For the longest time, the health paradigm in India has followed the pattern of Disease, Diagnosis and Treatment (DDT). This means that people only looked to healthcare providers in the event of sickness. Such a model has been perpetuated by the FMCG market that is steadfast in reaping profits at the cost of people’s health. However, the COVID-19 pandemic has brought about a remarkable shift in people’s perspective and an increasing number of people now realise the truth of the age-old adage—prevention is better than cure.
More and more people are thus adopting a health-conscious attitude and rising levels of disposable income are now giving birth to an even larger market for health and wellness products. India is now warming up to a new idea of health that is characterised by the goal of being the best version of oneself in terms of health. With these evolving times, consumer’s needs, aspirations and requirements are also evolving and all of this together has led to Fast Moving Health Goods (FMHG) becoming a flourishing market in India.
Growth drivers of the FMHG market include; changing lifestyle, innovation from the Fast Moving Consumer Goods (FMCG) sector and an increase in personalised foods. One of the biggest health concerns of modern times is lifestyle diseases, which are on the rise due to long working hours and sedentary habits in our country. In addition to this is India’s growing fast-food culture that makes people even more vulnerable to lifestyle diseases such as diabetes, obesity, Hypertension, PCOD and many more.
In a recent National Family Health Survey (NFHS), the data showed that most states show a sharp rise in obesity—in 18 of the 22 states and Union Territories, more than one in five women and one in five men is now either overweight or obese. Hence, Indians of all age are increasingly concerned about their health and the food that they consume. Yoga, Pilates or some or other form of fitness are subsuming more importance in everyone’s lives and holistic wellness is now the new mantra for good health.
With the increasing focus on health and wellness, the FMCG sector has been compelled to create functional food products that have less sugar and salt, more proteins, no MSG, and are plant-based and dairy-free. Food products are now being carefully tailor-made to fit into India’s progressively health-conscious market and hence, there is an array of specialised wellness products like designer foods, organic foods and sports nutrition foods that are being made available in the market.
A mindful lot of millennials are now creating a large part of the demand for healthy snacking, food and nutraceutical manufacturers are emphasising personalised foods. These foods will cater to India’s burgeoning healthy population who have specific dietary and lifestyle patterns. Innovative products such as keto snacks, Mediterranean diet-based foods, diabetic-friendly foods are hitting the shelves at increasing speed. The new-age Indian consumer is particular about their choices and is willing to go the extra mile for quality products. Consumers today are more aware and educated about the importance of a balanced, nutritious and varied diet.
Snacking and beverages account for 30 percent to sales of FMCG, according to Nielsen. A recent report by market researcher Mintel said that the persistence of COVID-19 has put the spotlight on how consumers’ dietary and lifestyle choices matter. Its global COVID-19 Tracker for November reflected consumer focus on preventive health care and mindful eating, indicating the potential for disruption in the food and wellness space. A greater focus on health consciousness is leading to an increase in consumer spend on nutritional supplements to boost immunity and support their overall health.
Manufacturers and retailers are also working towards enhancing their supply chain to meet the mushrooming demand in the health goods category. The rise of the e-commerce giants and retailers is forcing various brands to adopt an omnichannel model for supply. Brands are pursuing more aggressive procurement strategies, including participating in buying alliances, getting tighter on SKU proliferation, and decreasing inventory levels. They are also seeking out small brands and strengthening their private labels in their quest for differentiation and traffic. For example, Tata Group acquiring stakes in Big Basket and 1mg. Over the counter like formats are doing well in many markets and mobile will obviously continue to play a critical, vaulting role.
The converging economic and demographic trends in India have laid the foundation for an opportunity in the FMHG segment. The COVID-19 pandemic is a prospect for the consumer and health goods market. More and more businesses from pharma, OTC, nutraceuticals and dietary supplements, functional foods and FMCG are making a foray into this high growth segment.
—The author, Gulshan Bakhtiani is Founder and Director, Wellness Forever Pvt Ltd. Views are personal