In the last two years, words like comorbidity, immune enhancers, and supplements they have become household terms. The COVID-19 pandemic has changed lives in many ways, and our focus on health is one of them.
The startup space has taken notice of the change and D2C (direct to consumer) nutrition startups, which cater to the needs of children and adults alike, have gained traction.
“Nutrition is understood differently today than it was yesterday. We are a nation that has typically believed in natural nutrition, and supplemental nutrition has not been recognized as much. For example, the US is a very enabled market for supplements. When nutrition comes in the format it has today, people are ready because we’re talking about natural nutrition outside our diets. Because of this, the market is booming,” says Harish Bijoor, Brand Strategy Specialist at Harish Bijoor Consultants. Your history.
The nutritional supplement space has seen a shift in consumer behavior and demographics.
“What was once a market of fitness enthusiasts is now a proactive, health-conscious market.. More consumers are taking care of their bodies and have actively increased consumption in this category,” explains Rahul Chowdhri, Partner at Stellaris.
The nutraceuticals market in India is expected to grow from an estimated $4 billion to $18 billion by the end of 2025. The dietary supplement segment makes up more than 65 percent of the nutraceutical market and is growing at a rate of 17 percent and is likely to grow at 22 percent per year, especially as preventive health has become the focus for everyone in the current pandemic, said a 2020 report by the International Trade Administration.
The Indian nutraceutical industry is expected to hold at least 3.5 percent of the global market share by 2023.
New brands and markets.
Another important reason for rise of nutraceutical start-ups in Indiasays Rahul, it’s the emergence of online brands in new categories and formats.
Existing brands did not have formats like powder, liquid, tablets, gummies, melt strips, and so. Similarly, there is a rise of brands that have product lines that are natural, Ayurvedic, and plant-based to meet the demand for such products.
However, this is not a new concept, as brands like Himalaya, which are also dabbling in this space, have been around for quite some time. But new nutrition and nutraceutical companies have received significant attention from investors in 2020 and 2021. While many of these companies were founded in 2015 and 2016, many recently obtained financing.
According to data from of the 50 best startups in the segment, 20 have received funding in 2020 and 2021.
“What we find really interesting about this market is that protein deficiency in India is incredibly high, huge and widespread. Something like 70 percent of the urban population, adults and children are protein deficient and this kind of protein deficiency, especially in a child’s development, has a massive later impact on their physical growth, even their mental growth,” says Cathy Guo, Investment and Portfolio Manager at Antler.
“This type of predominant protein deficiency in the Indian diet presents a great opportunityCathy adds.
The space is also experiencing a boom due to increased penetration of modern forms of retail including hyper and supermarkets, and D2C and e-commerce channels. There are also an increased number of non-grocery retailers such as pharmacies, mass merchandisers, and chain retailers that are expanding their selections in
the plugin category.
Diversification
The D2C nutrition market, which includes products that are essential supplements to a person’s nutrient intake, has also fueled the growth of two adjacent markets: health food market and beauty products segment.
The healthy food market has brands like based in Mumbai based in Jaipur based in Mumbai The Green Snack Co, based in Delhi based in Lucknow and based in Noida among others.
“The offer here is to introduce a product in its current Dominant eating habits (breakfast-lunch-snack-dinner cycle). It is a much bigger market but also more crowded,” says Rahul of Stellaris.
Similarly, D2C nutrient startups like and they are branching out to add beauty products to their offerings. The beauty industry is already seeing trends in conscious purchasing, vegan beauty, and sustainability.
“Looking better and eating better are core needs, and brands want to diversify the issues they address,” says Cathy.
“This also means higher revenue per userbecause in the D2C space, if you can acquire a user digitally and then sell them products under the same brand or even in a brand house strategy, that obviously means better economics.”
legacy brands
The nutraceutical market also sees the participation of traditional FMCG companies: Unilever, Dabur, Nestle – which have launched food and drink ranges that are healthy alternatives to their existing products.
However, Cathy alleges that the legacy companies are still behind and their The pace of innovation is different.
She says, “They’re heavily offline. They don’t have the DNA or the understanding to suddenly operate as a D2C brand. We’re taking advantage of the digital transformation of society and marketing through digital channels where this consumer hangs out like YouTube, Instagram, Meta (former Facebook), Tik-Tok.”
The problem with large FMCG companies is also the lengthy processes that must be followed to address issues in order to innovate.
Ankit Chona, co-founder and CEO of , explains that the strength of a startup lies in the ability to quickly review a product, since most of the time it is its main offer. However, for a legacy company, it may be just one of many in their catalog.
Looking to the future
“The problem in space is lack of product differentiation; is that it is merchandise and not brands. Commodities that have become early adopters of the D2C format will do very well in the early years and do very well, but once these nutritional supplements are known, the market will once again be ideal competition.” Harish says.
“So the need of the hour is differentiation, branding, and the entire process of ensuring brand visibility.”
As we enter a post-pandemic world, we can see the The D2C nutrition starter space is filling up. However, entrepreneurs and investors in the space agree that the demand for dietary supplements and healthy foods and beverages is here to stay.
“Consumers will remove any brand that stays close to preservatives, trans fats, or excessive levels of processed sugar. At the same time, as adults shift to a cleaner lifestyle, we can also anticipate a rise in healthier, kid-friendly snack options,” says Phab’s Ankit.
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