FMHG market in IndiaA close view

With fast changing consumer beliefs, values and aspirations the marketing executives perhaps have a difficult task on their hands. Professionals have gone to the extent of penetrating the consumer mind with technologies like 'Neuro Marketing' to know what would really click with their identified consumers. The change is not only rapid but it is also of high magnitude affecting the multiple segments including health. However, thanks to this high involvement of consumers, Fast Moving Health Goods (FMHG) is now a burgeoning market in India. More and more businesses from pharma, OTC, nutraceuticals and dietary supplements, functional foods and Fast Moving Consumer Goods (FMCG) are entering into this high growth segment. India n market is largely a prescription oriented market. While Rx to OTC switches are implemented more frequently by the pharma majors, many other pharmaceutical and nutraceutical companies who were trying to promote their products through the doctor are now adopting a different route, the direct route to the identified end user. FMHG market represents products for health that are directly promoted to end users. For eg. Saffola Gold a FMCG product is more like a FMHG product the way it is promoted and used; health drinks (like Complan and Horlicks) are categorically FMHG products along with other health beverages such as fruit, energy and protein drinks. Equal, Sugarfree, Natura and other low calorie sweeteners, Benadryl and Glycodin the cough syrups, Tums and Gelusil the antacids, Vicks, Coldarin, Anacin, Listerine, Waterbury's Compound, Woodward's gripe water, and Iodex are some of the other FMHG products. Rejuvenators, weight loss products, dietary supplements, honey, joint pain relievers and even pregnancy test kits and emergency contraceptive pills have found their way in this segment. FMHG segmentComponents 1. Over-the-counter (OTC) drugs are medicines that may be sold without a prescription eg: Crocin, Disprin, D Cold, Benadryl, etc. 2. Functional foods are foods or dietary components that may provide a health benefit beyond basic nutrition like oats, bran, psyllium husk, whey protein, etc. 3. Medicinal FoodsThey are same as functional foods but have more medicinal values eg: Health bars with added medications. 4. Nutraceuticals is any substance that is a food or a part of a food and provides medical or health benefits, including the prevention and treatment of disease. They are healthcare products that are formulated and taken in fixed dosage form such as capsules, tablets, etc. They cover a wide range of products including dietary supplements and botanicals eg: vitamins, minerals, co-enzyme Q10, carnitine, ginseng, gingko biloba, saffron, ashwagandha, safed musli, Saint John's Wort, Saw Palmetto, hoodia gordoni, Malabar tamarind, green tea, psyllium husk, bitter guard powder, peepal, adatoda, garlic pills, tulsi, kalmegh, brahmi, etc and the list is ever increasing. 5. Phytochemicals are non-nutritive plant chemicals that have protective or disease preventive properties. Some of the well-known phytochemicals are lycopene in tomatoes, isoflavones in soy and flavanoids in fruits.

6. Ayurvedic and herbal medicines are alternate branch of medicine with claims of prevention, treatment and cure. Herbal medicines are essentially derived from plants in full or extract form. 7. There are other specialised wellness products such as designer foods, organic foods, sports nutrition, etc.

Growth drivers of FMHG market in India y Consumer awareness Increase in knowledge, higher spending power of people at large, growing awareness of the advantages of wellness to avoid illness, information on the

benefits of nutraceuticals and greater health consciousness are the factors increasing the popularity of w ellness products. Changing lifestyle The incidence of lifestyle diseases has been increasing with the changing lifestyle. With the growing fast food culture, people are resorting to high -fat, highcholesterol diet which makes them vulnerable to lifestyle diseases. There is a sharp rise in chronic diseases in India. Escalation in cost of serious medial treatment and the resultant inconvenience are major factors that are encouraging the masses to go for preventive support. Ageing population The ageing population will increase the demand for supple ments and functional foods to address age-related conditions. Increasing disposable income Growing population, particularly that of earning people, is the true growth opportunity to the Indian nutraceutical industry. Industry lobbying The Organisation of Pharmaceutical Producers of India (OPPI) has submitted a list of 11 molecules to the DCI to be excluded from Schedule H paving way for the initiation of responsible self medication as the first line of health management. Changing regulatory thought proc ess The Drugs Controller's plan to permit Schedule K drugs for sale not only at chemist shops but also at grocers and departmental stores is being actively considered for unrestricted spread of healthcare products in non -serious category. This is a signifi cant shift in government attitude towards the healthcare needs and aspirations of the common man. The booming retail growth A sudden rise in the pharmacy chains which were absent a few years back has added a new dimension to the healthcare product availability, display, counselling and growth in sales. There has a been a flood of pharmacy chains coming into the picture The mod retail formats are also poised to give a bigger exposure to this product segment Market situation analysis Nutraceuticals is one of the fastest growing segments in India. Different sources have quoted different statistics pertaining to the size of the market but all have been invariably common in their narration of the current and future potential of this market in India. Market size and growth Nutraceutical market in India is growing much faster than the prescription market which was always considered to be the backbone on Indian healthcare industry. In 2007, Indian nutraceutical market was estimated at Rs 18.75 billion and is growing at the CAGR rate of 21.23 percent; it is estimated to reach Rs 27 billion in 2009. (Source: Cygnus Business Consulting & Research 2008) Food supplements In food supplements, the major share is held by food products and supplements (artificial sweetener, meal replacer, and ginsengs), valued at Rs 5.63 billion in 2007. The next major pie is held by malted beverages valued at Rs 3.38 billion. The third major segment is fruit-based products , valued at Rs 0.68 billion. It is followed by paediatric nutrition (Lactogen, Lactodex, Dexolac, Pediasure), valued at Rs 0.56 billion. protein powder, sports products, and clinical products are valued at Rs 0.56 billion, Rs 0.23 billion and Rs 0.23 billion respectively. (Source: Cygnus Business Consulting & Research 2008) Vitamin and mineral supplements Vitamin-B complex, multivitamins, antioxidants, protein supplements, enteral nutrition, vitamin-B12 and metabolites and vitamin-C with minerals make up the vitamins and mineral supplements market. The major share is held by vitamin-B complex valued at Rs 2.25 billion in 2007.

