In early December 2011, New Hope Natural Media and its Engredea group produced a series of three Market QuickStart seminars in Mumbai, Hyderabad and Bangalore, India. Sponsored by Xsto Solutions, and in partnership with HADSA and Pharmexcil on the ground in India, these meetings brought together experts from the U.S. market and executives in the Indian pharmaceutical, nutraceutical, ayurvedic and supplement markets.
What follows is a Q&A with several of the Market QuickStart India presenters, with a few thoughts on the Chinese market thrown in for perspective.
What were your impressions of the Market QuickStart attendees in India?
Steve Taormina, Director of Standards, New Hope Natural Media: Attendees were eager to understand FDA regulations for properly manufacturing, labeling and marketing dietary supplements in the United States. They seemed quick to understand the basic regulations and had good, specific questions about compliance issues.
Kendal Norris, Show Director, Engredea: Inquisitive. Ready to take action. There was some clear confusion or frustration when the topic of NDIs came up, probably due to not having a real understanding about what it could mean to the market and how it could affect their business. They crave a better understanding of what the American consumer is looking for as it relates to supplements.
Len Monheit, Executive Director, Engredea: The Indian attendees were very technically savvy, and they wanted to do things the proper way, but they were having trouble getting beyond the pharma mentality. Their absolute hunger and appreciation for the information was really evident. We saw and met a diverse group, and there is huge untapped intellectual potential.
Dan Murray, Vice President of Business Development, Xsto Solutions: The QuickStart attendees I met varied from entrepreneurial start-ups to large, well-organized conglomerates that are presently—or soon will be—offering high-tech preparations of active ingredients or botanicals. The entrepreneurs have hopes of selling into both the premium North American market and the emerging domestic market of India. Several of the large producers are currently providing material to North America. In general, the attendees were highly educated (most had advanced degrees) and highly motivated to expand their businesses.
Steve Hanson, Owner, GRIP IDEAS: Absolutely impressive. The attendees in India demonstrated their in-depth technical knowledge along with awareness for the increased global manufacturing and regulatory requirements. Participating companies spanned nearly all aspects of the supply chain from raw materials to finished products across nutraceuticals, pharmaceuticals and functional foods. There were even a few animal nutrition companies present. Many had done business internationally while others were evaluating their first plans for expansion into new markets. Given India's long cultural history in utilizing natural products, many attendees exhibited a deep and personal understanding of the self-care nutritional approach contributing significantly to the meetings.
India’s potential untapped; China’s tempered by regulations
Taormina: India’s Ayurvedic medicine and China’s (TCM) Traditional Chinese Medicine are common, traditional disease-management therapies. Western-style foods or dietary supplements, per regulatory restrictions, are designed for maintaining health rather than treating disease, which seems to be a new concept in both cultures. India’s challenge could be distribution. China’s challenge could be improving its international image as a low-quality supplier.
Monheit: I see the re-emergence of Ayurveda and India as a sourcing powerhouse with their approach and technical capabilities. I wonder how to apply the ‘local’ theme in India. There are more immediate two-way opportunities in China. India’s business-friendly environment will mean 3-7 year opportunities, in my opinion. China is an eager market for traditional supplements from North America. Both markets use home delivery a lot. When I visited a mall in Mumbai, it was busy, but not swamped. I also went to a supermarket in India, where I saw a lot of staff on hand to assist shoppers, so there’s an opportunity for product education there.
Norris: India possesses the age-old tradition of Ayurveda. China has its own Eastern medicinal traditions. But let's face it; the average U.S. consumer doesn't trust either of them. If both countries can evolve into a quality mindset, I think the Indian and Chinese nutrition industries can have sustainable and long-term impacts on global health.
Murray: My overall impression is, "Wow, what enormous potential India is beginning to realize." They have the population to be a major global consumer, though unfortunately their economic influence does not yet match their population. There appears to be significant potential for anything and everything related to nutrition, meaning everything from better food fortification with vitamins and minerals to dietary supplements and functional ingredients. From an agricultural standpoint, India has 16 different climate zones for crop production so their capability to produce a wide variety of food and ingredients is quite vast.
Nutrition businesses have multiple opportunities in working with India; both as producers and consumers. With its high-tech capabilities and low cost of labor, we are seeing more and more active ingredients such as vitamins being produced in India. With its variety of climates, it has an advantage over many regions for botanical and fruit production. I believe India will continue to grow as an exporter and supplier of specialty ingredients and active molecules.
Regarding domestic consumption, westerners see the billion-plus population of India as huge potential for consumption of Western-style nutrition; however, it may take significant education and marketing to disrupt their traditional approach to food and nutrition. The global brands are all present (i.e. Pepsi, Coke and Nestle), but they didn’t seem to be as pervasive as they are in Europe and throughout the Americas.
Hanson: India is at a very important regulatory crossroads domestically. Currently, many nutraceuticals have been marketed in a gray area between pharmaceuticals and food, though regulations specific to nutraceuticals are currently in development. There is great anticipation that these new regulations will create a favorable climate for nutraceuticals. In fact, many of the companies with whom I spoke believe these new regulations will serve as the catalyst for explosive growth in the Indian market over the next 10 years. The prospect of getting involved on the ground floor of this opportunity should be exciting for any company. Those companies that are first in typically reap great rewards. The primary challenge will be balancing Ayurvedic traditions—a huge economic and social part of India’s culture—alongside more modern and corporate nutritional philosophies. Having said that, I also believe there is a latent opportunity for North American companies to import traditional Ayurvedic products and knowledge for a growing consumer audience interested in yoga and holistic lifestyles.
For China, the market opportunity and regulations are further along. In a relatively short amount of time, China has already become the third-largest country market for nutritionals with only a minority of its population consuming them. This means continued and significant market growth. Then again, Chinese regulations are more defined and continue to be tightened, thus raising the bar for companies seeking to do business there. Adherence to these regulations should be part of any plan for doing business in China and a company must be willing to invest the appropriate time and resources.
Highlights of the Indian Market QuickStart trip
Taormina: I specifically enjoyed the friendly business conversations between presentations … and of course the food.
Murray: The highlight of India for me was the people we met. On many international trips it’s the architecture or the natural beauty, but in India it was definitely the people that made it a great experience. We were enthusiastically welcomed at all our stops, the conference participants were eager to learn, and our hosts were so very gracious.
Monheit: The food. But seriously, the intensity of the dialogue we experienced almost universally in India was my highlight. The Indians are really serious about business and doing it the right way. The ACG facility in Mumbai where we presented and were hosted really impressed me, as well as the mobility and mandate to innovate. The ACG executives have built a fabrication studio next to a group of ‘kids’ doing 3D design. The capability for innovation was impressive.
Hanson: I enjoyed meeting the people and learning about its vibrant and wonderful culture. I was amazed. From the Bollywood movies to the clothes to the Indian food, the culture is very colorful and rich.