutrition. Together,
these factors contribute to more than 40% of deaths and
30% of the overall disease burden in developing countries.
In India, nearly 20% of the total population and 44% of young
children (below 5 years of age) are undernourished, numbers
which are significantly higher than even the poorer subSaharan African countries. Iron deficiency anemia during
pregnancy accounts for one-fifth of maternal deaths in India
and the prevalence of this deficiency in women has alarmingly
increased from 52% in 1998 to 56% in 2006. Iodine and
Vitamin A deficiencies in India are still above the WHO specified
desired levels. Annually as many as 0.3 million children
succumb to Vitamin A deficiency related diseases. The impact
of these deficiencies is a productivity loss of around one
percentage point of Indias GDP.
The nature of Indias nutrition concerns are three fold
On one hand is the undernourished population (380million)
with majority having inadequate purchasing power to
even consume a diet sufficient in calories, let alone take
sufficient nutrients. Their challenge is to meet foundation
needs to maintain normalcy of being. These needs
would have to be addressed by government programs
with the private sector playing a supportive role.
On the other hand is the huge population (570 million)
that is nourished in calorie intake but not in terms of
nutrient intake. This segment would typically include lower
middle to upper class population with sufficient purchasing
power but probably low awareness about their nutrient
requirements, leading to unmet condition specific needs in
addition to foundation needs. In fact, there are 340 million
in our population (30% in urban and 34% in rural areas) who
consume more than the recommended number of calories
with higher than recommended levels of dietary fats and
could be the largest contributor in making India the future
cardiovascular and diabetes capital of the world. While there
are several factors that have contributed to these severe
inadequacies, the key ones are increased urbanization,
larger working class population and growing affluence.
These factors have resulted in a shift of dietary habits from
consuming micronutrient rich foods such as fruits and
vegetables to consuming more of fat-rich calorie foods.

The third population segment (80 million) is one which


consumes nutrients and calories more than the norm due
to their enhanced physical requirements because of their
chosen lifestyles and interest areas such as professional
sports, heavy exercises and extensive outdoor field work.
This would lead to a greater need for nutrition, in addition
to some condition specific and foundational needs.
Many of the factors affecting nutrition related concerns are
irreversible that have led to natural sources of nutrients
being consumed in insufficient quantities. Hence, the
requirement of external intervention, that can supplement
diet to help prevent nutrition-related disorders and promote
wellness over treatment of illness, has become critical.
Such products are collectively called as nutraceuticals.
As a concept, nutraceuticals is in its stage of infancy with
several developed countries having defined it only in last 15
years. India has already defined it in the Food Safety and
Standards Act of 2006 but is yet to implement it as the rules
are not completely framed. Of the global nutraceuticals market
of USD117 billion (INR5148 billion), India has less than 1%
share and is estimated to be around INR44 billion in size. The
three broad categories within nutraceuticals are - functional
foods, functional beverages and dietary supplements.
While the global market is expected to grow at a CAGR of
7%, the Indian industry has been growing much faster at a
CAGR of 18% for the last three years, driven by functional
food and beverages categories that are growing faster than
the dietary supplements category due to wider distribution
across FMCG channels as well as aggressive mass marketing.
There are four key drivers to this growth an increased
affluence of the ever-growing working population, a
reduced affordability of sick care that in turn drives
consumers towards wellness, an increased physician
awareness and media penetration and finally, an
increased accessibility to newer distribution channels.
However, the latent market in India is two to four
times the existing market size (between INR89 billion
and INR172 billion) with nearly 148 million potential
customers. The market is latent because there some major
impediments to effectively tap this market. These are
High prices of nutraceuticals when compared to
conventional foods especially since India is a price
sensitive market.

Nutraceuticals Critical supplement for building a healthy India

Lack of credibility of the benefits of nutraceuticals


in the minds of consumers, further aggravated by the
unsubstantiated claims made by certain products.
Regulatory framework not yet implemented despite the
act being in place for over three years plus inadequate
resources available for implementation. This lack of
regulations to govern nutraceuticals acts as a deterrent for
large foreign players planning to enter the Indian market.

What needs to be done?


To overcome the above mentioned impediments and to pave the
way for nutraceuticals to supplement Indias quality healthcare
agenda, the following initiatives need to be undertaken:

Agenda for the government


Lay down rules to govern quality and claims of
nutraceutical products
While the Food Safety and Standards Authority created as
per the Food Safety and Standards Act 2006 have plans to
lay down rules for governing standards of articles of food and
to regulate their manufacture, storage and distribution by
end of 2009 based on panel recommendations, it is of critical
importance that these rules be made exhaustive to govern
quality and claims of nutraceutical products. The rules should:
Clearly specify revised RDA levels (the RDA norms
of 1989 are outdated and do not reflect lifestyle
changes as well as the considerable nutritional
research accumulated in this period)
Recognize proven nutrients and labeling requirements.
Define permitted health claims and the product
approval process.
Identify standards/monographs, and
Provide guidelines on good manufacturing practices
for nutraceutical products. Leading international
practices highlighted in the report can be used
as reference while framing the rules.

Measures should be taken to ensure availability of adequate


resources for efficient implementation of laid out rules.
These measures could include gearing-up of staff strength,
specialized training and increasing the number of food
testing laboratories from an estimated 250 laboratories
currently to a required number of 500 laboratories.
Encourage research and development in the field of nutrition
and deploy Public Private Partnership (PPP) models to
serve needs of the undernourished segment of population
The government should establish a dedicated fund for
focused nutraceuticals research and support nutraceutical
players by providing them with research infrastructure
Ensure that a larger population gets the benefit of
nutraceuticals
For this, the government should explore PPP to deliver
the benefits of nutrients to the undernourished section of
the population.

Agenda for the private sector


Product development: develop customer focused products
that address specific needs of different consumer segments
The private sector should invest in research to develop
products that meet specific consumer needs, preferences and
taste. One potential area can be converting the nutritional
properties of herbs and botanicals from the rich pool of
traditional Indian sources into nutraceutical products.
Product differentiation: differentiate products by focusing
on credibility building and/or lowering prices of products
In the cluttered market with me-too products and inadequate
intellectual property protection, the private sector can focus
on product differentiation by building credibility of their brands
and making products more affordable. Focusing on cost
reduction initiatives could be one of the levers to lower prices.
Product promotion: increase awareness of the benefits of
nutraceuticals through advertising and physician education
This is easier said than done. Concrete and sincere effort needs
to be put in by the stakeholders to enable nutraceuticals to
supplement Indias quality health agenda, ushering a shift in the
mindset from illness to wellness, from curing to preventing.

Nutraceuticals Critical supplement for building a healthy India

Section

Nutritional status of the


population of india

10

Nutraceuticals Critical supplement for building a healthy India

Summary
Various risk factors related to health result from an imbalance in nutrition. Such
imbalances in India are widely prevalent leading to adverse outcomes. The impact
of these outcomes is a productivity loss of around 1% point of Indias GDP
A
nalysis of our dietary intake reveals nutritional imbalances across most segments
of population :
Majority of the undernourished population (380 million) faces a challenge to
meet foundation needs to maintain normalcy of being.
There is a huge population (570 million) that is nourished in calorie intake but not
in terms of nutrient intake. They face the challenge of meeting condition specific
needs in addition to foundation needs and could be the largest contributor in
making India the future cardiovascular and diabetes capital of
the world.
There is another population segment (80 million) which consumes nutrients and
calories more than norm due to their enhanced physical requirements.
S
ince many of the drivers underlying nutrition related concerns are irreversible
and natural sources of nutrients are being consumed in insufficient quantities, the
requirement of an external intervention has become a non-negotiable imperative
that can supplement food diet to help prevent nutrition related disorders and
promote wellness rather than treat illness. Such products have collectively been
called as Nutraceuticals

Nutraceuticals Critical supplement for building a healthy India

11

More than forty percent deaths in developing countries are attributable to risk
factors linked to nutrition

8 of the top 15 risk factors are related to nutrition and contribute to nearly forty percent of total
deaths and thirty percent of total disease burden in developing countries like India
15 leading risk factors in developing countries with high mortality rates*
Risk factors

Percentage of deaths attributable to risk factors

1 Underweight

Percentage of disease burden attributable to risk factors


15%

13%

Unsafe sex

10%

10%

2 Blood pressure

2%

7%

6%

6%

Unsafe water, sanitation and hygiene

3 Cholesterol
Tobacco

5%

2%

5%

2%

Indoor smoke from solid fuels

4%

4 Low fruit and vegetable intake

4%

4%
1%

5 Zinc deciency

3%

3%

6 Vitamin A deciency

3%

3%

7 Iron deciency

3%

3%

Physical inactivity

2%

Alcohol

2%

8 Overweight

2%

1%
2%
1%
1%

1%

Unsafe healthcare injections

0%

5%

10%

15%

0%

4%

8%

12%

16%

Nutrition related risk factors

Source: World Health Report 2002, WHO


* Notes:
Includes 66 countries. Key countries include South Africa, sub-Saharan African countries, Iraq, Egypt, Pakistan, Peru, South Korea, India, Myanmar, Nepal
Other risk factors include physical inactivity, risk factors for injury, overweight, lead exposure, climate change, childhood sexual abuse, illicit drugs, urban air pollution, noise,
airborne particulates, ergonomic stressors, carcinogens which contribute to the remaining 30% deaths and 44% disease burden

Food is composed of a wide distribution of nutrients, which have very specific metabolic effects on the human body. Nutrients are
of two types - macro-nutrients and micro-nutrients
Denition of key nutrients

Macro-nutrients

Includes carbohydrates, fats & oils, proteins & amino acids


Supply energy, and these essential nutrients are needed for growth,
maintenance, and activity
Needed in large amounts

Micro-nutrients

Includes vitamins, trace minerals (iron, zinc)


Vitamins act as catalysts that help to trigger other reactions in the body while
trace minerals contribute to the synthesis of glycogen, protein, and fats
Needed in relatively small amounts

Nutrients

Nutraceuticals Critical supplement for building a healthy India

13

Such risk factors have led to significant adverse outcomes in India


Risk factors

Key adverse outcomes

44% of Indian children are underweight1, which is much higher than most comparable countries. Further,
the proportion of underweight children has reduced only marginally in last 10 years, showing slow pace of
improvement. Other related adverse health outcomes are stunting2 and wasting3 and the proportion of
these is also alarming at 38% and 19% respectively. Being underweight may reduce a childs IQ by 5%,
while stunting may reduce it by as much as 11%.
Percentage of underweight children below 5 years of age
43.5

Underweight

1.4

3.7

6.8

Russia

Brazil

China

India

Source: NFHS, World Bank, World Development Indicators 2007

Maternal mortality rate in India is much higher than that of comparable countries. About 20-40% of maternal
dealth in India are due to anemia, the proportion of which has increased in the last decade.
Maternal mortality rate per 10,000 live births, 2005
45

Iron
deciency

74
2.8

4.5

Russia

China

79
52 56

11

Brazil

Percentage
anemic children*

India

1998-99

Percentage women
suffering
from anemia**

2005-06

* Children between 6-35 months of age


** Married women in the age group of 15-49 years

Source: WHO, NFHS

Prevalence* of vitamin A deciency symptoms (1990-2003)


0.7-1.1%
0.5%

Vitamin A
deciency
India

Prevalence of vitamin A deciency is much


above WHO cut off levels resulting in
approximately 330,000 child deaths every year

WHO cut-off level

* Pre-school children
Source: NFHS, Report of the Working Group on Integrating Nutrition with Health, 11th Five Year Plan (2007-2012) , India Micronutrient National
Investment Plan 2007-2011
1
2
3

Underweight: Children under 5 years whose weight-for-age is less than -2 Standard Deviation (SD)
Stunted: Children under 3 years
height-for-age
is lessdeciency
than -2SD disorder)
Totalwhose
goiter
rate (Iodine
Wasted: Children under 3 years whose weight-for-height is less than -2SD

10%
14 Iodine

deciency

Prevalence of goiter caused due to Iodine deciency


is twice the WHO cut off levels, adversely impacting
Nutraceuticals Critical supplement for building a healthy India
intellectual capacity by upto 15%
5%

approximately 330,000 child deaths every year

deciency
India

WHO cut-off level

* Pre-school children
Source: NFHS, Report of the Working Group on Integrating Nutrition with Health, 11th Five Year Plan (2007-2012) , India Micronutrient National
Investment Plan 2007-2011

Total goiter rate (Iodine deciency disorder)


10%

Iodine
deciency

5%
India

Prevalence of goiter caused due to Iodine deciency


is twice the WHO cut off levels, adversely impacting
intellectual capacity by upto 15%

WHO cut-off level

Source: Report of the Working Group on Integrating Nutrition with Health, 11th Five Year Plan (2007-2012), India Micronutrient National
Investment Plan (2007-2011 )

India has the largest burden of CVD and largest number of diabetes patients in the world

Blood
pressure,
overweight,
cholesterol

Cardiovascular diseases
DALYs (millions)
24.5

Diabetes Number of patients (millions)


31.7

28.9
20.8

11.8
4.1
Brazil

Russia

China

Source: WHO 2009

India

4.6

4.6

Russia

Brazil

China

India

Source: WHO 2000

Adverse outcomes are estimated to cost nearly 1% point to Indias GDP and so improvement in
nutrition status is a critical part of the countrys agenda for progress
An estimate of the cost of productivity lost on account of mortality due to nutrition related
disorders was estimated to be 0.85% of the GDP in 2004 and is expected to increase upto 1.2% of
India's GDP by 2015
Source: WHO 2009, Popkins et. al (2001), Ernst & Young analysis

