Over the past two years, words like comorbidity, immunity boosters, and supplements 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 took note of the change and D2C (direct-to-consumer) nutrition startups, catering to the needs of children and adults, gained traction.
“Nutrition is understood differently today than it was yesterday. We are a nation that has generally believed in natural nutrition, and complementary nutrition has not been recognized as much. For example, the United States are a very supplement driven market when nutrition is in the form it is in today people are ready because we are talking about natural nutrition coming out of our diets. For this reason, the market is marked for a boom,” says Harish Bijoor, Brand Strategy Specialist, Harish Bijoor Consultants. Your story.
The nutritional supplement space has seen a shift in consumer behavior and demographics.
“What was once a fitness enthusiast market is now a proactive health conscious market. More and more consumers take care of their bodies and have actively increased their consumption in this category,” explains Rahul Chowdhri, Partner at Stellaris.
Nutraceuticals Market in India Expected to Grow by an Estimate $4 billion to $18 billion by the end of 2025. The dietary supplement segment constitutes more than 65% of the nutraceuticals market and is growing at a rate of 17% and is expected to grow 22% annually, especially when preventative health has become everyone’s priority 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% of the global market share by 2023.
New brands and markets
Another important reason for the Rise of nutraceutical startups in Indiasays Rahul, is the emergence of online brands in new categories and formats.
Existing brands did not have formats like powder, liquid, tablets, gummies, melting strips, etc Likewise, there is an emergence of brands that have natural, Ayurvedic and herbal product lines to meet the demand for such products.
This isn’t a new concept though, as brands like Himalaya that are also getting into this space have been around for quite some time now. But nutrition and nutraceutical startups have received particular attention from investors in 2020 and 2021. While many of these companies were founded in 2015 and 2016, many have only recently secured funding.
According to data fromamong the 50 best startups in the segment, 20 received funding in 2020 and 2021.
“What we found really interesting about this market is that protein deficiency in India is incredibly high, huge and widespread. Something like 70% of the urban population, adults and children, suffer from protein deficiency and this kind of protein deficiency, especially in a child’s development, has a massive later impact on their physical growth, even mental growth,” says Cathy Guo, Head of Investments and Portfolio at Antler.
“This type of dominant protein deficiency in the Indian diet presents a huge opportunityadds Cathy.
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 is also an increased number of non-food retailers, such as pharmacies, mass merchandisers and retail chains, which are expanding their selections in
the category of supplements.
The D2C nutrition market, which includes products that are essential supplements to a person’s nutritional intake, has also supported the growth of two adjacent markets – the health food market and the beauty products segment.
The health food market has brands such as Based in Mumbaibased 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 into your common eating habits (breakfast-lunch-snack-dinner cycle). It’s a much bigger market but also more crowded,” says Rahul of Stellaris.
Likewise, D2C nutrient startups likeand are branching out to add beauty products to their offering. The beauty industry is already seeing trends in conscious shopping, vegan beauty and sustainability.
“Looking better and eating better are two essential needs, and brands want to diversify the issues they tackle,” says Cathy.
“It 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 as part of a brand house strategy, that obviously means better economics.
The nutraceuticals market also sees the participation of former FMCG companies – Unilever, Dabur, Nestle – who have launched food and drink lines that are healthy alternatives to their existing products.
However, Cathy alleges that traditional businesses are always behind and their the pace of innovation is different.
She says, “They’re highly disconnected. They don’t have the DNA or the understanding to suddenly operate as a D2C brand. We’re riding the digital transformation of society and marketing through digital channels where that consumer hangs out like YouTube, Instagram, Meta (former Facebook), Tik-Tok.
The problem with large FMCG companies is also the time-consuming processes that must be followed to solve problems in order to innovate.
Ankit Chona, co-founder and managing director of, explains that the strength of a startup lies in its ability to quickly revise a product because more often than not, this is its core business. However, for a legacy business, it may be one of many in its catalog.
“The problem in space is lack of product differentiation; it is that it is about goods and not about brands. Products that have become early adopters of the D2C format will do very well in the early years and will do very well, but once these nutrient supplements become known, the market will return to ideal competition,” says Harish.
“So the need of the moment is differentiation, branding and the whole process of ensuring brand visibility.”
As we enter a post-pandemic world, we can see the D2C Nutrition’s Startup Space Gets Crowded. 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 weed out any brand that lingers anywhere near preservatives, trans fats, or excessive levels of processed sugar. At the same time, as adults embrace cleaner lifestyles, we can also anticipate an increase in healthier, kid-friendly snack options,” says Phab’s Ankit.