The next comes multivitamins, valued at Rs 1.5 billion. The third major segment is protein supplements, valued at Rs 1.2 billion, followed by anti -oxidants, valued at Rs 1.12 billion. The anti -oxidants market is booming with products like fish oils (omega 3), alpha lipoic acid and COQ10. Interestingly, although vitamin -B12 and metabolites occupies fifth place (valued at Rs 0.82 billion), it has grown very dramatically over the years. It is followed by vitamin-C with minerals and enteral nutrition, valued at Rs 0.37 billion and 0.22 billion respectively. (Source: Cygnus Business Consulting & Research 2008. Industry Insight. Indian Nutraceuticals. February 2008.) Regulatory environment Dietary supplements are now explicitly regulated in DSHEA-like fashion in India. The Indian Food Safety and Standards Bill 2005 has been signed into law, promising a significant impact on the Indian dietary supplement industry. The Food Safety and Standards Act (FSSA) replace nine food regulations. The FSSA would be assisted by a Central Advisory Committee, a scientific committee and a number of scientific panels in specifying standards. The standards would be enforced by the Commissioner of Food Safety of each state through designated officers and Food Safety Officers. Recipes for success y Bottom of pyramid marketing Even while the economy is on rise and the disposable incomes for the middle classes is growing, there is still a vast sea of population that cannot afford the much aspired better quality of life. A plethora of wonderful products like hoodia gordoni for weight loss, glucosamine and chondriatin combination for joint pain and saw palmetto for prostate enlargement in men could not be successful at the market place. The only reason was the cost of purchase per pack lasting for a month was felt rather high for the middle class urban population prohibiting them to even try even while they were getting convinced through the media communication about the health benefits of these products. However, these masses need to be targeted to ensure the best results and in order to derive maximum mileage out of the enormous ad spend that the consumer product companies have to make. The bottom of the pyramid marketing strategy to lower down the cost of nutraceutical products by coming up with innovative ideas like 'the single use therapy' and encourage the consumers to try them out and realise the predictable benefits. Creamy layer marketing The other strategy could be to target only the creamy layer comprising of SEC A and B through cost effective communication media and retail marketing campaigns for a slow but systematic and consistent growth. Intrinsic product value marketing There are many products in nutraceutical segment (being sold as fixed dose caps) that can be marketed as dietary supplements in powder form to keep the intrinsic value alive and reduce the cost of manufacturing and packaging. Heritage brand switch Calcium Sandoz, Crocin, Benadryl and many such brands have been long existent in the market and have been prescribed to and used by millions of consumers with good results. There are more than 50 such brands in different non serious therapeutic categories which are ripe for the OTC switch. The advantage is the brand equity that these brands already possess.
Professional endorsement

Wellness is fast becoming a high involvement area with most urban consumers. Majority consumers have already resorted to informed self medication for non -

serious ailments like cough, cold, back ache, acidity, etc. However in other health areas like fever, weakness, child health etc. they look for endorsement from their family doctors to get doubly sure of their decision. Hence, the brands falling into this category are not only promoted directly to the end users but the doctors are also in the loop for product promotion to ensure their positive belief towards the benefits the brand offeres to their patients. Direct marketing Direct marketing is at its nascent stage in India and the multi level marketing has not been generally well received. However, Amway has done a wonderful job in this area. Herbal Life, with their rich range of herbal products is following the same process.

Understanding the main core pharma and consumer healthcare marketing Consumer healthcare marketing needs an altogether different approach. Majority of the pharma companies are only exposed to pushing their brands through their medical representatives to the healthcare professionals to generate the Rx demand. In the FMHG segment the end user becomes the target audience. Reaching out to this target audience is the real challenge. The challenge involves extensive market research; need based product development, meaningful presentation, careful pricing, deep and wide spread availability (in the neighborhood of the end user), highly creative and aggressive mass media communication and an omnipresent below the line communication tools. The need is to excel in all areas of marketing to get the evasive consumer's attention. If done rightly there is a treasure of opportunity with over 1.3 billion bubbling and ever growing p opulation aspiring for better quality of life. Conclusion The converging economic and demographic trends in India have laid the groundwork for opportunity in nutraceuticals. Today the opportunities are plenty, there is vast empty space in the market, the consumer is hungry for products, the market forces are openly welcoming the new entrants, the competition is not yet intense, and the growth drivers are in place. Hence, in all probability, there could not be a better timing to enter this market in India than now.
(Contributed by Suhas Wadwalkar, Head - Brand Communications, SOHUM, an advertising agency with expertise in Healthcare and FMCG advertising. He can be contacted at wadwalkars@gmail.com)