Nutraceuticals Critical supplement for building a healthy India

15

Analysis of India's dietary patterns provides a few key insights into the
nutrition levels and needs of the population

Nearly 20% of the Indian population is undernourished implying a low calorie as well as
nutrient intake

Percentage of population undernourished


20

19
12
9

India lags behind not only other developing


countries but also some sub-Saharan African
countries in terms of undernourishment

Russia

Brazil

Nigeria

China

Uganda

India

Source: Global Hunger Index, International Food Policy Research Institute 2008

Even in the population that shows sufficient calorie intake, the micronutrient consumption is
not at desired levels

While the intake of calorie rich foods may be high, micronutrient rich foods are being consumed
in low proportions. As a result, significant micronutrient deficiencies exist in urban as well as
rural areas

Actual food intake as a percentage of ICMR recommended levels

101%
83%

109%

102%

111%

RDA

93%
76%

Average intake of key micronutrients (percentage of RDA)

76%

83%
70%

81%

71%

68%

56%
65%

Zinc

60%
58%

Vitamin A
33%

83%
90%

Iron
Cereals Edible oil Milk & milk Sugar
products
Calorie rich
Rural

Pulses

Vegetables Fruits

0%

Micronutrient rich

Urban

Source: India Micronutrient National Investment Plan 2007-2011

16

Nutraceuticals Critical supplement for building a healthy India

20%

40%

60%

80%

100%

120%

At the same time, there is a growing population (340 million) which is consuming excess
calories, with a disproportionately high level of fats

Nearly 340 million people - 30% of the population in urban areas and 34% of the population in rural
areas - consume calories more than the norm
Calories derived from fat as percentage of total calories
for the excess calories consuming population

Percentage of population by level of calorie intake as a


percentage of norm level*
13%

19%

21%

70%

66%

Urban
<100%

100%-120%

Recommended range

Calorie intake as a percentage of norm

11%

Rural
>120%

>150%

23%

120%
150%

17%

21%

Average

Rural
Source: NSSO 2004-05
*2700 kcal per consumer unit per day

32%
23%

16%

Urban

Source: NSSO 2004-05

Also, there is a growing fitness need which has led to rapid rise in slimming centers and
gymnasiums. This is driving enhanced nutrition requirements for this segment of the
population
Growth in slimming centers and gyms market (INR billion)
4.6

4.5
CAGR
23%

CAGR
33%

2.5
1.9

Slimming centres
2005

Gyms

2008

Source: Ernst & Young FICCI Wellness report, 2009

Nutraceuticals Critical supplement for building a healthy India

17

18

Nutraceuticals Critical supplement for building a healthy India

Over-nourished 80 million

Under-nourished 3
380 million

Decient

Micronutrient intake

ICMR norm
for fruits and
vegetables2

Sufcient/
excess

These patterns can be mapped into distinct population segments based on their
food and nutrient intake

Calorie sufcient nutrient decient


population- 570 million

Decient

Adequate/excess

80% of norm
level as dened
by NSSO

Calorie consumption

Calorie sufcient nutrient decient population


570 million

Undernourished population
380 million
Nearly 70 percent (280 million) of this segment would include
those with inadequate purchasing power to consume a diet that
would be adequate in calories and therefore decient in
micronutrients
Immediate need for this section of the population would be
foundational to meet basic calorie nourishment and will have to
be addressed by government intervention. Some programs
under-taken by government include mid-day meal, micronutrient
national investment plan and food security programs under
Millennium Development Goals
Remaining 30 percent (100 million)of this segment would include
people with sufcient purchasing power but inadequate food
consumption due to various reasons like chronic illness, low
appetite, extreme diet consciousness

This segment would consist of people who are consuming


adequate or excess calories than norm but not sufcient
nutrients. This segment would typically include high and middle
income group population with purchasing power enough to at
least consume an adequate calorie diet
This segment may have a need due to specic conditions
like pregnancy, menstruation, obesity, stress and may need
to increase awareness to maintain and promote a normal,
healthy life

Over-nourished population 80 million


This segment would consist of those with sufcient purchasing
power and with enhanced nutrient and calorie intake due to their
special requirements such as professional sports, heavy
exercising, extensive outdoor eld work

Source: NSSO 2004-05, India Micronutrient Initiative Plan 2007-2011, Ernst & Young analysis

Market size of this segment of the population is assumed to be insignicant as they are calorie decient but micronutrient sufcient implying that
they could be an extremely health conscious segment with dependence on very low calorie foods but still managing to derive sufcient micronutrients
1

Population as per NSSO 2006-07 report

As per most recent national initiative called the Micronutrient National Investment Plan 2007-2011, inadequate consumption of fruits and vegetables
is a key reason for deciency of essential micronutrients. For the purpose of estimating decient and sufcient nutrition intake population segments,
it has been assumed that persons who consume fruits and vegetables combined less than ICMR norm of 175 gms/ day would be decient in
micronutrients

The entire population below the food poverty line (as dened in the report of the National Commission on Macroeconomics and Health, 2005) has
been considered as undernourished, irrespective of level of calorie consumption

Nutraceuticals Critical supplement for building a healthy India

19

Nutrition related needs of population segments can be viewed as a hierarchy of


foundation, condition specific and enhancement needs

Hierarchy of nutritional needs


N
utrition requirements of over-nourished people
with enhanced nutrient and calorie intake due to
their special requirements such as professional
sports, heavy exercise, extensive outdoor eld
work etc

Enhancement
needs

Condition specic needs

These nutrition needs are for enhanced


functioning
N
utrition requirements prevalent in people largely
across the micronutrient decient segments during
specic conditions such as nutrient-specic deciency
due to lower intake, pregnancy, menstruation, post
menopause, obesity, stressful and sedentary life

These nutrition needs are for addressing


specic conditions

Foundation needs

20

N
utrition needed by all segments of population to
maintain and promote a normal, healthy life

These nutrition needs are for maintaining normalcy


of being

Nutraceuticals Critical supplement for building a healthy India

While food has been the major source for servicing these needs in the past,
with growing modernization some traditional ways are being given up, thereby
adversely impacting balanced nutrition

Nutrients concerned

Traditional ways being given up

Adverse impact on nutrient intake


due to modernization

Water soluble vitamins (Vitamins


B and C) and minerals

Fresh vegetables used for cooking

In the modern blanching processes adopted there


is loss of ascorbic acid, water soluble vitamins and
minerals just before freezing the vegetables

Proteins, minerals and Vitamin B complex

Manual processing of cereals

Milling and polishing of cereals significantly


reduces protein, mineral and Vitamin B complex

Calcium, Iron, Thiamine and Niacin

Fresh grinding of wheat at home

Heavy milling and poor storage conditions result in a


considerable loss of Calcium, Iron, Thiamin and Niacin

Iron

Cooking in iron karai

Organic iron from the conventional karai is stated


to fortify the food cooked in it a benefit absent
in modern cookware like non-stick and teflon
coated utensils

Copper

Use of copper vessels for


cooking and storing water

Copper, although required in minor amount, is not


gained from the stainless steel utensils used today.
Deficiency is known to cause chronic diarrhea,
mal-absorption problems and reduced immunity

Source: Srilakshmi B. 2003 Food Science, American Association of Cereals Chemists, Carribean Home Economics, Ernst & Young research

There is an ever widening gap in nutrient intake due to which "normal life is no longer normal"

Nutraceuticals Critical supplement for building a healthy India

21

Thus, the pressing need to complement food with external nutritional


interventions has become a non-negotiable imperative to avert
curative measures

While such interventions can be manifold, this report is focused only on products that can fulfill
this role. These products have been collectively referred to as "Nutraceuticals"

Traditional
medicine

Pharmaceuticals

Food

Nutraceuticals

Preventive

Usage

Curative

Nutraceuticals, an emerging concept, can be broadly categorized as products which are extracted
from natural sources (nature-like) or manufactured synthetically (man-made), which supplement the
diet to provide nutrition over and above regular food and help prevent nutrition related disorders.

Natural

Nature-like

Man made

Source

Ideally, intake of nutrients through food would have been sufficient to prevent curative
measures such as pharmaceuticals and traditional medicine to a large extent
However, in the absence of requisite nutrition through food, an external intervention in the
form of nutraceuticals has become imperative

22

Nutraceuticals Critical supplement for building a healthy India

Section

Nutraceuticals market:
global and India

24

Nutraceuticals Critical supplement for building a healthy India

II

Summary
As a concept, Nutraceuticals is in its stage of infancy with several developed
countries having defined it only in last 15 years
Of the global nutraceuticals market of USD117 billion (INR5148 billion), India has
less than one percent share and is estimated to be around INR44 billion in size. But
it has been growing much faster than global rates at a CAGR of 18% for the last 3
years driven by functional food and beverages categories
There are four key underlying drivers for this growth:
Affluence of working population with changing lifestyles
Reducing affordability of sick care, driving consumers towards wellness
Increasing physician awareness and media penetration
Increased accessibility due to emergence of newer distribution channels
However, the latent market in India is two to four times the existing market size
(between INR89 billion and INR172 billion) with nearly 148 million potential
customers.
The market is latent because there some major impediments to effectively tap into
this market. These are:
Regulatory framework not yet implemented
Inadequate resources for implementation of regulations
High prices of nutraceuticals
Lack of credibility of nutraceuticals

Nutraceuticals Critical supplement for building a healthy India

25

Nutraceuticals is an evolving concept with varying definitions across countries

While some countries define nutraceuticals based on the


segments it constitutes, others define it based on the
benefits it provides to the consumers. There is also no
clear consensus on inclusion or exclusion of traditional
medicines. Further, some of the most developed countries
have implemented legislation as recently as in 2004, so
the concept itself is recent in such countries
The nomenclature for nutraceuticals varies across countries
with Canada naming them as "Natural Health Products",
USA calling them "Dietary Supplements" and Japan
naming them "Foods for Special Health Use" (FOSHU)
The definitions even by regulating authorities in different
countries range from general to highly elaborate:

USA and Canada actually list the constituents that a product


must have to be called a nutraceutical, whereas Europe
and Japan just provide general guidelines on the properties
that a product should have to be called a nutraceutical.
Traditional and herbal medicines are included in the
definition of dietary/nutritional supplements in Canada.
Japan does not mention traditional herbal medicines under
FOSHU foods. USA includes herbs and botanicals in
its definition.
The Indian definition (as per the Food Safety and
Security Act 2006) lists down the ingredients that
a product should have, and it also specifies general
properties of nutraceuticals. Traditional medicines
though have been excluded from the definition.

There are distinct definitions and regulations for dietary


supplements and functional foods in USA, Canada and
Europe. Whereas in Japan, both dietary supplements and
functional foods are governed under the same set
of regulations.
Source: US Food & Drug Administration website; Health Claim Evidence Requirements in Japan,(Yamada et al); Health Canada Natural Health Products Directorate website;
European Union Directive; European Parliament directive on food supplements; Department of Health & Ageing, Therapeutic Goods Administration, Australia website; The
Russian Federation Chamber of commerce and Industry website, Food Safety and Security Act of India, 2006

26

Nutraceuticals Critical supplement for building a healthy India

Denitions of nutraceuticals as per various legislations around the globe

Canada
Known as: Natural Health Products
Governed by: Food and Drugs Authority
Implemented in: 2004

Known as: Food supplements


Governed by: Food Safety Authority
Implemented in: 2002

The denition covers:

The denition covers the following


products:

Vitamins and minerals


Herbal remedies
Homeopathic medicines
Traditional medicines such as
traditional Chinese medicines
Probiotics
Other products like amino
acids and essential fatty acids

Concentrated sources of nutrients


Other substances with a nutritional or
physiological effect

Known as: Biologically active food


supplements
Governed by: Ministry of Health & Social
Development
Implemented in: 1997
The denition covers :

Nutriceuticals (Vitamins, Minerals, amino


acids, dietary bers)
Para-pharmaceuticals ( bio-avonoids,
alkaloids, essential oils, polysaccharides)

Japan

Australia

USA
Known as: Dietary supplements
Governed by: Food and Drugs Authority
Implemented in: 1994

Known as: Complementary medicines


Governed by: Dept. of Health and Ageing
Implemented in: 1991

The denition covers products (other than tobacco )


containing:

The denition covers:

Russia

European Union (EU)

Vitamins
Minerals
Herb/botanicals
Amino acids
Concentrate, metabolite, constituent, extract

Herbal medicines
Vitamins and minerals
Nutritional supplements

Known as: Foods for Specic Health Use


Governed by: Japan Health and Nutrition
Food Association
Implemented in: 1991
Functional foods are foods that can have
three functions:

Nutrition
Sensory satisfaction
Physiological improvements

India
Regulation: Food Safety and Standards Act (FSSA)
Effective from: Passed in 2006, yet to be implemented
Foods for special dietary use are specially processed or formulated to satisfy particular dietary requirements which exist because of a particular
physical or physiological condition or specic diseases and disorders and which are presented as such wherein the composition of these foodstuffs
must differ signicantly from the Indian Standard (IS) composition of ordinary- foods of comparable nature, if such ordinary foods exist and may
contain one or more of the following ingredients, namely : Plants or botanicals or their parts in the form of powder, concentrate or extract in water, ethyl alcohol or hydro alcoholic extract, single
or combination
Minerals or vitamins or proteins or metals or their compounds or amino acids ( in amounts not exceeding the Recommended Daily Allowance for
Indians) or enzymes (within permissible limits)
Substances from animal origin
Dietary substances for use by human beings to supplement the diet by increasing the total dietary intake

