The Hindu Business Line : Biting into health

WHILE the consumer has been seen increasingly taking to health fads and everything and anything that delivers a `healthy' lifestyle, companies in the FMCG sector have figured out that this is the way to higher growth rates and are responding to enhanced consumer demand.

So, what have they started to do? Many have put their R&D centres on overtime and come up with innovations where health can become the selling proposition. Prime-time television commercials are a mirror of this trend, for you'll find the `healthy' Chyawanprash jostling for space with the `healthy khao' Saffola oil, not to leave out the health drinks and food brands. In fact, it is the food companies that are into the maximum innovation to claim the health mantle and project a wholesome image.

Companies such as Nestle, PepsiCo, Hindustan Lever and Dabur Foods, among others, have in recent months rolled out food products on the health platform. Even smaller firms such as Mamta Agro Foods are strategising to mark their presence in this segment.

The reason for all the action, perhaps, lies in the numbers. According to market watchers, the `health food products' segment is poised to grow at 15 per cent.

"There is tremendous potential in the untapped market that constitutes consumers who are on the constant lookout for `healthy' products such as fruit juices, soups and wholesome variants of even products like noodles and biscuits," says an industry official.

The growing market

Although the size of this segment is not clear, some growth figures have been estimated. For instance, the growth rate for aloe vera juices produced by Mamta Agro Foods is 15 per cent, according to its General Manager (Sales and Marketing), Ajay Kumar. Similarly, Nestlé's Maggi Atta Noodles, made of whole wheat as opposed to refined wheat (maida), seven months after its launch contributed 11 per cent in value to the instant noodle category.

The findings of the recent food and beverages research conducted by CII-ACNielsen ORG - MARG show that brands such as Britannia's Tiger Mast, which combine the taste of cream biscuits with the health associations of Tiger and the launch of health tea, like Brooke Bond Red Label Natural Care, seem to echo the belief of significant growth.

The focus on appearance has a lot to do with the new health consciousness, which has implications for the growth of low-fat/low-sugar foods, the report mentions.

Branded fruit drinks are in vogue and along with pure juice and nectars, the total market value is estimated at Rs 1,000 crore (CMIE Economic Review, 2004). The demand has been fuelled by growing consumer affluence and a conscious effort to move away from aerated drinks. This has even pressured traditional cola companies to broaden their portfolios and include juices and ice tea.

Milk and yoghurt have also come into focus. Branded versions from companies such as Amul, Nestle, Britannia and Mother Diary have seen considerable innovation such as fruit yoghurt, buttermilk and skimmed flavoured milk. Companies say a milk-based product goes down better with the Indian psyche and is likely to reach out to more traditional palates.

The target group for most food companies launching products on the health plank is what is described by Shivani Hegde, Nestlé's General Manager (Food Business) as "consumers who want to include health and wellness in their foods in a convenient manner."

A Euromonitor report classifies the category as people with rising affluence and lesser time to spend in kitchens, which has resulted in higher purchase of more health-oriented products for breakfast or otherwise.

In India, there has been a spurt in the launch of new products such as pasta, soups and noodles, which are expected to become more popular in the coming years.

The report also points out that some products considered luxury items a couple of years ago are becoming items of daily consumption in most households, specifically 100 per cent juice drinks and Ultra Heat Treatment (UHT) milk. It says Indians of all ages are becoming health- and calorie-conscious, preferring healthy beverages such as fruit/vegetable juices that contain no preservatives, no colour and no flavour additives.

The `healthy' company response

Nestle, Dabur and Kellogg have come out with new variants and other innovations to cater to changing consumer tastes.

Nestle India, which recently rolled out its Maggi Health Soups, is increasingly sharpening its focus. The soups contain vegetables and are described as low-fat and cholesterol- and monosodium glutamate (MSG)-free. This, it seems, is in accordance with the global strategy of food companies which have found that the health platform gives them an opportunity to accelerate growth. Apart from this, `healthy' packaged and fast foods are needed, says the World Health Organisation (WHO), which has been asking food companies worldwide to review their products to fight the rise in obesity and other health-related problems.

In order to give enough options to its consumers, Nestle India rolled out seven flavours of `healthy soups' both vegetarian and non-vegetarian recently. Hegde told Catalyst, "Health and wellness has always been a focus for Nestlé. Our ongoing research programme and surveys, indicating a growing awareness of healthy food alternatives, have helped to further renovate our products. Our consumer insight indicates that health and taste are defining elements in the choice of foods and is guiding the development of our product portfolio."

The company previously launched Maggi Atta Noodles and seems to have had considerable success with the product.

Emphasising on the importance of such products, Hegde says the atta noodles and the soups reflect Nestlé India's efforts to provide consumers with "more value through products that are superior in taste, nutrition, health and wellness, benefiting from the research and development facilities of the Nestlé Group." Nestle, in fact, has rejigged its whole advertising campaign and its new slogan emphasises the dual advantages of Taste Bhi, Health Bhi.

PepsiCo is also taking the health route. FritoLay, the snacks division of PepsiCo, will soon introduce low-fat namkeens (salty snacks). It recently introduced Lays Stax, a low-fat version of potato chips made from reconstituted potato flakes.

Manu Anand, Managing Director, FritoLay Division, Pepsico India Holdings Pvt Ltd, earlier told Business Line that the company was committed to healthy snacks but not at the cost of taste, and so would go slow before it put out such products.

FritoLay, which recently launched Quaker Oats in India, could look beyond salty snacks and ready-to-eat products if it detected enough potential, Anand had said.

In a similar attempt, Mamta Agro Foods, a subsidiary of Mamta Drinks and Industries Ltd, is reaping the benefits of its health drinks containing aloe vera and safed musli launched four months ago.

Besides the medicinal effect, the company believes that the herbal content also adds to the `wonderful taste' of the juices. It seems the company initially test-marketed the product with a sample of 1,000 women and men and realised that such juices have tremendous potential.

The health wave has not only been noticed by food manufacturers but also by fast food joints, which have been at the receiving end for dishing out `high-fat, unhealthy' food, resulting in burger major McDonald's looking at introducing dishes with the nutrition tag. It has also started serving salads, as do some pizza outlets.

Global health plank

India could be replicating the global scenario, which has been increasingly gearing up for the change in consumer preferences.

Apart from Nestle, other giants such as Unilever and Kraft Foods have made efforts to cut down on the salt, sugar and fat content of some of their products.

The WHO recently indicated that food companies must improve their record in this area and do more to improve the nutritional value of their products.

All in all, food companies appear to be redirecting their energies to address the growing health concerns of consumers.

Market analysts say there is growing awareness about health issues among consumers and as education about the benefits of health products increases, there is bound to be growing demand for these products.

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