Strong prospects in the Indian Vitamins and Supplements Sector

vitamins and supplements

The Indian Vitamin and Supplement (V&S) sector, while has always been considered high potential, post pandemic has gained further Philip leading to an accelerated and sustained adoption curve. The V&S market in India at Rs 25,600 crores in 2021 is expected to double to Rs 51,500 crores  by 2027 growing at a CAGR of 15% + p.a.

Strong prospects in the Indian Vitamins and Supplements Sector, driven by a strategic consumption shift as a lifestyle preventive choice!…Shefali Mehndroo at IMAP provides an overview and a glimpse into its trajectory…

Growing incidences of lifestyle diseases i.e. obesity, digestion, blood pressure, diabetes etc, the inability to sustain a healthy balanced diet due to hectic schedules, further fuelled by the pandemic, has driven consumer awareness about importance of preventive healthcare. While earlier V&S were largely taken by the elderly or just as a cure, only when prescribed by a medical practitioner, today there is perceptible shift in consumer behaviour – where recognising the need to maintain a lifestyle focussing on wellness and nutrition, health and hygiene, an estimated one in four of the general populace regularly consume V&S. Continued demand is expected in select segments including nutrition and deficiency, immunity and strength, digestion aid, weight management, bone and joint care and women’s wellness.

Increased consumer demand has resulted in an explosion in the V&S sector, both on the product and the distribution side.

Today, a wide array of products and remedies ranging from the traditional ayurvedic and herbal, to established allopathic OTC/ Rx products to niche organic, vegan, plant based, probiotics etc  are increasingly available in varied, innovative, easy to consume new formats like tablets, single use sachets, effervescent powder, gummies, chewables, shots, drinkables etc. R&D  for new products, new delivery formats is a requisite in order to maintain portfolio robustness.  V&S are increasingly being viewed by both consumers and companies as OTC/ FMCG/ Non Rx products. As part of a consumer’s regular consumption, V&S are often being purchased along-with household’s monthly purchases of groceries and other essential items. Distribution platforms have hence expanded from the traditional pharmacies and selective general trade, to include, modern trade, specialised stores (standalone and chains), online market places (wellness sand general) as well as specialised D2C channels. Multi-channel distribution networks, have resulted in the easy access of V&S to large populations across the country.

Given the ‘consumption driven’ nature of purchase and the ‘abundance of choice’ through availability of an extensive range of product (be it ayurvedic, herbal, allopathic, organic, natural etc – for the same ailment ! ), companies recognise the need to actively engage with consumers. Intensive multi-media marketing campaigns, trade promotions and celebrity endorsements are increasingly becoming norm for companies seeking to promote their products, highlight product differentiators, gain consumer trust (especially on purity and quality) and create sustainable brand equity.

The Indian V&S industry today is highly dynamic and constitutes a healthy mix of established players (Dabur, Mankind, Revital, Maxirich, Suprdyn, Nutrilite, Zincovet, Dr. Vaidyas, D-Protin, Ensure, Endura Mass, D-Rise, Himalaya, Himalaya Organics, Syndyota, Organic India, SBL, Carbabmide Forte etc) and a host of new brands which are rapidly proliferating the market ( HK Vitals, Pure Nutrition, Nutri Gummies, Fast&Up, Wellbeing Nutrition, InLife, Kapiva, Gynoved, OZiva),

While established brands have their loyal consumers base driven by trust and recognition developed over the years, new brands are offering consumers quality products, use of organic/ natural raw materials in innovative usage formats are fast gaining traction. Furthermore,  online channels have eliminated barriers of entry for these new brands and have increased the competitive play in the industry. In  this competitive environment, while established brands are aligning their products per changing consumer demands be it through improved, updated packaging, innovative usage formats, undertaking engaging marketing campaigns including celebrity endorsements, new brands are now looking to  grow and penetrate markets further by extending their product range as well as distribution reach through pharmacies and general trade.

A testimony to the changing industry dynamics are the various recent initiatives undertaken by  established players like Cipla, Lupin, Zydus, Piramal etc which include hiving off their existing OTC brands into special OTC focussed entities, acquiring brands, enhancing non-Rx distribution reach, undertaking advertising and marketing campaigns etc (which traditionally, pharma companies did not do).

Going forward, given its prospects, we believe the V&S sector will continue to attract private capital. In terms of M&A activity, companies will actively pursue consolidation opportunities to add to their product kitty and distribution strength. Some of the key themes we believe would entail a) acquisitions of strong legacy brands (e.g. Cipla Health’s recent acquisition of Endura Mass) b) acquisitions / partnering with credible new brands with complementary, innovative products c) acquisitions / partnering brands with an established brands / business with complementary Go-To-Market capabilities. Transaction momentum is expected to be strong with players competing for a slice of the multi-billion dollar opportunity !