Source: US Food & Drug Administration website; Health Claim Evidence Requirements in Japan,(Yamada et al); Health Canada Natural Health Products Directorate website;
European Union Directive; European Parliament directive on food supplements; Department of Health & Ageing, Therapeutic Goods Administration, Australia website;
The Russian Federation Chamber of commerce and Industry website, Food Safety and Security Act of India, 2006

Nutraceuticals Critical supplement for building a healthy India

27

Drawing on the common aspects from the definitions across different


countries, for the purpose of this report, definition of "Nutraceuticals" has
been restricted to

Formulations or foods with health benefits that are taken orally in addition to the normal diet
and can even be taken over prolonged periods in concentrations which are lower than the
Recommended Daily Allowance (i.e. below the therapeutic range) to:
Supplement the diet to help prevent nutrition related disorders
Provide structure/function support that may help prevent specific diseases like
diabetes, cancer, obesity through beneficial and proven effects that go beyond the known
nutritional effects
Fulfill special physiological needs of the body such as like pregnancy, lactation, sports,
infancy and sedentary lifestyle

Further to this definition, following 3 categories have been considered under


the purview of "Nutraceuticals"

3 Key
nutraceuticals
categories

Key product segments


Nutrition fortified foods
like fortified flour,
fortified oil, fortified
malted powder
Probiotic foods like yogurt

Dietary supplements provide nutrients


that are missing or are not consumed
in sufcient quantity in a person's diet

tary
Die ents
plem
sup

Foods that have specic


physiological benets and/
or reduce the risk of
chronic disease

Fun
ct
foo iona
ds l

Key product segments

Vitamin supplements
Mineral supplements
Macronutrients

Functional
beverages

Liquids that quench thirst along with replenishing minerals, provide energy, prevent ailments,
and promote healthy life styles

Antioxidants
Tonics
Herbal extracts like Chyawanprash,
non-herbal extracts like cod liver oil

Key product segments


Sports and energy drinks
Fortified juices
Glucose powder

28

Nutraceuticals Critical supplement for building a healthy India

The global nutraceuticals market is estimated at USD117 billion,


(INR5148 billion) of which Indias share is a meager 0.9%

US, Europe and Japan are key markets for nutraceutical consumption

Indian nutraceuticals market in 2008 is USD 1.0 billion

Geographic split*
Switzerland 3%

UK 2%

Functional foods
54%

Rest of EU 6%

Italy 3%
Japan 22%

France 6%
Germany 5%

Functional beverages
14%

India 1%
Rest of Asia 7%

US 36%

Others 9%

Dietary supplements
32%
Source: Primary interviews, Industry sources, Ernst & Young analysis

Source: Frost & Sullivan, Cygnus


* Based on 2007 estimates

Globally, this market is expected to reach USD177 billion in 2013 growing at a CAGR of 7% driven
by the fast growing dietary supplements category
Global nutraceuticals market
200
180

7%
GR
A
C

160

USD billion

140

71

120
100

38
49

80
60

39

40
40

20
0

2007

Functional foods

Functional beverages

57

2013
Dietary supplements

Source: BCC and Nutracueticals brochure FICCI

The dietary supplements category is expected to be the fastest growing product category
globally with a CAGR of 11%.

Nutraceuticals Critical supplement for building a healthy India

29

The nutraceuticals market in India is estimated to be at least INR44 billion with


functional foods forming largest category with 54% share

Indian nutraceuticals market


(2008)

Functional foods 23.9

Nutrition
fortied foods

Functional beverages

22.7

Probiotic foods 1.2

43.9

Dietary supplements 14.0

6.0

Sports and
energy drinks

0.5

Vitamin
supplements

3.0

Fortied juices

5.2

Mineral
supplements

1.0

Glucose powder 0.3

Macronutrients 2.2
Antioxidants

2.4

Tonics

1.4

Extracts

4.0

Note: All gures are in INR billion.


Source: Primary interviews, Industry sources, Ernst & Young analysis

The functional foods market is the largest followed closely by the dietary supplements market
which has a 32% market share. The functional beverages market in India is relatively nascent.
Note:
While we have not validated the efficacy of the products constituting these segments nor the studies backing their claims, the attempt here has been to estimate the market
size of those segments where some research exists to substantiate health or nutrition claims.
Segments such as iodized salt have been excluded from the market sizing exercise as large scale fortification of these products has led to consumption not primarily for the
fortification benefits but for regular food value.
Please note that in the energy drinks market, caffeine rich products have not been included.

30

Nutraceuticals Critical supplement for building a healthy India

Various nutraceutical product segments exist across the need hierarchy

Nutraceutical products aim to fulfill different consumer needs based on which they can be classified
as Enhancement segments, Condition specific segments and Foundation segments

Enhancement segments
There are a few product segments such as
sports and energy drinks catering to health
enhancing needs of the consumers

High protein
supplements
Energy drinks
Sports drinks
Glucose drinks

Condition specic segments

Antioxidants

Vitamin
supplements

Product segments like vitamin supplements,


mineral supplements etc. cater to the needs
arising out of condition specic health concerns

Mineral
supplements

Macronutrient supplements
Nutrition fortied foods, e.g., (fortied our)
Probiotic foods, e.g., (yogurt)
Extracts, e.g., (chyawanprash)
Child*

Young adult*

Adult*

Foundation segments
Foundation products segments cater to the
consumer trend towards wellness and healthier
lifestyles. These product segments promote
general well being are largely targeted at all
age groups.
Old age*

Lifecycle stages
*Note: Child: 0 4 years; Young Adult: 5 14 years; Adult: 15 59 years; Old Age: 60+ years
Source: Ernst & Young Analysis

Though a product category can be classified into a specific need-segment based on its predominant use, some product types may
transcend across need-segments
For example cod liver oil, along with meeting foundation needs of boosting the immune system, will also cater to prevention needs of
lowering cholesterol

Nutraceuticals Critical supplement for building a healthy India

31

...And product segments catering to foundation and condition specific needs


are the largest and growing the fastest

While the global industry is growing at a CAGR of 7%, the Indian industry
has been growing at a CAGR of 18% in the last 3 years

Enhancement
needs
Condition specic
needs
Foundation needs

Customer needs assessment

Glucose drinks
Sports and energy drinks
0.3
0.5
Mineral supplements

Antioxidants

3.1
Tonics

1.4 2.4

0.9

Extracts

Vitamin supplements

Probiotic foods

3.8

Macronutrients

2.2

Fortied juices
1.2

2.5

4.6 15.7

5.2

Fortied oil

Fortied our

Fortied malted powder


0%-10%

11%-20%

21%-30%

Percentage growth rate (3 years CAGR)


Market sizes in INR billion

Dietary supplements

Functional foods

Functional beverages

Source: Primary interviews, Industry sources, Ernst & Young analysis

The functional food and beverages categories consisting of nutrition fortified foods, sports and
energy drinks, fortified juices and probiotic foods are growing faster, driven by wider distribution
across FMCG channels as well as aggressive mass marketing

32

Nutraceuticals Critical supplement for building a healthy India

This growth in the nutraceuticals market in India is driven by several factors

e
enc
fu
A
1
Afuence of working
population with
changing lifestyles

ility
dab
r
o
f
Af

y
ibilt
ess
c
c
A

ss
ene
r
a
Aw

Reducing affordability
of sick care, driving
consumers towards
wellness

Increasing physician
awareness and media
penetration

18%

Increased accessibility
due to emergence of
newer channels

Affluence: Increased affluence of the ever-growing working population with changing


lifestyles is leading to changes in dietary habits

Increase of working population by 30 million


from 2005 to 2015

Percentage split of population

Increasing income levels of the


Indian population

Projected distribution of income classes

120%
100%

1.09 bn
8%

1.18 bn

1.25 bn

9%

10%

9%

22%

80%
60%

60%

62%

20%

32%

29%

27%

2005

2010

2015

<15 years

15-60 years

Source: Census 2001

26%

11%
30%

63%

40%

0%

6%

>60 years

72%

65%

58%

2001-02

2005-06

2007-08

<0.09 mpa

0.09-0.2 mpa

>0.2 mpa

Source: NCAER 2005

Growing disposable income and lifestyle changes such as shift in dietary habits towards higher
fat has resulted in increasing incidences of chronic disorders. This in turn is likely to fuel the
demand for nutraceutical products.

34

Nutraceuticals Critical supplement for building a healthy India

Affordability: Reduced affordability of sickness related expenditure is driving consumers


towards wellness

Out-of-pocket expenditure constitutes 64 % of


healthcare expenditure in India as compared
to 18% globally
Composition of healthcare expenditure

Average cost of inpatient treatment


12000

64

60
50
40

44

8000

34

30

24

10

6
Government
exp. on
healthcare

Global

6900

6000

Out-of pocket
exp. on
healthcare

2000

Other

Private and
social
insurance

4800

3900

4000

18

20

10800

10000

INR

Percentage of expenditure

70

Average cost of in-patient treatment both


in rural and urban India has doubled in the
last decade

Rural

2004-05

1995-96

India

Urban

Source: WHO statistical information system 2008

These factors are driving consumer towards health and wellness related services in order to lead healthier lifestyle and
prevent spiralling sick care costs.
Share of consumers wallet on healthcare expenditure
is expected to go on increasing
100

42

34
5

5
9.5

12

14

56
60

5.5
5

40

14
20
0

12

12

10.5

25.5
22

19

12
3
4
1995

5
7

6
9

13

2005

2015

2025

Health care

Education & recreation

Communication & transportation

Personal and household products

Housing & utilities

Apparel

Food, beverages & tobacco

Growth in slimming centers, gyms and


spas market (2005-2008)

INR billion

Share of wallet

80

25

5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0

CAGR
33%

FY2005

4.5

CAGR
23%

4.6

CAGR
31%
2.5

2.5
1.9
1.1

Slimming
centers

Gyms

Spas

FY2008

Source: Ernst & Young FICCI Wellness Report, 2009

Source: Marketing white book 2008


Nutraceuticals Critical supplement for building a healthy India

35

Awareness: While increased physician awareness is driving prescriptions of nutrition


supplements, penetration growth of media and diagnostic centers is helping create awareness

Physician awareness
about health benefits
of nutraceuticals has
fuelled growth in nutrition
related prescriptions at
26 % CAGR in recent years

Growth in nutrition related prescriptions

Numbers millions

400
350
300
250

26%

GR
CA

200
150
100
50
0

FY 2005

Source: Industry sources

45%

410

260

FY 2007

With growing diagnostic


centers, the awareness
about health disorders and
deficiencies is increasing

Media penetration (2007-08)

Number of people reached


(Percentage of population)

450

High media penetration


is improving consumer
awareness

40%

40%

35%
30%

Indian diagnostic market (INR billion)


R
AG
%C
1
.
16

36%

116

25%

25%
20%

64

15%
10%

6%

5%
0%

Mobiles TV (Cable Print


and satellite)

Internet

Source: Industry reports


Note: Population 1 billion

2006

2010E

Source: CRISIL, Cygnus Research,


Ernst & Young Research

Physician and consumer awareness together are driving growth of nutraceuticals.

36

156

Nutraceuticals Critical supplement for building a healthy India

2012E

Accessibility: Emergence of newer distribution channels is fuelling accessibility


to nutraceuticals

Emergence of wellness products and


services related retail outlets is also
driving accessibility of nutraceuticals

Growing organized retail has emerged as a


new channel for distribution of nutraceuticals

Expected growth in wellness related retail stores (2007-2009)

1,400

29%
CAGR
1,163

Number of stores

1,200

30000

58%
CAGR

25000
36%
CAGR

1,000

1,000
800

737

700

600

400

400

400

200
0

86%
CAGR
45

Apollo
Med Plus
Pharmacy

Existing 2007

Growth of retail shopping mall space (2001-2012)

156

276%
CAGR
6

85

Medicine
Fortis
Reliance
Shoppe Healthworld Wellness

32%
CAGR
20 35
GNC

'000 sq. mtrs.

%
19

20000
15000
10000

%
75

(8

R)
AG
C
ar
ye

(4

R)
AG
C
ar
ye

24,300

12,755

5000
0

259
2001

2008

2012

Planned 2009

Source: Company websites; Ernst & Young analysis

Source: ICRIER, India Retail Report

Nutraceuticals Critical supplement for building a healthy India

37

The Indian nutraceuticals market is dominated primarily by pharmaceuticals


and FMCG companies with very few pure play nutraceutical companies

FMCG dominated segments with player


such as Dabur, Nestle, Amul, Pepsico
and pure-play nutraceuticals players
such as Amway
Sports
drinks

Grocer

Distribution channels

Direct selling

Pharmaceutical and FMCG players active in the nutraceuticals space have diversified by
introducing product extensions and developing variants under existing brand names.

Nutrition
fortied foods

Energy
drinks

Pharmaceutical dominated
segments with player such as
GSKCH, Emami, Ranbaxy, Elder

Fortied
juices

Probiotic
foods

Chemist

Glucose drinks
Macronutrients

15 players
Consolidated

Extracts, tonics
and stimulants

Mineral
supplements
Vitamin
supplements
Antioxidants

610 players
Extent of fragmentation

11+ players
Fragmented

Source: Ernst and Young analysis


Note: Extent of fragmentation has been derived based on the number of companies commanding greater than 80 percent market share

Largely, the market is fragmented. However, the FMCG dominated segments are relatively
less fragmented as compared to the pharmaceuticals dominated segments.

