In Conversation With Sanjaya Mariwala, Executive Chairman And MD Of OmniActive Health Technologies
1. How can industry players in India contribute to the growth of the Nutraceuticals sector?
Growing emphasis on healthy living, building immunity, and increasing nutritional quotient even at the national level has revived the focus on preventive care. This has resulted in a speedy growth for the various preventive care streams including nutraceuticals. It is one of the prime times to spare no effort in reinforcing the expertise India possess in this field.
The heritage of Ayurveda is the intellectual property of India. However, globally, a much larger number of patents and registered trademarks on Ayurvedic products are in the name of other countries. Data says that at the end of 2019, Europe and the United States were the two major herbal product markets in the world, with a market share of 41% and 20%, respectively.
To make the nutraceuticals industry into a USD 25 billion industry for India from USD 4 billion today and leverage the huge export potential the industry offers, all the stakeholders have to play an equal role.
We need an ecosystem that is integrated and forward-looking. Develop a code of conduct, a roadmap to make Indian origin products as the preferred products, sharply define the nutraceutical sector and its products, establish HSN codes for the industry, establish a centrally powerful authority to help interface on intra-ministry issues and resolutions, and create an export body for the industry – these are some of the critical issues that must be addressed swiftly. Additionally, a strong PPP approach and a dedicated PLI scheme for the sector can be game changers too.
While the regulators would play their role, industry players should not wait for things to happen. Fear of technology, lack of willingness to involve themselves in agriculture and supply chains, and reluctance to invest in marketing new concepts are limiting the Industrial scale in this industry. We need to recognise that to succeed in this space, a new model of agri-farm linked enterprise needs to be created and nurtured. Our entrepreneurs still wait for the government to fix crop availability and cultivation of raw materials. These changes need to be brought out. The Govt, fortunately, has recognized this. The new farm bill for example is clearly to give momentum to such change initiatives. There is no reason for the industry players to stay shy.
2. What was the idea behind setting up AHNMI? What role does the association play in the nutraceuticals industry?
The nutraceutical industry is at its nascent stage in India. We still do not have structured regulations, definitions for the products, and not even a dedicated authority that looks after the nutraceutical sector. With increasing focus on health and wellness and preventive care taking the center stage, the sector offers significant growth opportunities. Given this, we decided to set up an industry association that can work with the regulators to tap the potential this industry offers. Our purpose is to provide a common platform to pursue and steer various matters of interest for our member organisations and voice their concerns related to the aspects that pose challenges to the growth and development of this sector.
3. Outlook on the overall healthcare sector for 2022 including preventive healthcare
Different waves of coronavirus and now the new Omicron – what we thought will stop at 1st and 2nd wave, is now seems to be grappling with novel variants. The healthcare sector is on one side challenged to showcase its ability to safeguard mankind from these viruses. And, on the other, is presented with opportunities to innovate. It is not just about the new vaccines and new medicines to fight the viruses, but it is also about transforming healthcare delivery models, customization to meet the individual needs and lifestyles, and providing advisory than just a prescription.
People are far more invested in preventive health, natural wellness than before. There has been a surge in demand across categories of supplements and it is here to stay. Even though most would assume that only immunity products have seen strong growth, the trend suggests that there is rising demand for digestive health, sleep, and stress, and a whole host of other categories too. I also expect a rise in demand for eye-health products as screen time has increased significantly for every age group.
The understanding that there are far deeper and more addressable health challenges that can be prevented through supplementation, is growing. We are already witnessing a lot of promise in the sleep category, and so is the case for other issues such as stress, anxiety, and mental health. At OmniActive we are focusing on all these categories. We do understand that it is important to focus on multiple aspects of human well-being, and we endeavour to alleviate the problems that are now spreading across age groups. Focus on overall wellbeing will continue to rise offering manifold opportunities across the whole supply chain of the healthcare sector including nutraceuticals.
4. What are the growth prospects for the international trade of nutraceutical products?
The nutraceutical sector is growing at roughly 9-10%, which is one of the highest across the industries. Many countries are opening up and joining the nutraceutical bandwagon. Those who have opened up like India are growing at 15-17% p.a. and other countries like Europe, Japan, are growing at 7-8% p.a. Given its Ayurvedic wisdom, pharmaceuticals knowledge & favourable agriculture base, India enjoys a natural advantage in this sector. Despite more than 50% of the products currently getting exported from India, we are still at only 1-2% of the global trade.
There are 4 different segments in which the industry can be divided. Cultivation of botanicals and raw materials, raw material processing, ingredient manufacturing (APIs), and the OTC products and formulations for consumption. We are largely present in the first two, with a limited presence in the ingredient space and a negligible share in the final products. There is a need to add more value-added products to the export basket. Today 90% of the API production is exported, however, the overall API segment itself is very small in India. If we expand just the API segment, there is tremendous potential to increase our share in the international market.
On the demand side, domestic demand itself is increasing steadily. I also expect populous markets like Indonesia, Vietnam, Bangladesh, Malaysia to present new growth opportunities. The disposable income in these countries is growing steadily and people are likely to start adopting nutraceutical products as their daily fulfilment need.
5. How did you identify the opportunity in the space of nutraceuticals?
Preventive care science was deep-rooted in India, however, like many other things, people remained under western influence and were more focused on research and innovations happening in synthetic chemistry. What was unfolding on the other side was the keen interest of the western world in the Indian heritage of yoga and Ayurveda. There was a steady rise in wellness tourism – people either coming for their treatments or coming to study the subjects. Together with this, the internet was picking up and millennials were becoming more global, better aware, and more read about various options available worldwide. These were enough indicators to begin the journey in the nutraceutical space.
6. What was the idea of launching OmniActive Health Technologies way before the nutraceutical sector received much importance in India?
OmniActive Health Technologies Ltd. was established with a clear purpose “to improve lives by enhancing nutrition and wellness and leveraging the most innovative science and technology to meet consumers’ demands while adhering to the highest scientific standards of quality”.
Currently, our products serve 5 categories – i) Active wellness and physical performance, ii) metabolic health and weight wellness, iii) vision, cognition, and mental wellness, and iv) daily energy and productivity performance and v) Specifications driven specialty extracts Research & Development is the backbone of everything we produce. Our global R&D center leads product development, setting the standard for ingredient and extract excellence; focused on developing new products and methods of delivery, isolating new plant bioactive, and establishing novel analytical measures for differentiation and purity. Today, OmniActive holds 38 patents, has applied for 60 more, derives 99% of its revenues from exports, and boasts heavyweight customers like Pennsylvania-based health and nutrition-related product manufacturer GNC, direct-seller of dietary supplements Amway, specialised eye care company Bausch and Lomb, and mass market giants Costco and Sam’s club and many other innovative companies that have launched interesting products and platforms in the nutritional space.
