By Len Monheit
I was intrigued by Wednesday’s article in the Economic Times of India and Hindustan Times which reporting that ‘Herbal Medicine (was) in for a big boom.’ My immediate response was to investigate other resources, and to check the wires to see if I had missed something significant.
The actual text of the article noted that the herbal medicine market would exceed 16 billion dollars by 2005, and that ‘world demand for herbals has been growing at a rate of 10-15 percent.’ The article didn’t say what period was reported, nor whether the rate was per year or not. The article went on to indicate that while herbal and ayurvedic sales in India were flattening out, international prospects and growth opportunities were excellent.
Those who have been following industry results will know that according to Nutrition Business Journal (NBJ), herbal product sales in the US grew 1 percent to $4.2 Billion in 2001, and globally, grew approximately 2 percent to $17.7 Billion. Ayurvedic product sales in the US, also according to NBJ, fell 1 percent in 2001 to approximately $16 Million.
The reported study was commissioned by the Export-Import Bank of India, and the guidance it provided, based on its numbers, was that Ayurveda and Siddha manufacturers gear up to handle growing international markets, and that perhaps government, industry and institutions collaborate and cluster to better serve this emerging opportunity.
This issues raises a bunch of red flags, for me at least.
- How often do business operators make decisions on dated information or wishes and beliefs instead of valid, current business information? How often do they scan for numbers and trends that support their own objectives, rather than take a step back for a clear picture?
- Whether the numbers are reporting functional and fortified foods and beverages or herbal product sales, there is significant discrepancy in the actual numbers, but the trends are usually remarkably similar. When they’re not, obviously something is seriously amiss.
- Business decisions are being made and changed at a much faster pace than ever before. This means that information resources and data sources, while being even more important, must be closer to current. In many cases, government and larger organizations find it extremely difficult to operate in this environment, providing a clear advantage to smaller and more dynamic organizations.
- Global issues affect us all. In the case of the noted article, serious sector investments will presumably result with more companies and products appearing on the global scene including the US. This could have a price impact (supply and demand issues), quality impact or consumer impact depending on how business is handled. In the best case, consumer awareness or the science base for herbal products could increase, driving demand. In the worst case, more confusion, an even more price driven market and lower margins for all industry stakeholders could result.
This lone article, intriguing though it is, shouldn’t be given undue importance or significance. It does point out some interesting behaviors and issues though.