38

Nutraceuticals Critical supplement for building a healthy India

Many new players have announced aggressive investment plans

Player

Expansion plan

Alkem Laboratories

Alkem Laboratories has invested over INR1 billion to create exclusive manufacturing facilities for their health
foods business.
Alkem Health Foods is expected to generate a turnover of over INR3-5 billion annually within a few years.

Plethico

The company recently acquired a USD100 million nutraceutical company named Natrol Inc in the US and is
planning to launch its 700 odd products in India and other global markets.
Plethico, is also setting up a INR1 billion plant in Dubai to make medicated lozenges, is targeting a turnover of
over INR30 billion within five years.

Divi's Laboratories

Divi's Laboratories has set up a INR350 million nutraceutical plant and a separate arm, Divi's Nutraceuticals.
The company has already developed potential vitamin products such as Astaxanthin, Betacarotene,
Canthaxanthin and Lycopene.

Mission Vivacare

Mission Vivacare is investing over INR800 million in modern manufacturing facilities to launch its products
globally under the brandname - Mission VivaPrime. Its prime targets are the US and Europe.

GNC

Plans are on to open 150 stores by 2009, has an exclusive master franchisee tie-up with Guardian pharmacy
which is investing approximately INR1 billion
Operates approximately 4900 stores worldwide

Vitabiotics

Plans of investing INR1.2 billion in a manufacturing unit to roll out its entire range of products in India

Robert Schwartz

Plans of increasing footprint through Manipal Cure and Care as well as 50 additional health and wellness
centers by 2011

Source: "Drugmakers cash in on health supplement segment", 22 August 2008 Business Standard, Primary interviews

Nutraceuticals Critical supplement for building a healthy India

39

Even though the current nutraceuticals market is pegged at INR44 billion, there
exists a large latent potential market
Nearly 70% of the undernourished population (280 million) has inadequate purchasing power
to consume a calorie sufficient diet and hence is not a latent potential market. However, out of
the remaining 750 million population, nearly 148 million people can be potential customers for
nutraceuticals based on their affordability.
It is observed that the top 3 MPCE1 groups in urban areas and the topmost MPCE1 class in rural areas
(collectively referred to as "segments with affordability" from hereon) spend a significant amount
(25 per cent more than average) on processed foods & beverages and would, therefore, have greater
affordability to buy nutraceuticals.
Per capita monthly average expenditure on processed
foods and beverages (INR)
Spend above urban average

Percent population by MPCE classes (100%=1.03 billion)

MPCE classes

271
126
91

>2540

2%

1880 2540

2%

1380 1880

3%

930-1380

59

6%

580-930
335-580
Below food poverty line

0 335
Rural - >1155

93
24

Four segments with


affordability
make 14%
of population or
148 million people

7%
4%
0.4%
7%

Rest of rural

69%

Urban average

74
31

Rural average

Source: NSSO 2006-07, Report of the National Commission on Macroeconomics and Health 2005

Note:
1. MPCE (Monthly per capita expenditure) As per NSSO definition, for a household, this is the total consumer expenditure over all items divided by its size and expressed on a
per month basis. A persons MPCE is understood as that of the household to which he or she belongs.
2. People below food poverty line have been considered to be those with monthly per capita expenditure on food less than the minimum expenditure required to consume a diet
sufficient in calories and nutrients as defined in the report of the National Commission on Macroeconomics and Health, 2005

40

Nutraceuticals Critical supplement for building a healthy India

This latent potential market is estimated to be atleast two to four times the
current market size (between INR89 billion and INR172 billion)

Hierarchy of nutritional needs

Potential
market
range

Most likely consumer proles considered for market sizing*

People going to the gymnasium and engaged in moderate to heavy


work-out routines, who have an enhanced need for nutrient intake
which can be met through dietary supplements like whey proteins
Enhancement
needs
For enhanced
functioning
People belonging to segments with affordability and likely to have the
following conditions:
Adults (>20 years) likely to face vitamin deciency disorders due to
signicantly lower than recommended fruit & vegetable consumption
Pregnant and lactating women with an increased requirement for
Condition
nutrient intake like proteins, iron
specic needs
Other women in the age group of 15-49 years suffering from any

For addressing specic conditions


form of anemia
Children aged between 4 to 17 years and consuming proteins
needed for growth at less than RDA levels

Foundation needs
For maintaining normalcy of being

People belonging to segments with affordability who consume


sufcient or excess calories (at least 90% calorie intake of
recommended norm) and need products to maintain and
promote a normal, healthy life

Total

Current
market

INR
1.2- 1.5
billion

INR
0.8
billion

INR
49.7
99.5
billion

INR
9.8
billion

INR
38.0 71.4
billion

INR
33.3
billion

INR
88.9 172.4
billion

INR
43.9
billion

Source: NSSO 2004-05, NSSO 2006-07. NNMB 2007, Ernst & Young-FICCI Wellness report, 2009, Primary interviews, Industry sources, Ernst & Young analysis

Key assumptions*
Segments with affordability (as defined earlier) form the consideration set for this analysis
The following three scenarios have been considered for analysis:
Scenario 1: Segments with affordability in urban areas spend 25% of their processed foods and edible oil expenditure on products
that cater to foundation needs. This is in line with their current spending levels on foundation product segments. In this scenario,
there is no spend assumed on foundation products by the segment with affordability in rural areas. In case of condition specific
needs, 50% of the current nutrient intake gap is met through nutraceutical products, while for enhancement needs 75% of the
enhanced nutrient requirement is met through nutraceuticals.
Scenario 2: Segments with affordability in urban areas spend 40% of processed foods and edible oil expenditure on products to
cater to foundation needs. In this scenario too, there is no spend assumed on foundation products by the segment with affordability
in rural areas. In case of condition specific needs, 75% of the current nutrient intake gap is met through nutraceutical products,
while for enhancement needs 90% of the enhanced nutrient requirement is met through nutraceuticals.
Scenario 3: In addition to segments with affordability in urban areas spending 40%, those in rural areas spend 10% of their
processed foods and edible oil expenditure on products that cater to foundation needs. In case of condition specific needs, 100% of
the current nutrient intake gap is met through nutraceutical products, while for enhancement needs 100% of the enhanced nutrient
requirement is met through nutraceuticals.
*Refer Annexure 1 for details
Nutraceuticals Critical supplement for building a healthy India

41

However, there are critical impediments to convert this latent opportunity into
a market

4
Critical impediments to growth

Lack of credibility
of nutraceuticals
High prices of
nutraceuticals

2
Inadequate resources
for implementation
of regulations

1
Regulatory framework
not yet implemented

42

Nutraceuticals Critical supplement for building a healthy India

Regulatory framework to govern the nutraceuticals market in India has not been implemented
as yet

The Food Safety and Standards Act of 2006, passed by the Indian Parliament, brought into existence
the Food Safety and Standards Authority of India (FSS or FSSA), which is the responsible body for
framing rules and regulations to govern the nutraceuticals market.
However, rules are yet to be framed and this scenario lends an environment that is not conducive for
the growth of nutraceuticals.
Genesis and current state of FSSA
2005-2006

Pre 2005

Multitude of laws and


ministries governing food and
food processing such as:
T
he Prevention of Food
Adulteration Act, 1954
The Fruit Products Order,
1955

A
need felt for integrating all
existing laws under one
G
roup of Ministers (GOM) appointed
by Government of India to propose
the Integrated Food Law

The Meat Products Order,


1973

F
ood Safety and Standards Bill
2005 introduced in parliament
and referred to the Standing
Committee on Agriculture

The Vegetable Oil Products


(Control) Order, 1947

R
ecommendations made by
standing committee incorporated

The Edible Oils


Packaging Order

F
SS Bill passed by parliament
and signed by President
on 23 August 2006

Varied standards under


these laws regarding
manufacturing, processing,
packaging etc. of foods.

Post 2006

While the act was passed in 2006, its


implementation has not been enforced even
three years down the line since rules have not
been framed. Further, while there are panels
that have been formed to take forward different
aspects of the Act but too little has been
achieved by such panels in this time period
A
s a result,
There is very limited check on the
safety, efficacy and quality of the
nutraceutical products. resulting in
increased risk to health of consumers
The claims made by many products are
un-validated and left to discretion of safety
officers, leading to increased chances
of corruption
This is also resulting in many court
cases that are under disputed
This is also acting as a deterrent
for large foreign players planning
to enter the Indian market

Source: Primary interviews and Ernst & Young analysis

Nutraceuticals Critical supplement for building a healthy India

43

Even if regulations are established, resources available to enforce them are insufficient

There is a lack of resources in terms of Food safety officers and Central food laboratories to monitor
compliance to regulations.
Monitoring reach
Food processing
units

Current strength estimates


0.18 million food
processing units
2,000 food safety officers

Retail outlets

7 million retail outlets

Sample testing in lab 250 food testing laboratories

Extent of inadequacy

Underlying assumptions

Understaffing is such that


each food processing unit
can be monitored only once
in 2 years which is much
below international norms

E
ach food safety officer can
handle 4 inspections per
month of required quality

Each retail outlet can be


monitored once in only 12 years.

E
ach food safety officer
can handle 25 retail outlet
inspections per month

E
ach lab can handle 25
Each sample from retail outlets
samples per day
and food processing units can only
be monitored once in 4 years.

Source: Primary interviews and Ernst & Young analysis

Case study (Attempted optimization of


existing staff from Maharashtra FDA, 1995)
The Maharashtra Foods and Drugs department was
understaffed. There were 200 food inspectors and 140 drug
inspectors and both fell short of required numbers for the
state. Coverage was inadequate due to not just understaffing
but also because there were separate cadres of drug officers
and food officers with limited resource sharing.

Authorities are aware of the severe


shortages in the number of food safety
officers and there have been attempts to
increase the strength, but despite efforts
the number of such resources continues to
be inadequate.

In Maharashtra FDA, a drug inspector requires a basic


qualification of B.Pharm whereas a food inspector requires
any B.Sc qualification. This means that if trained on the job,
all drug inspectors could technically learn and perform the
duties of food inspectors too.
With the number of establishments under foods category
increasing, there was an effort by the department in the year
1995-96 to create a unified cadre of such Food and Drugs
Control Officer having degree in B. Pharm thereby increasing
the number of food inspectors to 340 (70 percent increase) .
However, there was resistance faced from many food and
drug Inspectors on account of organization level mapping.
As a result of this, no consensus could be evolved and the
proposal was dropped.
Source: Primary interviews

44

Nutraceuticals Critical supplement for building a healthy India

Prices of nutraceutical products are high, severely limiting growth in demand

Prices of nutraceutical products in the Indian market are prohibitively high when compared to the
conventional foods. In a highly price sensitive market such as India, this is a severe limitation on the
growth in demand for nutraceuticals.

Product

Quantity

Percentage increase in price


for functional food functional
beverages/dietary supplement

Price of
conventional food/
pharmaceutical

Conventional and functional foods


Salt

1 kg

INR11

73% for low sodium variant

Atta

1 kg

INR18

139% for nutrient fortified mix for atta

330 ml

INR20

350% for energy drink

10 tablets

INR15

233% for vitamins in the form


of dietary supplements

Conventional and functional beverages


Chilled beverages
Pharmaceuticals and dietary supplements
Multivitamin tablets

Source: Ernst & Young analysis


Note: Prices based on various brands available in the market

Nutraceuticals Critical supplement for building a healthy India

45

There is a lack of credibility of nutraceuticals in the minds of consumers

A survey of consumers in 13 Asia Pacific countries including India, showed that for most
nutraceuticals more than 30% of the respondents felt that they do not offer any additional
health benefits

Percentage of respondents who believe these products do not offer any additional health benets

Percentage of respondents

42%
32%

31%
24%

Cholesterol
reducing oils

Whole grain, high


ber products

Fruit juices with


added supplements/
vitamins

Iodine enhanced
salt

Source: AC Nielsen Survey

This lack of belief in the benefits of nutraceuticals is further aggravated by the unsubstantiated
claims made by certain products.
This loss in credibility of nutraceuticals in the minds of consumers is the key limiting factor in
the growth of the market.

46

Nutraceuticals Critical supplement for building a healthy India

Some of the key ingredients with health claims used by Indian nutraceutical players
Over and above the micro and macro nutrient ingredients available in the market, there are host of
ingredients used by nutraceuticals companies with diverse set of heath claims providing structure
function benefits such as carotenoids, dietary fiber, fatty acids, flavonoids, isothiocyanates, phenolic
acids, plant stanols/sterols and polyols. Below mentioned are few examples of ingredients used by
Indian nutraceuticals players.

Ingredient

Used by industry categories

Health claim as per industry sources

Omega 3 and Omega 6

Functional foods
(Nutrition Fortified foods):
e.g. omega fortified malted beverages

Omega 3 and omega 6 benefit people suffering from


inflammatory and autoimmune diseases, while also
reducing cholesterol, and hence, various heart risks.

Lactobacillus and bifidobacterium

Functional foods (Probiotic foods):


e.g. probiotic yogurt

Lactobacillus and bifidobacterium improve


intestinal microflora and aid better digestive
abilities. They help in prevent diarrhea, other
gastrointestinal infections, irritable bowel syndrome,
and other inflammatory bowel disease

Beta glucan

Functional foods:
e.g. oat enriched foods

Beta glucan is a soluble fibre that soaks up the


cholesterol in our digestive system and help Reduce
the amounts of "bad" (LDL) cholesterol in the body

Phytoestrogens

Functional Beverages:
e.g. soya milk drinks

Reduces the risk of many kinds of cancers,


cholesterol and risk of coronary heart
disease, chances of osteoporosis.

