|
|
|
You can get e-magazine links on WhatsApp. Click here
|
|
|
|
|
|
Natural extracts industry - Challenges and pathway ahead
|
|
Thursday, 26 November, 2020, 14 : 00 PM [IST]
|
|
Laltu Sinha
|
THE natural extracts market comprehends products derived from plants or natural resources. These extracts are resourced according to their results based on their applications. These natural-based extracts are extensively used in various industries such as cosmetics, pharmaceuticals, food and beverages, and therapeutic or remedial industry. According to a recent study published in the World Economic Forum, people across the globe have observed a significant change in their lifestyle and dietary habits. Consumers around the globe have started opting for products based on natural extracts. Lesser toxicity levers, safer usage, lower or negligible side effects even on prolonged use are few benefits which drive the consumers to switch over natural extracts-based products over chemically or artificially processed products. Nutritive and preventive aspects of these products are such rationales that have impressively attributed to the natural extract industry. Globalisation and technological advent have made it easier for the industries to outreach the consumers through both online and offline modes.
Post-Pandemic Synopsis
Covid-19 pandemic has vacillated the global market scenario by transfiguring the market frame of every industry. The natural extract market and industry are no exception to remain untouched by this catastrophe. Jeopardising the risk of sustainable development, developing countries may be the worst to be affected. Tough it is yet early to anticipate the numbers of market impair, the fact that the developing countries are facing extreme economic, socio, and health crisis, which can lead to profound wreck in the market dynamics, can’t be contradicted.Enlisted below are few challenges faced by the natural extract market during the Covid-19 Pandemic, which can help create a new industry trail. Addressing these provocative may help in tackling the hedge in the current scenario.
1. Deranged logistics and Supply Chain Structure
The Covid-19 Pandemic has severely impacted the logistics and supply chain management throughout the world. Due to lockdown and restrictions in various countries, the supply management chain had been suspended. The production and development of products were hampered due to the non-movement of people and most goods.Even after the withdrawal of lockdown in various countries, flow in the market structure has taken a setback, and to get back in the state of normalcy, a prolonged period is being recognised.Few countries like France, Germany, and the UK and other European Countries, have again restricted a lockdown. This will vigorously hamper the logistics involving in the natural extract market. As the movement for only essential goods is allowed in these countries during the lockdown, this will interrupt further in the natural extract market’s supply chain system.
2. Lockdown and Restrictions in different parts of the Globe
As countries like France, UK and Germany go in lockdown to curb the second wave of Coronavirus, various ports and states across the globe are yet to open or allow free movement. Several ports and deport stations have limited the move with the quarantine period. The goods coming through water bodies or air are kept in quarantine state as implemented by authorities in their states and countries. This has cardinally impacted the deliverable time, thus creating a sharp dip in products sale. Sometimes, special notifications or permits are to be obtained by authorities to carry out the supply movement.
3. Transportation limitation
Fewer countries have started accepting flights and ships from different countries. Flight cancellation or fewer flights among the countries have limited or restricted products’ flow among the consumers. This has directly culminated in the flights’ fare, where the manufacturer pays huge fares to deliver their goods. The higher price in any segment of the supply chain will directly impact the overall cost of the product.
4. Unconfined Prices
The results of lockdown can be identified in the change in prices of the products. In recent times, prices of all products in almost all the industries are soaring high, with the natural extract industry not being an exception. Prices are altered as per the modifications in the logistics and deliverable time. This can, many times, drive the customer away from buying the products as there is an overall impact on the socio-economic structure of the society.Millions of people of having lost or limited their source of income are already considered out from their consumer’s list, generally shrinking the market size.
5. Revamped Market Valuation
A sheer amendment in the market size of the natural extract industry has transfused a figurative challenge in the overall trade. With prices soaring high, essential modifications are needed to be done to rearrange the logistics management. Also, the customer size depicting low as never before has resulted in losing a customer base. These shady times of pandemic have impacted the industry to an inappropriate level, where both the manufacture and the consumer are losing ends.
6. Unavailability of Raw Materials
With lockdowns being unrelieved, manufacturers are concerned with the unattainability of raw materials. Employees and workers being locked away at home due to lockdown have impeded the availability of raw materials used in manufacturing natural extract-based products. Transporting the raw materials from one place to another has added an extra cost to the valuation of the product.
7. Indefinite Delivery Time
An imprecise delivery system due to lockdown and restriction has resulted in an unsatisfied consumer base. With deliveries taking a longer time, the customers are opting out of the products. To keep in touch with the timeline, manufacturers across the globe are rushing out of time, thus contributing to various other fallouts in the market.
Unravel the road ahead of Covid-19 Pandemic
Though times are harsh with the natural extract market, a ray of hope can be added with the fact that people have started opting for natural extract-based products.Although things seem to be disillusioned at present, fewer implications such as broader reach, budget-friendly products, and unrestricted movement of goods will add value to the market scenario. Change on the economic front, along with backing from the government, will help in remoulding the structure of the industry.
(The author is research director, BlueWeave Consulting. He can be contacted at laltusinha@blueweaveconsulting.com)
|
|
|
|
|
|
|
|
|
|