Monday, August 20, 2007

FUNCTIONAL FOODS: future perfect

Functional foods and nutraceuticals

Human quest for the disease free body and mind is eternal. It is an innate instinct of humans to be healthy, beautiful, and young. The quest for eternal health and beauty is timeless.

Sickness management is the typical healthcare business. Pharmaceuticals and medical services concentrate on delivering value to sick persons. Healing is the goal of such healthcare activities.

The value offered by functional foods and nutraceuticals is not limited to sickness management. These entities have emphasis on wellness management too. The role play of functional foods is beyond clinical management to the ambit of day-to-day healthcare management with preventive properties.

Here is a review on functional foods:

Functional foods are foods designed to provide a specific and beneficial physiological effect on health, performance and/or well-being extending beyond the provision of simple nutrients. The effect should be documented scientifically.

The functional food concept stretches the borders of nutrition. Whereas classical nutrition focuses on essential nutrients and their significance regarding diseases due to deficiency, functional food science focuses on the physiological effects. These effects may be mediated by nutrients, but also by non-nutrients such as dietary fibre and various bioactive compounds, as well as by probiotics and other food qualities, e.g. structural properties.

Functional food science deals with knowledge providing opportunity to prevent diet-related diseases, e.g. metabolic syndrome, type II diabetes, coronary heart disease, obesity, hypertension, certain types of cancer, gastrointestinal diseases and osteoporosis.

Functional food science also includes knowledge on the positive effects on physical and psychological performance, e.g. cognitive function.


The term "nutraceutical" was coined from "nutrition" and "pharmaceutical" in 1989 by Stephen DeFelice, MD, founder and chairman of the Foundation for Innovation in Medicine (FIM), Cranford, NJ.1 According to DeFelice, nutraceutical can be defined as, "a food (or part of a food) that provides medical or health benefits, including the prevention and/or treatment of a disease.

In one sense, we can use the two words nutraceuticals and functional foods interchangeably.

Functional foods industry: a sunrise sector in India

India is at a tipping point for creation of a robust functional food industry. There is hectic activity in the healthcare food biz space. The functional foods industry is said to comprise of functional beverages and teas, fortified cereals and breads, soya foods, functional snacks and candies, and miscellaneous foods (like cholesterol lowering enriched foods and other functional processed foods).

Pharma companies have traditionally played a role in pioneering health food marketing – under the banner of food supplements. Complan, the range of products (B-Protin, Pulmocare, D-Protin, Menopro etc) from British Biologicals, and other food supplements from Novartis and Wockhardt are already in the ethical (ie. Promotion of products for prescriptions) food supplement space.

Thus, based on the marketing formats, we have two distinct groups of health foods:

a) Those that are promoted directly to consumers eg.: Amul range of products (including probiotics) and malted beverages (like Horlicks, Complan etc)

b) Those that are promoted to doctors for prescription support (ethical promotion)

So which marketing format do we use?

India is at an exciting phase in its economic situation. The per capita income is up leading to greater healthcare spends (in fact more than that for apparel). The healthcare boom is set to gain strength. In fact, The Times of India, dated - 13.8.2007, has reported that the maverick serial entrepreneur C Sivasankaran who has the uncanny ability to spot a trend before it becomes a mainstream business is said to enter the healthcare biz. Rumors are that he will import olive oil from Jordan, and promote it as a cooking medium in India from Jan 2008. Similarly, the Bangalore based bio-nutritional company Avesthagen backed by big names like Godrej and Tatas, is slowly yet surely developing products for the healthcare market. Nestle and Avesthagen are working on futuristic products for the diabetic market (India has the unfortunate distinction of being the diabetic capital of India). Danone and Avesthagen are co-ordinating efforts for bolstering the organic food brand Stonyfield. Avesthagen’s division, Avesta Good Earth is looking for further strengthening its muesli bars, cereals and crackers.

Thus, the question bugging functional food marketers and entrepreneurs is which marketing format do we use? The marketer can either promote products to doctors (as healthcare foods or nutraceuticals or food supplements) for prescription support or advertise and market the produce to end consumers.

The OTX marketing route is an interesting one

Marketing to doctors alone is becoming that more difficult. There are no doubt, some 11 lakh doctors and 3 lakh odd chemists. But there are also 1,25,000 Medical Representatives wooing the doctors. There is brand clutter at both the doctor’s end and chemists. Brand differentiation based on ingredient differentiation alone is not winning the battle for mindshare, chemist retail space, and prescription share.

The importance of doctors lies in the fact that they are very important opinion builders for healthcare products. Thus, it is perilous to ignore doctors while building the market for healthcare products.

The other emerging market is the OTX market (a combination market in which products are promoted to doctors and simultaneously promoted subtly to the end consumer through the doctors). This can be through interesting in-clinic activities where the product is connected to patients through the doctors. For eg. for Vicks Vaporub, one can organize talks on touch therapy for patients by the doctor (in his or her clinic) and subtly Vicks Vaporub can be promoted. Similarly, Pediasure can organize for direct-to-consumer product promotion through in-clinic activities.

The other component of OTX marketing is through attractive in-pharmacy activities. Tying up product promotional activities with chains like Manipal Cure and Care or Trust is a win-win situation for the company and the retailer (who benefits through increased footfalls and increased noise level in the market for his pharmacy).

The OTX marketing route is an emerging trend keeping in line with the increasing end consumer consciousness on healthcare, and cashing in on the potential of doctors and pharmacists as opinion builders for healthcare products. The OTX marketing route seems to be the best suitor among various marketing approaches for the new age healthcare functional foods in the first phase of the launch process. The new launches can later be taken to the nonchemist retailers after consolidating the sales base at pharmacies. This will help the new launch functional foods dominate the continuum of the healthcare market.

This blogpost is very interesting isn’t it? Please do read all other blogposts including the older ones as they are all very interesting. Thnks. I am Sunil S Chiplunkar, Ph.: 9448216237. This blogpost is dedicated to Avesthagen. The photo of the founder Dr. Patell is shown in this blogpost.

1 comment:

Shekhar said...

Hi sunil. The info that u have posted is gud. Do you have information about the size of functional food, probiotic and healthy oils market also?the definition of functional food also varies. which ones do you think are the categories of functional food?