Tocopherols

Functional foods:
e.g. rice barn fortified oil

Known for their cholesterol lowering ability. Prevent or


delay heart disease and related complications, cataracts
and macular degeneration, prostate and other cancers.
Retard the aging process and boost immune
function and promote healing of burns,
eczema, and other skin problems.

Ginseng

Dietary supplements:
e.g. Tonics and stimulants

Believed to cure lethargy, arthritis, impotence,


senility also effective anti-aging properties

Beta-carotene

Dietary supplements:
e.g. Beta-carotene in antioxidants

Helps prevent night blindness and other eye problems,


skin disorders, enhance immunity, protects against
toxins and cancer formations, colds, flu, and infections.
Beta-carotene is also a powerful antioxidant and
helps guard against cancer and heart disease.

Source: Frost & Sullivan, Websites of Tata Tea, Pepsico, Godrej, Saffola

Nutraceuticals Critical supplement for building a healthy India

47

Section

Way forward

48

Nutraceuticals Critical supplement for building a healthy India

III

Summary
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

Nutraceuticals Critical supplement for building a healthy India

49

Impediments

Way forward

I. Agenda for government

Regulatory
framework not
yet implemented

Inadequate
resources for
implementation
of regulations

Lay down rules to govern quality and claims of nutraceutical products

A. Revise RDA levels to make them applicable for the Indian population's current lifestyle
B. Develop rules which specify proven nutrients, permitted health claims, product approval process,
standards and Good Manufacturing Practice

Take measures to ensure availability of adequate resources for implementation of


laid out rules

A. Recruit and train a well-staffed cadre of food safety officers


B. Scale up food control infrastructure by outsourcing testing of food samples to private laboratories

Encourage R&D in the field of nutrition and deploy PPP models to serve needs of the
undernourished segment of population

A. Establish a dedicated fund focused on nutraceuticals research and support nutraceutical players by
providing them with research infrastructure
B. Deploy PPP models to cater to the needs of the undernourished section of the population
Lack of credibility
of nutraceuticals

II. Agenda for private sector


1

Product development: Understand consumer needs and invest in research to come


up with products to meet those needs

Product differentiation: Build credibility and lower prices of products


A. Adhere to all rules laid down by the government and obtain external institutional approval to build
credibility of products
B. Reduce prices to target a larger customer base

High prices of
nutraceuticals

50

Product promotion: Increase awareness of the benefits of nutraceuticals through


mass marketing, advertising and education of physicians

Nutraceuticals Critical supplement for building a healthy India

Agenda for Government

Lay down rules to govern quality and claims of nutraceutical products

In India, while the Food Safety and Standards Authority, created as per the Food Safety and Standards Act 2006 (FSSA), has plans to lay
down rules by end of 2009 based on panel recommendations, it will be enforced state by state over an extended period of time. Here, it is
of critical importance that not only are the rules made exhaustive to govern quality and claims but their implementation is also expedited.

What needs to be done?

Revise RDA levels to make them applicable for Indian population's current lifestyle

Develop rules which specify proven nutrients, permitted health claims, product
approval process, and Good Manufacturing Practice

Recognize list of nutritional ingredients with proven health benefits

ii

Define the list of permitted health claims and specify quantity of ingredients required to make those claims

iii

Setup a process for introduction of new nutraceutical products and define the nature and range of evidence required
to substantiate product claims

Case study of Japan:


After the introduction of FOSHU regulation in Japan, in the year 1991, the number of FOSHU approved products increased from
2 in 1993 to 192 in 2000 (CAGR of 90%). The sales of FOSHU approved products, however, increased slowly till 1996 and picked
up pace from year 1997 onwards ( CAGR of 82% till year 2000) thus indicating that with effective implementation of regulation,
market growth is not hindered in the long run but infact it grows in a compliant manner.

15

400
9.8

300
6.2

200
100
0

2
1993

69
1995

No. of FOSHU approved products

80

5
50

1997

153 150

15
300

192

10
5

100 50
1998

1999

2000

Sales of all FOSHU approved products (USD 10 million)

Sales per product (USD million)

Source: Japan health food and nutrition association

Nutraceuticals Critical supplement for building a healthy India

51

1.A. Revise RDA levels to make them applicable for Indian population's current lifestyle
India is currently using the RDA (Recommended Dietary Allowance) system with norms last defined 20 years ago (year 1989) by
ICMR (Indian council of Medical Research). These norms are outdated and do not reflect the lifestyle changes as well as the considerable
nutritional research accumulated in this period. The need for urgently revising these norms has also been identified in the 10th Five Year
Plan acknowledging that the existing RDA norms are overstating nutrition needs and should undergo revision. At the same time, countries
such as the US, Canada, Australia and New Zealand have replaced the RDA system with more advanced systems (Dietary Reference Intakes
in the US and Canada, Nutrient Reference Values in Australia and New Zealand). These advanced systems have noteworthy merits for India
to learn from but the time taken to adopt them would also be significant, and is a longer term measure that is needed.

What needs to be done?

2
1

Introduce a more appropriate system to plan diets for


population groups and individuals based on concepts such as
Dietary Reference Intake (DRI)*

Revise RDA levels to factor in


effects of changed lifestyles and
new research in the field of nutrition
Revision of RDA levels should be
taken up as an immediate activity:
As per the 10th Five Year Plan, the
reference (male and female) weights used
to calculate RDA in 1989 for Indians were
not accurate. They were higher than the
average weight of Indian men and women

Need

Also, since then the trends of physical


activity and dietary habits of Indians
has changed considerably

Energy requirements for average Indian male


is nearly 13% lower across activity categories
compared recommended levels as per RDA of 1989
Energy requirements of average Indian male

13%
2425 2115

Sedentary

13%
2875 2492

Moderate

Comparison of RDA and DRI levels in USA for


some nutrients shows considerable changes in
recommended levels of nutrients between 1989
and 1997
Vitamin A levels for women
19 to 50 years

13%
3800

There are advanced concepts such as the Dietary


Reference Intake (DRI) framework which are used in some
developed countries. DRI provides the nutrient norms that
helps prevent the development of risk factors for chronic
diseases related to inadequate intake for that nutrient.
DRI norm is an umbrella which includes RDA level,
Tolerable Upper Intake level, Adequate intake
level and Estimated Average Requirement level.
Each one of these levels have specific application
when it comes to establishing the recommended
intake at an individual or group level.

Considerable nutritional research


has also accumulated in the last 20
years which would change some base
assumptions of calculating RDA

Case

RDA is an "average level" of nutrient intake which


prevents the development of deficiency disorder.
They are meant to assess and plan dietary adequacy
of population groups. But they end up being used to
plan diets of individuals which can be misleading.

12.5%

Folate levels for women


19 to 50 years
122%

3000

1000

3293

Heavy

800

700

1989 RDA

1997 DRI

180
1989 RDA

400

1997 DRI

Activity category
Recommended as per 1989 RDA

Recommended Dietary Allowance (RDA)

Requirements as per average Indian male weight

Tolerable Upper Intake Level (UL)

Source: 10 Five Year Plan, planning commission


th

Source: US Department of Agriculture, food and nutrition information center

*Refer Annexure 2 for details

52

Nutraceuticals Critical supplement for building a healthy India


Develop rules which specify proven nutrients, permitted health claims, product approval
1.B.
process, standards and Good Manufacturing Practice
Rules with regards to proven nutrients, permitted health claims, product approvals, standards and GMP need to be defined exhaustively.

What needs to be done?

Recognize list of nutritional ingredients with proven health benefits

ii

Define the list of permitted health claims and specify quantity of ingredients required to make those claims

iii

Setup a process for introduction of new nutraceutical products and define the nature and range of evidence required
to substantiate product claims

Scientific panels have been set-up within the FSSA for defining rules to govern nutraceuticals market &
label claims. Apart from Codex guidelines some of the practices that can be referred to while framing
these rules are illustrated in the table below:

Summary of international practices


USA

Japan

Canada

India

Foods for Special Health


Use (FOSHU) Act; Foods
with Nutrient Function
Claims (FNFC) Act

Natural Health
Products Regulation

Food Safety & Standards Act

To be decided
Rules of the act not laid down
yet, hence no list currently
available

Regulation governing nutraceuticals


What are the regulations
governing nutraceuticals
across countries?

Dietary Supplement
Health and Education
Act (DSHEA)

Key clauses for maintaining quality standards


Is a defined list of proven
nutraceutical ingredients and
their functions available?
Can a new product having
ingredients which are already
marketed be launched
without approval/license?
Can a new product having
a "new dietary ingredient"
not previously marketed
be launched without
approval/license?

(Each new product needs


FOSHU approval)

(Each new product


needs approval and
product license)

(Pre-marketing
notification along with
evidence of safety has
to be submitted)

(Each new product needs


FOSHU approval)

(Each new product


needs approval and
product license)

To be decided
Regulations which specify the
approval process have not been
framed yet
To be decided
Regulations which specify the
approval process have not been
framed yet

To be decided
Rules specifying GMP/standards
would be part of the rules of the
act when they are laid down

Is Good Manufacturing
Practices (GMP) in place
for manufacturing of
nutraceuticals?
Management of claims on label
Is a claim specifying
the beneficial effect on
structure or function of
the body permitted?

Is a risk reduction
claim pertaining to
any specific disease or
condition permitted?

(Permitted without
validation but with
a disclaimer)

(Only for a pre-defined


list of nutrients with
proven results)

(The claim and the


supporting evidence is
tested and validated in
the approval process)

(The claim and the


supporting evidence is
tested and validated in
the approval process)

(The claim and the


supporting evidence is
tested and validated in
the approval process)

(The claim and the


supporting evidence is
tested and validated in
the approval process)

To be decided
The act only specifies that
claims should not be false or
misleading. Rules to govern
claims are yet to be laid down.
To be decided
The act only specifies that
claims should not be false or
misleading. Rules to govern
claims are yet to be laid down.

Enforcement and monitoring of regulations


Is monitoring done
through inspections
and random sampling of
products in market?
Is a record of adverse events
required to be maintained?

(Exception based
monitoring through
sample testing)

(Mandatory. Alerts
issued to consumers
based on no. of adverse
events reported)

(Exception based
monitoring through
sample testing)

(Mandatory. Alerts
issued to consumers
based on no. of adverse
events reported)

To be decided Act has not been


implemented yet.

To be decided
Rules yet to be laid down in the
act with regards to manufacturer
maintaining a record of all
adverse events

Source: US Food & Drug Administration website; "Health Claim Evidence Requirements in Japan,(Yamada et al); Health Canada Natural Health Products Directorate
website; Food Safety and Standards Act of India, 2006

54

Nutraceuticals Critical supplement for building a healthy India

Recognize list of nutritional ingredients with proven health benefits

What needs to be done?


B
ased on overall health and nutrition status of the country, key risk factors to health need to be identified.
N
utrients or functional ingredients which have science based evidence of reducing these risks should be identified and
included in the list of recognized ingredients for nutraceuticals.
T
his list can be expanded as products with new ingredients get approval after scientific evaluation.

Approved functional ingredients differ by country


Functional food category

Approved functional ingredients*


Japan

Foods for gastrointestinal health


(Oligosaccharides, Lactobacillus,
Bifidobacterium, Psyllium husk, indigestible
dextrin, wheat bran, low molecular sodium,
alginate, partially hydrolyzed guar gum)

Brazil
(Dietary fiber, lactulose, fructooligosaccharides, inulin)

Foods for those with high blood pressure


(GABA, peptides)
Foods for those with high blood glucose
(Indigestible dextrin, L-arabinose,
wheat albumin)
Foods for dental health
(Xylitol polyols, tea polyphenols, CPP-ACP)
Foods for bone health
(Soy Isoflavone)
Foods for those prone to anemia
(Heme iron)
Foods for people with high cholesterol/
triglyceride levels and body fat

(Soy protein, chitosan, low


molecular sodium alginate, peptides,
diacylclycerol, plant sterol/ stanol
(esters), green tea catechin, middle
chain fatty acid, degradation products
of globin protein, Psyllium husk)

Foods for people with high cholesterol/


triglyceride levels and body fat

(Beta-glucan, Psyllium, Quitosan, plant


sterols, soy protein, Omega-3)

(Lutein, lycopene)

Source: The World Bank - Agricultural and Rural Development Discussion Paper 30 "Health Enhancing Foods"
*Refer Annexure 3 for details

Nutraceuticals Critical supplement for building a healthy India

55

Define the list of permitted health claims and specify dosages of ingredients required to
make those claims

ii

What needs to be done?

