Marketique Sarang Tilak Jbims

Functional foods: “Healthy food, Healthy profits”
The food market is buzzing with excitement as products better in quality and variety are
taking a plunge in the food race. Let us try to foresee the future of functional foods in the
Indian market, analyze the challenges the category may face and propose a roadmap to
pharmaceuticals & FMCGs on future strategies to be adopted.
As salaries mount, a prominent wave of health consciousness is sweeping the globe, not
satisfied only with food that may taste good but also fill the nutritional need. It should be of
premium quality, affordable, fresh and convenient. Functional foods are foods that provide
health benefits beyond (in addition to) basic nutrition.
Here are some of the examples of the functional foods prevalent in the Indian market:
 Kellogg’s Frosted Mini-Wheat, Raisin Bran and All-Bran cereal products

 Nestlé NESVITA Yogurt
 Nestlé Pro-biotic dahi (Curd)
 Nestlé BLISS Yogurt
 GSK’s Nutribar
ECONOMIC OPPORTUNITIES
Functional foods sell at higher prices and contain larger profit margins than conventional
foods, which make the sector attractive for the players in the supply chain. Retail prices of
functional foods are typically 30 to 500 percent above the comparable conventional foods.
Global market size has been estimated between US$30 and US$60 billion depending on the
definition, with Japan, the United States, and Europe as the biggest markets. Global
functional foods sector grew exponentially over the past years with an approximately 10
percent annual increase in value.
Moreover, demand for functional foods within the developing countries is growing,
presenting a lucrative opportunity to develop domestic markets .The economic returns from
functional foods can offer improved opportunities for all members in the supply chain: from
raw material producers and processors to retailers.
CHALLENGES
Even though developing countries are a rich source of raw materials for functional food
products because of their vast biodiversity and cost advantages in crop production,
developing a functional foods industry in these countries faces significant barriers.
The cost of bringing a new product to the market can be significant especially the upfront
costs associated with high-value food processing and exporting (search for markets, product
research and certification, meeting regulatory demands, consumer research, and public
relations). Most countries lack a suitable regulatory category for these ‘hybrid’ functional
food products, which makes market development much more complicated.
A clear regulatory system for production, sales, certification, and advertising of functional
foods, together with consistent enforcement are critical factors in building consumer trust in
functional foods.
Nowadays, there has been an increased awareness about the ill effects of popping
pills and people have shifted/are shifting to a more natural way of staying healthy. This has
lead to development of a new category of ‘neutraceuticals’, which are foods consumed day-
to-day which have medicinal effects along with being tasty. Nutraceutical, a term combining
the words “nutrition” and “pharmaceutical,” describes a nutritional product that provides
medicinal benefits in addition to the regular nutritional value.
ROADMAP SUGGESTIONS
 Consumer awareness of health issues and their linkage to diet thus creating need in
the market for functional foods via extensive promotion
 Make use of positioning benefits – can be positioned as preventive, nurturing and
cosmetics and can be targeted demographically to different age groups
 Target parents by offering their children food solutions to health solutions
 Use adequate advertising strategy, use of 1 scientific jargon to build trust on.
 Organized retail
 Improve supply chain
 Provide shelf visibility
 Try to clear off preconceived notions by making people aware of the fact via talk
shows
 Increase market penetration
 Govt can supply products like soy milk at a lower cost to rural kids.
 Functional beverages can be marketed against the carbonated drinks that adversely
affect the health.
ANTIDIABETIC FOODS is an innovative concept and I believe it should be developed in the

near future by FMCGs and Pharmaceutical companies entering this new category of
neutraceuticals. The number of diabetics in India (as on November 15, 2009) is 50.8 million,
the highest in the world and by 2010 almost seven percent of India’s adult population will
have the disease. Thus, there is a huge and growing market for the product.
As of now there is no established cure of diabetes however it can be successfully managed

and a person can lead a perfectly normal life by following a healthy lifestyle. Thus, there is a
huge potential for anti – diabetic foods. It is important for an FMCG or a Pharma co. To be a
pioneer in the neutraceuticals catering to Anti-diabetic and Anti-obesity and gain a first
mover’s advantage.
Following are some of the potential anti-diabetic functional foods that I thought would be
feasible and marketable:
 Jambul juice; marketed as a ‘healthy and energetic thirst quencher’

 Soya shakes, fortified with other anti-diabetic ingredients; marketed as
supplementary protein sources with anti – diabetic properties
 Tea (tea made from the parsley or leaves of walnut are good for controlling
diabetes); marketed as a ‘tea without tannins’
 Onion-garlic paste fortified with broccoli extracts; marketed as ‘healthy way to eat
spicy food’
 Oat shakes as ‘health supplement’
It’s just a matter of time that these functional foods become a commonplace. There is a
market waiting for the right kind of foodstuff. The question is who taps it and is able to
launch a product which has that elusive success formula to become a winner.

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Functional foods: “Healthy food, Healthy profits”

 Kellogg’s Frosted Mini-Wheat, Raisin Bran and All-Bran cereal products

ANTIDIABETIC FOODS is an innovative concept and I believe it should be developed in the

As of now there is no established cure of diabetes however it can be successfully managed

 Jambul juice; marketed as a ‘healthy and energetic thirst quencher’

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