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With startups,businesses set on new growth curve
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Tuesday, 10 December, 2019, 15 : 00 PM [IST]
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Ravi Rohra
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With the advent of startups and investment options, nutraceuticals businesses are set on a new growth curve. Many leading companies such as Nestle and Alliance Boots are venturing into this new area of business through either the startup or investment route.
Nutraceuticals is a broad umbrella term that is used to describe any product derived from food sources with extra health benefits in addition to the basic nutritional value found in foods. They can be considered non-specific biological therapies used to promote general well being, control symptoms and prevent malignant processes.
Nutraceuticals is a term derived from “nutrition” and “pharmaceuticals.” The term is applied to products that are isolated from herbal products, dietary supplements (nutrients), specific diets and processed foods such as cereals, soups and beverages that other than nutrition are also used as medicine. We most commonly come across them in the form of diet supplements, mass gain protein supplements or even vitamin pills.
Not as heavily regulated as drugs
Many such products are now readily available in the market and are used by fitness enthusiasts as well as people suffering through a certain disease. Although nutraceuticals are not as heavily regulated as normal pharmacy drugs, they are now at the centre of the fitness game.
A dietary supplement is considered as a product that bears or contains one or more of the following dietary ingredients: A mineral, a vitamin, an amino acid, a medical herb or other botanical, a dietary substance for use by man to supplement the diet by increasing the total daily intake, or a concentrate, metabolite, constituent, extract or combinations of these ingredients. Nutraceuticals are of these nutritional supplements that are used for health purposes other than nutrition.
Multiple therapeutic properties
Some popular nutraceuticals include ginseng, Echinacea, green tea, glucosamine, Omega-3, lutein, folic acid, and cod liver oil. Majority of the nutraceuticals possess multiple therapeutic properties.
Nowadays, nutraceuticals have received considerable interest due to potential nutritional, safety and therapeutic effects. A market research recently proposed that the worldwide nutraceuticals market is expanding and would reach US$250 billion by 2018.
Recent studies have shown promising results for these compounds in various pathological complications such as diabetes, cardiovascular diseases, cancer and neurological disorders. These conditions involve many changes, including alterations redox state.
Most nutraceuticals have antioxidant activity with the ability to counteract this situation. Hence, they are considered as healthy sources of health promotion, especially for prevention of life threatening diseases such as diabetes, infection, renal and gastrointestinal disorders.
Fund takes varying stakes
As mentioned earlier, due to its popularity and many uses, new players are setting up shop in the nutraceuticals industry to beat the curve. Faced with technological, regulatory and logistical challenges, food and pharmaceuticals companies are taking advantage of the growth of nutraceuticals in different ways. Some are investing in startups.
Nestle has set up a venture capital fund with the aim of investing in early-stage nutraceuticals businesses. The fund takes varying stakes in these entities and then tries to buy a majority share at a later date, should the startup prove successful.
On the pharmaceuticals side, Alliance Boots (now part of Walgreens Boots Alliance, a global pharmacy chain created at the end of 2014) launched a specialised investment fund, B&B Investment Partners, which focusses on small- and medium-sized consumer brand businesses within health, wellness, beauty and personal care. One of its first deals, announced in November 2014, was the US$30 million acquisition of PhD Nutrition, a leading producer of protein powder and nutrition bars.
(The author is chief operating officer, Scitron Nutrition Pvt. Ltd)
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