T
he scientific panel on management of claims within the FSSA needs to frame a policy on the nature of claims that would
be acceptable
The level of regulatory control needs to be in line with the nature of claim while a low level of control is sufficient for
nutrition content claims, a high level of control is required for risk reduction claims ( types of claims and their definitions
are provided below)
For nutrition content claims and health claims, rules could specify the ingredient content limits. Further, for health claims a
list of acceptable claims needs to be identified based on scientific evidence

Claims made on the labels of nutraceutical products are generally classified into three types and the level of regulatory
control exercised on each type could vary as shown:
Nutrition claims

1
Types

Definition

Nutrition content claims

Health claims

Nutrition claims state,


suggest or imply that
a food has particular
nutritional properties.
F
oods which claim to be
sources of
Energy
Protein
Carbohydrates

Minerals

Level of
regulatory
control
required
Case (US
FDA claim
regulations*)

S
tructure-function claims
describe
A
nutritional ingredients
effect on a structure or
physiological function in
the human body, or
Its support of
an anatomical,
physiological, or mental
function

Source of calcium

" Maintains healthy gums"

High in fiber and low in fat

" A factor in the


maintenance of good
health"

Low

Risk reduction claims


R
isk reduction claims
describe the relationship
between using a
medicinal ingredient
and reducing the risk
of developing a specific
disease or abnormal
physiological state

N
o pre-approval of FDA
is required
N
o evidence is required to
be submitted
N
utrients and quantities are
required to be mentioned
on label

"Reduces risk of
heart disease"
"Lowers blood cholesterol"

Medium

High

N
o pre-approval is required

C
laim has to be for one of
the ingredients in the preapproved list of proven and
qualified health claims

P
re-launch notification
to FDA is required along
with evidence of claim
A
long with the claim a
disclaimer is required on
label mentioning that the
claim is not FDA approved

Source: Codex guidelines for use of nutritional and health claims; US FDA website
*Refer Annexure 4 for details

56

N
on-specific claims of overall
health are also included

Vitamins

Examples

Structure/function claims

Nutraceuticals Critical supplement for building a healthy India

T
he quantities of nutrients
required for the claim
to be made are also
required to be specified

iii

Setup regulatory process for introduction of new nutraceutical products

What needs to be done?

T
he process for introducing a new nutraceutical whether approval based or notification based should be clearly specified as
part of the rules and regulations of FSSA.
For an approval based system, the authorities responsible for processing the application and granting approval should be
identified and trained for standardization in implementation.
For a notification based system, a channel should be set-up to hear, record and process consumer grievances or adverse
event reports
In the Indian context, opting for an approval based process may lead to a regulatory bottleneck and delays. On the other
hand, a large proportion of the Indian consumers may not have adequate awareness or education levels because of which a
notification based process might lead to compromising consumer safety. Hence a hybrid of the two processes needs to be
conceived and implemented
The nature and range of evidence required to substantiate a particular health claim needs to be defined clearly.

Process for introduction of a new nutraceutical product

Level of
regulatory
control

Approval/license based

Notification based

High

Low

Manufacturer applies for approval to the


recognized authority (local governments, FDA)
The application by manufacturer includes the
evidence to substantiate product claims

Key
features

The responsibility to ensure the safety and


efficacy of the nutraceutical product in the
market lies with the authority granting approval

C
onsumer safety can be ensured and misleading
claims can be barred centrally

Advantages

R
educed effort on monitoring, through sampling
and testing of products from the market

I f there is a health claim associated with the


product, then the notification includes evidence
to substantiate claims
T
he responsibility to ensure safety and efficacy
of the nutraceutical product lies with the
manufacturer
R
educed burden on the FDA with lesser
resources needed to control the market (labs
& inspectors)
L
esser time to market for new products

R
educed reliance on consumer reporting of
adverse events

R
educed scope for corruption which might be
prevalent in strictly controlled environment
where licenses are granted

Japan*:

USA:

A
ll new products have to get approval to be sold
as a FOSHU product

P
roducts with ingredients which have already
been marketed do not need approval. A
notification has to be given with evidence to
support health claims

T
he application for a product is required to
include documentation regarding:

Cases

F
or a new product with ingredients which are
already marketed, no approval is required.
Manufacturer notifies the FDA prior to launch.

I ts effectiveness based on scientific evidence


including clinical studies
I ts safety based on historical consumption
pattern
A
nalytical method for determination of the
functional component
S
amples of the product are also tested in a
public food laboratory before approval is granted

F
or new ingredients, the pre-marketing
notification has to be 75 days prior to launch
in which period the FDA can analyze evidence
and raise concerns with the manufacturer
T
he manufacturer is required to maintain
a record of all adverse events reported by
consumers. Monitoring Monitoring is done
based on exceptions

Source: Health Claim Evidence Requirements in Japan,(Yamada et al); US FDA website


*Refer Annexure 5 for details

58

Nutraceuticals Critical supplement for building a healthy India

2.

Take measures to ensure availability of adequate resources for implementation and


enforcement of regulations
Current challenges

What needs to be done?

Formalize mechanism to capture data on exact numbers


Sharing of data on infrastructure and its electronic storage is critical to
manage and track the inspection of all food processing units, retail outlets,
stockists by food safety officers. Coordination and implementation across
key stakeholders across public bodies such as local governments and state
level FDAs is required and periodic status reports need to be made possible

Insufficient strength of Food


Safety Officers (FSO) to inspect
and evaluate food processing
units, stockists and retailers

Evaluate gaps in number of food safety officers and recruit to fill those gaps
State Food and Drug Administrations need to assess gap in required
and available food safety officers and recruit to scale up and meet the
required number

Authorize an external agency to evaluate and grant approval to products


An external agency could be appointed to evaluate nutraceutical products
for safety and efficacy based on the standards and GMP framed as a part of
regulations

Inspection of nutraceutical products


would require more specialized
knowledge and processes

Approvals by this agency would be in the form of a mark on the product which
would help build credibility for tested and proven products

Train Food Safety Officers to improve quality of inspection of facilities


Food safety officers should be trained in a phase-wise manner to inspect
facilities for manufacture, packaging, distribution and sale of nutraceuticals

Develop a network of central food testing laboratories

Insufficient facilities for testing and


analysis of food samples
Approximately 250 laboratories
The quality of equipment and
analysis of these laboratories needs
to be appropriately upgraded

Infrastructure needs be scaled up to have at least one central laboratory in


each state as role model
All central laboratories need to to follow Good Laboratory Practices or get
accreditation
Appoint private laboratories and outsource testing of food samples
Evaluate competence of private laboratories
Authorize competent laboratories to conduct tests on food samples for FDA

Source: Primary interviews; Ministry of Food Processing industries website; Industry sources

Nutraceuticals Critical supplement for building a healthy India

59

3.

Encourage R&D in nutritional food sector and deploy PPP models to serve needs of the
undernourished segment of population
Current challenges

What needs to be done?

Establish a dedicated fund for nutraceuticals research


Encourage research in the field of nutraceuticals by funding relevant research
and development in nutraceuticals
Provide R&D infrastructure support to nutraceutical players for conducting
research

Lack of investment and focus on


research & development in the

Allow use of public research facilities and food laboratories to nutraceutical


companies to give an impetus to R&D
Collaboration between industry and academia
Encourage collaborations between education and research institutions and the
industry so that there is a vigorous exchange of ideas.
Set up a central nutraceutical technology and research center. This center can
be a forum where eminent people from R&D institutions, medical institutions,
nutraceutical manufacturers, regulators, researchers can interact and exchange
ideas to fuel growth of the industry
Public-private partnerships

Imbalance of nutritional
ingredients in the food provided
to the undernourished through
government schemes

Deploy PPP models in the government schemes to supply food to the


undernourished segment of the population
The private partner could provide fortification of the food so that required
nutrients are delivered. They can also provide surveillance and logistics
management services to ensure the responsible supply of unadulterated
micronutrients.

It is a part of the government agenda to meet nutritional deficiencies in the undernourished segment
of the Indian population
Major goals of "National Nutrition Plan" to be met by 2012
R
educe the prevalence of underweight condition in children under five years to 20%
Eradicate the prevalence of severe under-nutrition in children under five years
R
educe prevalence of anaemia in high risk groups (infants, pre-school children, adolescent girls, pregnant and lactating
women) to 25 %
Eliminate vitamin A deficiency in children under five years as a public health problem and reduce sub-clinical deficiency of
vitamin A in children by 50 %
Reduce prevalence of Iodine deficiency disorders to less than 5 %
Source: 11th Five Year Plan, Working group on integrating nutrition with health

60

Nutraceuticals Critical supplement for building a healthy India

These goals are to be achieved through multiple health and nutrition interventions planned by
the government
Some nutrition interventions undertaken by different sectors of the government
I ntegrated Child Development Scheme (ICDS)
N
utrition Program for Adolescent Girls (NPAG)
I ron and Folic Acid supplementation of pregnant women
V
itamin A supplementation of children of 9 to 36 months age group
N
ational Iodine Deficiency Disorders Control Programme
M
id day meal for primary school children
Source: 11th Five Year Plan, Working group on integrating nutrition with health

However there are gaps in the implementation of these existing nutrition interventions which can
be filled by ensuring participation of the private sector through Public Private Partnerships
Some Issues

Inadequate intake of micronutrients by the beneficiaries


of government schemes

Inadequate supplies
reaching the point where
food is dispensed

Role of private sector

Partner with the government in supplementation and fortification of the food dispensed
through government initiatives

Provide surveillance and logistics management services to ensure the responsible supply of
unadulterated micronutrients

Source: India Micronutrient National Investment Plan 2007-2011 , Micronutrient India ; Network for Social Accountability website ; Ernst & Young analysis

Case study 1 PPP to provide supplementary nutrition


Britannia "Tiger" biscuits, fortified with iron were distributed to school children as a part of the Mid Day Meal program in 2007
The biscuits were given in addition to the rice based meals. This provided the children with 10% of the daily RDA of iron.
The Naandi foundation which partnered with Britannia in this particular project in Andhra Pradesh hopes to extend this program to
other parts of the country.
Source: Naandi foundation website

Case study 2 PPP to fortify food provided as a part of government schemes


H
einz partnered with ICDS (Integrated Child Development Scheme) and an NGO to provide micronutrients to children in a three month
Public Private Partnership project in 2007.
A
s a part of this initiative, more than 17,000 children between 6 months and 6 years of age were given "sprinkles plus" a
micronutrient powder mixed in their food.
T
he successful implementation of this project demonstrated that anemia can be reduced if such initiatives are implemented at preschool level in the "anganwadis" of the ICDS.
H
einz is working on a scale up project to reach several million at risk children with "sprinkles plus"
Source: Heinz website

Agenda for private sector

Agenda for private players in the nutraceuticals market

Product
development

1
Develop consumer focused products
and product variants for different target segments

Product
differentiation

2
A. Build credibility

B. Lower prices

Ensure publication of efcacy studies and


research results in scientic/medical journals

Improve processes/technology to
reduce cost of production

Obtain approval of reputed


external institutions

Lower pricing of products to target a


larger consumer base

Product
promotion

3
Educate physicians
about published
research on nutrition

Formulate health claims


as per published research
and approvals

Physician awareness

Use general media


to communicate
benets & differentiation

Public awareness

Health

62

Nutraceuticals Critical supplement for building a healthy India

1.

Product development: develop consumer focused products for different target segments
What needs to be done?

Develop consumer focused


products for different
target segments

Understand nutrition needs of different segments of consumers

Enable easier diagnosis


of nutrient deficiency

Considering a large proportion of the population is not aware of their specific


nutritional deficiencies, there is also a potential market for a nutrient deficiency
diagnostic test/kit

Develop relevant nutraceutical products targeted at different consumer segments


with regard to their preferences and taste

Leverage traditional Indian


knowledge in herbs and
botanicals to develop new
nutraceuticals

C
onvert the nutritional properties of herbs and botanicals as per knowledge
derived from traditional Indian sources into products for consumer

Case study 1 Identifying customer needs and positioning products to meet these needs
C
alcium Sandoz switched to the OTC route from the ethical pharmaceutical route in 2000
S
ince then, Novartis has continuously identified needs of different target segments of consumers and positioned variants for
each segment.
Consistent growth in sales (INR million) of the Calcium Sandoz brand
after introduction of multiple variants to cater to specic user needs
320
15%

CAGR

120

2001

Launch of
Calcium Sandoz
Growth specically
for children

2002

2003

Launch of Calcium
Sandoz Woman
for older woman

2004

2005

Launch of Calcium
Sandoz Soft Chew
in various avors
targeted at children
in their semi-teens
2006

2007

2008

Source: Novartis India website; Industry sources

Case study 2 Collaboration with the government to innovate nutraceuticals from traditional
medicine knowledge
Avesthagen and Indian Council of Medical Research (ICMR)
A
memorandum of understanding was signed between Avesthagen Limited, a knowledge based Lifesciences Company and
the Indian Council of Medical Research (ICMR) for the formulation, coordination and promotion of biomedical research for
three years.
A
s per the agreement both the parties will be exploring possibilities to innovate nutraceutical development from traditional
and folk medicine by knowledge sharing. The agreement will open new avenues for research on traditional Indian medicinal
plants and their nutritional properties.
Source: Express Pharma, 115 September 2008

2.

