Well being foods-Can they carve out a viable market?

The word "nutraceuticals" originated back in 1989 to differentiate edible consumer products which neither belong to a classical food industry segment or the pharmaceutical sector. Though there is lot of confusion regarding the precise meaning and scope of these new generation products, most consumers feel that they provide some value to boost health and can be a part of a regular diet. Many countries do not allow such a delineation but are taking them as food products though the claims on health attributes are some what regulated. Still there are many grey areas that deserve more clarification and transparency. The new generation products now being marketed use a more appropriate terminology "well being products" and the market for these foods seems to growing with each passing day with increasing consumer awareness about food related disorders like CVD, hypertension, diabetes, kidney ailments, and a host of others affecting precious lives besides lowering the quality of life. So far predominant players have been those from the food industry but this area is receiving focussed interests from pharmaceutical industry which is looking for investments and expansion in non-drug areas. This is understandable because regulators are becoming more and strict in scrutinizing health claims which require expensive field studies to corroborate the claims and pharmaceutical industry has the necessary wherewithal to wade through the intricate web of safety clearances involved. The turmoil going on in many developed countries vis-a-vis amalgamation, mergers and acquisitions of smaller food companies by established drug companies has become a focal point for investors looking for new business opportunities. Read further below:  

"A boom in "nutraceuticals" - food and drinks with potential health benefits - is paving the way for a rush of deals, as food and drug companies compete to dominate a market expected to be worth $280 billion by 2018. Consumers have been encouraged to eat smarter by an obesity epidemic and a burst of fitness-focused technology like gadgets and apps to track exercise and calorie intake. Now companies supplying goods like probiotic yoghurt, advertised as being healthier for the gut, and omega-3 biscuits, thought to improve brain and heart function, have seen demand rise sharply. "It's only a matter of time before the fight spills over into corporate takeover wars," consultancy KPMG predicted in a report. Bankers said moving into nutraceuticals was an obvious move for both food and pharma companies given the blurring line between their sectors. "The space is ripe for M&A and I think you are going to see more," added Jeremy Johnson, managing director of North Carolina-based Bourne, which advises on deals. Food companies are likely to take the lead, chasing healthy products to improve their profiles while drug companies, rocked by patent expiries and the rise of biotech medicines, look to divest units, forecast Bourne Partners, which estimated the market to hit $280 billion in 2018 - double that of 2011. M&A activity so far has been relatively small, but the pace is picking up. Bourne counted 185 mergers and acquisitions involving private and public nutraceutical companies in 2014, up from 95 in 2011. "It's an industry which has seen a lot of interest and is likely to see a lot of deals," said one consumer industry banker, adding that many smaller companies were looking to deals with bigger players to help them reach their potential customers. While the concept of nutraceuticals is not new - the term was first coined in 1989 - KPMG head of life sciences Chris Stirling believes the current focus on health will spur more tie-ups as firms seek to exploit increased consumer awareness. "The consumer arms of pharma companies are going to have to look at this area hard because there is so much public interest," he said. "They need to get on the bandwagon."

Look at India itself where many drug companies have positioned themselves to establish their predominance in the field of well being foods and the resources commanded by them cannot be matched by thoroughbred food companies. It is rather interesting that these products, though made by drug companies require clearance from FSSAI which does not have any clear policy regarding manufacture and marketing of well being foods in the country. The result is total confusion in the market with many products offered to the unwary consumers boasting of health benefits without much scientific evidence. Words like improved brain power, growing taller and smarter, protection from diseases like cancer, diabetes etc are routinely claimed as USPs to expand the consumer base. It is another thing that most manufacturers have no data to support these claims. Probably India has to take a leaf out EU experience where health claims are critically assessed and as of to day there are only a few products cleared by the authorities there. Such rigid clearance regime can benefit drug companies greatly because they only have the necessary insight into regulatory aspects and required testing infrastructure to satisfy the authorities. As for the consumer, he is more likely to trust these companies because of their established credentials in making life saving drugs. With deep pockets, drug industry can be expected to play a more important role in designing and making diverse well being products in the coming years.

V.H.POTTY
http://vhpotty.blogspot.com
http://foodtechupdates.blogspot.com