Product differentiation: build credibility and lower prices of products

In the absence of intellectual property protection, product differentiation in case of nutraceutical products can be achieved either through
building credibility of the brand/company or through prices lower than existing players in the market

Way forward

Adhere to all rules and regulations laid down to govern manufacture, distribution
and sale of nutraceutical products
F
ollow standards, GMP, claim regulations and approval process for nutraceutical
products

Build credibility of the


brand/company

Get results of efficacy studies published in medical journals as proof of


efficacy and safety of the product
Obtain approval of reputed and trustworthy external institutions for the
product and its claim

Lower prices of
nutraceutical products

Lower prices of nutraceutical products to target a larger consumer base instead of


a niche segment
Focus on cost reduction in manufacturing to help improve affordability of products

Case study 1 Reputed external institution in USA granting approvals to nutraceutical products
The USP (US Pharmacopeia) Dietary Supplement Verification Program in USA is a voluntary testing and auditing program.
T
his program validates the quality, purity, and potency of dietary supplement finished products through:
Comprehensive laboratory testing against standards
A thorough manufacturing and quality control document review
An on-site manufacturing facility audit
Random off-the-shelf testing
U
SP's expertise in setting standards of quality for medications for 200 years helps in lending credibility to products which carry
its approval
Source: US Pharmacopeia Dietary Supplement Verification Program website

Case study 2 Efficacy studies for a product published and external institutional approval taken
A
chilled fruit juice product "Sirco" from Provexis launched in the UK contains the patented Fruitflow bioactive food ingredient that
reduces blood platelet aggregation, a significant contributing factor to thrombosis, which can cause heart attack or stroke.
I n May 2006, Provexis, announced a scientific endorsement for Sirco; two scientific papers, which detailed the clinical efficacy of Sirco,
were published by the American Journal of Clinical Nutrition (AJCN), an internationally recognized journal in the nutrition field.
T
his followed the 2005 announcement of a three year collaboration with registered heart health charity, Heart UK, which allowed
Provexis formal approval for its Sirco product, allowing Sirco to wear the Heart UK logo on its packaging.
S
uch endorsements on the packaging of the product from renowned institutions offer credibility to claims that the product is good for
the heart.
Source: "Functional Food and Drink Consumption Trends"-Datamonitor

3.

Product promotion: increase awareness of the benefits of nutraceuticals through mass


marketing, advertising and education of physicians

What needs to be done?

G
et the relevant research published in research and medical journals so that it
reaches the physicians as a part of their CME(Continuous Medical Education)

Increase physician awareness

T
here is a need to educate the consumers about the relation between a healthy
life and a diet rich in nutrition
B
ased on the profile of customers identify various media channels of
communication such as TV, newspapers, magazines, direct selling etc.

Increase public awareness

C
reate the right content for communication which addresses customer needs or
creates awareness to activate latent needs
S
election of the right strategy need not be cost/investment heavy

Case "Revital" is Ranbaxys adult health supplement which transitioned from prescription to OTC
in 2002.

Increase in sales of Ranbaxys Revital


after switching to OTC channels
CAGR

20%

83

40

R
anbaxy used a well thought out television creative
to target the consumer directly through advertizing.
"Revital" was positioned to fit into the users hectic
lifestyle empowering them with energy strength & mental
sharpness, enabling them to enjoy life to the fullest,
hence making them live the brand punch line of Jiyo Jee
Bhar Ke
T
he advertising was spread over three phases:
I n the first phase the commercials sought to
demonstrate the pre-use scenario and post-use
benefits.

2002

2007

Source: Revitalizing the brand, Express Pharma 31 march 2006; Industry sources

T
he second phase showed how a consumer of
"Revital" was able to make the most of his life which
his colleagues and friends are unable to do.
T
he third phase is in the form of testimonials by
regular users of "Revital"

Annexure
Annexure 1: Estimation of potential market
Market size estimation for foundation needs: Target market of people belonging to segments with
affordability and consuming at least sufficient calories but needing products to maintain and promote
a normal, healthy life

Parameter

Assumption

No. of consumers
belonging to segments
with affordability*

P
opulation belonging to top 3
MPCE classes in urban areas
and topmost MPCE class in
rural areas
T
he number of actual
consumers will vary with
each scenario with growing
awareness

Source

NSSO 2006-07

Percentage population
willing to buy
nutraceuticals for their
general well-being

T
he population consuming at
least sufficient food (>90% of
norm of 2700 kcal/day), would
have the propensity to further
buy nutraceuticals to maintain
their general well-being.
T
he proportion of such
population would vary with
MPCE class

Amount willing to
spend on products that
meet foundation needs

A
mount willing to spend on such
products would be in proportion
to spend on food categories like
processed food and beverages
T
his spend would increase with
increasing MPCE and would
vary with each scenario

NSSO 2004-05

NSSO 2006-07, Ernst & Young analysis

Potential market for foundation needs (INR billion)

66

Scenario 1

Scenario 2

Scenario 3

38.0

60.8

71.4

Nutraceuticals Critical supplement for building a healthy India

Market size estimation for condition-specific needs (1/4): Target market of adults (>20 years)
likely to face vitamin and mineral deficiency disorders due to significantly lower than recommended
fruit & vegetable consumption

No. of consumers
belonging to
segments with
affordability

Parameter

Assumption

P
opulation
belonging to top
3 MPCE classes
in urban areas
and topmost
MPCE class in
rural areas

Percentage
adults
consuming
vitamins less
than RDA

Percentage
adults >20
years

T
he overall agewise break-up
of population
for urban and
rural areas was
equated to the
respective MPCE
classes

A
ssuming that
the households
in which fruit
and vegetable
consumption is
less than average
(which is still
lower than ICMR
norms), will be
facing deficiencies
in vitamins
The proportion of
such households
would vary with
each MPCE class

Source

NSSO 2006-07

NSSO 2004-05

Vitamin
intake gap
per adult
per day

Price
per unit
vitamin
gap

T
he gap is arrived
at for the most
extensively
tracked vitamins
T
he extent of this
gap varies with
MPCE classes

R
epresentative
price of the most
commonly used
multivitamin
supplement is
considered

F
urther, the
tendency
to address
this gap with
nutraceuticals
will vary with
each scenario

NSSO 2004-05

NNMB 2007

Ernst & Young


analysis
Note: Prices based
on various brands
available in market

Potential market for vitamins for adults (INR billion)


Scenario 1

Scenario 2

Scenario 3

4.1

6.2

8.2

Nutraceuticals Critical supplement for building a healthy India

67

Market size estimation for condition-specific needs (2/4): Target market of pregnant and lactating
women with an increased requirement for nutrient intake like proteins, iron

Parameter

Assumption

No. of women
consumers belonging
to segments with
affordability

W
omen belonging to
top 3 MPCE classes
in urban areas and
topmost MPCE class
in rural areas

Percentage
pregnant and
lactating women
in the age group
of 15-49 years

T
he overall
proportion of
women in the age
15-49 years for
urban and rural
areas was assumed
to be applicable
for the respective
MPCE classes
B
ased on the birth
rate figures, number
of pregnant and
lactating women
were arrived at

Source

NSSO 2006-07

NSSO 2004-05

Nutrient
intake gap
per pregnant
woman per day

The gap is arrived


at for the key
representative nutrients
proteins and iron
T
he extent of this
gap varies with
MPCE classes

Price
per unit
nutrient

R
epresentative
price of the most
commonly used
protein and iron
supplements is
considered

F
urther, the tendency
to address this gap with
nutraceuticals will vary
with each scenario

NNMB 2007

Ernst & Young analysis


Note: Prices based on various
brands available in market

Potential market for nutrients for pregnant and lactating women (INR billion)

68

Scenario 1

Scenario 2

Scenario 3

20.1

30.2

40.3

Nutraceuticals Critical supplement for building a healthy India

Market size estimation for condition-specific needs (3/4): Target market of other women in the age
group of 15-49 years suffering from any form of anemiao

Parameter

Assumption

Source

No. of women
consumers
belonging to
segments with
affordability

Women belonging to
top 3 MPCE classes
in urban areas and
topmost MPCE
class in rural areas

NSSO 2006-07

Percentage
non-pregnant,
non-lactating
women in the
age group of
15-49 years

Percentage
women
consuming
iron less
than RDA

The overall
proportion of
women in the
age 15-49 years
for urban and
rural areas was
assumed to be
applicable for
the respective
MPCE classes

Women suffering
from any form
of anemia and
belonging to this
age group would
have maximum
impact due to loss
of iron through
blood during
menstruation

The number of
pregnant and
lactating women
is subtracted from
the total figure

Proportion of
such women
belonging to
the high income
groups was
considered

NSSO 2004-05

NFHS 3, 2005-06

Iron
intake gap
(mg) per
woman
per day

Price
per mg
of iron

The extent of this


gap varies with
MPCE classes
F
urther, the
tendency
to address
this gap with
nutraceuticals
will vary with
each scenario

NNMB 2007

Representative
price of
the most
commonly
used iron
supplements
is considered

Ernst & Young


analysis
Note: Prices based
on various brands
available in market

Potential market for iron for other women (INR billion)


Scenario 1

Scenario 2

Scenario 3

18.9

28.3

37.8

Nutraceuticals Critical supplement for building a healthy India

69

Market size estimation for condition-specific needs (4/4): Target market of children aged between
4 to 17 years and consuming less than RDA proteins needed for growth

No. of persons
belonging to
segments with
affordability

Parameter

Assumption

Source

Population
belonging to
top 3 MPCE
classes in
urban areas
and topmost
MPCE class in
rural areas

NSSO 2006-07

Percentage
children
consuming
protein less
than RDA

Percentage
children
in the age
group of
4-17 years

The overall
proportion
of children in
this age group
in urban and
rural areas was
assumed to be
applicable for
the respective
MPCE classes

Households in which
overall protein
consumption is less
than RDA limits,
were considered

NSSO 2004-05

NSSO 2004-05, Ernst

T
he proportion of
such households
would vary with
each MPCE class

Protein
intake
gap (gms)
per child
per day

Price per
gm of
protein

The extent of this


gap varies with
MPCE classes
Further, the
tendency
to address
this gap with
nutraceuticals
will vary with
each scenario

Representative
price of the
most commonly
used protein
supplements
is considered

NNMB 2007

Ernst & Young

& Young analysis

analysis
Note: Prices based
on various brands
available in market

Potential market for proteins for children (INR billion)


Scenario 1

Scenario 2

Scenario 3

6.6

9.9

13.2

Potential market for condition-specific needs (INR billion)

70

Scenario 1

Scenario 2

Scenario 3

49.7

74.6

99.5

Nutraceuticals Critical supplement for building a healthy India

Market size estimation for enhancement needs: Target market of people going to the gym and
engaged in moderate to heavy work-out routines, who have an enhanced need for nutrient intake

No. of gym goers

Parameter

B
ased on annual
size of gym market
and average
subscription per user
Assumption

Percentage
needing enhanced
protein nutritions

Typically a
proportion of these
gym goers who
are engaged in
moderate to heavy
work-out would be
needing enhanced
protein nutrition

Ernst & Young - FICCI


Wellness report, 2009

Source

Additional
protein intake
needed
(gm/day)

Protein requirement
of such people
is usually 20%
higher than RDA
for an average
sedentary male

Price per
gm of
protein

Representative
price of the most
commonly used whey
protein supplement

H
owever, the
tendency to address
this additional
requirement with
nutraceuticals
will vary with
each scenario

Primary interviews,
NNMB 2007, Ernst &
Young research

Ernst & Young analysis


Note: Prices based on
various brands available in
market

Potential market for enhancement needs (INR billion)


Scenario 1

Scenario 2

Scenario 3

1.2

1.4

1.5

Nutraceuticals Critical supplement for building a healthy India

71

Annexure-2
An understanding of Dietary Reference Intakes (DRI)
Reference values known in the United States as Recommended Dietary Allowances (RDAs) and
in Canada as Recommended Nutrient Intakes (RNIs) were used through the 1990s. They were
established primarily to set nutrition and health policy.

Need

In 1994, in response to significant changes in the nutrition field as well as the recognition that for many nutrients
the single RDA values did not meet the expanding needs for nutrient reference values, the IOM began an initiative to
develop a new, broader set of values known as the DRIs. The U.S. and Canadian governments supported this initiative
In 1997, the first DRI report was released. In the subsequent years, RDA/AI levels for other nutrients
were described

Dietary Reference Intakes Definitions


Estimated Average Requirement (EAR): Reflects the estimated median requirement and is particularly
appropriate for applications related to planning and assessing intakes for groups of persons.

DRIs

Recommended Dietary Allowance (RDA): Derived from the EAR and covers the requirements for 97% of
the population.
Tolerable Upper Intake Level (UL): Highest average intake that is likely to pose no risk.
Adequate Intake (AI): Used when an EAR/RDA cannot be developed; average intake level based on observed
or experimental intakes.

DRI has significant advantages over older RDAs. The new DRIs

Advantages

Include upper levels of intake, where appropriate. Upper levels were not defined in the older RDAs prior
to 1997. This provided a safe upper limit for nutrient intake.

Specifically highlight concepts of probability and risk for defining reference values. The EARs use the
median values to calculate the RDA levels taking into account the distribution of dietary requirements
for each nutrient (where possible). This accurate calculation of the DRIs was useful in their application to
determine adequacy of diet at an individual level. The older RDAs used the average values determined
from a group of the population and extrapolated to determine RDA levels...

Incorporate chronic disease endpoints within the array of endpoints that may serve to establish
adequate intake or upper intake levels where possible. The older RDAs used appearance of signs or
symptoms of deficiency disorders as endpoints

Source: Dietary reference intakes for calcium, phosphorus, magnesium, vitamin D, and fluoride/Standing Committee on the Scientific, Evaluation of Dietary Reference Intakes,
Food and Nutrition Board, Institute of Medicine.USA; The Development of DRIs 1994-2004: Lessons Learned and New Challenges: Workshop Summary- Food and Nutrition
Board, Institute of Medicine, National Academy of Sciences, USA

72

Nutraceuticals Critical supplement for building a healthy India

Annexure-3
Case studies: Approved functions and functional ingredients
Japan:
In the mid 1980s Japan was faced with a crisis having an ageing population with its increasing health problems and the expected
increases in health care costs as a result. This pushed government-initiated research to investigate, in-depth, the role foods can play in
reversing and preventing the prevalent chronic health conditions. "Foods for Special Health Use" (FOSHU) regulations were framed and
implemented by the Ministry of Health, Labor and Welfare (MHLW) in 1991, which recognized various health conditions for which a list of
preventive foods was made.
FOSHU functions and functional food components
FOSHU function

Approved products (number) Main functional ingredients

Foods for gastrointestinal health

254

Oligosaccharides, Lactobacillus, Bifidobacterium, Psyllium


husk, indigestible dextrin, wheat bran, low molecular
sodium, alginate, partially hydrolyzed guar gum

Foods for people with high cholesterol/


triglyceride level and body fat

117

Soy protein, chitosan, low molecular sodium alginate,


peptides, diacylclycerol, plant sterol/stanol (esters),
green tea catechin, middle chain fatty acid, degradation
products of globin protein, Psyllium husk

Foods for those with high blood glucose

71

indigestible dextrin, L-arabinose, wheat albumin

Foods for those with high blood pressure

64

G A B A, peptides

Foods for dental health

34

Xylitol, polyols, tea polyphenols, CPP-ACP

Foods for bone health

26

Soy isoflavone

Foods for those prone to anemia

Heme iron

Source: The World Bank - Agricultural and Rural Development Discussion Paper 30 "Health Enhancing Foods"; "Health Claim Evidence Requirements in Japan", Yamada et al

In April 2001, a new category was introduced by MHLW "Foods with Nutrition Function Claims" (FNFC)
under which 12 vitamins including vitamin A; thiamin; riboflavin; vitamins B-6, B-12, C, E, D; biotin,
pantothenic acid, folic acid, niacin as well as minerals calcium, iron, zinc, magnesium and copper have
been standardized
Brazil:
Functional food regulations were introduced in Brazil in 1999, and since then over 200 products have been approved with 14 different
functional property claims.
Food Components and related approved functions
Approved functions

Functional ingredients

Foods for maintenance of healthy blood triglyceride levels

Omega 3

Foods for protection against cellular damage from free radicals

Lutein, Lycopene

Foods for intestinal function

Dietary fiber, Lactulose

Foods for balanced intestinal flore

Fructo-oligosaccharides, inulin,

Foods to reduce absorption of fats/ cholesterol

Beta-glucan, Psyllium, Quitosan, Plant sterols

Foods for reduction of cholesterol

Soy protein

Source: The World Bank - Agricultural and Rural Development Discussion Paper 30 "Health Enhancing Foods"

Nutraceuticals Critical supplement for building a healthy India

73

Annexure-4
Case study: Regulations governing nutrition and health claims
USA:
Claims on nutraceutical product labels are governed by DSHEA and NLEA in the USA

Nutrition
content
claims

Structure/
function
claims

N
o pre-approval required
G
uidelines provided for content level and evidence required

N
o pre-approval required
P
re-marketing notification to the FDA 30 days prior to marketing the product
M
anufacturer responsible for having sufficient evidence to back-up the claims made
D
isclaimer on the label stating that the claim is "not approved by FDA" and "the
product does not prevent, cure, treat any specific disease or condition"

Risk
reduction
claims

P
re-approved list of permitted risk reduction claims for certain ingredients is available
I f the product contains one of these ingredients in specified quantities, the related claim can be made
Pre-approved list of permitted risk reduction claims:
C
alcium and Osteoporosis
D
ietary Lipids (Fat) and Cancer
D
ietary Saturated Fat and Cholesterol and Risk of Coronary Heart Disease
D
ietary Non-cariogenic Carbohydrate Sweeteners and Dental Caries
F
iber-containing Grain Products, Fruits and Vegetables and Cancer
F
olic Acid and Neural Tube Defects
F
ruits and Vegetables and Cancer
F
ruits, Vegetables and Grain Products that contain Fiber, particularly Soluble
F
iber, and Risk of Coronary Heart Disease
S
odium and Hypertension
S
oluble Fiber from Certain Foods and Risk of Coronary Heart Disease
S
oy Protein and Risk of Coronary Heart Disease
S
tanols and/or Sterols and Risk of Coronary Heart Disease
Source: US Food & Drug Administration website

74

Nutraceuticals Critical supplement for building a healthy India

Annexure-5
Case studies: Regulatory process for launch of a new nutraceutical product
Japan:
As per FOSHU, all manufacturers that seek approval for their products need to go through the approval process before they can market
their product.

M
anufacturer submits application to the Office of Health Policy on
Newly Developed Foods (The Office) under the MHLW
The application for a product should include documentation
regarding:
I ts effectiveness based on scientific evidence including
clinical studies
I ts safety based on historical consumption pattern
A
nalytical method for determination of the functional component

Process of FOSHU approval

5. Grant of
approval
1. Submit
application

Manufacturer

4. Submit
analysis

Ministry of Health,
Labor & Welfare

3. Submit
samples &
get analysis
National Inst.for
health & nutrition

2. Consultation &
recommendation

E
xpert committees evaluate the application for efficacy
O
pinions of the Food Safety Commission is taken to
evaluate safety

Council of pharma affairs


& food sanitation

Food safety
commission

Source: Health Claim Evidence Requirements in Japan,(Yamada et al)

I f application is appropriate, the MHLW notifies the manufacturer


to send samples for testing to the National Institution of Health
and Nutrition
A
fter validation and testing of samples is done, the product is
granted FOSHU approval

Nutraceuticals Critical supplement for building a healthy India

75

Acknowledgements
Ajit Singh

Priya Parab

President
Health Foods and Dietary Supplements Association

Proprietor
Vihaan Naturals

Anil Bhanudas Sawant

Dr. R.B.Smarta

Manager-Marketing
Ayuherb Healthcare

Managing Director
Interlink Marketing Consultancy Pvt. Ltd.

Arun Kelkar

R. D.Joshi

Managing Director
Hexagon Nutrition Pvt. Ltd.

(Former Secretary General OPPI)


Director Business Processes
Interlink Marketing Consultancy Pvt. Ltd.

Dr. Bhushan M. Karnik

Ranjit Puranik

Managing Director
GCI Nutrients (India) Pvt. Ltd

Chief Executive Officer


Shri Dhootpapeshwar Ltd.

Chanchal K. Chadha

Dr. Vilas Shirhatti

Regional Vice President


International Sales and Marketing
NBTY Inc.

Head - Technology
Marico Industries

Deepali Shukla

Dr.S.K.Sharma

Head - Marketing
Amway India

Manager - Marketing
Zandu Pharmaceuticals

Farhat Navlakhi Saxena

S.W.Deshpande

Chief Executive Officer


R R Oomerbhoy Pvt. Ltd.

Advocate
Former Joint Commissioner FDA- Maharashtra

Himanshoo Nayak

Sanjay Singh

General Manager Business development


Elder Pharmaceuticals

Technical manager
Plethico Pharmaceuticals Ltd.

Dr. Michael Lelah

Shrihari Shidaye

Technical Director
NOW foods

Vice President - Sales, Marketing and Business development


Piramal Healthcare Ltd.

Dr. P.I. Suvrathan

Dr. U.Y.Rege

Chairman
Food Safety and Standards Authority of India

Proprietor
Mukta Technical Consultancy Services

Pradeep Patil

Vikram Trivedi

G.M - Marketing
Zandu Pharmaceuticals.

Senior Research Manager R&D


Zandu Pharmaceuticals

76

Nutraceuticals Critical supplement for building a healthy India

Glossary of terms
Glossary of terms (1/3)
Term

Explanation

AI

Adequate Intake

AJCN

American Journal of Clinical Nutrition

Antioxidants

A compound that helps to protect cells against damage by free radicals eg: flavonoids

BCC

Business Communications Company

B Pharm

Bachelor of Pharmacy

B Sc

Bachelor of Science

Chronic Illness/disorder

Illness/disorder that is long term or permanent and requires prolonged treatment

CAGR

Compounded Annual Growth Rate. The standard formula is: (last number/first number)^(1/periods)-1

CCP-ACP

Casein Phosphopeptide-Amorphous Calcium Phosphate

CME

Continuous Medical Education

CVD

Cardio Vascular Disease

DALY

Disability-Adjusted Life Year.DALY is a measure of overall disease burden. It was originally


developed by the World Health Organization. DALYs are calculated by taking the sum of these two
components. In a formula: DALY = YLL (Years of Life Lost) + YLD (Years Lived with Disability).

DRI

Dietary Reference Intake.DRI is a system of nutrition recommendations from the Institute of


Medicine (IOM) of the US National Academy of Sciences. The DRI system is used by both the
United States and Canada and is intended for the general public and health professionals.

DSHEA

Dietary Supplement Health and Education Act


Under the DSHEA, the dietary supplement manufacturer is responsible for ensuring that
a dietary supplement is safe before it is marketed. FDA is responsible for taking action
against any unsafe dietary supplement product after it reaches the market.

EAR

Estimated Average Requirement

FDA

Food and Drug Administration

FICCI

Federation of Indian Chambers of Commerce and Industry

FMCG

Fast Moving Consumer Goods

Fortified foods

Foods with nutrients added in addition to the levels that were originally
found eg: edible oils fortified with vitamins A and D

FNFC

Foods with Nutrition Functional Claims

FOSHU

Foods for Special Health Use

FSO

Food Safety Officers

FSS

Food Safety and Standards

Nutraceuticals Critical supplement for building a healthy India

77

Glossary of terms
Glossary of terms (2/3)
Term

Explanation

FSSA

Food Safety and Standards Act

GABA

Gamma-Aminobutyric acid

GDP

Gross Domestic ProductGDP is a basic measure of a country's economic performance and is the
market value of all final goods and services made within the borders of a nation in a year .It calculated
as: GDP = private consumption + gross investment + government spending + (exports imports)

GMP

Good manufacturing practice

GOM

Group of Ministers

GSK CH

Glaxo SmithKline Consumer Healthcare

ICDS

Integrated Child Development Scheme

ICMR

Indian Council of Medical Research

ICRIER

Indian Council for Research and International Economic Relations

INR

Indian rupee

IQ

Intelligence Quotient

KCal

Kilo calories ( 1 Kilo Cal = 1000 calories)

LDL

Low density lipoprotein

Maternal Mortality Rate

Number of maternal deaths related to childbearing divided by the number of live births

MPA

Million per annum

MPCE

Monthly Per Capita Expenditure

NABL

National Accreditation Board for Testing and Calibration Laboratories

NCAER

National Council of Applied Economic Research

NFHS

National Family Health Survey

Niacin

Vitamin B3- important for normal function of gastrointestinal and


nervous systems, deficiency of which leads to pellagra

NLEA

Nutrition Labeling and Education Act

NNMB

National Nutrition Monitoring Bureau

NSSO

National Sample Survey Organization

OTC

Over The Counter

Probiotic food

Food containing live micro-organisms which on consumption in adequate amounts,


confer a health benefit to the consumer eg: Probiotic ice cream

PPP

Public Private Partnerships

RDA

Recommended Dietary Allowance

78

Nutraceuticals Critical supplement for building a healthy India

Glossary of terms
Glossary of terms (3/3)
Term

Explanation

RNI

Recommended Nutrient Intakes

SD

Standard Deviation

Thiamin

Vitamin B1 which helps to maintain appetite and growth, deficiency of which causes beri beri

UL

Tolerable Upper Intake Level

USD

US dollar

USP

United States Pharmacopeia

WHO

World Health Organization

Nutraceuticals Critical supplement for building a healthy India

79

About FICCI
Set up in 1927, FICCI is the largest and oldest apex business organization of Indian business. Its history is very closely interwoven with
the freedom movement. FICCI inspired economic nationalism as a political tool to fight against discriminatory economic policies. FICCIs
commitment is now directed at changing the economic landscape of India, through reforms that expand the space for private sector and
public private partnerships.
FICCI is the rallying point for free enterprises in India. It has empowered Indian businesses, in the changing times, to shore up their
competitiveness and enhance their global reach.
FICCI maintains the lead as the proactive business solution provider through research, interactions at the highest political level and
global networking.
In the knowledge-driven globalized economy, FICCI stands for quality, competitiveness, transparency, accountability and businessgovernment-civil society partnership to spread ethics-based business practices and to enhance the quality of life of the common people.
FICCI- Western Regional Council is the western regional arm of the Federation of Indian Chambers of Commerce & Industry, which has
14 domestic and 7 overseas offices. In addition to supporting FICCI, New Delhi, FICCI-WRC organizes its own conferences, seminars,
workshops and networks with visiting delegations from several developing countries.
FICCI WRC actively provides sectoral services in brand protection, boating, business matching, design, gems & jewellery, nutraceuticals,
progressive Maharashtra, textiles, technical textiles and wellness.

For more details contact:


Dr. Vaijayanti Pandit/Ms. Amita Kardile (+91 9890069558)
Director
FICCI Western Regional Council
Plot no. 33B Krishnamai Building
Sir Pochkhanwala Road, Worli
Mumbai 400 030
Telephone: +91 022-24968000
Fax: +91 022-24966631/32
E-mail: drvpandit@ficci.com/amitak@ficci.com

Head Office
Federation of Indian Chambers of Commerce & Industry
Federation House
Tansen Marg
New Delhi 110 001
Website: www.ficci.com

80

Nutraceuticals Critical supplement for building a healthy India

Notes

Nutraceuticals Critical supplement for building a healthy India

81

Ernst & Young offices


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155 Nutraceuticals. Artwork by Deepti Khatri.

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